Investments in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2018

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

5.	Investments in Unconsolidated Joint Ventures

Prior to March 14, 2018, RDF, in which we have a 7.4% interest, owned 20.0% of One Steuart Lane (the “Property”). On March 14, 2018, RDF transferred its 20.0% interest to a new joint venture in which it owns a 75.0% interest. Separately on March 14, 2018, RDF acquired an additional 10.0% interest in the Property from its existing partner. Subsequent to these transactions RDF owns a 25.0% economic interest in the Property, comprised of the newly acquired 10.0% interest and an indirect 15.0% interest it owns through the joint venture. Accordingly, RDF was required to consolidate its 75.0% interest in the joint venture that owns 20.0% of the Property, and reflect the 25.0% interest in this venture (5.0% economic interest in the Property) it does not own as noncontrolling interests. We continue to consolidate our 7.4% interest in RDF and reflect the 92.6% interest we do not own as noncontrolling interests. As of December 31, 2018, our economic interest in the Property was 1.85%.

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	2018			2017
712 Fifth Avenue ⁽¹⁾	50.0%	$	-		$	-
60 Wall Street ⁽²⁾	5.0%		22,353			25,083
One Steuart Lane ⁽²⁾	25.0% ⁽³⁾		52,923	⁽⁴⁾		16,031
Oder-Center, Germany ⁽²⁾	9.5%		3,587			3,648
Investments in unconsolidated joint ventures		$	78,863		$	44,762

(Amounts in thousands)	For the Year Ended December 31,
Our Share of Net Income (Loss):	2018			2017			2016
712 Fifth Avenue ⁽¹⁾	$	3,901		$	20,072		$	7,335
60 Wall Street ⁽²⁾		(518	)		(152	)		-
One Steuart Lane ⁽²⁾		(18	)		182			-
Oder-Center, Germany ⁽²⁾		103			83			78
Income from unconsolidated joint ventures	$	3,468		$	20,185		$	7,413

⁽¹⁾

As of December 31, 2018, our basis in the partnership that owns 712 Fifth Avenue, was negative $17,611 resulting from distributions made to us in excess of our share of earnings recognized. Accordingly, we no longer recognize our proportionate share of earnings from the venture because we have no further obligation to fund additional capital to the venture. Instead, we only recognize earnings to the extent we receive cash distributions from the venture.

⁽²⁾

As of December 31, 2018, the carrying amount of our investment in 60 Wall Street, One Steuart Lane and Oder Center, Germany is greater than our share of equity in these investments by $2,772, $692, $5,055, respectively, and primarily represents the unamortized portion of our capitalized acquisition costs. Basis differences allocated to depreciable assets are being amortized into “income from unconsolidated joint ventures” over the estimated useful life of the related assets.

⁽³⁾

Represents RDF’s economic interest in the Property.

⁽⁶⁾

Includes a $7,086 basis adjustment which was recorded upon the adoption of ASU 2017-05 on January 1, 2018.

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


(Amounts in thousands)	As of December 31,
Balance Sheets:	2018		2017
Real estate, net	$	1,236,989	$	1,196,116
Intangible assets		97,658		126,422
Other assets		91,552		81,596
Total assets	$	1,426,199	$	1,404,134

Notes and mortgages payable, net	$	887,882	$	886,902
Other liabilities		22,310		14,196
Total liabilities		910,192		901,098
Equity		516,007		503,036
Total liabilities and equity	$	1,426,199	$	1,404,134

(Amounts in thousands)	For the Year Ended December 31,
Income Statements:	2018			2017			2016
Rental income	$	113,156		$	113,643		$	54,420
Tenant reimbursement income		27,178			25,161			4,495
Fee and other income		7,146			1,622			1,882
Total revenues		147,480			140,426			60,797
Operating		53,417			51,390			23,670
Depreciation and amortization		48,452			46,409			12,509
Total expenses		101,869			97,799			36,179
Operating income		45,611			42,627			24,618
Interest and other income		803			381			68
Interest and debt expense		(39,406	)		(33,461	)		(12,212	)
Unrealized gain on interest rate swaps		-			1,896			4,109
Net income before income taxes		7,008			11,443			16,583
Income tax expense		(10	)		(2	)		(10	)
Net income	$	6,998		$	11,441		$	16,573