Investment in Unconsolidated Joint Venture

On October 30, 2013, the Company purchased a 48.9% equity interest in WWP Holdings, LLC ("Worldwide Plaza") for a contract purchase price of $220.1 million, based on the property value for Worldwide Plaza of $1,325.0 million less $875.0 million of debt on the property. As of June 30, 2015, the Company's pro-rata portion of debt on Worldwide Plaza was $427.9 million. The debt on the property has a weighted average interest rate of 4.6% and matures in March 2023. The Company accounts for the investment in Worldwide Plaza using the equity method of accounting because the Company exercises significant influence over, but does not control, the entity.

Pursuant to the terms of the membership agreement governing the Company’s purchase of the 48.9% equity interest in Worldwide Plaza, the Company retains an option to purchase the balance of the equity interest in Worldwide Plaza beginning 38 months following the closing of the acquisition, or December 2016, at an agreed-upon property value of $1.4 billion, subject to certain adjustments, including, but not limited to, adjustments for certain loans that are outstanding at the time of exercise, adjustments for the percentage equity interest being acquired and any of the Company's preferred return in arrears. If the Company does not exercise its purchase option, it will be subject to a fee in the amount of $25.0 million.

At acquisition, the Company's investment in Worldwide Plaza exceeded the Company's share of the book value of the net assets of Worldwide Plaza by $260.6 million. This basis difference resulted from the excess of the Company's purchase price for its equity interest in Worldwide Plaza over the book value of Worldwide Plaza's net assets. Substantially all of this basis difference was allocated to the fair values of Worldwide Plaza's assets and liabilities. The Company amortizes the basis difference over the anticipated useful lives of the underlying tangible and intangible assets acquired and liabilities assumed. The basis difference related to the land will be recognized upon disposition of the Company's investment. As of June 30, 2015 and December 31, 2014, the carrying value of the Company's investment in Worldwide Plaza was $226.3 million and $225.5 million, respectively.

The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the financial information of Worldwide Plaza. The Company does not record losses of the joint venture in excess of its investment balance because the Company is not liable for the obligations of the joint venture or is otherwise committed to provide financial support to the joint venture.

The condensed balance sheets as of June 30, 2015 and December 31, 2014 for Worldwide Plaza are as follows:



(In thousands)	June 30, 2015			December 31, 2014
	(Unaudited)
Real estate assets, at cost	$	713,339		$	704,143
Less accumulated depreciation and amortization	(107,075		)	(97,181		)
Total real estate assets, net	606,264			606,962
Other assets	269,005			255,784
Total assets	$	875,269		$	862,746

Debt	$	875,000		$	875,000
Other liabilities	18,807			12,442
Total liabilities	893,807			887,442
Deficit	(18,538		)	(24,696		)
Total liabilities and deficit	$	875,269		$	862,746

Company's basis	$	226,306		$	225,501

The condensed statement of operations for the three and six months ended June 30, 2015 and 2014 for Worldwide Plaza is as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Rental income	$	30,751		$	27,739		$	61,265		$	55,394
Other revenue	1,232			1,229			2,449			2,444
Total revenue	31,983			28,968			63,714			57,838
Operating expenses:
Operating expense	11,727			10,779			23,967			22,292
Depreciation and amortization	6,864			6,260			13,714			12,628
Total operating expenses	18,591			17,039			37,681			34,920
Operating income	13,392			11,929			26,033			22,918
Interest expense	(9,992		)	(9,992		)	(19,874		)	(19,874		)
Net income	3,400			1,937			6,159			3,044
Preferred return	(3,894		)	(1,334		)	(7,745		)	(7,745		)
Net income (loss) to members	$	(494	)	$	603		$	(1,586	)	$	(4,701	)

Net income (loss) related to Worldwide Plaza includes the Company's pro rata share of Worldwide Plaza net income (loss) to members as well as the Company's preferred return less depreciation and amortization expenses related to the amortization of the basis difference. The following table presents the components of the income (loss) related to the Company's investment in Worldwide Plaza for the periods presented, which is included in income (loss) from unconsolidated joint venture on the consolidated statements of operations and comprehensive loss.



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Company's preferred return	$	3,894		$	3,894		$	7,745		$	7,745
Company's share of net loss from Worldwide Plaza	(242		)	(957		)	(776		)	(2,299		)
Amortization of basis difference	(3,082		)	(3,241		)	(6,164		)	(6,482		)
Reallocation of net loss to members	—			1,252			—			—
Company's income (loss) from Worldwide Plaza	$	570		$	948		$	805		$	(1,036	)