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Note 4 - Investments and Advances in Real Estate Joint Ventures | 6 Months Ended
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Jun. 30, 2013
Investments And Advances In Real Estate Joint Ventures [Text Block] |
Investments And Advances In Real Estate Joint Ventures [Text Block] | 4. Investments and Advances in Real Estate Joint Ventures The Company and its subsidiaries have investments in and advances to various real estate joint ventures. These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. The Company and the joint venture partners have joint approval rights for major decisions, including those regarding property operations. As such, the Company holds noncontrolling interests in these joint ventures and accounts for them under the equity method of accounting. The table below presents joint venture investments for which the Company held an ownership interest at June 30, 2013 and December 31, 2012 (in millions, except number of properties):
|  | As of June 30, 2013 |  |  | As of December 31, 2012 |
Venture |  | Average Ownership Interest |  |  | Number of Properties |  |  | GLA |  |  | Gross Real Estate |  |  | The Company's Investment |  |  | Average Ownership Interest |  |  | Number of Properties |  |  | GLA |  |  | Gross Real Estate |  |  | The Company's Investment |
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2) (10) |  |  | 15.0 | % |  |  | 60 |  |  |  | 10.6 |  |  | $ | 2,716.4 |  |  | $ | 169.4 |  |  |  | 15.0 | % |  |  | 61 |  |  |  | 10.7 |  |  | $ | 2,744.9 |  |  | $ | 170.1 |
Kimco Income Opportunity Portfolio (“KIR”) (2) (13) |  |  | 48.6 | % |  |  | 58 |  |  |  | 12.4 |  |  |  | 1,514.0 |  |  |  | 189.0 |  |  |  | 45.0 | % |  |  | 58 |  |  |  | 12.4 |  |  |  | 1,543.2 |  |  |  | 140.3 |
UBS Programs (“UBS”) (2) (7) (14)* |  |  | - | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 0.9 |  |  |  | 17.9 | % |  |  | 40 |  |  |  | 5.7 |  |  |  | 1,260.1 |  |  |  | 58.4 |
Kimstone (2) (14) |  |  | 33.3 | % |  |  | 39 |  |  |  | 5.6 |  |  |  | 1,085.6 |  |  |  | 107.1 |  |  |  | 0.0 | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
BIG Shopping Centers (2) (9)* |  |  | 37.9 | % |  |  | 21 |  |  |  | 3.4 |  |  |  | 519.0 |  |  |  | 30.8 |  |  |  | 37.7 | % |  |  | 22 |  |  |  | 3.6 |  |  |  | 547.7 |  |  |  | 31.3 |
The Canada Pension Plan Investment Board (“CPP”) (2) |  |  | 55.0 | % |  |  | 6 |  |  |  | 2.4 |  |  |  | 436.0 |  |  |  | 148.7 |  |  |  | 55.0 | % |  |  | 6 |  |  |  | 2.4 |  |  |  | 436.1 |  |  |  | 149.5 |
Kimco Income Fund (2)(6) |  |  | 39.5 | % |  |  | 12 |  |  |  | 1.5 |  |  |  | 288.1 |  |  |  | 51.0 |  |  |  | 15.2 | % |  |  | 12 |  |  |  | 1.5 |  |  |  | 287.0 |  |  |  | 12.3 |
SEB Immobilien (2) |  |  | 15.0 | % |  |  | 13 |  |  |  | 1.8 |  |  |  | 361.3 |  |  |  | 1.2 |  |  |  | 15.0 | % |  |  | 13 |  |  |  | 1.8 |  |  |  | 361.2 |  |  |  | 1.5 |
