Real Estate Fund Investments

12 Months Ended

Dec. 31, 2022

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. The Fund had an initial eight-year term ending February 2019, which has been extended to December 2023, by which time the Fund intends to dispose of its remaining investments and wind down its business. 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 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 24.3% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. Through our interests in the Fund and the Crowne Plaza Joint Venture, in total we own an indirect, minority 32.8% interest in the Crowne Plaza Times Square Hotel. 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 December 31, 2022, our total investment in the Crowne Plaza Times Square Hotel had a carrying value of zero on our consolidated balance sheet. On June 9, 2020, the Fund and the Crowne Plaza Joint Venture (collectively, the “Crowne Plaza Co-Investors”) defaulted on the $274,355,000 non-recourse loan on the Crowne Plaza Times Square Hotel.

4. Real Estate Fund Investments - continued

In 2021, the mezzanine lender to the Crowne Plaza Co-Investors exercised its right under the loan documents and appointed an independent director to certain subsidiaries of the Crowne Plaza Co-Investors. Since then, neither we nor the Fund control Crowne Plaza Times Square Hotel nor have we or the Fund been involved in making any operating decisions relating to Crowne Plaza Times Square Hotel. In December 2022, the Fund entered into a Restructuring Support Agreement with certain subsidiaries and the lender of the loan on the Crowne Plaza Times Square Hotel, pursuant to which the independent director caused the subsidiaries to enter into a Chapter 11 bankruptcy restructuring process and the Fund agreed to work consensually with such subsidiaries and the lender to effectuate a transfer of ownership of the hotel property through a court supervised auction process, or an equitization of the secured loans held by the lender. We expect that, following the Chapter 11 restructuring, neither we nor the Fund will have any continuing ownership or other interest in the property and neither we nor the Fund will receive any proceeds or have any liability as a result of the restructuring.

On May 20, 2022, 1100 Lincoln Road was conveyed to the lender pursuant to a deed-in-lieu of foreclosure agreement in exchange for a $5,672,000 payment to the Fund. From the inception of this investment through its disposition, the Fund realized a $54,255,000 net loss.

As of December 31, 2022, we had two real estate fund investments through the Fund and the Crowne Plaza Joint Venture carried at zero on our consolidated balance sheet, $276,390,000 below cost, and had remaining unfunded commitments of $28,465,000, of which our share was $8,849,000. As of December 31, 2021, we had three real estate fund investments with an aggregate fair value of $7,730,000.

Below is a summary of income (loss) from the Fund and the Crowne Plaza Joint Venture.


(Amounts in thousands)	For the Year Ended December 31,
	2022		2021		2020
Previously recorded unrealized loss on exited investments	$	59,396	$	—	$	—
Realized (loss) income on exited investments	(54,255)		1,364		—
Net unrealized (loss) income on held investments	(7,730)		3,257		(226,107)
Net investment income (loss)	6,130		6,445		(220)
Income (loss) from real estate fund investments	3,541		11,066		(226,327)
Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries	(1,870)		(7,309)		163,213
Income (loss) from real estate fund investments net of noncontrolling interests in consolidated subsidiaries	$	1,671	$	3,757	$	(63,114)

The table below summarizes the changes in the fair value of the Fund and the Crowne Plaza Joint Venture.


(Amounts in thousands)	For the Year Ended December 31,
	2022		2021
Beginning balance	$	7,730	$	3,739
Previously recorded unrealized loss on exited investments	59,396		—
Realized (loss) income on exited investments	(54,255)		1,364
Net unrealized (loss) income on held investments	(7,730)		3,257
Dispositions	(5,141)		(5,104)
Purchases/additional fundings	—		4,474

Ending balance	$	—	$	7,730