Investments in Real Estate Partnerships

The Company invests in real estate partnerships, which primarily include five co-investment partners. Investments in real estate partnerships as of December 31, 2013 consist of the following (in thousands):



	Ownership		Total Investment	Total Assets of the Partnership	Net Income (Loss) of the Partnership	The Company's Share of Net Income (Loss) of the Partnership
GRI - Regency, LLC (GRIR) ⁽¹⁾	40.00%	$	250,118	1,870,660	31,705	12,789
Macquarie CountryWide-Regency III, LLC (MCWR III) ⁽¹⁾⁽²⁾	—%		—	—	213	53
Columbia Regency Retail Partners, LLC (Columbia I) ⁽¹⁾	20.00%		16,735	204,759	8,605	1,727
Columbia Regency Partners II, LLC (Columbia II) ⁽¹⁾	20.00%		8,797	295,829	6,290	1,274
Cameron Village, LLC (Cameron)	30.00%		16,678	103,805	2,198	662
RegCal, LLC (RegCal) ⁽¹⁾	25.00%		15,576	159,255	1,300	332
Regency Retail Partners, LP (the Fund) ⁽³⁾	20.00%		1,793	9,325	9,234	7,749
US Regency Retail I, LLC (USAA) ⁽¹⁾	20.00%		1,391	118,865	2,387	487
BRE Throne Holdings, LLC (BRET) ⁽⁴⁾	—%		—	—	4,499	4,499
Other investments in real estate partnerships	50.00%		47,761	177,101	4,619	2,146
Total investments in real estate partnerships		$	358,849	2,939,599	71,050	31,718

⁽¹⁾This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2013, the Company did not sell any properties to this real estate partnership.

⁽²⁾ As of December 31, 2012, our ownership interest in MCWR III was 24.95%. The liquidation of MCWR III was complete effective March 20, 2013.

⁽³⁾On August 13, 2013, the Fund sold 100% of its interest in its entire portfolio of shopping centers to a third party. The Fund will be dissolved following the final distribution of proceeds.

⁽⁴⁾ On October 23, 2013, the Company sold 100% of its interest in the BRET unconsolidated real estate partnership and received a capital distribution of $47.5 million, its share of the undistributed income of the partnership, and an early redemption premium. Regency no longer has any interest in the BRET partnership.

Investments in real estate partnerships as of December 31, 2012 consist of the following (in thousands):



	Ownership	Total Investment		Total Assets of the Partnership	Net Income (Loss) of the Partnership		The Company's Share of Net Income (Loss) of the Partnership
GRI - Regency, LLC (GRIR) ⁽¹⁾	40.00%	$	272,044	1,939,659	23,357		9,311
Macquarie CountryWide-Regency III, LLC (MCWR III) ⁽¹⁾	24.95%	29		60,496	(75	)	(22	)
Columbia Regency Retail Partners, LLC (Columbia I) ⁽¹⁾	20.00%	17,200		210,490	42,399		8,480
Columbia Regency Partners II, LLC (Columbia II) ⁽¹⁾	20.00%	8,660		326,649	1,467		290
Cameron Village, LLC (Cameron)	30.00%	16,708		102,930	2,021		596
RegCal, LLC (RegCal) ⁽¹⁾	25.00%	15,602		164,106	2,160		540
Regency Retail Partners, LP (the Fund)	20.00%	15,248		323,406	407		297
US Regency Retail I, LLC (USAA) ⁽¹⁾	20.00%	2,173		123,053	1,484		297
BRE Throne Holdings, LLC (BRET) ⁽²⁾	47.80%	48,757		—	2,211		2,211
Other investments in real estate partnerships	50.00%	46,506		184,165	3,833		1,807
Total investments in real estate partnerships		$	442,927	3,434,954	79,264		23,807

⁽¹⁾This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2012, the Company did not sell any properties to this real estate partnership.

⁽²⁾ On July 25, 2012, the Company sold a 15-property portfolio and retained a $47.5 million, 10.5% preferred stock investment in the entity that owns the portfolio. Regency does not provide leasing or management services for the Portfolio after closing. As the property holdings of BRET do not impact the rate of return on Regency's preferred stock investment, BRET's portfolio information is not included.

In addition to earning its pro-rata share of net income or loss in each of these real estate partnerships, the Company received recurring, market-based fees for asset management, property management, and leasing, as well as fees for investment and financing services, of $24.2 million, $25.4 million, and $29.0 million for the years ended December 31, 2013, 2012, and 2011, respectively. The Company also received non-recurring transaction fees of $5.0 million for the year ended December 31, 2011.

