nvestments in Partially Owned Entities

The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following tables and information summarize the Company’s investments in partially owned entities as of March 31, 2013 (amounts in thousands except for project and apartment unit amounts):



	Consolidated								Unconsolidated
	Development Projects								Development Projects
	Held for and/or Under Development		Operating			Total			Held for and/or Under Development		Operating			Total

Total projects (1)	—		20			20			—		1			1

Total apartment units (1)	—		3,917			3,917			—		336			336

Balance sheet information at 3/31/13 (at 100%):
ASSETS
Investment in real estate	$	219,252	$	644,208		$	863,460		$	280,326	$	55,017		$	335,343
Accumulated depreciation	—		(160,227		)	(160,227		)	—		(540		)	(540		)
Investment in real estate, net	219,252		483,981			703,233			280,326		54,477			334,803
Cash and cash equivalents	4,022		12,437			16,459			2,607		1,589			4,196
Investments in unconsolidated entities	—		56,253			56,253			—		—			—
Deposits – restricted	43,616		24,582			68,198			—		—			—
Deferred financing costs, net	—		2,632			2,632			57		—			57
Other assets	5,781		26,700			32,481			346		1,336			1,682
Total assets	$	272,671	$	606,585		$	879,256		$	283,336	$	57,402		$	340,738

LIABILITIES AND EQUITY/CAPITAL
Mortgage notes payable	$	—	$	343,218		$	343,218		$	117,688	$	30,550		$	148,238
Accounts payable & accrued expenses	1,788		2,201			3,989			10,127		—			10,127
Accrued interest payable	—		1,195			1,195			460		—			460
Other liabilities	1,224		1,168			2,392			242		1,681			1,923
Security deposits	—		1,765			1,765			47		—			47
Total liabilities	3,012		349,547			352,559			128,564		32,231			160,795

Noncontrolling Interests - Partially Owned Properties/Partners' equity	89,888		16,042			105,930			114,909		20,137			135,046
Company equity/General and Limited Partners' Capital	179,771		240,996			420,767			39,863		5,034			44,897
Total equity/capital	269,659		257,038			526,697			154,772		25,171			179,943
Total liabilities and equity/capital	$	272,671	$	606,585		$	879,256		$	283,336	$	57,402		$	340,738

Debt – Secured (2):
Company/Operating Partnership Ownership (3)	$	—	$	266,228		$	266,228		$	39,120	$	6,110		$	45,230
Noncontrolling Ownership	—		76,990			76,990			78,568		24,440			103,008
Total (at 100%)	$	—	$	343,218		$	343,218		$	117,688	$	30,550		$	148,238



	Consolidated									Unconsolidated
	Development Projects									Development Projects
	Held for and/or Under Development									Held for and/or Under Development			Operating

				Operating			Total									Total
Operating information for the quarter ended 3/31/13 (at 100%):
Operating revenue	$	—		$	17,485		$	17,485		$	219		$	453		$	672
Operating expenses	52			5,602			5,654			256			185			441

Net operating (loss) income	(52		)	11,883			11,831			(37		)	268			231
Depreciation	—			6,094			6,094			—			540			540
General and administrative/other	122			13			135			—			—			—

Operating (loss) income	(174		)	5,776			5,602			(37		)	(272		)	(309		)
Interest and other income	1			3			4			—			—			—
Other expenses	(86		)	—			(86		)	—			(49		)	(49		)
Interest:
Expense incurred, net	—			(2,854		)	(2,854		)	(16		)	(87		)	(103		)
Amortization of deferred financing costs	—			(50		)	(50		)	—			—			—

(Loss) income before income and other taxes, (loss) from investments in unconsolidated entities and net gain on sales of discontinued operations	(259		)	2,875			2,616			(53		)	(408		)	(461		)
Income and other tax (expense) benefit	(11		)	(39		)	(50		)	—			—			—
(Loss) from investments in unconsolidated entities	—			(97		)	(97		)	—			—			—
Net gain on sales of discontinued operations	—			2,807			2,807			—			—			—

Net (loss) income	$	(270	)	$	5,546		$	5,276		$	(53	)	$	(408	)	$	(461	)


(1)	Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed.


