Real Estate

12 Months Ended

Dec. 31, 2022

Note 3. Real Estate

Investment in unconsolidated joint venture

On May 5, 2021, the Company formed a joint venture with Goldman Sachs Urban Investment Group and Asland Capital Partners (the “Joint Venture”) for the construction of an approximately 258,000 square foot six-story commercial building in Washington, D.C. consisting of approximately 240,000 square feet of office space which is 100% leased to the Washington, D.C., Department of General Services (“DGS”) for its headquarters and approximately 18,000 square feet of street-level retail. The term of the lease with DGS is for 20 years and 10 months, to commence upon substantial completion and delivery to the DGS. The Company sold approximately $8.0 million of development costs to the Joint Venture as part of its formation on May 5, 2021.

On August 5, 2022, the Joint Venture was sold in connection with the Grocery-Anchored Portfolio Sale. The Company contributed approximately $4.8 million of capital to the Joint Venture through its tenure.

2022 Acquisition

On June 28, 2022, the Company acquired the 40% minority ownership percentage in the Crossroads II joint venture for $1.0 million. The Company's ownership interest in Crossroads II was included in the Grocery-Anchored Portfolio Sale that occurred on July 7, 2022.

2021 Acquisition

On October 14, 2021, the Company purchased the 60% minority ownership in the Patuxent Crossing joint venture, located in California, Maryland. The purchase price for the minority ownership was $0.3 million.

Dispositions

Excluding the Grocery-Anchored Portfolio Sale, during 2022, 2021 and 2020, the Company sold the properties listed below:


					Gain on Sale/
		Date	Sales		Reversal of
Property	Location	Sold	Price		Impairment
2022
Riverview Plaza	Philadelphia, PA	5/16/2022	$	34,000,000	$	(361,000	)

2021
Kempsville Crossing (land parcel)	Virginia Beach, VA	2/24/2021	$	1,300,000	$	1,047,000
The Commons	Dubois, PA	5/5/2021		9,761,000		1,849,000
Camp Hill Shopping Center	Camp Hill, PA	6/21/2021		89,662,500		48,857,000
			$	100,723,500	$	51,753,000
2020
Metro Square	Owings Mills, MD	7/9/2020	$	4,288,000	$	-
Oakland Mills outparcel building	Columbia, MD	9/17/2020		1,050,000		643,000
Glen Allen Shopping Center	Glen Allen, VA	10/8/2020		8,540,000		1,780,000
Pine Grove Plaza outparcel building	Brown Mills, NJ	11/2/2020		1,100,000		565,000
Suffolk Plaza	Suffolk, VA	12/10/2020		6,950,000		1,408,000
			$	21,928,000	$	4,396,000

Impairments of $9.4 million for the year ended December 31, 2022 also include those related to the Company's investment in the unconsolidated joint venture and the note receivable associated with Senator Square. These impairments are included in operating loss in the accompanying consolidated statement of operations.

Impairments of $58.5 million for the year ended December 31, 2021 relate to the Company's dual-track strategic alternatives process required upon classification as held for sale. These impairments are included in operating loss in the accompanying consolidated statement of operations.

The Company recorded impairment charges of $7.2 million relating to Metro Square during 2020, which are included in continuing operations in the accompanying consolidated statements of operations.

Real Estate Held for Sale

As of December 31, 2022, there were no properties classified as “real estate held for sale” on the accompanying consolidated balance sheet. As of December 31, 2021, Carll’s Corner, located in Bridgeton, New Jersey, and Riverview Plaza, located in Philadelphia, Pennsylvania, along with the properties that were part of the Grocery-Anchored Portfolio Sale and the East River Park and Senator Square redevelopment asset sales, were classified as “real estate held for sale” on the accompanying consolidated balance.

As of December 31, 2022 and 2021, real estate held for sale consists of the following:


	December 31,
	2022		2021
Real estate held for sale	$	—	$	736,230,000
Receivables		—		8,453,000
Other assets and deferred charges, net		—		12,354,000
Total real estate held for sale	$	—	$	757,037,000

During 2021, the Company recorded a (1) reversal of impairment charges of $1.8 million for The Commons, located in Dubois, Pennsylvania, and (2) recorded, as part of the dual-track strategic alternatives process, impairment charges of $9.3 million. In addition, the Company recorded impairment charges of $0.4 million for The Commons in 2020. These impairment charges were included in continuing operations in the accompanying consolidated statement of operations.

