Equity Method Investment

6 Months Ended

Jun. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment

Equity Method Investment

City Center

On February 25, 2016, the Company acquired a 37% interest in Durham City Center II, LLC (“City Center”) for purposes of developing a 22-story mixed use tower in Durham, North Carolina. As of June 30, 2017 and December 31, 2016, the Company has invested $11.0 million and $10.3 million, respectively, in City Center. The Company has agreed to guarantee 37% of the construction loan for City Center; however, the loan is collateralized by 100% of the assets of City Center. As of June 30, 2017, $10.8 million has been drawn against the construction loan, of which $5.5 million is attributable to the Company's portion of the loan.

As of June 30, 2017 and December 31, 2016, the difference between the carrying value of the Company’s initial investment in City Center and the amount of underlying equity was immaterial. For the three and six months ended June 30, 2017 and 2016, City Center did not have any operating activity, and therefore the Company did not receive any dividends or allocated income. 

Based on the terms of City Center’s operating agreement, the Company has concluded that City Center is a variable interest entity, and that the Company holds a variable interest. The Company does not have the power to direct the activities of the project that most significantly impact its performance.   Accordingly, the Company is not the project’s primary beneficiary and, therefore, does not consolidate City Center in its consolidated financial statements.