Variable Interest Entities

Consolidated VIEs:

At December 31, 2016 and 2015, nine and 11 of our real estate joint ventures, whose activities primarily consisted of owning and operating 25 and 30 neighborhood/community shopping centers, respectively, were determined to be VIEs. Based on a financing agreement by one of our real estate joint ventures that has a bottom dollar guaranty, which is disproportionate to our ownership, we have determined that we are the primary beneficiary and have consolidated this joint venture. For the remaining real estate joint ventures, we concluded we are the primary beneficiary based primarily on our significant power to direct the entities' activities without any substantive kick-out or participating rights.

In July 2016, in conjunction with the acquisition of a property with a net book net value of $249.5 million at December 31, 2016, we entered into a like-kind exchange agreement with a third party intermediary for tax purposes. The third party purchased the property via our financing, and then leased the property to us. Based on the associated agreements, we have determined that the entity is a VIE, and we are the primary beneficiary based on our significant power to direct the entity's activities without any substantive kick-out or participating rights. Accordingly, we consolidated the property and its operations as of the respective acquisition date. Subsequent to December 31, 2016, the ownership of this property was conveyed to us in accordance with the terms of the like-kind exchange agreement.

A summary of our consolidated VIEs is as follows (in thousands):



	December 31,
	2016		2015
Assets Held by VIEs ⁽¹⁾	$	504,293	$	289,558
Assets Held as Collateral for Debt ⁽²⁾	46,136		57,735
Maximum Risk of Loss ⁽²⁾	29,784		37,178

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(1)	Upon adoption of ASU No. 2015-02, "Amendments to the Consolidation Analysis," prior year's amount was made to conform to the current year presentation. See Note 2 for additional information.


(2)	Represents the amount of debt and related assets held as collateral associated with the bottom dollar guaranty at one real estate joint venture.

In May 2015, a joint venture agreement was amended to reflect an additional contribution of $43 million made by us to the joint venture in the form of a preferred equity arrangement. The amended agreement specified that these funds were to be used by the joint venture to pay down debt that became due. This arrangement provided the most favorable economics, including financing and taxation considerations, to the joint venture, as well as to us. During 2016, the venture paid off the preferred equity with us.

Restrictions on the use of these assets can be significant because they may serve as collateral for debt. Further, we are generally required to obtain our partner's approval in accordance with the joint venture agreement for any major transactions. Transactions with these joint ventures on our consolidated financial statements have primarily been positive as demonstrated by the generation of net income and operating cash flows, as well as the receipt of cash distributions. We and our partners are subject to the provisions of the joint venture agreements which include provisions for when additional contributions may be required to fund operating cash shortfalls, development expenditures and unplanned capital expenditures. For the year ended December 31, 2016, $2.5 million in additional contributions were made primarily for capital activities. Currently, $.2 million of additional contributions are anticipated for 2017.

Unconsolidated VIEs:

At December 31, 2016 and 2015, one unconsolidated real estate joint ventures was determined to be a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the success of the entity. In December 2016, we entered into one joint venture arrangement for the future development of a mixed-use project. Based on the associated agreements, we have determined that the entity is a VIE; however, we are not the primary beneficiary due to the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity.

A summary of our unconsolidated VIEs is as follows (in thousands):



	December 31,
	2016		2015
Investment in Real Estate Joint Ventures and Partnerships, net ^{(1) (2)}	$	886	$	10,497
Maximum Risk of Loss ⁽³⁾	34,000		10,992

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(1)	The carrying amount of the investment represents our contributions to the real estate joint ventures, net of any distributions made and our portion of the equity in earnings of the joint ventures.


(2)	As of December 31, 2016, the carrying amount of the investment for one VIE is $(9) million, which is included in Other Liabilities and results from the distribution of proceeds from the issuance of debt.


(3)	The maximum risk of loss has been determined to be limited to our debt exposure for the real estate joint ventures.

We and our partner are subject to the provisions of the joint venture agreement that specify conditions, including operating shortfalls, development expenditures and unplanned capital expenditures, under which additional contributions may be required. We anticipate funding approximately $127 million in equity and debt associated with the mixed-use project through 2020.