As of December 31, 2013 and 2012, the summarized balance sheet information for the investments in real estate partnerships, on a combined basis, is as follows (in thousands):



		2013	2012

Investments in real estate, net	$	2,742,591	3,213,984
Acquired lease intangible assets, net		52,350	74,986
Other assets		144,658	145,984
Total assets	$	2,939,599	3,434,954

Notes payable	$	1,519,943	1,816,648
Acquired lease intangible liabilities, net		31,148	46,264
Other liabilities		66,829	70,576
Capital - Regency		468,099	518,505
Capital - Third parties		853,580	982,961
Total liabilities and capital	$	2,939,599	3,434,954

The following table reconciles the Company's capital in unconsolidated partnerships to the Company's investments in real estate partnerships as of December 31, 2013 and 2012 (in thousands):



		2013		2012
Capital - Regency	$	468,099		518,505
add: Preferred equity investment in BRET		—		47,500
add: Investment in Indian Springs at Woodlands, Ltd.		4,094		—
less: Impairment		(5,880	)	(5,880	)
less: Ownership percentage or Restricted Gain Method deferral		(29,261	)	(38,995	)
less: Net book equity in excess of purchase price		(78,203	)	(78,203	)
Investments in real estate partnerships	$	358,849		442,927

For the years ended December 31, 2013, 2012, and 2011, the revenues and expenses for the investments in real estate partnerships, on a combined basis, are summarized as follows (in thousands):



		2013		2012		2011
Total revenues	$	378,670		387,908		399,091
Operating expenses:
Depreciation and amortization		125,363		128,946		134,236
Operating and maintenance		55,423		55,394		62,442
General and administrative		7,385		7,549		7,905
Real estate taxes		45,451		46,395		49,103
Other expenses		1,725		3,521		3,477
Total operating expenses		235,347		241,805		257,163
Other expense (income):
Interest expense, net		95,505		104,694		112,099
Gain on sale of real estate		(15,695	)	(40,437	)	(7,464	)
Provision for impairment		—		3,775		—
Early extinguishment of debt		(1,780	)	967		(8,743	)
Preferred return on equity investment		(4,499	)	(2,211	)	—
Other expense (income)		(1,258	)	51		776
Total other expense (income)		72,273		66,839		96,668
Net income (loss) of the Partnership	$	71,050		79,264		45,260
The Company's share of net income (loss) of the Partnership	$	31,718		23,807		9,643

Acquisitions

The following table provides a summary of shopping centers and land parcels acquired through our unconsolidated co-investment partnerships during the year ended December 31, 2013 (in thousands):



Date Purchased	Property Name	City/State	Property Type	Co-investment Partner	Ownership %		Purchase Price	Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
7/23/2013	Shoppes of Burnt Mills	Silver Spring, MD	Operating	Columbia II	20.00%	$	13,600	7,496	8,438	332
						$	13,600	7,496	8,438	332

The following table provides a summary of shopping centers and land parcels acquired through our unconsolidated co-investment partnerships during the year ended December 31, 2012 (in thousands):



Date Purchased	Property Name	City/State	Property Type	Co-investment Partner	Ownership %		Purchase Price	Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
1/17/2012	Lake Grove Commons	Lake Grove, NY	Operating	GRIR	40.00%	$	72,500	31,813	5,397	4,342
6/20/2012	Tysons CVS	Vienna, VA	Operating	Other	50.00%		13,800	—	—	—
11/28/2012	Applewood Village Shops	Wheat Ridge, CO	Operating	GRIR	40.00%		3,700	—	363	34
12/19/2012	Village Plaza	Chapel Hill, NC	Operating	Columbia II	20.00%		19,200	—	2,242	686
12/28/2012	Phillips Place	Charlotte, NC	Operating	Other	50.00%		55,400	44,500	—	—
						$	164,600	76,313	8,002	5,062

Dispositions

The following table provides a summary of shopping centers and land out-parcels disposed of through our unconsolidated co-investment partnerships during the years ended December 31, 2013, 2012, and 2011 (dollars in thousands):



		2013	2012	2011
Proceeds from sale of real estate investments	$	145,295	119,275	43,710
Gain on sale of real estate	$	15,695	40,437	7,464
The Company's share of gain on sale of real estate	$	3,847	8,962	2,114
Number of operating properties sold		15	7	5
Number of land out-parcels sold		3	1	1
Percent interest sold		100%	100%	100%

Notes Payable

The Company’s proportionate share of notes payable of the investments in real estate partnerships was $534.1 million and $597.4 million and at December 31, 2013 and 2012, respectively. The Company does not guarantee these loans. As of December 31, 2013, scheduled principal repayments on notes payable of the investments in real estate partnerships were as follows (in thousands):



Scheduled Principal Payments by Year:		Scheduled Principal Payments	Mortgage Loan Maturities		Unsecured Maturities	Total		Regency’s Pro-Rata Share
2014	$	19,921	53,015		14,060	86,996		25,460
2015		20,382	99,750		—	120,132		43,107
2016		17,550	305,076		—	322,626		113,362
2017		17,685	87,479		—	105,164		27,053
2018		18,888	37,000		—	55,888		15,723
Beyond 5 Years		54,158	775,994		—	830,152		310,014
Unamortized debt premiums (discounts), net		—	(1,015	)	—	(1,015	)	(579	)
Total notes payable	$	148,584	1,357,299		14,060	1,519,943		534,140