Investments in Real Estate Ventures

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENTS IN REAL ESTATE VENTURES

As of June 30, 2020 and December 31, 2019, we had Investments in real estate ventures of $393.6 million and $404.2 million, respectively.

Approximately 85% of our investments, as of June 30, 2020, are direct investments in 47 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement. These also include investments by JLL Spark in property-technology funds and early-stage companies. The remaining 15% of our Investments in real estate ventures, as of June 30, 2020, were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, primarily, 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%.

We have maximum potential unfunded commitments to direct investments or investment vehicles of $338.5 million as of June 30, 2020. Of this amount, while we remain contractually obligated, we do not expect a call on the $60.4 million relating to our investment in LIC II as its fund life terminated in January 2020.

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.



(in millions)	June 30, 2020		December 31, 2019
Property and equipment, net	$	132.3	126.3
Investments in real estate ventures	10.9		13.2
Other assets	10.8		14.3
Total assets	$	154.0	153.8
Other current liabilities	$	2.9	3.2
Mortgage indebtedness (included in Other liabilities)	73.3		69.7
Total liabilities	76.2		72.9
Members' equity (included in Noncontrolling interest)	77.8		80.9
Total liabilities and members' equity	$	154.0	153.8



	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2020			2019		2020			2019
Revenue	$	2.9		1.7		$	7.2		3.0
Operating and other expenses	(3.9		)	(1.6	)	(8.2		)	(3.2	)
Net gains on sale of investments (included in Equity earnings)	—			—		12.2			—
Net (loss) income	$	(1.0	)	0.1		$	11.2		(0.2	)

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

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for the six months ended June 30, 2020 and 2019.

Fair Value

We report a majority of our investments in real estate ventures at fair value. For such investments, we increase or decrease our investment each reporting period by the change in the fair value and we report these fair value adjustments in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings. The table below shows the movement in our investments in real estate ventures reported at fair value.



(in millions)	2020			2019
Fair value investments as of January 1,	$	328.6		247.3
Investments	29.8			32.2
Distributions	(29.6		)	(22.3	)
Change in fair value, net	(21.4		)	14.6
Foreign currency translation adjustments, net	(3.3		)	1.0
Fair value investments as of June 30,	$	304.1		272.8

See Note 8, Fair Value Measurements, for additional discussion of our investments in real estate ventures reported at fair value.