(2)	All outstanding debt is non-recourse to the Company.


(3)	Represents the Company’s/Operating Partnership’s current equity ownership interest.

Note:

The above tables exclude the Company's interests in unconsolidated joint ventures entered into with AVB in connection with the Archstone transaction. These ventures own certain non-core Archstone assets that are held for sale and succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters as well as responsibility for tax protection arrangements and third-party preferred interests in former Archstone subsidiaries. The preferred interests have an aggregate liquidation value of $167.2 million at March 31, 2013. The ventures are owned 60% by the Company and 40% by AVB.

The Company is the controlling partner in various consolidated partnership properties and development properties having a noncontrolling interest book value of $105.9 million at March 31, 2013. The Company has identified one development partnership, consisting of a land parcel with a book value of $5.0 million, as a VIE. The Company does not have any unconsolidated VIEs.

On February 27, 2013, in conjunction with the Archstone Acquisition, the Company acquired interests in several joint ventures. Details of these interests follow by project:

Enclave at Wellington – This venture is currently developing certain land parcels into a 268 unit apartment building located in Wellington, Florida. The Company has a 95% equity interest with an initial basis of $26.2 million. Total project costs are expected to be approximately $50.0 million. The Company is the managing member, is responsible for constructing the project and its partner does not have substantive kick-out or participating rights. As a result, the entity is required to be consolidated on the Company's balance sheet.

East Palmetto Park – This venture was formed to ultimately develop certain land parcels into a 377 unit apartment building located in Boca Raton, Florida. The Company has a 90% equity interest with an initial basis of $20.2 million. The Company is the managing member, is responsible for constructing the project and its partner does not have substantive kick-out or participating rights. As a result, the entity is required to be consolidated on the Company's balance sheet.

Wisconsin Place – This venture was formed to develop and operate a mixed-use site located in Chevy Chase, Maryland consisting of residential, retail, office and accessory uses, including underground parking facilities. The Company has a 75% equity interest with an initial basis of $189.4 million in the 432 unit residential component. The Company is the managing member, was responsible for constructing the residential project and its partner does not have substantive kick-out or participating rights. As a result, the entity that owns the residential component of this mixed-use site is required to be consolidated on the Company's balance sheet. Such entity also retains an unconsolidated interest in an entity that owns the land underlying the project and owns and operates the parking facility. The initial fair value of this investment is $56.5 million. The Company does not have any ownership interest in the retail and office components.

San Norterra – This venture is currently developing certain land parcels into a 388 unit apartment building located in Phoenix, Arizona. The Company has an 85% equity interest with an initial basis of $16.9 million. Total project costs are approximately $56.3 million and construction is being partially funded with a loan that is guaranteed by the partner and non-recourse to the Company. The loan has a maximum debt commitment of $34.8 million and a current unconsolidated outstanding balance of $24.0 million; the loan bears interest at LIBOR plus 2.25% and matures January 6, 2015. The partner is the managing member and is developing the project. The Company does not have substantive kick-out or participating rights. As a result, the entity is unconsolidated and recorded using the equity method of accounting.

Waterton Tenside – This venture was formed to develop and operate a 336 unit apartment property located in Atlanta, Georgia. The Company has a 20% equity interest with an initial basis of $5.1 million. The partner is the managing member and developed the project. The project is encumbered by a non-recourse mortgage loan that has a current outstanding balance of $30.6 million, bears interest at 3.66% and matures December 1, 2018. The Company does not have substantive kick-out or participating rights. As a result, the entity is unconsolidated and recorded using the equity method of accounting.

Mission Gorge – This venture was formed to ultimately develop a land parcel into a 444 unit apartment building located in San Diego, California. The Company has a 23.17% equity interest with an initial basis of $4.1 million. While the Company is the managing member of the joint venture and will be responsible for constructing the project, the joint venture partner has significant participating rights and has active involvement in and oversight of the ongoing project. As a result, this entity is unconsolidated and recorded using the equity method of accounting.

