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Note 7 - Investment and Advances in Real Estate Joint Ventures

12 Months Ended

Dec. 31, 2014

Investments And Advances In Real Estate Joint Ventures [Abstract]

Investments And Advances In Real Estate Joint Ventures [Text Block]

7. Investment and Advances in Real Estate Joint Ventures:

The Company and its subsidiaries have investments and advances in 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 December 31, 2014 and 2013 (in millions, except number of properties):

	As of December 31, 2014										As of December 31, 2013
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)		15.0%		60		10.6	$	2,728.9	$	178.6		15.0%		60		10.6	$	2,724.0	$	179.7
Kimco Income Opportunity Portfolio (“KIR”) (2) (3)		48.6%		54		11.5		1,488.2		152.1		48.6%		57		12.0		1,496.0		163.6
Kimstone (2) (5)		33.3%		39		5.6		1,098.7		98.1		33.3%		39		5.6		1,095.3		100.3
BIG Shopping Centers (2) (6) *		50.1%		6		1.0		151.6		-		37.9%		21		3.4		520.1		29.5
The Canada Pension Plan Investment Board (“CPP”) (2) (7)		55.0%		7		2.4		504.0		188.9		55.0%		6		2.4		437.4		144.8
Kimco Income Fund (“KIF”) (2) (8)		-		-		-		-		-		39.5%		12		1.5		288.7		50.6
SEB Immobilien (2) (9)		15.0%		3		0.4		86.0		2.5		15.0%		13		1.8		361.9		0.9
Other Institutional Programs (2) (10) (11)	Various			50		1.4		327.8		8.5	Various			56		2.1		385.3		16.8
RioCan		50.0%		45		9.3		1,205.8		159.8		50.0%		45		9.3		1,314.3		156.3
Latin America (15)	Various			13		0.1		91.2		24.4	Various			28		3.7		313.2		156.7
Other Joint Venture Programs (20) (23)	Various			60		9.5		1,401.2		224.3	Various			75		11.5		1,548.9		257.8
Total				337		51.8	$	9,083.4	$	1,037.2				412		63.9	$	10,485.1	$	1,257.0

* Ownership % is a blended rate

The table below presents the Company’s share of net income/(loss) for these investments which is included in the Company’s Consolidated Statements of Income under Equity in income of joint ventures, net for the years ended December 31, 2014, 2013 and 2012 (in millions):

	Year ended December 31,
	2014			2013		2012
KimPru and KimPru II (1)	$	8.1		$	9.1	$	7.4
KIR (3)(4)		26.5			25.3		23.4
Kimstone (5)		2.0			3.6		-
BIG Shopping Centers (6)		22.5			3.0		(3.7	)
CPP		7.1			5.8		5.3
KIF (8)		0.9			3.3		1.7
SEB Immobilien (9)		0.8			1.1		0.7
Other Institutional Programs (10-13)		2.6			3.2		5.5
RioCan (14)		30.6			27.6		30.4
Latin America (15- 19)		(3.8	)		103.1		15.8
Other Joint Venture Programs (20- 28)		62.3			23.6		26.4
Total	$	159.6		$	208.7	$	112.9

(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. During the year ended December 31, 2014, KimPru recognized impairment charges of $21.4 million related to the decline in value of two operating properties. The Company had previously taken other-than-temporary impairment charges on its investment in KimPru and had allocated these impairment charges to the underlying assets of the KimPru joint ventures including a portion to these operating properties. As such, the Company’s share of these impairment charges was $2.4 million.

(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)

During the year ended December 31, 2014 KIR, (i) sold two operating properties for a sales price of $17.7 million, for which the Company recognized its share of an aggregate net gain of $1.1 million, (ii) recognized aggregate impairment charges of $5.0 million, of which the Company’s share was $2.8 million, related to two properties which KIR anticipates selling within the next year and therefore effectively shortened its anticipated hold period for these assets which resulted in the expected future cash flows being less than the carrying value and (iii) sold one of the impaired properties for a sales price of $2.0 million.

(4)

During the year ended December 31, 2013, KIR sold an operating property in Cincinnati, OH for a sales price of $30.0 million and recognized a gain of $6.1 million. The Company’s share of this gain was $3.0 million.

