Investments in Unconsolidated Real Estate Ventures (Tables)

3 Months Ended

Mar. 31, 2024

Investments in Unconsolidated Real Estate Ventures

Summary of unconsolidated investments

The following is a summary of the composition of our investments in unconsolidated real estate ventures:

	Effective
	Ownership
Real Estate Venture	Interest (1)	March 31, 2024		December 31, 2023
		(In thousands)
Prudential Global Investment Management ("PGIM") (2)	50.0%	$	4,358	$	163,375
J.P. Morgan Global Alternatives ("J.P. Morgan") (3)	50.0%		73,592		72,742
4747 Bethesda Venture	20.0%		12,141		13,118
Brandywine Realty Trust	30.0%		13,625		13,681
CBREI Venture (4)	10.0%		169		180
Landmark Partners (5)	18.0%		585		605
Other			312		580
Total investments in unconsolidated real estate ventures (6) (7)		$	104,782	$	264,281

(1) Reflects our effective ownership interests as of March 31, 2024. We have multiple investments with certain venture partners in the underlying real estate.

(2) In February 2024, the venture sold its interest in Central Place Tower for a gross sales price of $325.0 million.

(3) J.P. Morgan is the advisor for an institutional investor.

(4) Excludes The Foundry for which we have a zero-investment balance and discontinued applying the equity method of accounting after September 30, 2023. In April 2024, the lender foreclosed on the loan secured by The Foundry and took possession of the property.

(5) Excludes the L'Enfant Plaza Assets for which we have a zero-investment balance and discontinued applying the equity method of accounting after September 30, 2022.

(6) Excludes (i) 10.0% subordinated interest in one commercial building, (ii) the Fortress Assets, (iii) the L'Enfant Plaza Assets and (iv) The Foundry held through unconsolidated real estate ventures. See Note 1 for more information. Also, excludes our interest in an investment in the real estate venture that owns 1101 17th Street for which we have discontinued applying the equity method of accounting since June 30, 2018 because we received distributions in excess of our contributions and share of earnings, which reduced our investment to zero; further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support.

(7) As of March 31, 2024 and December 31, 2023, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $9.0 million and $8.7 million, resulting principally from our zero-investment balance in certain real estate ventures and capitalized interest.

	Weighted
	Average Effective
	Interest Rate (1)	March 31, 2024		December 31, 2023
		(In thousands)
Variable rate (2)	5.73%	$	175,000	$	175,000
Fixed rate (3)	4.13%		60,000		60,000
Mortgage loans (4)			235,000		235,000
Unamortized deferred financing costs and premium / discount, net			(7,847)		(8,531)
Mortgage loans, net (4) (5)		$	227,153	$	226,469

(1) Weighted average effective interest rate as of March 31, 2024.

(2) Includes variable rate mortgages with interest rate cap agreements.

(3) Includes variable rate mortgages with interest rates fixed by interest rate swap agreements.

(4) Excludes mortgage loans related to the Fortress Assets, the L'Enfant Plaza Assets and The Foundry.

(5) See Note 17 for additional information on guarantees of the debt of certain of our unconsolidated real estate ventures.

	March 31, 2024		December 31, 2023
	(In thousands)
Combined balance sheet information: (1)
Real estate, net	$	450,949	$	729,791
Other assets, net		76,246		137,771
Total assets	$	527,195	$	867,562
Mortgage loans, net	$	227,153	$	226,469
Other liabilities, net		29,266		47,251
Total liabilities		256,419		273,720
Total equity		270,776		593,842
Total liabilities and equity	$	527,195	$	867,562

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Combined income statement information: (1)
Total revenue	$	13,282	$	20,033
Operating income (2)		4,524		2,491
Net income (loss) (2)		644		(1,720)

(1) Excludes amounts related to the Fortress Assets and the L'Enfant Plaza Assets. Excludes combined balance sheet information for both periods presented and combined income statement information for the three months ended March 31, 2024 related to The Foundry as we discontinued applying the equity method of accounting after September 30, 2023.

(2) Includes the gain on the sale of Central Place Tower of $894,000 for the three months ended March 31, 2024.

Summary of unconsolidated investments disposition activity

						Proportionate
	Real Estate			Gross		Share of
	Venture		Ownership	Sales		Aggregate
Date Disposed	Partner	Assets	Percentage	Price		Gain (1)
				(In thousands)
February 13, 2024	PGIM	Central Place Tower	50.0%	$	325,000	$	480

(1) Additionally, we recognized $1.4 million related to certain previously recorded contingent liabilities, which were relieved in connection with the sale and included in "Gain on the sale of real estate, net" in our statement of operations.