8.	Other Real Estate Investments and Other Assets :

Other Real Estate Investments

Preferred Equity Capital-

The Company previously provided capital to owners and developers of real estate properties through its Preferred Equity program

. The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited to its net investment. As of

December 31, 2017,

the Company’s net investment under the Preferred Equity program was

$201.9

million relating to

357

properties, including

344

net leased properties which are accounted for as direct financing leases. For the year ended

December 31, 2017,

the Company earned

$32.2

million from its preferred equity investments, including

$14.8

million of cumulative foreign currency translation gain recognized as a result of the substantial liquidation of the Company’s investments in Canada during

2017.

As of

December 31, 2016,

the Company’s net investment under the Preferred Equity program was

$193.7

million relating to

365

properties, including

346

net leased properties which are accounted for as direct financing leases. For the year ended

December 31, 2016,

the Company earned

$27.5

million from its preferred equity investments, including

$10.5

million in profit participation earned from

five

capital transactions.

As of

December 31,

2017,

these preferred equity investment properties had non-recourse mortgage loans aggregating

$361.0

million. These loans have scheduled maturities ranging from

eight

months to

seven

years and bear interest at rates ranging from

4.19%

10.47%.

Due to the Company’s preferred position in these investments, the Company’s share of each investment is subject to fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with its preferred equity investments is limited to its invested capital.

Summarized financial information relating to the Company

’s preferred equity investments is as follows (in millions):

	December 31,
	201 7		201 6
Assets:
Real estate, net	$	142.3	$	187.0
Other assets		581.2		587.1
	$	723.5	$	774.1
Liabilities and Partners ’/Members’ Capital:
Mortgages payable, net	$	381.9	$	454.7
Other liabilities		6.0		8.3
Partners ’/Members’ capital		335.6		311.1
	$	723.5	$	774.1

	Year Ended December 31,
	201 7			201 6			2015
Revenues from rental propert ies	$	75.4		$	102.6		$	122.1
Operating expenses		(14.7	)		(27.4	)		(35.6	)
Depreciation and amortization		(4.6	)		(6.7	)		(11.4	)
Interest expense		(20.4	)		(26.7	)		(35.7	)
Other expense, net		(5.9	)		(11.5	)		(9.2	)
Income from continuing operations		29.8			30.3			30.2
Gain on sale of properties , net		4.3			5.3			6.0
Net income	$	34.1		$	35.6		$	36.2

Other Assets

Kimsouth (Albertsons) –

Kimsouth Realty Inc. (“Kimsouth”) is a wholly-owned subsidiary of the Company. KRS AB Acquisition, LLC (the “ABS Venture”) was a subsidiary of Kimsouth that ha

d a combined

14.35%

noncontrolling interest (of which the Company held

9.8%

and

the

two

other noncontrolling members in the partnership, including

Colony NorthStar, Inc. (“Colony NorthStar”) held a

4.3%

ownership interest), in AB Acquisition, LLC (“AB Acquisition”).

AB Acquisition was

a joint venture which owned grocery operators Albertsons LLC (“Albertsons”), NAI Group Holdings Inc. (“NAI”) and Safeway Inc. (“Safeway”). The Company held a controlling interest in the ABS Venture and consolidated this entity. Richard B. Saltzman, a member of the Board of Directors of the Company, is the chief executive officer and president of Colony NorthStar.

As of

December 31, 2016,

the ABS Venture was reflected on the Company

’s Consolidated Balance Sheets as a gross investment of

$205.1

million which was included in Other assets and

$64.9

million which was included in noncontrolling interest.

During

June 2017,

the Company and ABS Venture received an aggregate cash distribution of

$34.6

million from Albertsons, of which the Company

’s combined share was

$23.7

million with the remaining

$10.9

million distributed to the

two

noncontrolling interest members in the ABS Venture. This distribution exceeded the Company’s carrying basis

in its Albertson

’s investment

and as such was recognized as income and is included in Equity in income from other real estate investments, net on the Company’s Consolidated Statements of Income.

During

December 2017,

Albertsons, NAI and Safeway were merged into a single corporate entity Albertsons Companies, Inc. (“

ACI”). In addition, the Company liquidated the ABS Venture, its consolidated partnership with Colony NorthStar and its other noncontrolling member, which held investments in Albertsons, NAI and Safeway. As a result of these transactions, the Company now owns

9.74%

of the common stock of ACI through

two

newly formed wholly-owned partnerships and accounts for this investment on the cost method.

The liquidation of the ABS Venture resulted in the elimination of the previous noncontrolling member

’s, including Colony NorthStar’s noncontrolling interest of

$64.9

million, and a corresponding reduction in other assets to reflect the Company’s net investment in ACI of

$140.2

million. The Company’s net investment in ACI is included in Other assets on the Company’s Consolidated Balance Sheets. The previous

two

noncontrolling members now own their respective interests in ACI directly and are

longer in a joint venture partnership with the Company.

February 20, 2018,

ACI announced the execution of a definitive merger agreement under which ACI will acquire all the outstanding shares of Rite Aid Corp. (NYSE: RAD). This agreement is subject to customary closing conditions.