Investments in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

6. 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 December 31,
Our Share of Investments:	Ownership	2022			2021
712 Fifth Avenue (1)	50.0%	$	-		$	-
Market Center	67.0%		192,948			185,344
55 Second Street (2)	44.1%		85,340			88,284
111 Sutter Street	49.0%		-	(3)		35,182
1600 Broadway (2)(4)	9.2%		9,113			-
60 Wall Street (2)	5.0%		25,034			19,230
One Steuart Lane (2)	35.0% (5)		77,961			76,428
Oder-Center, Germany (2)	9.5%		3,107			3,628
Investments in unconsolidated joint ventures		$	393,503		$	408,096

(Amounts in thousands)	For the Year Ended December 31,
Our Share of Net (Loss) Income:	2022				2021			2020
712 Fifth Avenue (1)	$	-			$	(10,265	)	$	687
Market Center		(10,405	)			(11,848	)		(11,315	)
55 Second Street (2)		(2,943	)			(2,912	)		(2,723	)
111 Sutter Street		(35,190	)	(3)		(2,658	)		(3,172	)
1600 Broadway (2)(4)		(9	)			-			-
60 Wall Street (2)		(89	)			66			(70	)
One Steuart Lane (2)		(4,696	)			2,678			(2,043	)
Oder-Center, Germany (2)		81				43			17
Loss from unconsolidated joint ventures	$	(53,251	)		$	(24,896	)	$	(18,619	)

(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. During the year ended December 31, 2022, the joint venture had net income of $1,804 of which our 50.0% share was $902. Accordingly, our basis in the joint venture, taking into account our share of income, was negative $13,427 as of December 31, 2022.

(2)As of December 31, 2022, the carrying amount of our investments in 55 Second Street, 1600 Broadway, 60 Wall Street, One Steuart Lane and Oder-Center, Germany was greater than our share of equity in these investments by $466, $323, $2,574, $645, $3,847, respectively, and primarily represents the unamortized portion of our capitalized acquisition costs.

(3)In the fourth quarter of 2022, the joint venture that owns 111 Sutter Street recognized a $64,663 real estate impairment loss, of which our 49.0% share was $31,685. This impairment loss, together with our share of operating losses recognized during the fourth quarter, caused our basis in the joint venture to become negative $107 as of December 31, 2022. Since we have no further obligation to fund additional capital to the joint venture, we are no longer required to recognize our proportionate share of earnings from the joint venture until such time that our basis in the joint venture becomes positive. In the meantime, we will 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.

(4)Acquired on February 24, 2022.

(5)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 December 31,
Balance Sheets:	2022		2021
Real estate, net	$	2,377,084	$	2,246,152
Cash and cash equivalents and restricted cash		252,540		216,910
Intangible assets, net		69,599		58,590
For-sale residential condominium units (1)		322,232		359,638
Other assets		87,054		46,646
Total assets	$	3,108,509	$	2,927,936
Notes and mortgages payable, net	$	1,834,916	$	1,791,404
Intangible liabilities, net		10,972		18,397
Other liabilities		50,783		61,097
Total liabilities		1,896,671		1,870,898
Equity		1,211,838		1,057,038
Total liabilities and equity	$	3,108,509	$	2,927,936

(Amounts in thousands)	For the Year Ended December 31,
Income Statements:	2022				2021				2020
Revenues:
Rental revenue	$	194,031			$	229,420			$	243,713
Other income		65,850		(2)		139,705		(2)		2,828
Total revenues		259,881				369,125				246,541
Expenses:
Operating		152,313		(2)		220,396		(2)		109,114
Depreciation and amortization		85,949				107,079				117,640
Total expenses		238,262				327,475				226,754
Other income (expense):
Interest and other (loss) income, net		991				(111	)			(36	)
Interest and debt expense		(62,173	)			(63,493	)			(58,239	)
Real estate impairment loss		(64,663	)	(3)		-				-
Loss before income taxes		(104,226	)			(21,954	)			(38,488	)
Income tax expense		(60	)			(32	)			(47	)
Net loss	$	(104,286	)		$	(21,986	)		$	(38,535	)

(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.

(3)Represents a real estate impairment loss on 111 Sutter Street, of which our share is $31,685.