Investment in Partially-Owned Entities

Investments in unconsolidated partially-owned entities at June 30, 2012 and December 31, 2011 consisted of the following:



	Percent	As of
($ in thousands)	Owned	June 30, 2012			December 31, 2011
Multifamily:
Belterra, Ft. Worth, TX	10%	$	332		$	365
CG at Huntcliff, Atlanta, GA	20%	1,297			1,382
CG at McKinney, Dallas, TX ₍₁₎	25%	1,718			1,721
CG at Research Park, Raleigh, NC	20%	602			660
Regents Park (Phase II), Atlanta, GA ₍₁₎	40%	3,381			3,341
Total Multifamily		$	7,330		$	7,469

Commercial:
600 Building Partnership, Birmingham, AL	33%	341			331
Bluerock, Huntsville, AL ₍₂₎	10%	(6,795		)	(6,426		)
Colonial Promenade Madison, Huntsville, AL ₍₃₎	—%	—			2,062
Colonial Promenade Smyrna, Smyrna, TN	50%	1,523			2,259
DRA/CLP JV ₍₄₎	—%	—			(25,152		)
Highway 150, LLC, Birmingham, AL	10%	34			43
Parkside Drive LLC II, Knoxville, TN ₍₅₎	—%	36			112
Total Commercial		$	(4,861	)	$	(26,771	)

Other:
Colonial/Polar-BEK Management Company, Birmingham, AL	50%	29			28
Total Other		$	29		$	28

Net investment in partially-owned entities ₍₆₎		$	2,498		$	(19,274	)

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(1)	These joint ventures consist of undeveloped land.


(2)	Equity investment includes the Company’s investment of approximately $(0.1) million, plus by the excess basis difference on the transaction of approximately $(6.7) million, which is being amortized over the life of the properties. This joint venture is presented under “Liabilities” on the Company’s Consolidated Condensed Balance Sheets as of June 30, 2012 and December 31, 2011.


(3)	In the first quarter 2012, the Company sold its noncontrolling interest in this joint venture (see below).


(4)	The Company's noncontrolling interest in this joint venture was redeemed effective as of June 30, 2012 (see below).


(5)	In the fourth quarter 2011, the Company sold its noncontrolling interest in this joint venture.


(6)	Net investment in partially-owned entities as of December 31, 2011 includes the Trust's $4.1 million contingent obligation related to the DRA/CLP JV. CRLP's net investment in partially owned entities was $(15.1) million as of December 31, 2011.

Effective June 30, 2012, the Company's remaining 15% interest in the 18-asset DRA/CLP joint venture was redeemed by the joint venture in exchange for $2.0 million, and the Company is no longer responsible for approximately $111.3 million of mortgage debt, which represented the Company's pro rata share of the joint venture's mortgage debt. The $2.0 million contingent consideration is payable to the Company following the occurrence of one or more capital events and after certain returns have been achieved with respect to additional capital expected to be invested in the joint venture by other members of the joint venture. As of the date of the transaction, the Company assigned no value to this consideration. In addition, the Trust was released from a $4.1 million contingent liability, which represents the Trust's pro rata share of such guaranty obligation resulting from a debt guaranty provided by the joint venture. As a result of the transaction, the Company recognized a gain of approximately $21.9 million (presented in “Income (loss) from partially-owned unconsolidated entities” on the Company's Consolidated Condensed Statements of Operations and Comprehensive Income (Loss)), the majority of which had been deferred since the formation of the DRA/CLP joint venture in 2007. The gain is net of a $3.2 million non-cash impairment charge, which represents the Company's pro-rata share of an impairment recorded by the joint venture for 2011, but omitted in the Company's annual financial statements for the year ended December 31, 2011. Along with the redemption of its interest in the DRA/CLP joint venture, the Company is reducing its workforce in the commercial segment by 21 employees through the elimination of certain positions resulting in the Company accruing an aggregate of approximately $1.1 million in termination benefits and severance-related charges. These charges were included in “Income (loss) from partially-owned unconsolidated entities” on the Company's Consolidated Condensed Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2012, and reflected in “Accrued expenses” on the Company's Consolidated Condensed Balance Sheet as of June 30, 2012. The Company expects to transition management and certain leasing responsibilities to a third party by August 31, 2012.

In February 2012, the Company sold its 25% noncontrolling joint venture interest in Colonial Promenade Madison, a 111,000 square-foot retail center located in Huntsville, Alabama, to a minority partner for total consideration of $3.0 million. The Company recognized a gain of approximately $1.0 million on this transaction. Proceeds from the sale were used to repay a portion of the outstanding balance on the Company's unsecured credit facility. As a result of this transaction, the Company no longer has an interest in this joint venture.

Combined financial information for the Company’s investments in unconsolidated partially-owned entities since the respective dates of the Company’s acquisitions is as follows (the following tables give effect to the DRA/CLP joint venture disposition transaction, effective as of June 30, 2012, as described above):



	As of
($ in thousands)	June 30, 2012		December 31, 2011 ₍₁₎
Balance Sheet
Assets
Land, building and equipment, net	$	294,727	$	1,044,266
Construction in progress	13,841		13,841
Other assets	25,186		78,564
Total assets	$	333,754	$	1,136,671
Liabilities and partners’ equity
Notes payable ₍₂₎	$	212,919	$	957,068
Other liabilities	88,485		106,068
Partners’ equity	32,350		73,535
Total liabilities and partners’ equity	$	333,754	$	1,136,671

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(1)	"Land, building and equipment, net" has been revised from the amount previously reported to appropriately reflect an asset impairment of $34.5 million recorded by the DRA/CLP joint venture during 2011.


(2)	The Company’s pro-rata share of indebtedness, as calculated based on ownership percentage, at June 30, 2012 and December 31, 2011, was $35.9 million and $147.8 million, respectively.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in thousands)	2012			2011			2012			2011
Statement of Operations
Revenues	$	32,496		$	40,796		$	67,633		$	81,915
Operating expenses	(13,436		)	(14,845		)	(26,304		)	(29,486		)
Interest expense	(15,260		)	(17,389		)	(30,625		)	(34,727		)
Depreciation, amortization and other	9,273			(15,641		)	(2,825		)	(33,124		)
Net income (loss)₍₁₎	$	13,073		$	(7,079	)	$	7,879		$	(15,422	)

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(1)

In addition to including the Company’s pro-rata share of income (loss) from partially-owned unconsolidated entities, “Income (loss) from partially-owned unconsolidated entities” of $21.3 million and $(0.1) million for the three months ended June 30, 2012 and 2011, respectively, and $22.0 million and $(0.5) million for the six months ended June 30, 2012 and 2011, respectively, includes gains on the Company’s dispositions of joint-venture interests and amortization of basis differences which are not reflected in the table above.