Discontinued Operations

On July 7, 2022, the Company and certain of its subsidiaries completed the Grocery-Anchored Portfolio Sale and the East River Park and Senator Square redevelopment asset sales for total gross proceeds of approximately $879 million, including the assumed debt. The assets sold in these transactions are:


Property Name	Location	Property Name	Location
Academy Plaza	Philadelphia, PA	New London Mall	New London, CT
Bethel Shopping Center	Bethel, CT	Newport Plaza	Newport, PA
Carmans Plaza	Massapequa, NY	Northside Commons	Campbelltown, PA
Christina Crossing	Wilmington, DE	Norwood Shopping Center	Norwood, MA
Colonial Commons	Harrisburg, PA	Oak Ridge Shopping Center	Suffolk, VA
Crossroads II	Bartonsville, PA	Oakland Mills	Columbia, MD
East River Park	Washington, DC	Palmyra Shopping Center	Palmyra, PA
Elmhurst Square	Portsmouth, VA	Quartermaster Plaza	Philadelphia, PA
Fishtown Crossing	Philadelphia, PA	Senator Square	Washington, DC
Franklin Village Plaza	Franklin, MA	Shoppes at Arts District	Hyattsville, MD
General Booth Plaza	Virginia Beach, VA	Swede Square	E. Norriton Township, PA
Girard Plaza	Philadelphia, PA	The Point	Harrisburg, PA
Groton Shopping Center	Groton, CT	The Shops as Bloomfield Station	Bloomfield, NJ
Halifax Plaza	Halifax, PA	The Shops at Suffolk Downs	Revere, MA
Jordan Lane	Wethersfield, PA	Trexlertown Plaza	Trexlertown, PA
Kempsville Crossing	Virginia Beach, VA	Valley Plaza	Hagerstown, MD
Lawndale Plaza	Philadelphia, PA	Yorktowne Plaza	Cockeysville, MD
Meadows Marketplace	Hummelstown, PA

The Grocery-Anchored Portfolio Sale represents a strategic shift and has a material effect on the Company’s operations and financial results, and, therefore, the Company determined that it is deemed a discontinued operation. Accordingly, the portfolio of 33 grocery-anchored shopping centers have been classified as held for sale and the results of their operations have been classified as discontinued operations retrospectively for all periods presented herein.

The following is a summary of income (loss) from discontinued operations:


	Years ended December 31,
	2022			2021			2020
REVENUES
Rental revenues	$	45,073,000		$	87,839,000		$	88,763,000
Other		184,000			524,000			885,000
Total revenues		45,257,000			88,363,000			89,648,000
EXPENSES
Operating, maintenance and management		10,818,000			19,518,000			21,311,000
Real estate and other property-related taxes		6,749,000			13,040,000			12,727,000
General and administrative		151,000			222,000			174,000
Depreciation and amortization		9,726,000			27,313,000			31,943,000
Total expenses		27,444,000			60,093,000			66,155,000


OPERATING INCOME		17,813,000			28,270,000			23,493,000

NON-OPERATING INCOME AND EXPENSES
Interest expense, net		(3,511,000	)		(4,735,000	)		(2,134,000	)
Total non-operating income and expenses		(3,511,000	)		(4,735,000	)		(2,134,000	)

INCOME FROM DISCONTINUED OPERATIONS		14,302,000			23,535,000			21,359,000

Impairment (charges) reversal		(16,629,000	)		(33,913,000	)		643,000
Gain on sales		125,500,000			1,047,000			—

TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS	$	123,173,000		$	(9,331,000	)	$	22,002,000

Net cash provided by operations from discontinued operations was $25.9 million, $48.3 million and $39.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. Net cash provided by (used in) investing activities from discontinued operations was $651.5 million, $(21.2) million and $(23.4) million for the years ended December 31, 2022, 2021 and 2020, respectively.