Parkside at Emeryville – This venture is currently developing certain land parcels into a 180 unit apartment building located in Emeryville, California. The Company has a 5% equity interest with an initial basis of approximately $1.4 million. Total project costs are expected to be approximately $75.0 million and construction will be partially funded with a loan. The loan has a maximum debt commitment of $39.5 million and as of March 31, 2013 has not yet been drawn; the loan will bear interest at LIBOR plus 2.25% and matures August 14, 2015. The Company has given a repayment guaranty on the construction loan of 50% of the outstanding balance, up to a maximum of $19.7 million, and has given certain construction cost overrun guarantees. The partner is the managing member and is developing the project. The Company does not have substantive kick-out or participating rights. As a result, the entity is unconsolidated and recorded using the equity method of accounting.

On February 27, 2013, in connection with the Archstone Acquisition, subsidiaries of the Company and AVB entered into three limited liability company agreements (collectively, the “Residual JV”). The Residual JV owns certain non-core Archstone assets that are held for sale, such as interests in a German portfolio of apartment buildings, and succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters. The Residual JV is owned 60% by the Company and 40% by AVB and the Company's initial investment was $105.2 million. The venture is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the venture is unconsolidated and recorded using the equity method of accounting.

On February 27, 2013, in connection with the Archstone Acquisition, a subsidiary of the Company and AVB entered into a limited liability company agreement (the “Legacy JV”), through which they assumed obligations of Archstone in the form of preferred interests, some of which are governed by tax protection arrangements. At March 31, 2013, the preferred interests have an aggregate liquidation value of $167.2 million, our share of which is included in other liabilities in the accompanying consolidated balance sheets. Obligations of the venture are borne 60% by the Company and 40% by AVB. The venture is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the venture is unconsolidated and recorded using the equity method of accounting.

In December 2011, the Company and Toll Brothers (NYSE: TOL) jointly acquired a vacant land parcel at 400 Park Avenue South in New York City. The Company's and Toll Brothers' allocated portions of the purchase price were approximately $76.1 million and $57.9 million, respectively. The Company is the managing member and Toll Brothers does not have substantive kick-out or participating rights. Until the core and shell of the building is complete, the building and land will be owned jointly and are required to be consolidated on the Company's balance sheet (not a VIE). Thereafter, the Company will solely own and control the rental portion of the building (floors 2-22) and Toll Brothers will solely own and control the for sale portion of the building (floors 23-40). Once the core and shell are complete, the Toll Brothers' portion of the property will be deconsolidated from the Company's balance sheet. The acquisition was financed through contributions by the Company and Toll Brothers of approximately $102.5 million and $75.7 million, respectively, which included the land purchase noted above, restricted deposits and taxes and fees. As of March 31, 2013, the Company's and Toll Brothers' consolidated contributions to the joint venture were approximately $212.7 million, of which Toll Brothers' noncontrolling interest balance totaled $87.3 million.

The Company admitted an 80% institutional partner to two separate entities/transactions (Nexus Sawgrass in December 2010 and Domain in August 2011), each owning a developable land parcel, in exchange for $40.1 million in cash and retained a 20% equity interest in both of these entities. These land parcels are now unconsolidated. Total project costs are approximately $232.8 million and construction will be predominantly funded with two separate long-term, non-recourse secured loans from the partner. Nexus Sawgrass has a maximum debt commitment of $48.7 million and a current unconsolidated outstanding balance of $36.3 million; the loan bears interest at 5.60% and matures January 1, 2021. Domain has a maximum debt commitment of $98.6 million and a current unconsolidated outstanding balance of $57.4 million; the loan bears interest at 5.75% and matures January 1, 2022. While the Company is the managing member of both of the joint ventures, is responsible for constructing both of the projects and has given certain construction cost overrun guarantees, the joint venture partner has significant participating rights and has active involvement in and oversight of the ongoing projects, neither of which is a VIE. The Company currently has no further funding obligations related to these projects.