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Note 6 - Investment In and Advances to Real Estate Joint Ventures

12 Months Ended

Dec. 31, 2023

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

6. Investment in and Advances to Real Estate Joint Ventures:

The Company has 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 Company manages certain of these joint venture investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, asset management fees and construction management fees. The table below presents unconsolidated joint venture investments for which the Company held an ownership interest at December 31, 2023 and 2022 (in millions, except number of properties):

	Noncontrolling			The Company's Investment
	Ownership Interest			December 31,
Joint Venture	December 31, 2023			2023		2022
Prudential Investment Program		15.0	%	$	138.7	$	153.6
Kimco Income Opportunity Portfolio (“KIR”) (1)		52.1	%		286.3		281.5
Canada Pension Plan Investment Board (“CPP”)		55.0	%		204.6		190.8
Other Institutional Joint Ventures	Various				247.5		256.8
Other Joint Venture Programs	Various				210.7		208.9
Total*				$	1,087.8	$	1,091.6

* Representing 104 property interests and 21.1 million square feet of GLA, as of December 31, 2023, and 111 property interests and 22.4 million square feet of GLA, as of December 31, 2022.

(1)

During 2022, the Company purchased additional ownership interests for $55.1 million, including the General Partner’s ownership interest from Milton Cooper, Executive Chairman of the Board of Directors of the Company, for $0.1 million. There was no change in control as a result of these transactions.

The table below presents the Company’s share of net income for the above investments, which is included in Equity in income of joint ventures, net on the Company’s Consolidated Statements of Income (in millions):

	Year Ended December 31,
	2023		2022		2021
Prudential Investment Program (1)	$	16.4	$	9.6	$	17.5
KIR		34.7		70.3		36.9
CPP		8.7		10.6		9.2
Other Institutional Joint Ventures		2.6		7.0		1.7
Other Joint Venture Programs		9.9		12.0		19.5
Total	$	72.3	$	109.5	$	84.8

(1)	During 2022, the Prudential Investment Program recognized an impairment charge on a property of $15.1 million, of which the Company’s share was $2.3 million.

During 2023, the Company acquired the remaining 85% interest in three operating properties from Prudential Investment Program, in separate transactions, with an aggregate gross fair value of $150.7 million. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as a result, recognized net gains on change in control of interests of $7.7 million, in aggregate, resulting from the fair value adjustments associated with the Company’s previously held equity interests. See Footnote 3 of the Notes to Consolidated Financial Statements for the operating properties acquired by the Company.

In addition, during 2023, certain of the Company’s real estate joint ventures disposed of four properties and a parcel, in separate transactions, for an aggregate sales price of $132.3 million. These transactions resulted in an aggregate net gain to the Company of $0.3 million for the year ended December 31, 2023.

During 2022, certain of the Company’s real estate joint ventures disposed of nine properties and two parcels, in separate transactions, for an aggregate sales price of $349.1 million. These transactions resulted in an aggregate net gain to the Company of $39.3 million for the year ended December 31, 2022.

The table below presents debt balances within the Company’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at December 31, 2023 and 2022 (dollars in millions):

	December 31, 2023							December 31, 2022
Joint Venture	Mortgages and Notes Payable, Net		Weighted Average Interest Rate			Weighted Average Remaining Term (months)*		Mortgages and Notes Payable, Net		Weighted Average Interest Rate			Weighted Average Remaining Term (months)*
Prudential Investment Program	$	291.6		6.00	%		24.6	$	380.1		5.20	%		33.1
KIR		273.4		5.82	%		39.2		297.9		5.46	%		47.2
CPP		81.9		5.12	%		31.0		83.1		6.14	%		43.0
Other Institutional Joint Ventures		234.1		5.76	%		35.7		233.5		4.30	%		47.7
Other Joint Venture Programs		367.9		4.44	%		59.6		388.8		4.10	%		71.8
Total	$	1,248.9						$	1,383.4

* Average remaining term includes extensions

Unconsolidated Significant Subsidiaries

The Company holds a 52.1% noncontrolling limited partnership interest in KIR, which the Company determined under Rule 4-08(g) of Regulation S-X was significant under the income and revenue tests for the year ended December 31, 2022 and requires summarized financial information. The Company has a master management agreement whereby the Company performs services for fees relating to the management, operation, supervision and maintenance of the KIR joint venture properties. The following table shows summarized unaudited financial information for KIR, as follows (in millions):

	December 31,
	2023		2022
Assets:
Real estate, net	$	669.2	$	668.7
Other assets, net		67.5		72.4
Total Assets	$	736.7	$	741.1
Liabilities and Members’ Capital:
Notes payable, net	$	273.4	$	272.9
Mortgages payable, net		-		25.0
Other liabilities		15.9		13.9
Accumulated other comprehensive income		0.6		-
Members’ capital		446.8		429.3
Total Liabilities and Members’ Capital	$	736.7	$	741.1

	Year Ended December 31,
	2023			2022			2021
Revenues, net	$	174.1		$	182.5		$	186.6
Operating expenses		(46.7	)		(48.2	)		(51.3	)
Depreciation and amortization		(38.5	)		(39.4	)		(40.3	)
Gain on sale of properties		-			76.2			-
Interest expense		(16.8	)		(15.5	)		(18.1	)
Other expense, net		(0.6	)		(1.2	)		(2.1	)
Net income	$	71.5		$	154.4		$	74.8

Summarized financial information for the Company’s investment in and advances to all other real estate joint ventures is as follows (in millions):

	December 31,
	2023		2022
Assets:
Real estate, net	$	3,156.2	$	3,440.1
Other assets, net		251.6		208.4
Total Assets	$	3,407.8	$	3,648.5

Liabilities and Members’ Capital:
Notes payable, net	$	159.9	$	159.5
Mortgages payable, net		815.6		925.9
Other liabilities		70.9		78.8
Accumulated other comprehensive income		5.1		6.3
Noncontrolling interests		34.4		33.5
Members’ capital		2,321.9		2,444.5
Total Liabilities and Members’ Capital	$	3,407.8	$	3,648.5

	Year Ended December 31,
	2023			2022			2021
Revenues, net	$	378.4		$	395.2		$	340.3
Operating expenses		(126.6	)		(126.9	)		(111.7	)
Impairment charges		(17.8	)		(21.1	)		(23.5	)
Depreciation and amortization		(108.2	)		(119.0	)		(97.2	)
Gain on sale of properties		48.0			24.7			61.5
Interest expense		(55.4	)		(38.6	)		(27.6	)
Other expense, net		(6.4	)		(6.2	)		(0.9	)
Net income	$	112.0		$	108.1		$	140.9

Other liabilities included in the Company’s accompanying Consolidated Balance Sheets include investments in certain real estate joint ventures totaling $5.1 million and $5.3 million at December 31, 2023 and 2022, respectively. The Company has varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with GAAP.

The Company’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. Generally, such investments contain operating properties and the Company has determined these entities do not contain the characteristics of a VIE. As of December 31, 2023 and 2022, the Company’s carrying value in these investments was $1.1 billion.