7.	Equity Investments

The Trust’s carrying amounts in its equity investments consist of the following at June 30, 2013 and December 31, 2012 (in thousands):


Venture Partner	Equity Investment	Nominal % Ownership at June 30, 2013			June 30, 2013		December 31, 2012

VHH LLC (1)	Vintage Housing LLC		75.0	%	$	32,886	$	30,534
Elad Canada Ltd	WRT-Elad One South State Equity LP		50.0	%		—		460
Elad Canada Ltd	WRT-Elad One South State Lender LP		50.0	%		23,614		24,644
Mack-Cali	WRT-Stamford LLC		20.0	%		8,773		8,501
Atrium/Northstar	10 Metrotech Loan LLC		33.3	%		10,845		10,845
Atrium Holding	RE CDO Management LLC		50.0	%		1,061		1,779
Freed	Mentor Retail LLC		49.9	%		584		551
Inland	Concord Debt Holdings LLC		33.3	%		—		—
Inland	CDH CDO LLC		24.8	%		—		—
Inland (2)	Concord Debt Holdings LLC		33.3	%		3,932		3,974
Inland (2)	CDH CDO LLC		24.8	%		1,079		322
Sealy (1)	Northwest Atlanta Partners LP		60.0	%		7,871		8,104
Sealy (1)	Newmarket GP LLC		68.0	%		—		—
Sealy (1)	Airpark Nashville GP		50.0	%		—		—
Marc Realty (1)	Brooks Building LLC		50.0	%		8,049		7,983
Marc Realty (1)	High Point Plaza LLC		50.0	%		2,175		2,241
Marc Realty (1)	1701 Woodfield LLC		50.0	%		2,036		1,977
Marc Realty (1)	Enterprise Center LLC		50.0	%		2,471		2,679
Marc Realty (1)	Atrium Mall LLC		50.0	%		3,935		—
ROIC	WRT-ROIC Lakeside Eagle LLC		50.0	%		10		—
New Valley/Starwood	Socal Office Portfolio Loan LLC		73.0	%		—		8
New Valley/Witkoff	701 7th WRT Investors LLC		60.9	%		30,602		28,735
Fenway	WRT-Fenway Wateridge LLC		50.0	%		1,722		1,522

					$	141,645	$	134,859

(1)	The Trust has determined that these equity investments are investments in VIEs. The Trust has determined that it is not the primary beneficiary of these VIEs since the Trust does not have the power to direct the activities that most significantly impact the economic performance of the VIEs.

(2)	Represents the interests acquired from Lexington Realty Trust on May 1, 2012.

The following table reflects the activity of the Trust’s equity investments for the period ended June 30, 2013 (in thousands):


Investment	Balance at December 31, 2012		Contributions		Equity Income (loss)			Distributions			Sales Price			Balance at June 30, 2013

Vintage Housing LLC (2)	$	30,534	$	—	$	4,617		$	(2,265	)	$	—		$	32,886
WRT-Elad One South State Equity LP (2)		460		865		(1,325	)		—			—			—
WRT-Elad One South State Lender LP (2)		24,644		—		1,935			(2,965	)		—			23,614
WRT-Stamford LLC		8,501		—		445			(173	)		—			8,773
10 Metrotech LLC		10,845		—		608			(608	)		—			10,845
RE CDO Management LLC		1,779		—		3,761			(4,479	)		—			1,061
Mentor Retail LLC		551		—		33			—			—			584
Concord Debt Holdings LLC		—		—		71			(71	)		—			—
CDH CDO LLC		—		—		150			(137	)			(13)		—
701 7th WRT Investors LLC (3)		28,735		1,742		1,320			(1,195	)		—			30,602
WRT-Fenway Wateridge LLC (2)		1,522		117		83			—			—			1,722
CDH CDO LLC (1)		322		—		907			(137	)			(13)		1,079
Sealy		8,104		—		(233	)		—			—			7,871
Marc Realty		14,880		—		9			(158	)					14,731
Atrium Mall LLC		—		3,935		—			—			—			3,935
WRT-ROIC Lakeside Eagle LLC		—		25		(15	)		—			—			10
SoCal Office Portfolio Loan LLC		8		—		(2	)		(6	)		—			—
Concord Debt Holdings LLC (1)		3,974		—		29			(71	)		—			3,932


Total	$	134,859	$	6,684	$	12,393		$	(12,265	)	$	(26	)	$	141,645

(1)	Represents the interests acquired from Lexington Realty Trust on May 1, 2012.

(2)	The Trust has elected to report its share of earnings from the investment on a one month lag period.

(3)	The Trust has elected to report its share of earnings from the investment on a three month lag period.

The Trust has determined that the fair value of certain of its investments in the Marc Realty ventures marginally exceed their carrying values. The Sealy Northwest Atlanta venture has a carrying value that is above the current fair value. Management believes that the decline in value is temporary. While this venture continues to aggressively market available space for lease and work with existing tenants for lease renewal, which has resulted in an increase in occupancy from 70% at December 31, 2012 to 72% at June 30, 2013, declines in occupancy could cause impairment of this venture that could be material.

WRT-Elad - The Trust holds its mezzanine loan interest in Sullivan Center through WRT-Elad One South State Lender LP (“Lender LP”) and its profits participation interest through WRT-Elad One South State Equity LP (“Equity LP”). On February 18, 2013, a forbearance agreement was entered into whereby Lender LP agreed to forbear from exercising its rights under the loan documents with respect to the borrower’s failure to pay debt service for the period from December 2012 through October 2013. To the extent such debt service is not paid, debt service will accrue and be added to the outstanding principal balance of the mezzanine loan on each applicable monthly payment date. In exchange for the forbearance, Equity LP’s future interest in the property increased by 5% to 70%, with a corresponding decrease in the borrower’s general partner’s interest. In consideration for the forbearance the borrower is required to pay a $1,400,000 fee to Lender LP on or prior to November 9, 2013. If the $1,400,000 is not paid, in lieu of payment, then Equity LP’s indirect future interest in the property will increase by an additional 6% with a corresponding decrease to the general partner’s interest.