(5)

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) in which the Company owns a 33.3% noncontrolling interest. On February 2, 2015, the Company purchased the remaining 66.7% interest in the 39-property Kimstone portfolio from Blackstone for a gross purchase price of $1.4 billion, including the assumption of $638.0 million in mortgage debt (see Footnote 26 of the Notes to Consolidated Financial Statements).

(6)

During the year ended December 31, 2014, the Company and their joint venture partner BIG divided 15 of the 21 properties in the BIG Shopping Centers venture with the Company receiving a 99% ownership interest in seven operating properties and BIG receiving a 99% ownership interest in eight operating properties. The Company recognized a gain of $19.7 million on the properties where BIG obtained a 99% interest (see Footnote 3 of the Notes to Consolidated Financial Statements). Subsequent to this transaction the BIG Shopping Centers venture continues to hold six operating properties. During the year ended December 31, 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.

(7)

During the year ended December 31, 2014, CPP acquired land parcels in Dania, FL, for $62.8 million. These land parcels will be developed into a retail center.

(8)

During the year ended December 31, 2014, the Company purchased the remaining interest in KIF based on a gross purchase price of $408.0 million (see Footnote 3 of the Notes to Consolidated Financial Statements).

(9)

During the year ended December 31, 2014, the Company purchased the remaining 85% interest in 10 SEB properties based on a gross purchase price of $275.8 million (see Footnote 3 of the Notes to Consolidated Financial Statements).

(10)

During the year ended December 31, 2014, the Company acquired four properties from a joint venture in which the Company has a noncontrolling interest for a total sales price of $116.2 million (see Footnote 3 of the Notes to Consolidated Financial Statements).

(11)

During the year ended December 31, 2014, two joint ventures in which the Company holds a noncontrolling interest sold two operating properties for an aggregate sales price of $46.6 million and recognized an aggregate gain of $11.1 million. The Company’s share of this gain was $2.2 million.

(12)

During the year ended December 31, 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, another joint venture in which the Company holds a noncontrolling interest sold an operating property to the Company for a sales price of $127.0 million. As a result of this transaction, the Company recognized promote income of $1.1 million.

(13)

During the year ended December 31, 2012, the UBS Program recognized impairment charges of $13.0 million related to the sale of two properties. The Company’s share of these impairment charges was $2.2 million.

(14)

During the year ended December 31, 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.

(15)

During the year ended December 31, 2014, the Company sold its noncontrolling interest in 14 operating properties located throughout Mexico based on a gross aggregate sales price of $324.5 million. The Company recognized a net gain of $39.1 million, before income taxes of $9.0 million.

(16)

During the fourth quarter 2014, the Company substantially liquidated its investment in Mexico, which resulted in the release of a cumulative foreign currency translation loss of $47.3 million.

(17)

During the year ended December 31, 2013, joint ventures in which the Company held noncontrolling interests sold 20 operating properties located throughout Mexico and Chile for $341.9 million. These transactions resulted in an aggregate net gain to the Company of $22.9 million, after tax.

(18)

During the year ended December 31, 2013, the Company and its joint venture partner sold their noncontrolling ownership interest in a joint venture which held interests in 84 operating properties located throughout Mexico for $603.5 million (including debt of $301.2 million). The Company’s share of the net gain was $78.2 million, before income taxes of $25.1 million.

(19)

During the year ended December 31, 2013, the Company was in advanced negotiations to sell 10 operating properties located throughout Mexico, which were held in unconsolidated joint ventures in which the Company held noncontrolling interests. Based upon the allocation of the selling price, the Company recorded its share of impairment charges of $9.4 million on six of these properties.

(20)

During the year ended December 31, 2014, a joint venture in which the Company holds a noncontrolling interest sold 16 operating properties for an aggregate sales price of $199.5 million and recognized an aggregate gain of $62.9 million. The Company’s share of this gain was $31.7 million.

(21)

During the year ended December 31, 2014, the Company received a distribution of $15.4 million from a joint venture that was in excess of its carrying value and as such, the Company recognized this amount as equity in income.

