Investments in Unconsolidated Real Estate Ventures (Tables)

9 Months Ended

Sep. 30, 2024

Investments in Unconsolidated Real Estate Ventures.

Schedule 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)	September 30, 2024		December 31, 2023
		(In thousands)
J.P. Morgan Global Alternatives ("J.P. Morgan") (2)	50.0%	$	73,978	$	72,742
4747 Bethesda Venture	20.0%		11,208		13,118
Brandywine Realty Trust	30.0%		13,781		13,681
Prudential Global Investment Management ("PGIM") (3)	50.0%		664		163,375
Landmark Partners (4)	18.0%		560		605
CBREI Venture (5)	10.0%		175		180
Other			316		580
Total investments in unconsolidated real estate ventures (6) (7)		$	100,682	$	264,281

(1) Reflects our effective ownership interests as of September 30, 2024. We have multiple investments with certain venture partners in the underlying real estate.

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

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

(4) 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. In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza Assets and took possession of the properties.

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

(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. 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 September 30, 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 $10.3 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)	September 30, 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			(6,480)		(8,531)
Mortgage loans, net (4) (5)		$	228,520	$	226,469

(1) Weighted average effective interest rate as of September 30, 2024.

(2) Includes variable rate mortgage loans with interest rate cap agreements.

(3) Includes variable rate mortgage loans 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. In April 2024, the lender foreclosed on the mortgage loan secured by The Foundry and took possession of the property. In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza Assets and took possession of the properties.

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

	September 30, 2024		December 31, 2023
	(In thousands)
Combined balance sheet information: (1)
Real estate, net	$	447,747	$	729,791
Other assets, net		64,955		137,771
Total assets	$	512,702	$	867,562
Mortgage loans, net	$	228,520	$	226,469
Other liabilities, net		26,538		47,251
Total liabilities		255,058		273,720
Total equity		257,644		593,842
Total liabilities and equity	$	512,702	$	867,562

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands)
Combined income statement information: (1)
Total revenue	$	7,903	$	23,570	$	29,097	$	68,555
Operating income (loss) (2)		776		(20,584)		6,714		(13,005)
Net loss (2)		(3,226)		(27,622)		(5,093)		(31,557)

(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 and nine months ended September 30, 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 nine months ended September 30, 2024. Includes the gain on the sale of Stonebridge at Potomac Town Center of $4.6 million for the three and nine months ended September 30, 2023. Includes an impairment loss of $30.1 million for the three and nine months ended September 30, 2023.

Schedule 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.