Investments in Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2022

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

On February 24, 2022, a joint venture, in which we own a 9.2% interest, acquired a 26,000 square foot retail condominium at 1600 Broadway in Manhattan for $191,500,000. In connection with the acquisition, the joint venture obtained a 10-year, $98,000,000 interest-only loan that has a fixed rate of 3.45%. The property, which is located in the heart of Times Square, is 100% leased to Mars, Inc. for a 15-year term and serves as the New York flagship location for M&M’s World. We account for our investment in 1600 Broadway under the equity method of accounting from the date of acquisition.

The following tables summarize our investments in unconsolidated joint ventures as of the dates thereof and the income or loss from these investments for the periods set forth below.


(Amounts in thousands)	Paramount	As of
Our Share of Investments:	Ownership	September 30, 2022		December 31, 2021
712 Fifth Avenue (1)	50.0%	$	-	$	-
Market Center	67.0%		197,050		185,344
55 Second Street (2)	44.1%		85,988		88,284
111 Sutter Street	49.0%		33,012		35,182
1600 Broadway (2)(3)	9.2%		9,369		-
60 Wall Street (2)	5.0%		20,630		19,230
One Steuart Lane (2)	35.0% (4)		79,355		76,428
Oder-Center, Germany (2)	9.5%		3,381		3,628
Investments in unconsolidated joint ventures		$	428,785	$	408,096


	For the Three Months Ended						For the Nine Months Ended
(Amounts in thousands)	September 30,						September 30,
Our Share of Net Income (Loss):	2022			2021			2022			2021
712 Fifth Avenue (1)	$	-		$	431		$	-		$	(10,697	)
Market Center		(2,811	)		(2,228	)		(7,661	)		(9,272	)
55 Second Street (2)		(825	)		(702	)		(2,296	)		(2,171	)
111 Sutter Street		(748	)		(685	)		(2,207	)		(1,874	)
1600 Broadway (2)(3)		30			-			(38	)		-
60 Wall Street (2)		(23	)		18			42			52
One Steuart Lane (2)		(1,516	)		3,363			(3,303	)		3,138
Oder-Center, Germany (2)		96			26			137			14
(Loss) income from unconsolidated joint ventures	$	(5,797	)	$	223		$	(15,326	)	$	(20,810	)

(1)

At December 31, 2021, our basis in the joint venture that owns 712 Fifth Avenue was negative $14,329. Since we have no further obligation to fund additional capital to the joint venture, we no longer recognize our proportionate share of earnings from the joint venture. Instead, we recognize income only to the extent we receive cash distributions from the joint venture and recognize losses to the extent we make cash contributions to the joint venture. For the nine months ended September 30, 2022, the joint venture had net income of $588 of which our 50.0% share was $294. Accordingly, our basis in the joint venture, taking into account our share of income, was negative $14,035 as of September 30, 2022. Additionally, during the nine months ended September 30, 2021, we received $1,053 in distributions from the joint venture and made an $11,750 contribution to the joint venture, which are included in "(loss) income from unconsolidated joint ventures" on our consolidated statements of income for the nine months ended September 30, 2021.

(2)

As of September 30, 2022, the carrying amount of our investments in 55 Second Street, 1600 Broadway, 60 Wall Street, One Steuart Lane and Oder-Center is greater than our share of equity in these investments by $471, $325, $2,586, $645 and $4,138, respectively, and primarily represents the unamortized portion of our capitalized acquisition costs.

(3)

Acquired on February 24, 2022.

(4)

Represents our consolidated Residential Development Fund’s (“RDF”) economic interest in One Steuart Lane, a for-sale residential condominium project. Our economic interest in One Steuart Lane (based on our 7.4% ownership interest in RDF) is 2.6%.

The following tables provide the combined summarized financial information of our unconsolidated joint ventures as of the dates thereof and for the periods set forth below.


(Amounts in thousands)	As of
Balance Sheets:	September 30, 2022		December 31, 2021
Real estate, net	$	2,410,055	$	2,246,152
Cash and cash equivalents and restricted cash		214,815		216,910
Intangible assets, net		74,927		58,590
For-sale residential condominium units (1)		322,696		359,638
Other assets		85,360		46,646
Total assets	$	3,107,853	$	2,927,936

Notes and mortgages payable, net	$	1,833,023	$	1,791,404
Intangible liabilities, net		12,700		18,397
Other liabilities		58,134		61,097
Total liabilities		1,903,857		1,870,898
Equity		1,203,996		1,057,038
Total liabilities and equity	$	3,107,853	$	2,927,936


	For the Three Months Ended						For the Nine Months Ended
(Amounts in thousands)	September 30,						September 30,
Income Statements:	2022			2021			2022			2021
Revenues:
Rental revenue	$	41,145		$	57,998		$	153,181		$	171,721
Other income (2)		15,250			92,360			65,276			93,698
Total revenues		56,395			150,358			218,457			265,419
Expenses:
Operating (2)		34,234			102,949			129,035			153,526
Depreciation and amortization		17,734			26,432			68,140			80,899
Total expenses		51,968			129,381			197,175			234,425
Other income (expense):
Interest and other income (loss)		471			(27	)		487			(83	)
Interest and debt expense		(13,967	)		(17,503	)		(47,900	)		(45,135	)
(Loss) income before income taxes		(9,069	)		3,447			(26,131	)		(14,224	)
Income tax expense		(11	)		(17	)		(54	)		(32	)
Net (loss) income	$	(9,080	)	$	3,430		$	(26,185	)	$	(14,256	)

(1)

Represents the cost of residential condominium units at One Steuart Lane that are available for sale.

(2)

Includes proceeds and cost of sales from the sale of residential condominium units at One Steuart Lane.