15.

Noncontrolling Interests:

Noncontrolling interests represent the portion of equity that the Company does not own in those entities it consolidates as a result of having a controlling interest or determined that the Company was the primary beneficiary of a VIE in accordance with the provisions of the FASB’s Consolidation guidance.

The Company accounts and reports for noncontrolling interests in accordance with the Consolidation guidance and the Distinguishing Liabilities from Equity guidance issued by the FASB. The Company identifies its noncontrolling interests separately within the equity section on the Company’s Consolidated Balance Sheets. Units that are determined to be contingently redeemable are classified as Redeemable noncontrolling interests and presented in the mezzanine section between Total liabilities and Stockholder’s equity on the Company’s Consolidated Balance Sheets. The amounts of consolidated net income attributable to the Company and to the noncontrolling interests are presented separately on the Company’s Consolidated Statements of Income.

The Company owns

seven

shopping center properties located throughout Puerto Rico. These properties were acquired partially through the issuance of

$158.6

million of non-convertible units and

$45.8

million of convertible units. Noncontrolling interests related to these acquisitions totaled

$233.0

million of units, including premiums of

$13.5

million and a fair market value adjustment of

$15.1

million (collectively, the "Units"). Noncontrolling interests relating to the remaining units was

$86.2

million and

$88.9

million as of

December

31,

2016

and

2015,

respectively. The Units, related annual cash distribution rates and related conversion features consisted of the following as of

December

31,

2016

and

2015:

Type	Par Value Per Unit		Number of Units Remaining		Return Per Annum
Preferred A Units (1)	$	1.00		79,642,697		5.0%
Class B-1 Preferred Units (2)	$	10,000		189		7.0%
Class B-2 Preferred Units (1)	$	10,000		42		7.0%
Class C DownReit Units (2)	$	30.52		52,797	Equal to the Company’s common stock dividend

(1)

These units are redeemable for cash by the holder or callable by the Company and are included in Redeemable noncontrolling interests on the Company’s Consolidated Balance Sheets.

(2)

These units are redeemable for cash by the holder or at the Company’s option, shares of the Company’s common stock, based upon the conversion calculation as defined in the agreement. These units are included in Noncontrolling interests on the Company’s Consolidated Balance Sheets.

The Company owns a shopping center located in Bay Shore, NY, which was acquired in

2006

with the issuance of

647,758

redeemable Class B Units at a par value of

$37.24

per unit. The units accrue a return equal to the Company’s common stock dividend and are redeemable for cash by the holder or at the Company’s option, shares of the Company’s common stock at a ratio of

1:1.

These units are callable by the Company any time after

April

2026,

and are included in Noncontrolling interests on the Company’s Consolidated Balance Sheets. During

2007,

30,000

units, or

$1.1

million par value, of the Class B Units were redeemed and at the Company’s option settled in cash. As of both

December

31,

2016

and

2015,

noncontrolling interest relating to the remaining Class B Units was

$26.5

million.

Noncontrolling interests also includes

138,015

convertible units issued during

2006

by the Company, which were valued at

$5.3

million, including a fair market value adjustment of

$0.3

million, related to an interest acquired in an office building located in Albany, NY. These units are currently redeemable at the option of the holder for cash or at the option of the Company for the Company’s common stock at a ratio of

1:1.

The holder is entitled to a distribution equal to the dividend rate of the Company’s common stock. The Company is restricted from disposing of these assets, other than through a tax free transaction, through

January

2017.

The following table presents the change in the redemption value of the Redeemable noncontrolling interests for the years ended

December

31,

2016

and

2015

(in thousands):

	201 6			201 5
Balance at January 1,	$	86,709		$	91,480
Income (1)		4,349			7,061
Distribution		(4,105	)		(5,922	)
Conversion of redeemable units		-			(5,910	)
Balance at December 31,	$	86,953		$	86,709

(1)

Includes

$1.0

million in fair market value remeasurement for the year ended

December

31,

2015.

During the year ended

December

31,

2015,

the Company acquired its partner’s interest in

three

previously consolidated joint ventures for

$31.6

million. The Company continues to consolidate these entities as there was no change in control from these transactions. The purchase of the remaining interests resulted in an aggregate decrease in noncontrolling interest of

$25.2

million for the year ended

December

31,

2015,

and a net decrease of

$6.4

million to the Company’s Paid-in capital, during

2015.