Other Institutional Programs (2) (8) |  | Various |  |  |  | 56 |  |  |  | 2.1 |  |  |  | 452.8 |  |  |  | 17.0 |  |  | Various |  |  |  | 58 |  |  |  | 2.6 |  |  |  | 499.2 |  |  |  | 21.3 |
RioCan |  |  | 50.0 | % |  |  | 45 |  |  |  | 9.3 |  |  |  | 1,306.1 |  |  |  | 136.5 |  |  |  | 50.0 | % |  |  | 45 |  |  |  | 9.3 |  |  |  | 1,379.3 |  |  |  | 111.0 |
Intown (3) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 138 |  |  | N/A |  |  |  | 841.0 |  |  |  | 86.9 |
Latin America (12) |  | Various |  |  |  | 124 |  |  |  | 15.4 |  |  |  | 1,010.5 |  |  |  | 274.8 |  |  | Various |  |  |  | 131 |  |  |  | 18.0 |  |  |  | 1,198.1 |  |  |  | 334.2 |
Other Joint Venture Programs (4) (5) |  | Various |  |  |  | 82 |  |  |  | 12.5 |  |  |  | 1,646.4 |  |  |  | 266.0 |  |  | Various |  |  |  | 87 |  |  |  | 13.2 |  |  |  | 1,846.7 |  |  |  | 311.4 |
Total |  |  |  |  |  |  | 516 |  |  |  | 77.0 |  |  | $ | 11,336.2 |  |  | $ | 1,392.4 |  |  |  |  |  |  |  | 671 |  |  |  | 81.2 |  |  | $ | 12,944.5 |  |  | $ | 1,428.2 |
* Ownership % is a blended rate The table below presents the Company’s share of net income/(loss) for the above investments which is included in the Company’s Condensed Consolidated Statements of Income in Equity in income of joint ventures, net for the six months ended June 30, 2013 and 2012 (in millions):
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
KimPru and KimPru II (10) |  | $ | 2.3 |  |  | $ | 2.1 |  |  | $ | 4.2 |  |  | $ | 4.1 |
KIR |  |  | 7.4 |  |  |  | 5.9 |  |  |  | 14.5 |  |  |  | 11.9 |
UBS Programs (14) |  |  | 0.7 |  |  |  | 0.6 |  |  |  | 1.6 |  |  |  | 0.4 |
BIG Shopping Centers (9) |  |  | (0.5 | ) |  |  | (0.8 | ) |  |  | 1.5 |  |  |  | (1.4 | )
CPP |  |  | 1.6 |  |  |  | 1.3 |  |  |  | 3.0 |  |  |  | 2.5 |
Kimco Income Fund |  |  | 0.9 |  |  |  | 0.2 |  |  |  | 1.5 |  |  |  | 1.0 |
SEB Immobilien |  |  | 0.3 |  |  |  | 0.2 |  |  |  | 0.5 |  |  |  | 0.3 |
Other Institutional Programs (16) (18) |  |  | 0.5 |  |  |  | 1.2 |  |  |  | 0.9 |  |  |  | 4.2 |
RioCan (17) |  |  | 6.6 |  |  |  | 12.5 |  |  |  | 12.7 |  |  |  | 17.8 |
Intown |  |  | 1.6 |  |  |  | 0.3 |  |  |  | 1.4 |  |  |  | 0.8 |
Latin America (12) |  |  | 30.5 |  |  |  | 3.9 |  |  |  | 32.1 |  |  |  | 6.5 |
Other Joint Venture Programs (11) (15) |  |  | 7.6 |  |  |  | 3.0 |  |  |  | 9.7 |  |  |  | 17.0 |
Total |  | $ | 59.5 |  |  | $ | 30.4 |  |  | $ | 83.6 |  |  | $ | 65.1 |
| (1) | This venture represents four separate joint ventures, with four separate accounts managed by Prudential Real Estate Investors (“PREI”), three of these ventures are collectively referred to as KimPru and the remaining venture is referred to as KimPru II.
| (2) | The Company manages these joint venture investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, asset management fees and construction management fees.
