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Investments in Partially Owned Entities | 9 Months Ended
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Sep. 30, 2015
Investments in Partially Owned Entities [Abstract] |
Investments in Partially Owned Entities | 6. Investments in Partially Owned Entities The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following tables and information summarize the Company’s investments in partially owned entities as of September 30, 2015 (amounts in thousands except for project and apartment unit amounts):
|  | Consolidated |  | Unconsolidated
|  | Operating |  | Operating
Total projects |  | 19 |  |  | 3 |
Total apartment units |  | 3,771 |  |  | 1,281 |
Balance sheet information at 9/30/15 (at 100%): |  |  |  |
ASSETS |  |  |  |
Investment in real estate |  | $ | 687,814 |  |  | $ | 290,733 |
Accumulated depreciation |  | (211,120 | ) |  | (27,563 | )
Investment in real estate, net |  | 476,694 |  |  | 263,170 |
Cash and cash equivalents |  | 19,242 |  |  | 8,912 |
Investments in unconsolidated entities |  | 50,140 |  |  | — |
Deposits – restricted |  | 335 |  |  | 284 |
Deferred financing costs, net |  | 1,875 |  |  | 6 |
Other assets |  | 26,816 |  |  | 882 |
Total assets |  | $ | 575,102 |  |  | $ | 273,254 |
LIABILITIES AND EQUITY/CAPITAL |  |  |  |
Mortgage notes payable (1) |  | $ | 343,341 |  |  | $ | 174,992 |
Accounts payable & accrued expenses |  | 3,318 |  |  | 3,227 |
Accrued interest payable |  | 1,206 |  |  | 691 |
Other liabilities |  | 709 |  |  | 513 |
Security deposits |  | 2,017 |  |  | 614 |
Total liabilities |  | 350,591 |  |  | 180,037 |
Noncontrolling Interests – Partially Owned Properties/Partners' equity |  | 4,643 |  |  | 90,878 |
Company equity/General and Limited Partners' Capital |  | 219,868 |  |  | 2,339 |
Total equity/capital |  | 224,511 |  |  | 93,217 |
Total liabilities and equity/capital |  | $ | 575,102 |  |  | $ | 273,254 |
|  | Consolidated |  | Unconsolidated
|  | Operating |  | Operating
Operating information for the nine months ended 9/30/15 (at 100%): |  |  |  |
Operating revenue |  | $ | 70,142 |  |  | $ | 24,125 |
Operating expenses |  | 20,208 |  |  | 8,949 |
Net operating income |  | 49,934 |  |  | 15,176 |
Depreciation |  | 16,638 |  |  | 9,251 |
General and administrative/other |  | 44 |  |  | 178 |
Operating income |  | 33,252 |  |  | 5,747 |
Interest and other income |  | 8 |  |  | 2 |
Other expenses |  | (50 | ) |  | — |
Interest: |  |  |  |
Expense incurred, net |  | (11,704 | ) |  | (7,047 | )
Amortization of deferred financing costs |  | (266 | ) |  | (1 | )
Income (loss) before income and other taxes and (loss) from investments in unconsolidated entities |  | 21,240 |  |  | (1,299 | )
Income and other tax (expense) benefit |  | (35 | ) |  | (18 | )
(Loss) from investments in unconsolidated entities |  | (1,104 | ) |  | — |
Net income (loss) |  | $ | 20,101 |  |  | $ | (1,317 | )
(1) | All debt is non-recourse to the Company.
Note: | The above tables exclude the Company's interests in unconsolidated joint ventures entered into with AvalonBay Communities, Inc. (“AVB”) in connection with the acquisition of certain real estate related assets from Archstone Enterprise LP (such assets are referred to herein as "Archstone"). These ventures own certain non-core Archstone assets that are held for sale and succeeded to certain residual Archstone liabilities/litigation, as well as responsibility for tax protection arrangements and third-party preferred interests in former Archstone subsidiaries. The preferred interests had an aggregate liquidation value of $42.8 million at September 30, 2015. The ventures are owned 60% by the Company and 40% by AVB.
