Investments in Unconsolidated Entities

6 Months Ended

Jun. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

The following is a summary of our investments in unconsolidated entities as of June 30, 2024 and December 31, 2023 (dollars in thousands):


	Ownership %	Number of Properties	Carrying Amount (1) of Investment as of
Investment	As of June 30, 2024		June 30, 2024		December 31, 2023
Bellagio Las Vegas Joint Venture - Common Equity Interest	21.9%	1	$	283,608	$	296,097
Bellagio Las Vegas Joint Venture - Preferred Equity Interest	n/a	n/a	650,000		650,000
Data Center Joint Venture	80.0%	2	286,151		226,021

Total investment in unconsolidated entities			$	1,219,759	$	1,172,118

(1) The total carrying amount of the investments was greater than the underlying equity in net assets (i.e., basis difference) by $7.8 million as of June 30, 2024. The basis difference is primarily attributable to capitalized interest for the data center joint venture development funding.

A. Bellagio Las Vegas Joint Venture Interests

This joint venture owns a 95.0% interest in the real estate of The Bellagio Las Vegas. We made an initial investment in October 2023, including $301.4 million of common equity for an indirect interest of 21.9% in the property and a $650.0 million preferred equity interest. During the six months ended June 30, 2024, we recognized interest income of $26.3 million for 8.1% preferential cumulative distributions within 'Other' revenue in our consolidated statements of income and comprehensive income. The unconsolidated entity had total debt outstanding of $3.0 billion as of June 30, 2024, all of which was non-recourse to us with limited customary exceptions.

B. Data Center Joint Venture

We own an 80.0% equity interest in a joint venture that owns and operates two data centers that were substantially completed during the second quarter of 2024. Based on our reevaluation conducted during the second quarter of 2024, we determined that this joint venture is a VOE. As we do not control this joint venture, we account for it under the equity method. Our maximum exposure to loss associated with this VOE is limited to our equity investment and our pro rata share of the remaining $52.4 million of estimated development costs for the first phase of the project.