Investments in and Advances to Unconsolidated Real Estate Ventures

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



Real Estate Venture Partners	Ownership Interest ⁽¹⁾	September 30, 2018		December 31, 2017
		(In thousands)
Canadian Pension Plan Investment Board ("CPPIB")	55.0% - 79.2%	$	136,877	$	36,317
Landmark	1.8% - 49.0%	86,561		95,368
CBREI Venture	5.0% - 64.0%	75,713		79,062
Berkshire Group	50.0%	38,124		27,761
Brandywine	30.0%	13,858		13,741
CIM Group ("CIM") and Pacific Life Insurance Company ("PacLife")	16.7%	9,664		—
JP Morgan	—%	—		9,296
Other		137		246
Total investments in unconsolidated real estate ventures		360,934		261,791
Advances to unconsolidated real estate ventures		80		20
Total investments in and advances to unconsolidated real estate ventures		$	361,014	$	261,811

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⁽¹⁾	Ownership interests as of September 30, 2018. We have multiple investments with certain venture partners with varying ownership interests.

In January 2018, we invested $10.1 million for a 16.67% interest in a real estate venture with CIM and PacLife, which purchased the 1,152-key Wardman Park hotel, located adjacent to the Woodley Park Metro Station in northwest Washington, D.C. Prior to the acquisition by this venture, the JBG Legacy Funds owned a 47.64% interest in the Wardman Park hotel. The JBG Legacy Funds did not receive any proceeds from the sale, as the net proceeds were used to satisfy the prior mortgage debt. A third-party asset manager oversees the hotel operations on behalf of the venture and our involvement will increase only to the extent the land development opportunity becomes the primary business plan for the asset.

In February 2018, we entered into a real estate venture with CPPIB to develop and own 1900 N Street, an under construction office asset in Washington, D.C. We contributed 1900 N Street, valued at $95.9 million, to the real estate venture, and CPPIB has committed to contribute approximately $101.0 million to the venture for a 45.0% interest, which will reduce our ownership interest from 100.0% at the real estate venture's formation to 55.0% as contributions are funded.

In June 2018, the real estate venture with CPPIB that owns 1101 17th Street, a 216,000 square foot office building located in Washington, D.C., in which we have a 55.0% ownership interest, refinanced a mortgage loan payable that was collateralized by the property. The terms of the new mortgage loan eliminated the principal guaranty provisions that had been included in the prior loan. Distributions and our share of the cumulative earnings of the venture exceeded our investment in the venture by $5.4 million, which resulted in a negative investment balance. After the elimination of the principal guaranty provisions in the prior mortgage loan, we no longer guarantee the obligations of the venture or provide further financial support to the venture. Accordingly, we recognized the $5.4 million negative investment balance as income within “Income from unconsolidated real estate ventures, net” in our statements of operations for the nine months ended September 30, 2018. We have also suspended the equity method accounting for this real estate venture. We will recognize as income any future distributions from the venture until our share of unrecorded earnings and contributions exceed the cumulative excess distributions previously recognized in income. For the three and nine months ended September 30, 2018, we recognized income of $890,000 related to a distribution from 1101 17th Street, which is included in “Income from unconsolidated real estate ventures, net” in our statement of operations.

In August 2018, JP Morgan, our partner in the real estate venture that owned the Investment Building, a 401,000 square foot office building located in Washington, D.C., acquired our 5.0% interest in the venture for $24.6 million, resulting in a gain of $15.5 million, which is included in "Income from unconsolidated real estate ventures, net” in our statements of operations for the three and nine months ended September 30, 2018.

The following is a summary of the debt of our unconsolidated real estate ventures:



	Weighted Average Effective Interest Rate ⁽¹⁾	September 30, 2018			December 31, 2017
		(In thousands)
Variable rate ⁽²⁾	4.96%	$	536,950		$	534,500
Fixed rate ⁽³⁾	3.95%	852,674			657,701
Unconsolidated real estate ventures - mortgages payable		1,389,624			1,192,201
Unamortized deferred financing costs		(2,555		)	(2,000		)
Unconsolidated real estate ventures - mortgages payable, net ⁽⁴⁾		$	1,387,069		$	1,190,201

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⁽¹⁾	Weighted average effective interest rate as of September 30, 2018.


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


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


⁽⁴⁾	See Note 15 for additional information on guarantees of the debt of certain of our unconsolidated real estate ventures.

The following is a summary of the financial information for our unconsolidated real estate ventures:



	September 30, 2018		December 31, 2017
Combined balance sheet information:	(In thousands)
Real estate, net	$	2,425,633	$	2,106,670
Other assets, net	307,105		264,731
Total assets	$	2,732,738	$	2,371,401

Mortgages payable, net	$	1,387,069	$	1,190,201
Other liabilities, net	100,104		76,416
Total liabilities	1,487,173		1,266,617
Total equity	1,245,565		1,104,784
Total liabilities and equity	$	2,732,738	$	2,371,401



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Combined income statement information:	(In thousands)
Total revenue	$	76,247		$	46,830		$	236,938		$	83,387
Operating income	6,861			3,237			23,719			14,576
Net loss	(6,970		)	(5,191		)	(12,159		)	(414		)