REAL ESTATE PARTNERSHIPS

Federal/Lion Venture LP

We have a joint venture arrangement (the “Partnership”) with affiliates of a discretionary fund created and advised by ING Clarion Partners (“Clarion”). We own 30% of the equity in the Partnership and Clarion owns 70%. We hold a general partnership interest, however, Clarion also holds a general partnership interest and has substantive participating rights. We cannot make significant decisions without Clarion’s approval. Accordingly, we account for our interest in the Partnership using the equity method. As of December 31, 2014, the Partnership owned six retail real estate properties. We are the manager of the Partnership and its properties, earning fees for acquisitions, dispositions, management, leasing, and financing. Intercompany profit generated from fees is eliminated in consolidation. We also have the opportunity to receive performance-based earnings through our Partnership interest. Accounting policies for the Partnership are similar to accounting policies followed by the Trust. The Partnership is subject to a buy-sell provision which is customary for real estate joint venture agreements and the industry. Either partner may initiate this provision at any time, which could result in either the sale of our interest or the use of available cash or borrowings to acquire Clarion’s interest. As of December 31, 2014, we have made total contributions of $48.8 million and received total distributions of $30.4 million.

The following tables provide summarized operating results and the financial position of the Partnership:



	Year Ended December 31,
	2014		2013		2012
	(In thousands)
OPERATING RESULTS
Revenue	$	18,329	$	19,209	$	19,051
Expenses
Other operating expenses	5,948		5,999		5,234
Depreciation and amortization	5,678		5,506		5,508
Interest expense	2,759		3,363		3,376
Total expenses	14,385		14,868		14,118
Net income before gain on sale of real estate	3,944		4,341		4,933
Gain on sale of real estate	14,507		—		—
Net income	$	18,451	$	4,341	$	4,933
Our share of net income from real estate partnership before gain on sale of real estate	$	1,423	$	1,498	$	1,815
Our share of gain on sale of real estate	$	4,401	$	—	$	—



	December 31,
	2014		2013
	(In thousands)
BALANCE SHEETS
Real estate, net	$	149,203	$	170,867
Cash	2,864		2,210
Other assets	5,346		5,668
Total assets	$	157,413	$	178,745
Mortgages payable	$	34,385	$	56,922
Other liabilities	3,673		4,100
Partners’ capital	119,355		117,723
Total liabilities and partners’ capital	$	157,413	$	178,745
Our share of unconsolidated debt	$	10,316	$	17,077
Our investment in real estate partnership	$	32,367	$	32,264

On June 5, 2014, the Partnership repaid an $11.9 million mortgage loan secured by one of its properties at par prior to the original maturity date of July 5, 2014. The partners made additional capital contributions totaling $11.9 million to repay the mortgage loan, of which our contribution was $3.6 million.

On July 24, 2014, the Partnership sold the fee interest in Pleasant Shops in Weymouth, Massachusetts for a sales price of $34.3 million, resulting in a gain on sale of $14.5 million. Our share of the gain was $4.4 million. The partners received distributions totaling $32.8 million as a result of the sale, of which our distribution was $10.4 million.

On September 2, 2014, the Partnership repaid a $10.5 million mortgage loan secured by one of its properties at par prior to the original maturity date of December 1, 2014. The partners made additional capital contributions totaling $10.5 million to repay the mortgage loan, of which our contribution was $3.2 million.

Taurus Newbury Street JV II Limited Partnership

In May 2010, we formed Taurus Newbury Street JV II Limited Partnership ("Newbury Street Partnership"), a joint venture with an affiliate of Taurus Investment Holdings, LLC ("Taurus"), to acquire, operate and redevelop properties located primarily in the Back Bay section of Boston, Massachusetts. We held an 85% limited partnership interest in Newbury Street Partnership and Taurus held a 15% limited partnership interest and served as general partner. As general partner, Taurus was responsible for the operation and management of the properties, subject to our approval on major decisions. Accordingly, given Taurus' role as general partner, we accounted for our interest in Newbury Street Partnership using the equity method. Due to the timing of receiving financial information from the general partner, our share of earnings was recorded one quarter in arrears. On October 31, 2011, our Newbury Street Partnership sold its entire portfolio of three buildings for $44.0 million. Due to our earnings being recorded one quarter in arrears, we recognized the gain on sale of $11.9 million in the first quarter of 2012.