
.	INVESTMENTS IN REAL ESTATE VENTURES

As of September 30, 2016 and December 31, 2015, we had Investments in real estate ventures of $359.9 million and $311.5 million, respectively.

Approximately 65% of our investments are direct co-investments in 52 separate property or commingled funds for which we also have an advisory agreement. Our investment ownership percentages in these funds generally range from less than 1% to 15%. The remaining 35% of our Investments in real estate ventures as of September 30, 2016 were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest in certain real estate ventures that own and operate real estate. Of our investments attributable to investment vehicles, the majority was invested in LaSalle Investment Company II ("LIC II"), in which we held an effective ownership interest of 48.78%.

Typically, our investments in real estate ventures are not redeemable until the earlier of the disposition of the underlying real estate investments or the end of the fund's life, which is generally five to seven years.

As of September 30, 2016, LIC II had unfunded capital commitments to underlying ventures of $70.4 million and a $10.0 million revolving credit facility (the "LIC II Facility"), principally for working capital needs. LIC II's exposure to the liabilities and losses of the underlying real estate ventures in which it has invested is limited to existing capital contributions and remaining unfunded capital commitments. Considering our proportionate share of LIC II's commitments to underlying funds and our exposure to fund our proportionate share of the then outstanding balance on the LIC II facility, our maximum potential unfunded commitment to LIC II was $69.6 million as of September 30, 2016. We expect LIC II to draw down on our commitments over the next three to five years to satisfy its existing commitments to underlying real estate ventures.

The following table summarizes the above discussion relative to LIC II:



($ in millions)	September 30, 2016
Our effective ownership interest in co-investment vehicle	48.78		%
Our maximum potential unfunded commitments in LIC II	$	69.6
Our share of unfunded capital commitments to underlying funds	34.4
Our share of exposure on outstanding borrowings	0.9
Our maximum exposure, assuming LIC II Facility is fully drawn	4.9

Exclusive of our LIC II commitment structure, we have potential unfunded commitments to other similar investment vehicles or direct investments, the aggregate maximum of which is $143.6 million as of September 30, 2016.

We evaluate our less-than-wholly-owned investments to determine whether the underlying entities are classified as variable interest entities ("VIEs"); we assess each identified VIE to determine whether we are the primary beneficiary. We have determined that we are the primary beneficiary of certain VIEs and accordingly, we have consolidated such entities. The assets of the consolidated VIEs are available only for the settlement of the obligations of the respective entities and the mortgage loans of the consolidated VIEs are non-recourse to JLL.

Summarized financial information for our consolidated VIEs is presented in the following tables.



	September 30,		December 31,
(in millions)	2016		2015
Property and equipment, net	$	13.9	32.6
Investment in real estate venture	10.1		6.6
Other assets⁽¹⁾	77.8		4.9
Total assets	$	101.8	44.1
Mortgage indebtedness	$	9.7	25.8
Other liabilities⁽¹⁾	37.3		—
Total liabilities	47.0		25.8
Members' equity	54.8		18.3
Total liabilities and members' equity	$	101.8	44.1

(1) Balances primarily represent investment properties and their corresponding liabilities, classified as held for sale.



	Three Months Ended September 30,					Nine Months Ended September 30,
(in millions)	2016			2015		2016			2015
Revenue⁽²⁾	$	2.6		4.6		$	5.6		7.1
Operating and other expenses	(3.7		)	(1.0	)	(5.7		)	(2.8	)
Gain on sale of investment	—			—		13.3			1.3
Net income	$	(1.1	)	3.6		$	13.2		5.6

(2) Includes $3.3 million for the three and nine months ended September 30, 2015, representing our proportionate share of the gain on the sale of real estate by an investment of one of our consolidated VIE's that was accounted for pursuant to the equity method.

We allocate the members' equity and net income of the consolidated VIEs to the noncontrolling interest holders as Noncontrolling interest on our Condensed Consolidated Balance Sheets and as Net income attributable to noncontrolling interest in our Condensed Consolidated Statements of Comprehensive Income, respectively.

Impairment

We evaluate our investments in real estate ventures accounted for under the equity method on a quarterly basis, or as otherwise deemed necessary, for indications we may not be able to recover the carrying value of our investments and whether such investments are other than temporarily impaired. Our assessments consider the existence of impairment indicators in the underlying real estate assets that comprise the majority of our investments. We base such assessments, in regard to both the investment and underlying asset levels, on evaluations of regular updates to future cash flow models and on factors such as operational performance, market conditions, major tenancy matters, legal and environmental concerns, and our ability and intent to hold each investment. When events or changes in circumstances indicate the carrying amount of one of our investments in real estate ventures may be other than temporarily impaired, we consider the likelihood of recoverability of the carrying amount of our investment as well as the estimated fair value and, as applicable, record an impairment charge. Impairment charges to write down the carrying value of the real estate assets underlying our investments, our proportionate share of which we recognize within Equity earnings from real estate ventures, are generally the result of completing discounted cash flow models that primarily rely upon Level 3 inputs to determine fair value. Impairment charges aggregated to $0.2 million and $0.1 million for the three months ended September 30, 2016 and 2015, respectively, and $0.9 million and $4.2 million for the nine months ended September 30, 2016 and 2015, respectively.

Fair Value

We report our investments in certain real estate ventures at fair value. For such investments, we increase or decrease our investment each reporting period by the estimated change in fair value, which activity we reflect as gains or losses in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings from real estate ventures. The table below shows the movement in our investments in real estate ventures reported at fair value.



(in millions)	2016			2015
Fair value investments as of January 1,	$	155.2		113.6
Investments	59.8			28.0
Distributions	(32.6		)	(5.6	)
Change in fair value	14.2			18.5
Foreign currency translation adjustments, net	7.4			(4.2	)
Fair value investments as of September 30,	$	204.0		150.3