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Investments in Partially Owned Entities
 9 Months Ended
Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Partially Owned Entities Investments in Partially Owned Entities
Fifth Avenue and Times Square JV
As of September 30, 2022, we own a 51.5% common interest in a joint venture ("Fifth Avenue and Times Square JV") which owns interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the "Properties"). The remaining 48.5% common interest in the joint venture is owned by a group of institutional investors (the "Investors"). Our 51.5% common interest in the joint venture represents an effective 51.0% interest in the Properties. The 48.5% common interest in the joint venture owned by the Investors represents an effective 47.2% interest in the Properties. We provide various services to Fifth Avenue and Times Square JV in accordance with management, development, leasing and other agreements.
We also own $1.828 billion of preferred equity security interests in certain of the properties. The preferred equity has an annual coupon of 4.25% through April 2024, increasing to 4.75% for the subsequent five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.
As of September 30, 2022, the carrying amount of our investment in the joint venture was less than our share of the equity in the net assets of the joint venture by approximately $378,876,000, the basis difference primarily resulting from non-cash impairment losses recognized during 2020. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Fifth Avenue and Times Square JV’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as a reduction to depreciation expense over their estimated useful lives.
6.    Investments in Partially Owned Entities - continued
Fifth Avenue and Times Square JV - continued
On April 18, 2022, we received a $13,613,000 refund of New York City real property transfer tax that we previously paid in connection with the transfer of the Properties to Fifth Avenue and Times Square JV in April 2019. The receipt of the refund was recognized in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the nine months ended September 30, 2022.
330 West 34th Street land owner joint venture
On August 18, 2022, the joint venture that owns the fee interest in the 330 West 34th Street land, in which we have a 34.8% interest, completed a $100,000,000 refinancing. The interest-only loan bears interest at a fixed rate of 4.55% and matures in September 2032. In connection with the refinancing, we realized net proceeds of $10,500,000. The loan replaces the previous $50,150,000 loan that bore interest at a fixed rate of 5.71%.
Alexander's, Inc. ("Alexander's") (NYSE: ALX)
As of September 30, 2022, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common equity. We manage, develop and lease Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable.
As of September 30, 2022, the market value ("fair value" pursuant to ASC Topic 820, Fair Value Measurements ("ASC 820")) of our investment in Alexander’s, based on Alexander’s September 30, 2022 closing share price of $208.96, was $345,634,000, or $254,356,000 in excess of the carrying amount on our consolidated balance sheets. As of September 30, 2022, the carrying amount of our investment in Alexander’s, excluding amounts owed to us, exceeded our share of the equity in the net assets of Alexander’s by approximately $29,828,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income.
Below is a schedule summarizing our investments in partially owned entities.
Percentage Ownership at September 30, 2022Balance as of
(Amounts in thousands)September 30, 2022December 31, 2021
Investments:
Fifth Avenue and Times Square JV (see page 26 for details):
51.5%$2,765,475 $2,770,633 
Partially owned office buildings/land(1)
Various271,634 298,415 
Alexander’s32.4%91,278 91,405 
Other investments(2)
Various121,810 136,936 
$3,250,197 $3,297,389 
Investments in partially owned entities included in other liabilities(3):
7 West 34th Street53.0%$(63,124)$(60,918)
85 Tenth Avenue49.9%(16,884)(18,067)
$(80,008)$(78,985)
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(1)Includes interests in 280 Park Avenue, 650 Madison Avenue, 512 West 22nd Street, 61 Ninth Avenue and others.
(2)Includes interests in Independence Plaza, Rosslyn Plaza and others.
(3)Our negative basis results from distributions in excess of our investment.
6.    Investments in Partially Owned Entities - continued
Below is a schedule of income from partially owned entities.
(Amounts in thousands)Percentage Ownership at September 30, 2022For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
 Our share of net income (loss):
Fifth Avenue and Times Square JV (see page 26 for details):
Equity in net income51.5%$11,941 $12,671 $41,915 $32,314 
Return on preferred equity, net of our share of the expense9,430 9,430 27,985 27,985 
21,371 22,101 69,900 60,299 
Alexander's (see page 27 for details):
Equity in net income(1)
32.4%4,740 3,710 14,235 17,764 
Management, leasing and development fees1,170 1,085 3,352 3,622 
5,910 4,795 17,587 21,386 
Partially owned office buildings(2)
Various(4,732)418 (8,080)8,395 
Other investments(3)
Various1,792 (1,045)4,368 (3,312)
$24,341 $26,269 $83,775 $86,768 
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(1)On June 4, 2021, Alexander's completed the sale of a parcel of land in the Bronx, New York for $10,000. As a result of the sale, we recognized our $2,956 share of the net gain and also received a $300 sales commission from Alexander's.
(2)Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue (consolidated from August 5, 2021), 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
(3)Includes interests in Independence Plaza, Rosslyn Plaza and others.