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Investments in and Advances to Unconsolidated Affiliates
 6 Months Ended
Jun. 30, 2024
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. The Company’s investments in and advances to unconsolidated affiliates consist of the following (dollars in thousands):

 

 

 

 

 

Ownership Interest

 

June 30,

 

 

December 31,

 

Portfolio

 

Property

 

June 30, 2024

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Core:

 

Renaissance Portfolio

 

20%

 

$

30,203

 

 

$

30,745

 

 

 

Gotham Plaza

 

49%

 

 

30,616

 

 

 

30,772

 

 

 

Georgetown Portfolio (a)

 

50%

 

 

4,211

 

 

 

4,230

 

 

 

1238 Wisconsin Avenue (a, b)

 

80%

 

 

19,169

 

 

 

19,719

 

 

 

840 N. Michigan Avenue (c)

 

91.85%

 

 

22,384

 

 

 

15,761

 

 

 

 

 

 

 

 

106,583

 

 

 

101,227

 

Investment Management:

 

 

 

 

 

 

 

 

 

 

Fund IV:

 

Fund IV Other Portfolio

 

90%

 

 

5,510

 

 

 

5,221

 

 

 

650 Bald Hill Road

 

90%

 

 

9,767

 

 

 

9,486

 

 

 

Paramus Plaza (d)

 

50%

 

 

4,133

 

 

 

70

 

 

 

 

 

 

 

 

19,410

 

 

 

14,777

 

 

 

 

 

 

 

 

 

 

 

 

Fund V:

 

Family Center at Riverdale (c)

 

89.42%

 

 

1,847

 

 

 

2,552

 

 

 

Tri-City Plaza

 

90%

 

 

5,363

 

 

 

6,452

 

 

 

Frederick County Acquisitions

 

90%

 

 

12,365

 

 

 

11,345

 

 

 

Wood Ridge Plaza

 

90%

 

 

10,014

 

 

 

10,313

 

 

 

La Frontera Village

 

90%

 

 

15,638

 

 

 

17,483

 

 

 

Shoppes at South Hills

 

90%

 

 

10,426

 

 

 

11,707

 

 

 

Mohawk Commons

 

90%

 

 

14,728

 

 

 

16,434

 

 

 

 

 

 

 

 

70,381

 

 

 

76,286

 

 

 

 

 

 

 

 

 

 

 

 

Other:

 

Shops at Grand

 

5%

 

 

2,441

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Various:

 

Due from (to) Related Parties

 

 

 

 

299

 

 

 

396

 

 

 

Other (e)

 

 

 

 

4,296

 

 

 

4,554

 

 

 

Investments in and advances to
unconsolidated affiliates

 

 

 

$

203,410

 

 

$

197,240

 

 

 

 

 

 

 

 

 

 

 

 

Core:

 

Crossroads (f)

 

49%

 

$

7,301

 

 

$

7,982

 

 

 

Distributions in excess of income from,
and investments in, unconsolidated affiliates

 

 

 

$

7,301

 

 

$

7,982

 

 

(a)
Represents a variable interest entity (“VIE”) for which the Company is not the primary beneficiary (Note 15).
(b)
Includes the amounts advanced against a $12.8 million construction commitment from the Company to the venture that holds its investment in 1238 Wisconsin. As of June 30, 2024 and December 31, 2023 the note receivable from a related party had a balance of $12.8 million, net of an allowance for credit losses of $0.2 million, as of each period. The loan is collateralized by the venture members' equity interest in the entity that holds the 1238 Wisconsin development property, bears interest at Prime + 1.0% subject to a 4.5% floor and matures on December 28, 2024.
(c)
Represents a tenancy-in-common interest.
(d)
As of June 30, 2024, the investment balance relates to undistributed proceeds from the disposition of the property. These proceeds were distributed to Fund IV in July 2024.
(e)
Includes cost-method investments in Fifth Wall.
(f)
Distributions have exceeded the Company’s investment; however, the Company recognizes a liability balance as it may elect to contribute capital to the entity.

