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Unconsolidated Joint Ventures
3 Months Ended
Mar. 31, 2018
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments and Joint Ventures Disclosure [Text Block]
Unconsolidated Joint Ventures
Liberty Property 18th & Arch LP and Liberty Property 18th & Arch Hotel, LP
On June 30, 2014, the Company entered into two joint ventures for the purpose of developing and owning the Comcast Technology Center (the “Project”) located in Philadelphia, Pennsylvania as part of a mixed-use development. The 60-story building will include 1.3 million square feet of leasable office space (the “Office”) and a 217-room Four Seasons Hotel (the “Hotel”) (collectively, “Liberty Property 18th and Arch”). Project costs for the development of the Project, exclusive of tenant-funded interior improvements, are anticipated to be approximately $955.3 million.  The Company's investment in the Project is expected to be approximately $191.1 million with 20% ownership interests in both joint ventures. As of March 31, 2018, the Company's investment in these joint ventures was $179.2 million and is reflected in investments in and advances to unconsolidated joint ventures in the Company's consolidated balance sheet. These joint ventures are part of the Company's Philadelphia reportable segment.
During the three months ended March 31, 2018, the joint ventures for Liberty Property 18th & Arch brought into service 250,000 square feet of office space representing a Total Investment of $138.3 million. The 217-room Four Seasons hotel representing an aggregate Total Investment of $217.4 million continued to be developed by one of the joint ventures as of March 31, 2018.
The two joint ventures have engaged the Company as the developer of the Project pursuant to a Development Agreement by which the Company agrees, in consideration for a development fee, to be responsible for all aspects of the development of the Project and to guarantee the timely lien-free completion of construction of the Project as well as the payment, subject to certain exceptions, of any cost overruns incurred in the development of the Project. To mitigate its risk, the Company entered into guaranteed maximum price contracts with a third-party contractor (the “GMP Contracts”) to construct the Project. The Company is accounting for the project under the New Revenue Standards on a variable basis as a percentage of costs incurred, formerly referred to as the percentage of completion method. The Company believes it has applied reasonable estimates and judgments in determining the amount of estimated development costs for the Project. The Company has been notified by its third-party contractor, however, that the contractor has incurred cost overruns and expects to incur additional construction costs in connection with completing the Project. Recently, the contractor advised the Company that it currently believes that these costs could total as much as $67 million in excess of the guaranteed maximum price payable to the contractor under the GMP Contracts (as that guaranteed maximum price has been adjusted pursuant to change orders accepted to date). The Company intends to vigorously pursue all remedies to enforce the third-party contractor’s obligations under the GMP Contracts and to seek to recover any amounts expended by the Company or the joint ventures in excess of their contractual obligations. Until such time as the Company receives from the third-party contractor further information concerning the amount and nature of the excess costs that the contractor recently quantified and has an opportunity to investigate them, it is not possible to estimate the amount of any possible additional expenses that the Company may incur in connection with its development cost guarantee to the joint ventures. If the Company were to incur additional expenses in connection with its development cost guarantee, such amounts could be material to its results of operations in future periods.
Liberty/Comcast 1701 JFK Boulevard, LP
During the three months ended March 31, 2018, Liberty/Comcast 1701 JFK Boulevard LP (a joint venture in which the Company holds a 20% interest) paid in full the $305.2 million mortgage loan. The payment was funded through loans from the joint venture partners in proportion to their ownership interests. The Company's portion of the loan to the joint venture is included in investments in, and advances to, unconsolidated joint ventures in the Company's consolidated balance sheets.
Cambridge Medipark Ltd
During the three months ended March 31, 2018, Cambridge Medipark, Ltd (a joint venture in which the Company holds a 50% interest) recognized gains on the sale of land leasehold interests. The Company's share of these gains was $2.0 million for the three months ended March 31, 2018 compared to $3.0 million for the same period in 2017.