The Company is the controlling partner in various consolidated partnership properties having an aggregate noncontrolling interest book value of $4.6 million at September 30, 2015. The Company does not have any variable interest entities. Operating Properties The Company has a 75% equity interest in the Wisconsin Place joint venture. The project contains a mixed-use site located in Chevy Chase, Maryland consisting of residential, retail, office and accessory uses, including underground parking facilities. The joint venture owns the 432 unit residential component, but has no ownership interest in the retail and office components. At September 30, 2015, the residential component had a net book value of $176.8 million. The Company is the managing member and its partner does not have substantive kick-out or participating rights. As a result, the entity that owns the residential component is required to be consolidated on the Company's balance sheet. The joint venture also retains an unconsolidated interest in an entity that owns the land underlying the entire project and owns and operates the parking facility. At September 30, 2015, the basis of this investment was $50.1 million. The Company has a 20% equity interest in the Waterton Tenside joint venture which owns a 336 unit apartment property located in Atlanta, Georgia and had a basis of $4.0 million at September 30, 2015. The partner is the managing member and developed the project. The project is encumbered by a non-recourse mortgage loan that has a current outstanding balance of $29.6 million, bears interest at 3.66% and matures December 1, 2018. The Company does not have substantive kick-out or participating rights. As a result, the entity is unconsolidated and recorded using the equity method of accounting. The Company has a 20% equity interest in each of the Nexus Sawgrass and Domain joint ventures. The Nexus Sawgrass joint venture owns a 501 unit apartment property located in Sunrise, Florida and had a basis of $5.3 million at September 30, 2015. The Domain joint venture owns a 444 unit apartment property located in San Jose, California and had a basis of $10.2 million at September 30, 2015. Nexus Sawgrass and Domain were completed and stabilized during the quarters ended September 30, 2014 and March 31, 2015, respectively. Construction on both projects was predominantly funded with long-term, non-recourse secured loans from the partner. The mortgage loan on Nexus Sawgrass has a current unconsolidated outstanding balance of $48.6 million, bears interest at 5.60% and matures January 1, 2021. The mortgage loan on Domain has a current unconsolidated outstanding balance of $96.8 million, bears interest at 5.75% and matures January 1, 2022. While the Company is the managing member of both of the joint ventures, was responsible for constructing both of the projects and had given certain construction cost overrun guarantees, the joint venture partner has significant participating rights and has active involvement in and oversight of the ongoing projects. As a result, the entities are unconsolidated and recorded using the equity method of accounting. The Company currently has no further funding obligations related to these projects. Other On February 27, 2013, in connection with the acquisition of Archstone, subsidiaries of the Company and AVB entered into three limited liability company agreements (collectively, the “Residual JV”). The Residual JV owns certain non-core Archstone assets, such as interests in a two property portfolio of apartment buildings and succeeded to certain residual Archstone liabilities/litigation. The Residual JV is owned 60% by the Company and 40% by AVB. The Company's initial investment was $147.6 million and the Company's basis at September 30, 2015 was $4.5 million. The Residual JV is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the Residual JV is unconsolidated and recorded using the equity method of accounting. During the nine months ended September 30, 2015, the Company received approximately $45.1 million in distributions from the Residual JV as a result of the winddown/sale of remaining assets owned by the Residual JV and litigation settlements received by the Residual JV. The Company's pro rata share of the distributions related to the winddown of the German dispositions that occurred in 2014 was approximately $3.5 million during the nine months ended September 30, 2015 and $102.0 million cumulatively since the acquisition of Archstone. The Company's pro rata share of the proceeds related to the sale of certain remaining assets owned by the Residual JV and the litigation settlements received by the Residual JV were approximately $24.8 million and $16.8 million, respectively, during the nine months ended September 30, 2015. On February 27, 2013, in connection with the acquisition of Archstone, a subsidiary of the Company and AVB entered into a limited liability company agreement (the “Legacy JV”), through which they assumed obligations of Archstone in the form of preferred interests, some of which are governed by tax protection arrangements. During the nine months ended September 30, 2015, the Legacy JV distributed $27.9 million to its preferred interests holders for accrued and unpaid dividends, of which the Company's pro rata share was approximately $16.7 million. At September 30, 2015, the remaining preferred interests had an aggregate liquidation value of $42.8 million, our share of which is included in other liabilities in the accompanying consolidated balance sheets. Obligations of the Legacy JV are borne 60% by the Company and 40% by AVB. The Legacy JV is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the Legacy JV is unconsolidated and recorded using the equity method of accounting.

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- Definition Investments in Partially Owned Entities. + References No definition available. + Details
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- Definition Disclosure of investments in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). + References No definition available. + Details
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