Investment in Unconsolidated Real Estate

3 Months Ended

Mar. 31, 2014

Investment in Unconsolidated Real Estate

12. Investment in Unconsolidated Real Estate

We currently manage and hold a 15% equity interest in a joint venture (“the JV”) that indirectly owns three properties located at 3001-3233 Mission Oaks Boulevard in Ventura County.  We account for this investment under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences from other-than-temporary impairments, if applicable). The carrying value of our JV investment includes a gross $2.8 million basis adjustment resulting from the contribution of our equity interest as part of the formation transactions that occurred on July 24, 2013.  The basis adjustment is being amortized over the estimated useful life of the underlying assets.

Our Predecessor owned a 70% interest in a property located at 10439-10477 Roselle Street.  This was a tenancy-in-common interest in which control was shared equally with the other 30% tenant-in-common partner.  As part of the formation transactions, on July 24, 2013, we acquired the 30% interest not previously owned by us in exchange for 2,828 units in our Operating Partnership. Before this transaction, this investment was accounted for under the equity method of accounting.  

The following tables present combined summarized financial information of our equity method investment properties. Amounts provided are the total amounts attributable to the entities and do not represent our proportionate share:

	Three Months Ended March 31,
	2014(1)			2013(2)
Revenues	$	1,812,000		$	2,146,000
Expenses		(1,605,000	)		(2,220,000	)
Net income (loss)	$	207,000		$	(74,000	)

	March 31, 2014			December 31, 2013
Assets	$	62,092,000		$	61,422,000
Liabilities		(42,833,000	)		(42,475,000	)
Partners'/members' equity	$	19,259,000		$	18,947,000

(1) Includes summarized financial information for our equity method investment property located at 3001-3233 Mission Oaks Boulevard.

(2) Includes summarized financial information for properties located at 3001-3233 Mission Oaks Boulevard and 10439-10477 Roselle St.

Our unconsolidated real estate entities incurred management, leasing and development fees, which were payable to us, of $94,000 and $0.1 million for the three months ended March 31, 2014 and 2013, respectively.

We recognized management, leasing and development revenue of $139,000 and $0.1 million for the three months ended March 31, 2014 and 2013, respectively, which has been recorded in management, leasing and development services.