| (3) | The Company’s share of this investment was subject to fluctuation and dependent upon property cash flows. During June 2013, the Intown portfolio was sold for a sales price of $735.0 million which included the assignment of $609.2 million in debt. This transaction resulted in a deferred gain to the Company of $21.7 million. The Company continues to maintain its guarantee of $145.2 million of outstanding debt assumed by the buyer. The guarantee is collateralized by the buyer’s ownership interest in the portfolio. The Company is entitled to a guarantee fee, for the initial term of the loan, which is scheduled to mature in December 2015. The guarantee fee is calculated based upon the difference between LIBOR plus 1.15% and 5.0% per annum multiplied by the outstanding amount of the loan. Additionally, the Company has entered into a commitment to provide financing up to $145.2 million for five years past the date of maturity. This commitment can be in the form of extensions with the current lender or a new lender or financing directly from the Company to the buyer. Due to this continued involvement, the Company deferred its gain until such time that the guarantee and commitment expire.
| (4) | During the six months ended June 30, 2013, the Company amended one of its Canadian preferred equity investment agreements to restructure the investment as a pari passu joint venture in which the Company holds a noncontrolling interest. As a result of this transaction, the Company continues to account for its investment in this joint venture under the equity method of accounting and includes this investment in Investments and advances to real estate joint ventures within the Company’s Condensed Consolidated Balance Sheets.
| (5) | During the six months ended June 30, 2013, two joint ventures in which the Company held noncontrolling interests sold two operating properties to the Company, in separate transactions, for an aggregate sales price of $228.8 million. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance. As such, the Company recognized an aggregate gain of $30.9 million, before income tax, from the fair value adjustment associated with its original ownership due to a change in control and now consolidates these operating properties.
| (6) | During the six months ended June 30, 2013, the Company purchased an additional 24.24% interest in Kimco Income Fund for $38.3 million.
| (7) | During the six months ended June 30, 2013, UBS sold an operating property to the Company for a sales price of $32.7 million, which was equal to the remaining debt balance. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance. As such the Company recognized no gain or loss from a change in control and now consolidates this operating property.
| (8) | During the six months ended June 30, 2013, a joint venture in which the Company held a noncontrolling interest sold an operating property to the Company for a sales price of $14.2 million. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance. As such the Company recognized a gain of $0.5 million from the fair value adjustment associated with the Company’s original ownership due to a change in control and now consolidates this operating property.
| (9) | During the six months ended June 30, 2013, BIG recognized a gain on early extinguishment of debt of $13.7 million related to a property that was foreclosed on by a third party lender. The Company’s share of this gain was $2.4 million.
| (10) | During the six months ended June 30, 2013, the Company purchased the remaining interest in an operating property for a purchase price of $15.8 million. As a result of this transaction, KimPru recognized an impairment charge of $4.0 million, of which the Company’s share was $0.6 million.
| (11) | During the six months ended June 30, 2013, a joint venture in which the Company has a noncontrolling interest recognized an impairment charge of $1.8 million related to the pending sale of one property. The Company’s share of this impairment charge was $0.9 million.
| (12) | During the six months ended June 30, 2013, the Company sold nine operating properties located throughout Mexico for $274.0 million which were held in unconsolidated joint ventures in which the Company has noncontrolling interests. This transaction resulted in a net gain of $48.6 million, after tax, of which the Company’s share was $24.3 million.
| (13) | During the six months ended June 30, 2013, the Company purchased an additional 3.57% interest in KIR for $48.4 million.
| (14) | During June 2013, the Company increased its ownership interest in the UBS Programs to 33.3% and simultaneously UBS transferred its remaining 66.7% ownership interest in the UBS Programs to affiliates of Blackstone Real Estate Partners VII (“Blackstone”). Both of these transactions were based on a gross purchase price of $1.1 billion. Upon completion of these transactions, Blackstone and the Company entered into a new joint venture (Kimstone) under a new joint venture agreement in which the Company owns a 33.3% noncontrolling interest.
| (15) | During the six months ended June 30, 2012, three joint ventures in which the Company holds noncontrolling interests sold three properties, in separate transactions, for an aggregate sales price of $180.0 million. The Company’s share of income related to these transactions was an aggregate gain of $8.3 million.
