Investments in Unconsolidated Subsidiaries

12 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Subsidiaries

Investments in unconsolidated subsidiaries are accounted for under the equity method of accounting. Our investment ownership percentages in equity method investments vary, generally ranging from 1.0% to 50.0%. The following table represents the composition of investment in unconsolidated subsidiaries (dollars in thousands):


	December 31,
Investment type	2022		2021
Real estate investments (in projects and funds)	$	622,826	$	453,813

Investment in Altus:
Class A common stock (24.55 million shares)	160,093		229,900
Alignment shares (1)	59,530		114,727
Private placement warrants (2)	—		23,741
Subtotal	$	219,624	$	368,368

Other (3)	$	475,256	$	373,907

Total investment in unconsolidated subsidiaries	$	1,317,705	$	1,196,088

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(1)The alignment shares, also known as Class B common shares, will automatically convert into Altus Class A common shares based on the achievement of certain total return thresholds on Altus Class A common shares as of the relevant measurement date over the seven fiscal years following the merger. As of March 31, 2022 (the first measurement date), 201,250 of alignment shares automatically converted into 2,011 shares of Class A common stock, which were issued on April 11, 2022.

(2)On September 21, 2022, we exercised all of the private placement warrants on a “cashless basis” and received 2,552,390 shares of Class A common stock based on a 0.2763 conversion rate.

(3)Consists of our investments in Industrious and other non-public entities.

Combined condensed financial information for the entities accounted for using the equity method is as follows (dollars in thousands):


	December 31,
	2022		2021
Combined Condensed Balance Sheets Information:
Current assets	$	9,043,686	$	7,127,598
Non-current assets	45,616,330		30,586,991
Total assets	$	54,660,016	$	37,714,589

Current liabilities	$	2,346,015	$	3,128,205
Non-current liabilities	15,857,710		8,875,779
Total liabilities	$	18,203,725	$	12,003,984

Non-controlling interests	$	926,390	$	588,067


	Year Ended December 31,
	2022		2021		2020
Combined Condensed Statements of Operations Information:
Revenue	$	2,782,660	$	2,680,675	$	2,036,818
Operating income	1,215,456		1,371,014		587,689
Net income (1)	4,102,329		3,260,051		483,224

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(1)Included in net income are realized and unrealized earnings and losses in investments in unconsolidated investment funds and realized earnings and losses from sales of real estate projects in investments in unconsolidated subsidiaries. These realized and unrealized earnings and losses are not included in revenue and operating income.

Our Real Estate Investments segment invests our own capital in certain real estate investment funds with clients. We provided investment management, property management, brokerage and other professional services in connection with these real estate investments and earned revenues from these unconsolidated subsidiaries of $268.9 million, $213.5 million and $145.9 million during the years ended December 31, 2022, 2021 and 2020, respectively. Additionally, in our global development business, we earned development and construction management revenues from our investments in unconsolidated subsidiaries of $103.0 million, $68.2 million and $45.2 million during the years ended December 31, 2022, 2021 and 2020.

During the second quarter of 2022, we made an additional $100 million investment in Industrious bringing our total ownership percentage to approximately 45%. We have elected the fair value option for the overall equity investment in Industrious (see Note 7).