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Note 4 - Investment and Advances in Real Estate Joint Ventures

9 Months Ended

Sep. 30, 2014

Investments And Advances In Real Estate Joint Ventures [Abstract]

Investments And Advances In Real Estate Joint Ventures [Text Block]

4. Investments and Advances in Real Estate Joint Ventures

The Company and its subsidiaries have investments in and advances to various real estate joint ventures. These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. The Company and the joint venture partners have joint approval rights for major decisions, including those regarding property operations. As such, the Company holds noncontrolling interests in these joint ventures and accounts for them under the equity method of accounting. The table below presents joint venture investments for which the Company held an ownership interest at September 30, 2014 and December 31, 2013 (in millions, except number of properties):

	As of September 30, 2014											As of December 31, 2013
Venture	Average Ownership Interest			Number of Properties		GLA		Gross Real Estate		The Company's Investment		Average Ownership Interest			Number of Properties		GLA		Gross Real Estate		The Company's Investment
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2) (9)		15.0	%		60		10.6	$	2,747.7	$	180.7		15.0	%		60		10.6	$	2,724.0	$	179.7
Kimco Income Opportunity Portfolio (“KIR”) (2) (3)		48.6	%		55		11.6		1,486.0		153.8		48.6	%		57		12.0		1,496.0		163.6
Kimstone (2)		33.3	%		39		5.6		1,096.5		93.3		33.3	%		39		5.6		1,095.3		100.3
BIG Shopping Centers (2) (21)*		37.9	%		21		3.4		522.1		31.3		37.9	%		21		3.4		520.1		29.5
The Canada Pension Plan Investment Board (“CPP”) (2)		55.0	%		6		2.4		438.8		155.6		55.0	%		6		2.4		437.4		144.8
Kimco Income Fund (“KIF”) (2) (8)		-			-		-		-		-		39.5	%		12		1.5		288.7		50.6
SEB Immobilien (2) (12)		15.0	%		3		0.4		85.8		2.5		15.0	%		13		1.8		361.9		0.9
Other Institutional Programs (2) (4) (5)	Various				51		1.5		344.4		10.1	Various				56		2.1		385.3		17.9
RioCan		50.0	%		45		9.3		1,256.9		162.6		50.0	%		45		9.3		1,314.3		156.3
Latin America (6)	Various				17		1.0		95.9		52.6	Various				28		3.7		313.2		156.7
Other Joint Venture Programs (7)	Various				61		9.8		1,447.7		244.9	Various				75		11.5		1,548.9		256.7
Total					358		55.6	$	9,521.8	$	1,087.4					412		63.9	$	10,485.1	$	1,257.0

* Ownership % is a blended rate

The table below presents the Company’s share of net income/(loss) for the above investments which is included in the Company’s Condensed Consolidated Statements of Income in Equity in income of joint ventures, net for the three and nine months ended September 30, 2014 and 2013 (in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
KimPru and KimPru II	$	2.6	$	2.4	$	7.7	$	6.6
KIR (3) (11) (20)		6.5		9.0		19.4		23.5
Kimstone (10)		1.3		1.8		0.6		1.7
BIG Shopping Centers (21)		1.0		0.9		2.6		2.3
CPP		2.1		1.5		5.2		4.5
KIF (8)		-		0.9		0.9		2.5
SEB Immobilien (12)		0.2		0.3		0.7		0.8
Other Institutional Programs (5)		2.4		0.4		2.4		2.8
RioCan		7.7		7.3		23.0		20.0
Latin America (6) (14) (15) (16) (17)		0.8		69.3		35.3		101.4
Other Joint Venture Programs (7) (13) (18) (19)		27.2		2.4		52.3		13.7
Total	$	51.8	$	96.2	$	150.1	$	179.8

(1)

This venture represents four separate joint ventures, with four separate accounts managed by Prudential Real Estate Investors (“PREI”), three of these ventures are collectively referred to as KimPru and the remaining venture is referred to as KimPru II.

(2)

The Company manages these joint venture investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, asset management fees and construction management fees.

(3)

During the nine months ended September 30, 2014, KIR sold two operating properties for a sales price of $17.7 million. In connection with the two dispositions, the Company recognized its share of an aggregate net gain of $1.1 million.

(4)

During the nine months ended September 30, 2014, the Company acquired three properties from a joint venture in which the Company has a noncontrolling interest for a total sales price of $93.2 million. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance. As such, the Company recognized a gain of $3.7 million from the fair value adjustment associated with the Company’s original ownership due to a change in control and now consolidates these operating properties.

(5)

During the nine months ended September 30, 2014, two joint ventures in which the Company holds a noncontrolling interest sold two operating properties for an aggregate sales price of $46.6 million and recognized an aggregate gain of $11.1 million. The Company’s share of this gain was $2.2 million.

(6)

During the nine months ended September 30, 2014, the Company sold its noncontrolling interest in 10 operating properties located throughout Mexico based on a gross aggregate sales price of $202.1 million. The Company recognized a net gain of $30.0 million, before income taxes, associated with these transactions.

