Investments in and Advances to Unconsolidated Affiliates

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investments in and Advances to Unconsolidated Affiliates

4. Investments in and Advances to Unconsolidated Affiliates

The Company accounts for its investments in and advances to unconsolidated affiliates primarily under the equity method of accounting as it has the ability to exercise significant influence, but does not have financial or operating control over the investment, which is maintained by each of the unaffiliated partners who co-invest with the Company. The Company’s investments in and advances to unconsolidated affiliates consist of the following (dollars in thousands):


		Ownership Interest	March 31,		December 31,
Portfolio	Property	March 31, 2022	2022		2021

Core:	840 N. Michigan (a)	88.43%	$	51,858	$	51,513
	Renaissance Portfolio	20%		28,985		28,466
	Gotham Plaza	49%		29,202		29,187
	Georgetown Portfolio	50%		4,103		4,089
	1238 Wisconsin Avenue (b)	80%		6,954		5,895
				121,102		119,150

Mervyns II:	KLA/ABS (c)	36.7%		136,916		124,316

Fund III:	Self Storage Management (b)	0%		—		207
	640 Broadway (d)	63.13%		—		17,825
				—		18,032

Fund IV:	Fund IV Other Portfolio	98.57%		12,243		12,675
	650 Bald Hill Road	90%		10,819		11,677
	Paramus Plaza	50%		1,716		1,975
				24,778		26,327

Fund V:	Family Center at Riverdale (a)	89.42%		12,032		12,449
	Tri-City Plaza	90%		7,888		6,827
	Frederick County Acquisitions	90%		12,445		10,748
	Wood Ridge Plaza	90%		15,746		—
	La Frontera Village (e)	90%		78,281		—
				126,392		30,024

Various:	Due from (to) Related Parties			142		666
	Other (f)			3,811		3,811
	Investments in and advances to unconsolidated affiliates		$	413,141	$	322,326

Core:	Crossroads (g)	49%	$	9,547	$	9,939
	Distributions in excess of income from, and investments in, unconsolidated affiliates		$	9,547	$	9,939

Represents a tenancy-in-common interest.

Represents a variable interest entity for which the Company was determined not to be the primary beneficiary.

Includes an interest in Albertsons at fair value, as described below ("Investment in Albertsons") (Note 8).

In January 2022, the Company foreclosed on partner's interest and now owns 100% and consolidates the entity (Note 2).

Includes $52.0 million in bridge financing to the entity from the Company at 10.0% due on October 1, 2022.

Includes cost-method investments in Storage Post, Fifth Wall and other investments.

Distributions have exceeded the Company’s investment; however, the Company recognizes a liability balance as it may be required to return distributions to fund future obligations of the entity.

During the three months ended March 31, 2022, the Company:

•

through Fund V, acquired a 90% interest in a venture for $26.5 million, which acquired La Frontera Village, a shopping center located in Round Rock, Texas for $81.4 million. In addition, Fund V made a bridge loan to the entity for $52.0 million.

•

through Fund V, acquired a 90% interest in a venture for $15.3 million, which acquired Wood Ridge Plaza, a shopping center located in Houston, Texas for $49.3 million. In addition, on March 21, 2022 the Wood Ridge Plaza venture entered into a $36.6 million mortgage loan, of which $32.3 million was funded at closing.

•

through Fund III, foreclosed on the remaining 37% interest in 640 Broadway. Accordingly, the Company now consolidates this property (Note 2)

•

through Fund III, sold its investment in Self Storage Management for $6.0 million and recognized its proportionate gain of approximately $1.5 million, which is included in Realized and unrealized holding gains on investments and other in the consolidated statements of income.

•

received a cash dividend in the amount of $0.5 million at Mervyns II related to distributions from its Investment in Albertsons and recorded a net unrealized holding gain of $12.6 million reflecting the change in fair value of its Investment in Albertsons.

During the year ended December 31, 2021, the Company:

•

received dividends of $1.7 million at Mervyns II related to distributions from its Investment in Albertsons and recorded a net unrealized holding gain of $51.9 million reflecting the change in fair value of its Investment in Albertsons

•

on January 4, 2021, Fund V sold two land parcels at its unconsolidated Family Center at Riverdale property for a total of $10.5 million, repaid $7.9 million of the related mortgage and the venture recognized a gain of $3.2 million, of which the Company's share was $0.6 million;

•

called capital for its Crossroads investment of $7.5 million, of which the venture partner's share was $5.4 million; and

•

made a capital contribution to its Fifth Wall investment in the amount of $1.9 million.

Fees from Unconsolidated Affiliates

The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated partnerships totaling $0.1 million for each of the three months ended March 31, 2022 and 2021, which are included in other revenues in the consolidated statements of income.

In addition, the Company's joint ventures paid to certain unaffiliated partners of its joint ventures, $0.3 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively, for leasing commissions, development, management, construction and overhead fees.

Summarized Financial Information of Unconsolidated Affiliates

The following combined and condensed Balance Sheets and Statements of income, in each period, summarize the financial information of the Company’s investments in unconsolidated affiliates that were held as of March 31, 2022, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):


	March 31,		December 31,
	2022		2021
Combined and Condensed Balance Sheets
Assets:
Rental property, net	$	698,314	$	631,661
Real estate under development		9,389		8,112
Other assets		116,690		78,300
Total assets	$	824,393	$	718,073
Liabilities and partners’ equity:
Mortgage notes payable	$	618,824	$	571,461
Other liabilities		82,688		69,166
Partners’ equity		122,881		77,446
Total liabilities and partners’ equity	$	824,393	$	718,073

Company's share of accumulated equity	$	205,579	$	113,285
Basis differential		53,559		66,031
Deferred fees, net of portion related to the Company's interest		3,587		4,071
Amounts receivable/payable by the Company		142		666
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates		262,867		184,053
Investments carried at fair value or cost		140,727		128,334
Company's share of distributions in excess of income from and investments in unconsolidated affiliates		9,547		9,939
Investments in and advances to unconsolidated affiliates	$	413,141	$	322,326


	Three Months Ended March 31,
	2022			2021
Combined and Condensed Statements of Operations
Total revenues	$	23,118		$	18,060
Operating and other expenses		(7,258	)		(6,451	)
Interest expense		(4,739	)		(5,061	)
Depreciation and amortization		(5,911	)		(9,211	)
Gain on disposition of properties (a)		—			3,206
Net income attributable to unconsolidated affiliates	$	5,210		$	543

Company’s share of equity in net income of unconsolidated affiliates	$	3,383		$	2,646
Income attributable to unconsolidated affiliates recently sold or consolidated		—			(328	)
Basis differential amortization		(253	)		(436	)
Company’s equity in earnings of unconsolidated affiliates	$	3,130		$	1,882

Represents the gain on the sale of two land parcels by the Family Center at Riverdale on January 4, 2021.