Real Estate Fund Investments

9 Months Ended

Sep. 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. 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 the 24.7% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. 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 September 30, 2016, we had six real estate fund investments with an aggregate fair value of $519,386,000, or $210,451,000 in excess of cost, and had remaining unfunded commitments of $117,907,000, of which our share was $34,422,000. Below is a summary of income from the Fund and the Co-Investment for the three and nine months ended September 30, 2016 and 2015.

(Amounts in thousands)		For the Three Months Ended				For the Nine Months Ended
		September 30,				September 30,
		2016		2015		2016		2015
Net investment income		$	5,841	$	5,116	$	12,237	$	13,716
Net unrealized (losses) gains on held investments			(4,764)		(2,544)		16,091		37,001
Net realized (losses) gains on exited investments			-		(907)		14,676		24,684
Previously recorded unrealized gain on exited investment			-		-		(14,254)		(23,279)
Income from real estate fund investments			1,077		1,665		28,750		52,122
Less income attributable to noncontrolling interests			(270)		(42)		(15,088)		(29,453)
Income from real estate fund investments
	attributable to Vornado ⁽¹⁾	$	807	$	1,623	$	13,662	$	22,669


(1)	Excludes management, leasing and development fees of $804 and $678 for the three months ended September 30, 2016 and 2015, respectively, and $2,499 and $2,015 for the nine months ended September 30, 2016 and 2015, respectively, which are included as a component of "fee and other income" in our consolidated statements of income.