Real Estate Fund Investments

6 Months Ended

Jun. 30, 2016

Real Estate Fund Investments [Abstract]

5. Real Estate Fund Investments

We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”), which has an eight-year term and a three-year investment period that ended in July 2013. During the investment period, the Fund was our exclusive investment vehicle for all investments that fit within its investment parameters, as defined. The Fund is accounted for under ASC 946, Financial Services – Investment Companies (“ASC 946”) and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting.

We are also the general partner and investment manager of Crowne Plaza Times Square Hotel Co-Investment (the “Co-Investment”), which owns a 24.7% interest in the Crowne Plaza Times Square Hotel. The Fund owns the remaining 75.3% interest. The Co-Investment is also accounted for under ASC 946. We consolidate the accounts of the Co-Investment into our consolidated financial statements, retaining the fair value basis of accounting.

At June 30, 2016, we had six real estate fund investments with an aggregate fair value of $524,150,000, or $215,215,000 in excess of cost, and had remaining unfunded commitments of $117,907,000, of which our share was $34,522,000. Below is a summary of income from the Fund and the Co-Investment for the three and six months ended June 30, 2016 and 2015.

(Amounts in thousands)		For the Three Months Ended				For the Six Months Ended
		June 30,				June 30,
		2016		2015		2016		2015
Net investment income		$	1,723	$	2,150	$	6,396	$	8,600
Net realized gains on exited investments			-		886		14,676		25,591
Previously recorded unrealized gain on exited investment			-		-		(14,254)		(23,279)
Net unrealized gains on held investments			14,666		23,332		20,855		39,545
Income from real estate fund investments			16,389		26,368		27,673		50,457
Less income attributable to noncontrolling interests			(8,845)		(15,872)		(14,818)		(29,411)
Income from real estate fund investments attributable to Vornado ⁽¹⁾		$	7,544	$	10,496	$	12,855	$	21,046


(1)	Excludes management, leasing and development fees of $935 and $633 for the three months ended June 30, 2016 and 2015, respectively, and $1,695 and $1,337 for the six months ended June 30, 2016 and 2015, respectively, which are included as a component of "fee and other income" in our consolidated statements of income.