Real Estate Fund Investments

3 Months Ended

Mar. 31, 2019

Real Estate Fund Investments [Abstract]

We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”) and own a 25.0% interest in the Fund, which had an initial eight-year term ending February 2019. On January 29, 2018, the Fund's term was extended to February 2023. The Fund's three-year investment period ended in July 2013. The Fund is accounted for under ASC Topic 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 the Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) and own a 57.1% interest in the joint venture which owns the 24.7% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. The Crowne Plaza Joint Venture is also accounted for under ASC 946 and we consolidate the accounts of the joint venture into our consolidated financial statements, retaining the fair value basis of accounting.

As of March 31, 2019, we had four real estate fund investments through the Fund and the Crowne Plaza Joint Venture with an aggregate fair value of $322,858,000, or $6,706,000 below our cost, and had remaining unfunded commitments of $44,194,000, of which our share was $13,969,000. At December 31, 2018, we had four real estate fund investments with an aggregate fair value of $318,758,000.

Below is a summary of loss from the Fund and the Crowne Plaza Joint Venture for the three months ended March 31, 2019 and 2018.



(Amounts in thousands)	For the Three Months Ended March 31,
	2019			2018
Net investment (loss) income	$	(267	)	$	2,734
Net unrealized gain on held investments	100			—
New York City real property transfer tax (the "Transfer Tax")	—			(10,630		)	⁽¹⁾
Net realized loss on exited investments	—			(911		)
Loss from real estate fund investments	(167		)	(8,807		)
Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries	(2,737		)	5,369
Loss from real estate fund investments attributable to the Operating Partnership	(2,904		)	(3,438		)
Less loss attributable to noncontrolling interests in the Operating Partnership	182			212
Loss from real estate fund investments attributable to Vornado	$	(2,722	)	$	(3,226	)

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(1)

Due to the disputed additional Transfer Tax related to the March 2011 acquisition of One Park Avenue which was recorded as a result of the New York City Tax Appeals Tribunal (the "Tax Tribunal") decision in the first quarter of 2018. We appealed the Tax Tribunal's decision to the New York State Supreme Court, Appellate Division, First Department ("Appellate Division"). Our appeal was heard on April 2, 2019, and on April 25, 2019 the Appellate Division entered a unanimous decision and order that confirmed the decision of the Tax Tribunal and dismissed our appeal. We are currently evaluating our options regarding this matter.