
5.	INVESTMENTS IN REAL ESTATE VENTURES

As of December 31, 2016 and 2015, we had investments in real estate ventures of $355.4 million and $311.5 million, respectively.

Approximately two-thirds 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 10%. The remaining one-third of our Investments in real estate ventures as of December 31, 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 December 31, 2016, LIC II had unfunded capital commitments to underlying funds of $61.5 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 $68.8 million as of December 31, 2016. We expect LIC II to draw down on our commitment over the next two to four years to satisfy its existing commitments to underlying real estate ventures.

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



($ in millions)	December 31, 2016
Our effective ownership interest in co-investment vehicle	48.78		%
Our maximum potential unfunded commitments in LIC II	$	68.8
Our share of LIC II's unfunded capital commitments to underlying funds	30.0
Our share of exposure on LIC II's outstanding borrowings	0.7
Our maximum exposure, assuming LIC II's facility is fully drawn	4.9

Exclusive of our LIC II commitment structure, we have potential unfunded commitment obligations to other similar investment vehicles or direct investments, the aggregate maximum of which is $139.8 million as of December 31, 2016.

Our investments in real estate ventures include investments in entities classified as VIEs, which we analyze for potential consolidation. We had equity method investments, either directly or indirectly, of $7.3 million and $2.1 million as of December 31, 2016 and 2015, respectively, in entities classified as VIEs. 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. During the fourth quarter of 2016, we deconsolidated two VIEs due to changes in the decision-making rights of the ownership parties or a reduction in our ownership percentage. The deconsolidation had no material impact on our Consolidated Statement of Comprehensive Income for the year ended December 31, 2016.

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



	December 31,
($ in millions)	2016		2015
Property and equipment, net	$	13.8	32.6
Investments in real estate ventures	10.3		6.6
Other assets ⁽¹⁾	40.7		4.9
Total assets	$	64.8	44.1

Mortgage indebtedness	$	9.7	25.8
Other liabilities ⁽¹⁾	35.0		—
Total liabilities	44.7		25.8
Members' equity	20.1		18.3
Total liabilities and members' equity	$	64.8	44.1

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



	Year Ended December 31,
($ in millions)	2016			2015		2014
Revenue ⁽²⁾	$	6.6		8.5		4.2
Operating and other expenses	(7.1		)	(3.9	)	(3.9	)
Gain on sale of investments	13.3			1.4		—
Net income	$	12.8		6.0		0.3

(2) Includes $3.3 million for the year ended December 31, 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 Consolidated Balance Sheets and as Net income attributable to noncontrolling interest on our Consolidated Statements of Comprehensive Income, respectively.

The following tables summarize the combined financial information for our unconsolidated real estate ventures (including those held via LIC II) accounted for under equity method or at fair value.



				December 31,
($ in millions)				2016		2015
Balance Sheets:
	Investments in real estate, net of depreciation			$	14,780.7	12,216.7
	Total assets			16,728.2		13,993.9
	Mortgage indebtedness			5,480.6		4,345.9
	Other borrowings			502.0		628.2
	Total liabilities			6,729.7		5,608.3
	Total equity			9,998.5		8,385.6

		Year Ended December 31,
($ in millions)		2016		2015		2014
Statements of Operations:
	Revenue	$	1,266.8	1,473.6		1,397.6
	Net income	874.7		1,179.5		1,099.1

Impairment

Impairment charges on investments which were other than temporarily impaired aggregated to $1.7 million, $6.0 million, and $2.4 million for the years ended December 31, 2016, 2015, and 2014, 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 and this activity is reflected as gains or losses on our 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.



	Year Ended December 31,
($ in millions)	2016			2015		2014
Fair value investments as of January 1,	$	155.2		113.6		78.9
Investments	105.8			33.8		35.2
Distributions	(62.1		)	(9.0	)	(3.1	)
Net fair value gains	16.6			21.1		7.1
Foreign currency translation adjustments, net	(2.8		)	(4.3	)	(4.5	)
Fair value investments as of December 31,	$	212.7		155.2		113.6

See Note 9 for additional discussion of our investments in real estate ventures reported at fair value.