6. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

As of December 31, 2015, the Company had an aggregate investment of $33.8 million in its equity method joint ventures with unaffiliated third parties.

Included in the Company’s investments in unconsolidated joint ventures as of December 31, 2015 is one unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture is primarily established to develop real estate property for long-term investment and was deemed to be a VIE primarily based on the fact there are disproportionate voting and economic rights within the joint venture. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has shared control of this entity along with the entity’s partner and therefore does not have controlling financial interests in this VIE. The Company’s aggregate investment in this VIE was $30.9 million. The Company has not provided financial support to this VIE that it was not previously contractually required to provide. In general, future costs of development not financed through a third party will be funded with capital contributions from the Company and its outside partner in accordance with their respective ownership percentages.

The following is a summary of the Company’s investments in unconsolidated joint ventures, which we account for using the equity method, as of December 31, 2015 and 2014 ($ in thousands):



Entity	December 31, 2015		December 31, 2014

Ladder Capital Realty Income Partnership I LP	$	49	$	3,898
Grace Lake JV, LLC	2,891		2,143
24 Second Avenue Holdings LLC	30,857		—
Company’s investment in unconsolidated joint ventures	$	33,797	$	6,041

The following is a summary of the Company’s allocated earnings (losses) based on its ownership interests from investment in unconsolidated joint ventures for the years ended December 31, 2015, 2014 and 2013 ($ in thousands):



	Year Ended December 31,
Entity	2015			2014		2013

Ladder Capital Realty Income Partnership I LP	$	116		$	1,090	$	2,568
Grace Lake JV, LLC	823			900		635
24 Second Avenue Holdings LLC	(568		)	—		—
Earnings (loss) from investment in unconsolidated joint ventures	$	371		$	1,990	$	3,203

Ladder Capital Realty Income Partnership I LP

On April 15, 2011, the Company entered into a limited partnership agreement, becoming the general partner and acquiring a 10% limited partnership interest in Ladder Capital Realty Income Partnership I LP (“LCRIP I”) to invest in first mortgage loans held for investment and acted as general partner and Manager to LCRIP I. The Company accounts for its interest in LCRIP I using the equity method of accounting, as it exerts significant influence but the unrelated limited partners have substantive participating rights, as well as kick-out rights. During the quarter ended June 30, 2015, the last loan held by LCRIP I was repaid. LCRIP I will continue in existence until the fifth anniversary of the date of its closing, April 15, 2016. Simultaneously with the execution of the LCRIP I Partnership Agreement, the Company was engaged as the manager of LCRIP I and is entitled to a fee based upon the average net equity invested in LCRIP I, which is subject to a fee reduction in the event average net equity invested in LCRIP I exceeds $100.0 million. During the years ended December 31, 2015, 2014 and 2013, the Company recorded $77.4 thousand, $0.4 million and $0.8 million, respectively, in management fees, which is reflected in fee and other income in the combined consolidated statements of income.

During the years ended December 31, 2015 and 2014, there were no sales of loans to LCRIP I. During the year ended December 31, 2013, the Company sold one loan to LCRIP I for aggregate proceeds of $17.2 million, which exceeded its carrying value by $0.1 million, and is included in sale of loans, net on the combined consolidated statements of operations. It is the Company’s policy to defer 10% of the gain on any sale of loans to LCRIP I, representing its 10% limited partnership interest, until such loans are subsequently sold by LCRIP I or repaid.

The Company is entitled to income allocations and distributions based upon its limited partnership interest of 10% and is eligible for additional distributions of up to 25% if certain return thresholds are met upon asset sale, full prepayment or other disposition. During the years ended December 31, 2015, 2014 and 2013, the return thresholds were met on certain assets that have been fully realized. The Company is obligated to provide LCRIP I 10% of any costs related to the assets held in its portfolio as of December 31, 2015.

Grace Lake JV, LLC

In connection with the origination of a loan in April 2012, the Company received a 25% equity kicker with the right to convert upon a capital event. On March 22, 2013, the loan was refinanced and the Company converted its interest into a 25% limited liability company membership interest in Grace Lake JV, LLC (“Grace Lake JV”), which holds an investment in an office building complex. After taking into account the preferred return of 8.25% and the return of all equity remaining in the property to the Company’s operating partner, the Company is entitled to 25% of the distribution of all excess cash flows and all disposition proceeds upon any sale. The Company is not legally required to provide any future funding to Grace Lake JV. The Company accounts for its interest in Grace Lake JV using the equity method of accounting, as it has a 25% investment, compared to the 75% investment of its operating partner.

24 Second Avenue Holdings LLC

On August 7, 2015, the Company entered into a joint venture, 24 Second Avenue Holdings LLC (“24 Second Avenue”) with an operating partner to invest in a condominium development located at 24 Second Avenue, New York, NY. The Company accounts for its interest in 24 Second Avenue using the equity method of accounting as its joint venture partner is the managing member of 24 Second Avenue and has substantive participating rights. The Company contributed $31.1 million for a 73.8% interest, with the operating partner holding the remaining 26.2% interest. The Company is entitled to income allocations and distributions based upon its membership interest of 73.8% until the Company achieves a 1.70x profit multiple, after which, ultimately, income is allocated and distributed 50% to the Company and 50% to the operating partner. During the year ended December 31, 2015, the Company recorded $0.6 million in expenses, which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the combined consolidated statements of income. The Company capitalizes interest related to the cost of its investment as 24 Second Avenue has activities in progress necessary to construct and ultimately sell condominium units. During the year ended December 31, 2015, the Company capitalized $0.3 million of interest expense, using a weighted average interest rate, which is recorded in investment in unconsolidated joint ventures in the combined consolidated balance sheets.

Combined Summary Financial Information for Unconsolidated Joint Ventures

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of December 31, 2015 and 2014 ($ in thousands):



	December 31, 2015		December 31, 2014

Total assets	$	131,214	$	118,762
Total liabilities	88,973		81,073
Partners’/members’ capital	$	42,241	$	37,689

The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the years ended December 31, 2015, 2014 and 2013 ($ in thousands):



	Year Ended December 31,
	2015		2014		2013

Total revenues	$	18,886	$	26,059	$	36,135
Total expenses	15,849		16,864		10,554
Net income (loss)	$	3,037	$	9,195	$	25,581