(22)

During the year ended December 31, 2014, two joint ventures in which the Company holds a noncontrolling interest sold two operating properties for an aggregate sales price of $46.5 million and recognized an aggregate gain of $11.1 million. The Company’s share of this gain was $2.2 million.

(23)

During the year ended December 31, 2014, the Company acquired a partners’ interest in a joint venture in which the Company had a noncontrolling interest for a total price of $3.0 million (see Footnote 3 of the Notes to Consolidated Financial Statements).

(24)

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 maintains its guarantee on a portion of the debt ($139.7 million as of December 31, 2014 and 2013) assumed by the buyer. Due to this continued involvement, the Company deferred its gain until such time that the guarantee and commitment expire. On February 24, 2015, the outstanding debt balance of $139.7 million was fully repaid and as such, the Company was relieved of its related commitments and guarantee. As a result, the Company will recognize the deferred gain of $21.7 million during the first quarter of 2015 (see Footnote 19 of the Notes to Consolidated Financial Statements).

(25)

During the year ended December 31, 2013, two joint ventures in which the Company held noncontrolling interests sold two operating properties to the Company, in separate transactions, for an aggregate price of $228.8 million (see Footnote 3 of the Notes to Consolidated Financial Statements).

(26)

During the year ended December 31, 2013, joint ventures in which the Company has noncontrolling interests sold six operating properties, in separate transactions, for an aggregate sales price of $132.1 million. In connection with these transactions, the Company recognized its share of the aggregate gains of $6.1 million and aggregate impairment charges of $1.5 million.

(27)

During the year ended December 31, 2012, two joint ventures in which the Company holds noncontrolling interests sold two properties, in separate transactions, for an aggregate sales price of $118.0 million. The Company’s share of the aggregate gain related to these transactions was $8.3 million.

(28)

During the year ended December 31, 2012, three joint ventures in which the Company has noncontrolling interests recognized aggregate impairment charges of $12.8 million related to the sale of one operating property, the pending sale of one property and the potential foreclosure of another property. The Company’s share of these impairment charges was $6.4 million.

The table below presents debt balances within the Company’s joint venture investments for which the Company held noncontrolling ownership interests at December 31, 2014 and 2013 (dollars in millions):

	As of December 31, 2014							As of December 31, 2013
Venture	Mortgages and Notes Payable		Average Interest Rate			Average Remaining Term (months)**		Mortgages and Notes Payable		Average Interest Rate			Average Remaining Term (months)**
KimPru and KimPru II	$	920.4		5.53	%		23.0	$	923.4		5.53	%		35.0
KIR		866.4		5.04	%		61.9		889.1		5.05	%		75.1
Kimstone		704.4		4.45	%		28.7		749.9		4.62	%		39.3
BIG Shopping Centers		144.6		5.52	%		22.0		406.5		5.39	%		40.1
CPP		112.1		5.05	%		10.1		138.6		5.23	%		19.0
Kimco Income Fund		-		-			-		158.0		5.45	%		8.7
SEB Immobilien		50.2		4.06	%		35.7		243.8		5.11	%		43.3
RioCan		642.6		4.29	%		39.9		743.7		4.59	%		48.0
Other Institutional Programs		223.1		5.47	%		20.8		272.9		5.32	%		31.0
Other Joint Venture Programs		927.5		5.31	%		58.6		1,063.1		5.53	%		60.6
Total	$	4,591.3						$	5,589.0

** Average remaining term includes extensions

KIR -

The Company holds a 48.6% noncontrolling limited partnership interest in KIR and has a master management agreement whereby the Company performs services for fees relating to the management, operation, supervision and maintenance of the joint venture properties.