(7)

During the nine months ended September 30, 2014, a joint venture in which the Company holds a noncontrolling interest sold 14 operating properties for an aggregate sales price of $158.5 million and recognized an aggregate gain of $51.9 million. The Company’s share of this gain was $26.2 million.

(8)

During the nine months ended September 30, 2014, the Company purchased the remaining interest in KIF based on a gross purchase price of $408.0 million. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance. As such, the Company recognized a gain of $65.6 million from the fair value adjustment associated with the Company’s original ownership due to a change in control and now consolidates these operating properties.

(9)

During the nine months ended September 30, 2014, KimPru acquired an additional parcel within one of its existing operating properties in Elk Grove, CA for a purchase price of $10.5 million. The Company’s capital contribution for this acquisition was $1.6 million.

(10)

During June 2013, Blackstone Real Estate Partners VII and the Company entered into a new joint venture (Kimstone) in which the Company owns a 33.3% noncontrolling interest.

(11)

During the nine months ended September 30, 2014, KIR recognized aggregate impairment charges of $5.0 million related to two properties which KIR anticipates selling within the next 18 months. KIR effectively shortened its anticipated hold period for these assets which resulted in the expected future cash flows being less than the carrying value. The Company’s share of these impairment charges was $2.8 million.

(12)

During the nine months ended September 30, 2014, the Company purchased the remaining 85% interest in 10 SEB properties based on a gross purchase price of $275.8 million including the assumption of $193.6 million of mortgage debt. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance. As such, the Company recognized a gain of $14.4 million from the fair value adjustment associated with the Company’s original ownership due to a change in control and now consolidates these operating properties.

(13)

During the nine months ended September 30, 2014, the Company received a distribution of $15.4 million from a joint venture that was in excess of its carrying value and as such, the Company recognized this amount as equity in income.

(14)

During the nine months ended September 30, 2013, joint ventures in which the Company held noncontrolling interests sold ten operating properties located throughout Mexico for $315.5 million. These transactions resulted in an aggregate net gain to the Company of $21.8 million, after tax.

(15)

During the nine months ended September 30, 2013, the Company and its joint venture partner sold their noncontrolling ownership interest in a joint venture which held interests in 84 operating properties located throughout Mexico for $603.5 million (including debt of $301.2 million). This transaction resulted in a net gain to the Company of $78.2 million, before income taxes of $25.1 million.

(16)

During the nine months ended September 30, 2013, a joint venture in which the Company held a noncontrolling interest sold nine operating properties located throughout Chile for net proceeds of $17.6 million. This transaction resulted in a net gain to the Company of $4.0 million.

(17)

During the nine months ended September 30, 2013, the Company recorded impairment charges of $12.9 million on six properties that were in advanced negotiations to sell located throughout Mexico based upon the anticipated selling prices.

(18)

During the nine months ended September 30, 2013, a joint venture in which the Company has a noncontrolling interest sold on operating property for a sales price of $7.6 million and recognized an impairment charge of $2.0 million. The Company’s share of this impairment charge was $1.0 million.

(19)

During June 2013, the InTown portfolio was sold for a sales price of $735.0 million which included the assignment of $609.2 million in debt. This transaction resulted in a deferred gain to the Company of $21.7 million.

(20)

During the nine months ended September 30, 2013, KIR sold an operating property in Cincinnati, OH for a sales price of $30.0 million and recognized a gain of $6.1 million. The Company’s share of this gain was $3.0 million.

(21)

During October 2014, the Company and their joint venture partner BIG divided 15 of the 21 properties in the BIG Shopping Centers venture with the Company receiving a 99% ownership interest in seven operating properties and BIG receiving a 99% ownership interest in eight operating properties. As a result of this transaction, the Company will consolidate these seven properties. Subsequent to this transaction the BIG Shopping Centers venture holds six operating properties.

The table below presents debt balances within the Company’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at September 30, 2014 and December 31, 2013 (dollars in millions):

	As of September 30, 2014							As of December 31, 2013
Venture	Mortgages and Notes Payable		Weighted Average Interest Rate			Weighted Average Remaining Term (months)**		Mortgages and Notes Payable		Weighted Average Interest Rate			Weighted Average Remaining Term (months)**
KimPru and KimPru II	$	921.2		5.53	%		26.0	$	923.4		5.53	%		35.0
KIR		870.6		5.04	%		64.9		889.1		5.05	%		75.1
Kimstone		729.5		4.46	%		30.8		749.9		4.62	%		39.3
BIG Shopping Centers		406.3		5.41	%		34.2		406.5		5.39	%		40.1
CPP		112.6		5.03	%		13.1		138.6		5.23	%		19.0
Kimco Income Fund		-		-			-		158.0		5.45	%		8.7
SEB Immobilien		50.2		4.06	%		38.7		243.8		5.11	%		43.3
RioCan		679.0		4.46	%		40.5		743.7		4.59	%		48.0
Other Institutional Programs		223.4		5.47	%		23.8		272.9		5.32	%		31.0
Other Joint Venture Programs		952.5		5.33	%		59.5		1,063.1		5.53	%		60.6
Total	$	4,945.3						$	5,589.0

** Average Remaining Term includes extension options.