Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2016

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

Note 4 - Investments in Unconsolidated Entities

We participate in entities with equity interests ranging from 20% to 58% for the purpose of acquiring and/or developing land. We determine the method for accounting for our investment at inception or upon a reconsideration event.

We share in the profits and losses of unconsolidated entities generally in accordance with our ownership interests. We and our equity partners typically make initial and ongoing capital contributions to these unconsolidated entities on a pro rata basis. The obligation to make capital contributions is governed by each unconsolidated entity’s respective operating agreement or other governing documents. We made contributions totaling $0.0 million and $2.1 million to our unconsolidated entities during the three months ended March 31, 2016 and 2015, respectively. The balance of our investments in unconsolidated entities was $1.2 million as of March 31, 2016 and December 31, 2015. 

In May 2012, we entered into an agreement with JEN Arizona 4, LLC to form a limited liability company, EM 646, LLC (“EM 646”).  We hold a 58% interest in the venture, which was organized for the purpose of acquiring, entitling, developing, and distributing specific sections of real property located in Mesa, Arizona.  The property was originally acquired in November 2012 and in April 2015 the final distribution of developed land to the partners was completed at cost.

As of March 31, 2016, EM 646 was financed by partner equity and does not have third-party debt. In addition, we have not provided any guarantees to the entity or our equity partner. The assets of our investee can only be used to settle obligations of the investee.