During the six months ended June 30, 2024, the Company:

•
retained a 5% interest through an investment in a newly formed joint venture, Shops at Grand, which was fair valued at $2.4 million upon deconsolidation (Note 2);
•
through Fund IV, sold its investment in Paramus Plaza for $36.8 million and repaid the related $27.9 million mortgage loan. Fund IV recognized a gain of $4.1 million of which the Company’s proportionate share was $1.0 million; and
•
extended the maturity date on a property mortgage loan at Gotham Plaza to September 2, 2024, which had an outstanding balance of $17.1 million.

Fees earned from and paid to Unconsolidated Affiliates

The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated affiliates totaling $0.3 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.4 million and $0.2 for the six months ended June 30, 2024 and 2023, respectively, which are included in Other revenues in the Condensed Consolidated Statements of Operations.

In addition, the Company’s unconsolidated joint ventures paid fees to affiliates of $1.1 million and $0.8 million for the three months ended June 30, 2024 and 2023, respectively, and $2.2 million and $1.6 million for the six months ended June 30, 2024 and 2023, 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 Operations, in each period, summarize the financial information of the Company’s investments in unconsolidated affiliates that were held as of June 30, 2024 (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Combined and Condensed Balance Sheets

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

Rental property, net

 

$

734,373

 

 

$

723,411

 

Real estate under development

 

 

-

 

 

 

—

 

Other assets

 

 

128,786

 

 

 

125,699

 

Total assets

 

$

863,159

 

 

$

849,110

 

Liabilities and partners’ equity:

 

 

 

 

 

 

Mortgage notes payable

 

$

630,882

 

 

$

662,552

 

Other liabilities

 

 

89,409

 

 

 

100,270

 

Partners’ equity

 

 

142,868

 

 

 

86,288

 

Total liabilities and partners’ equity

 

$

863,159

 

 

$

849,110

 

 

 

 

 

 

 

 

Company's share of accumulated equity

 

$

136,176

 

 

$

128,690

 

Basis differential

 

 

51,336

 

 

 

51,824

 

Deferred fees, net of portion related to the Company's interest

 

 

4,002

 

 

 

3,794

 

Amounts receivable/payable by the Company

 

 

299

 

 

 

396

 

Investments in and advances to unconsolidated affiliates, net of Company's
   share of distributions in excess of income from and investments in
   unconsolidated affiliates

 

 

191,813

 

 

 

184,704

 

Investments carried at fair value or cost

 

 

4,296

 

 

 

4,554

 

Company's share of distributions in excess of income from and
   investments in unconsolidated affiliates

 

 

7,301

 

 

 

7,982

 

Investments in and advances to unconsolidated affiliates

 

$

203,410

 

 

$

197,240

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Combined and Condensed Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

28,180

 

 

$

28,667

 

 

$

56,184

 

 

$

56,885

 

Operating and other expenses

 

 

(10,149

)

 

 

(8,708

)

 

 

(20,135

)

 

 

(17,349

)

Interest expense

 

 

(10,205

)

 

 

(9,901

)

 

 

(20,619

)

 

 

(19,134

)

Depreciation and amortization

 

 

(10,129

)

 

 

(11,233

)

 

 

(21,795

)

 

 

(20,134

)

Gain on extinguishment of debt

 

 

853

 

 

 

—

 

 

 

2,011

 

 

 

—

 

Impairment of Investment

 

 

(288

)

 

 

—

 

 

 

(288

)

 

 

—

 

Gain on disposition of property

 

 

8,519

 

 

 

—

 

 

 

8,519

 

 

 

—

 

Net income (loss) attributable to unconsolidated affiliates

 

$

6,781

 

 

$

(1,175

)

 

$

3,877

 

 

$

268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company’s share of equity in net earnings (losses) of unconsolidated affiliates

 

$

4,724

 

 

$

(1,190

)

 

$

4,656

 

 

$

(914

)

Basis differential amortization

 

 

(244

)

 

 

(247

)

 

 

(488

)

 

 

(494

)

Company’s equity in earnings (losses) of unconsolidated affiliates

 

$

4,480

 

 

$

(1,437

)

 

$

4,168

 

 

$

(1,408

)