18. COMMITMENTS AND CONTINGENCIES

Commitments

Operating Leases

The Partnership leases office space under non-cancelable lease and sublease agreements, which expire on various dates through 2032. Occupancy lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord, and are recognized on a straight-line basis over the term of the lease agreement. Rent expense includes base contractual rent and variable costs such as building expenses, utilities, taxes and insurance. Rent expense for the years ended December 31, 2013, 2012 and 2011, was $78.6 million, $74.8 million and $72.7 million, respectively. At December 31, 2013 and 2012, the Partnership maintained irrevocable standby letters of credit and cash deposits as security for the leases of $9.0 million and $9.4 million, respectively. As of December 31, 2013, the aggregate minimum future payments, net of sublease income, required on the operating leases are as follows:


2014	$	71,286
2015		67,388
2016		61,299
2017		56,379
2018		54,279
Thereafter		189,150

Total	$	499,781

Investment Commitments

Blackstone had $1.5 billion of investment commitments as of December 31, 2013 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. The consolidated Blackstone Funds had signed investment commitments of $54.6 million as of December 31, 2013 which includes $25.2 million of signed investment commitments for portfolio company acquisitions in the process of closing.

Contingencies

Guarantees

Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the on-going business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to the Partnership to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, the Partnership’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $4.9 million as of December 31, 2013.

On March 28, 2012, the Blackstone Holdings Partnerships entered into a guaranty agreement with a lending institution in which the Holdings Partnerships guarantee certain loans held by employees for investment in Blackstone funds. The amount guaranteed as of December 31, 2013 was $60.3 million.

Litigation

From time to time, Blackstone is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, Blackstone does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.

Contingent Obligations (Clawback)

Carried Interest is subject to clawback to the extent that the Carried Interest received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds with a potential clawback obligation, including available contemplated extensions, are currently anticipated to expire at various points through 2018. Further extensions of such terms may be implemented under given circumstances.

For financial reporting purposes, the general partners have recorded a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Carried Interest distributions with respect to such fund’s realized investments.

During the year ended December 31, 2013, the Blackstone general partners paid a cash clawback obligation of $89.7 million relating to Blackstone Communications Partners (“BCOM”) of which $70.6 million was paid by Blackstone Holdings and $19.1 million by current and former Blackstone personnel.

The following table presents the clawback obligations by segment:


	December 31,
	2013							2012
Segment	Blackstone Holdings			Current and Former Personnel		Total		Blackstone Holdings		Current and Former Personnel		Total
Private Equity	$	(5	)	$	151	$	146	$	69,302	$	133,852	$	203,154
Real Estate		1,501			518		2,019		32,152		31,223		63,375
Credit		1,213			892		2,105		340		247		587

Total	$	2,709		$	1,561	$	4,270	$	101,794	$	165,322	$	267,116

A portion of the Carried Interest paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Consolidated Financial Statements of the Partnership, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At December 31, 2013, $420.9 million was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.