Note 5 — Investment in Unconsolidated Joint Venture

On October 30, 2013, the Company purchased a 48.9% equity interest in Worldwide Plaza for a contract purchase price of $220.1 million, based on the property value for Worldwide Plaza of $1.3 billion less $875.0 million of debt on the property. As of June 30, 2016, the Company's pro rata portion of debt secured by 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. As a result of new accounting guidance, the Company has determined that Worldwide Plaza is a VIE, but is not required to consolidate the activities of Worldwide Plaza. 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. See Note 3 — Summary of Significant Accounting Policies.

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 (the "WWP Option") to purchase the balance of the equity interest in Worldwide Plaza beginning on the first day of the 39th month following the closing of the acquisition, or January 1, 2017, 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 the WWP Option, the Company will be subject to a fee in the amount of $25.0 million. See Note 17 — Subsequent Events for additional disclosure regarding the WWP Option.

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, 2016 and December 31, 2015, the carrying value of the Company's investment in Worldwide Plaza was $201.1 million and $215.4 million, respectively.

The Company is party to litigation related to Worldwide Plaza. See Note 11 — Commitments and Contingencies.

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, 2016 and December 31, 2015 for Worldwide Plaza are as follows:



(In thousands)	June 30, 2016			December 31, 2015
	(Unaudited)
Real estate assets, at cost	$	715,266		$	714,642
Less accumulated depreciation and amortization	(127,218		)	(117,092		)
Total real estate assets, net	588,048			597,550
Cash and cash equivalents	3,935			9,036
Other assets	267,127			259,894
Total assets	$	859,110		$	866,480

Debt	$	875,000		$	875,000
Other liabilities	16,914			15,515
Total liabilities	891,914			890,515
Deficit	(32,804		)	(24,035		)
Total liabilities and deficit	$	859,110		$	866,480

Company's basis	$	201,114		$	215,370

The condensed statements of operations for the three and six months ended June 30, 2016 and 2015 for Worldwide Plaza are as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Rental income	$	31,120		$	30,751		$	62,609		$	61,265
Other revenue	1,230			1,232			2,460			2,449
Total revenue	32,350			31,983			65,069			63,714
Operating expenses:
Operating expenses	11,624			11,727			23,610			23,967
Depreciation and amortization	6,847			6,864			13,619			13,714
Total operating expenses	18,471			18,591			37,229			37,681
Operating income	13,879			13,392			27,840			26,033
Interest expense	(10,255		)	(9,992		)	(20,509		)	(19,874		)
Net income	3,624			3,400			7,331			6,159
Company's preferred return	(3,987		)	(3,894		)	(8,054		)	(7,745		)
Net loss to members	$	(363	)	$	(494	)	$	(723	)	$	(1,586	)

Net income (loss) related to Worldwide Plaza includes the Company's preferred return, the Company's pro rata share of Worldwide Plaza net income (loss) to members and amortization of the basis difference. The following table presents the components of the income related to the Company's investment in Worldwide Plaza for the periods presented, which is included in income 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)	2016			2015			2016			2015
Company's preferred return	$	3,987		$	3,894		$	8,054		$	7,745
Company's share of net loss from Worldwide Plaza	(177		)	(242		)	(353		)	(776		)
Amortization of basis difference	(3,053		)	(3,082		)	(5,856		)	(6,164		)
Company's income from Worldwide Plaza	$	757		$	570		$	1,845		$	805