| (16) | During the six months ended June 30, 2012, a joint venture in which the Company holds a noncontrolling interest sold two encumbered operating properties to the Company for an aggregate sales price of $75.5 million. As a result of this transaction, the Company recognized promote income of $2.6 million. Additionally, the Company evaluated these transactions pursuant to the FASB’s Consolidation guidance. As such, the Company recognized a gain of $2.0 million from the fair value adjustment associated with its original ownership due to a change in control and now consolidates these operating properties.
| (17) | During the six months ended June 30, 2012, the Company recognized income of $7.5 million, before taxes of $1.5 million, from the sale of certain air rights at one of the properties in the RioCan portfolio.
| (18) | During the six months ended June 30, 2012, a joint venture in which the Company held a noncontrolling interest sold an operating property to the Company for a sales price of $127.0 million. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $12.1 million from the fair value adjustment associated with its original ownership due to a change in control. In addition, the Company recognized promote income of $1.1 million in connection with this transaction.
The table below presents debt balances within the Company’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at June 30, 2013 and December 31, 2012 (dollars in millions):
|  | As of June 30, 2013 |  |  | As of December 31, 2012 |
Venture |  | Mortgages and Notes Payable |  |  | Weighted Average Interest Rate |  |  | Weighted Average Remaining Term (months)** |  |  | Mortgages and Notes Payable |  |  | Weighted Average Interest Rate |  |  | Weighted Average Remaining Term (months)** |
KimPru and KimPru II |  | $ | 994.4 |  |  |  | 5.54 | % |  |  | 38.6 |  |  | $ | 1,010.2 |  |  |  | 5.54 | % |  |  | 44.5 |
KIR |  |  | 897.0 |  |  |  | 5.05 | % |  |  | 81.2 |  |  |  | 914.6 |  |  |  | 5.22 | % |  |  | 78.6 |
UBS Programs |  |  | - |  |  |  | - | % |  |  | - |  |  |  | 691.9 |  |  |  | 5.40 | % |  |  | 39.1 |
Kimstone |  |  | 731.4 |  |  |  | 5.00 | % |  |  | 37.4 |  |  |  | - |  |  |  | - | % |  |  | - |
BIG Shopping Centers |  |  | 406.1 |  |  |  | 5.52 | % |  |  | 39.6 |  |  |  | 443.8 |  |  |  | 5.52 | % |  |  | 45.5 |
CPP |  |  | 140.0 |  |  |  | 5.18 | % |  |  | 25.0 |  |  |  | 141.5 |  |  |  | 5.19 | % |  |  | 31.0 |
Kimco Income Fund |  |  | 159.7 |  |  |  | 5.45 | % |  |  | 14.8 |  |  |  | 161.4 |  |  |  | 5.45 | % |  |  | 20.7 |
SEB Immobilien |  |  | 243.8 |  |  |  | 5.11 | % |  |  | 49.3 |  |  |  | 243.8 |  |  |  | 5.11 | % |  |  | 55.3 |
RioCan |  |  | 799.4 |  |  |  | 4.84 | % |  |  | 51.3 |  |  |  | 923.2 |  |  |  | 5.16 | % |  |  | 41.2 |
Intown |  |  | - |  |  |  | - | % |  |  | - |  |  |  | 614.4 |  |  |  | 4.46 | % |  |  | 46.1 |
Other Institutional Programs |  |  | 273.9 |  |  |  | 5.32 | % |  |  | 37.1 |  |  |  | 310.5 |  |  |  | 5.24 | % |  |  | 39.0 |
Other Joint Venture Programs |  |  | 1,468.1 |  |  |  | 5.65 | % |  |  | 58.6 |  |  |  | 1,612.2 |  |  |  | 5.70 | % |  |  | 57.8 |
Total |  | $ | 6,113.8 |  |  |  |  |  |  |  |  |  |  | $ | 7,067.5 |  |  |  |  |  |  |  |  |
** Average Remaining Term includes extension options

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