There is a basis differential of $11,719,000 between the Trust’s carrying value of its investments in WRT-Elad One South State Equity LP and the basis reflected at the joint venture level, which is amortized over the life of the related assets. The basis differential primarily relates to a bargain purchase gain recognized at the joint venture level upon acquisition.

Concord - On February 25, 2013, the Trust sold for $25,000 a 17% interest in the equity of CDH CDO LLC, exclusive of the interest in the entity that holds the collateral management agreement of CDH CDO, to Inland American. The sale of the interest was bifurcated between the Trust’s original interest and the interest acquired from Lexington Realty Trust with $12,500 of the sales price being allocated to each interest. The Trust recognized a gain of $12,500 on the sale of its original interest and a loss of $123,000 on the sale of its other interest. The sale of the interest did not affect the voting rights within CDH CDO LLC and did not result in a change in control. The Trust will continue to account for its investments in CDH CDO LLC under the equity method.

There is a basis differential on the Concord Debt Holdings and CDH CDO LLC interests acquired from Lexington of $5,288,000. This basis differential was a result of the purchase price exceeding the book basis at the venture level for the acquired interest.

RE CDO Management - On February 20, 2013 the venture sold its subordinated interests in Sorin CDO III for $2,750,000 and transferred the Sorin CDO III collateral management agreement for $0. On March 8, 2013 the venture sold its C Tranche subordinated interests in Sorin CDO IV for $6,240,000. As a result of the sales, the Trust received distributions of approximately $4,416,000 in the aggregate. The Trust’s share of the gain has been recorded as equity in earnings of this equity investment.

Sealy - On May 30, 2013 the Trust contributed its interest in Newmarket GP LLC and its interest in Airpark Nashville GP to WRT-TRS Management Corp its wholly owned taxable REIT subsidiary. The Trust’s carrying value of both investments was zero at the time of the contributions and the transaction had no effect on the financial statements of the Trust.

New joint venture investment- The Trust has made a new investment during the quarter ended June 30, 2013 in Atrium Mall LLC that is discussed in Note 4.

The summarized balance sheets of the Trust’s Vintage Housing venture is as follows (in thousands):


	June 30, 2013		December 31, 2012
ASSETS
Real estate, net	$	351,320	$	340,666
Cash and cash equivalents		6,002		6,555
Receivables and other assets		78,468		68,559

Total Assets	$	435,790	$	415,780


LIABILITIES AND MEMBERS’ CAPITAL
Mortgage and notes payable	$	314,844	$	298,654
Other liabilities		50,963		53,687
Non-controlling interests		18,976		15,997
Members’ Capital		51,007		47,442

Total Liabilities and Members’ Capital	$	435,790	$	415,780


Carrying value of the Trust’s investment in Vintage Housing	$	32,886	$	30,534

The summarized statements of operations of the Trust’s Vintage Housing venture is as follows (in thousands):


	For the Three Month Period Ended June 30, 2013		For the Three Month Period Ended June 30, 2012		For the Six Month Period Ended June 30, 2013		For the Six Month Period Ended June 30, 2012

Total revenue	$	10,824	$	11,448	$	21,403	$	20,600

Expenses
Operating		4,486		4,292		9,303		7,996
Real estate taxes		113		134		269		303
Interest		542		1,651		995		3,321
Depreciation and amortization		244		3,324		691		5,627
Other expenses		1,371		1,544		2,723		2,725

Total expenses		6,756		10,945		13,981		19,972

Net income		4,068		503		7,422		628
Loss attributable to non-controlling interests		745		358		723		762

Net income attributable to VHH	$	4,813	$	861	$	8,145	$	1,390

Trust’s share of net income	$	2,696	$	595	$	4,617	$	934

The Trust records its investments in Vintage Housing LLC on a one month lag, therefore, amounts in the Trust’s financial statements for the period ended June 30, 2013 are based on balances and results from Vintage Housing LLC for the period ended May 31, 2013.

The summarized balance sheets of the Trust’s RE CDO Management venture is as follows (in thousands):


	June 30, 2013		December 31, 2012
ASSETS
Cash and cash equivalents	$	156	$	123
Loan receivable (1)		1,050		1,070
Receivables and other assets		933		2,400

Total Assets	$	2,139	$	3,593


LIABILITIES AND MEMBERS’ CAPITAL
Other liabilities	$	18	$	36
Members’ Capital		2,121		3,557

Total Liabilities and Members’ Capital	$	2,139	$	3,593


Carrying value of the Trust’s investments in RE CDO Management	$	1,061	$	1,779

(1)	The one remaining loan receivable is accounted for using the cost recovery method.

The summarized statement of operations of the Trust’s RE CDO Management venture is as follows (in thousands):


	For the Three Months Ended June 30, 2013			For the Three Months Ended June 30, 2012		For the Six Months Ended June 30, 2013		For the Six Months Ended June 30, 2012
Expenses
General and administrative	$	59		$	87	$	117	$	194
Other expenses		13			33		1,432		65

Total expenses		72			120		1,549		259


Other income:
Gain on sale of investment		—			—		8,940		—
Other income		55			152		131		313

Total other income		55			152		9,071		313


Net income (loss)	$	(17	)	$	32	$	7,522	$	54


Trust’s share of net income (loss)	$	(9	)	$	17	$	3,761	$	28