The Company’s equity in income from KIR for the years ended December 31, 2012, exceeded 10% of the Company’s income from continuing operations before income taxes; as such the Company is providing summarized financial information for KIR as follows (in millions):

	December 31,
	2014		2013
Assets:
Real estate, net	$	1,024.3	$	1,064.2
Other assets		80.5		81.9
	$	1,104.8	$	1,146.1
Liabilities and Members’ Capital:
Mortgages payable	$	866.4	$	889.1
Other liabilities	19.8			21.8
Members’ capital		218.6		235.2
	$	1,104.8	$	1,146.1

	Year Ended December 31,
	2014			2013			2012
Revenues from rental property	$	201.6		$	197.0		$	190.6
Operating expenses		(57.7	)		(53.7	)		(50.8	)
Interest expense		(46.1	)		(47.8	)		(54.0	)
Depreciation and amortization		(39.2	)		(38.8	)		(38.8	)
Impairment charges		(3.1	)		-			-
Other expense, net		(1.5	)		(0.6	)		(1.3	)
		(147.6	)		(140.9	)		(144.9	)
Income from continuing operations		54.0			56.1			45.7
Discontinued Operations:
Income from discontinued operations		0.2			1.9			2.6
Impairment on dispositions of properties		(4.3	)		(9.8	)		(0.1	)
Gain on dispositions of properties		4.5			6.1			-
Net income	$	54.4		$	54.3		$	48.2

RioCan Investments -

The Company has three joint ventures (collectively, the "RioCan Ventures") with RioCan Real Estate Investment Trust ("RioCan"), in which the Company has 50% noncontrolling interests, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company’s management personnel. Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and RioCan.

The Company’s equity in income from the RioCan Ventures for the year ended December 31, 2012, exceeded 10% of the Company’s income from continuing operations, as such the Company is providing summarized financial information for the RioCan Ventures as follows (in millions):

	December 31,

	2014		2013
Assets:
Real estate, net	$	987.4	$	1,106.2
Other assets		40.7		43.8
	$	1,028.1	$	1,150.0
Liabilities and Members' Capital:
Mortgages payable	$	642.6	$	743.7
Other liabilities		13.1		13.0
Members' capital		372.4		393.3
	$	1,028.1	$	1,150.0

	Year ended December 31,
	2014			2013			2012
Revenues from rental properties	$	202.5		$	209.9		$	213.3

Operating expenses		(74.6	)		(76.9	)		(78.1	)
Interest expense		(31.9	)		(40.1	)		(51.9	)
Depreciation and amortization		(33.5	)		(36.0	)		(37.3	)
Other (expense)/income, net		(1.3	)		(1.8	)		14.7
		(141.3	)		(154.8	)		(152.6	)
Net income	$	61.2		$	55.1		$	60.7

Summarized financial information for the Company’s investment and advances in real estate joint ventures (excluding KIR and the RioCan Ventures, which are presented above) is as follows (in millions):

	December 31,
	2014		2013
Assets:
Real estate, net	$	5,410.3	$	6,601.8
Other assets		208.6		390.1
	$	5,618.9	$	6,991.9
Liabilities and Partners’/Members’ Capital:
Mortgages payable	$	3,061.3	$	3,956.2
Construction loans		21.0		-
Other liabilities		87.6		102.0
Noncontrolling interests		21.4		19.2
Partners’/Members’ capital		2,427.6		2,914.5
	$	5,618.9	$	6,991.9

	Year Ended December 31,
	2014			2013			2012
Revenues from rental property	$	655.8		$	873.3		$	1,009.2
Operating expenses		(201.2	)		(279.7	)		(330.6	)
Interest expense		(169.3	)		(228.5	)		(281.3	)
Depreciation and amortization		(187.3	)		(224.0	)		(258.4	)
Impairment charges		(20.0	)		(32.3	)		(17.0	)
Other expense, net		(11.6	)		(13.8	)		(19.8	)
		(589.4	)		(778.3	)		(907.1	)
Income from continuing operations		66.4			95.0			102.1
Discontinued Operations:
Income/(loss) from discontinued operations		2.6			12.2			(9.1	)
Impairment on dispositions of properties		0.5			(5.0	)		(21.1	)
Gain on dispositions of properties		466.6			223.4			94.5
Net income	$	536.1		$	325.6		$	166.4

Other liabilities included in the Company’s accompanying Consolidated Balance Sheets include accounts with certain real estate joint ventures totaling $40.3 million and $41.5 million at December 31, 2014 and 2013, respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with GAAP.

The Company’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. Generally, such investments contain operating properties and the Company has determined these entities do not contain the characteristics of a VIE. As of December 31, 2014 and 2013, the Company’s carrying value in these investments is $1.0 billion and $1.3 billion, respectively.