Investments in Real Estate Ventures

12 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

5. INVESTMENTS IN REAL ESTATE VENTURES

As of December 31, 2020 and 2019, we had Investments in real estate ventures of $430.8 million and $404.2 million, respectively.

Approximately 90% of our investments, as of December 31, 2020, are in 50 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 10% of our Investments in real estate ventures, as of December 31, 2020, were attributable to investment vehicles that use our capital and outside capital generally 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 $320.7 million as of December 31, 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.

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 $76.4 million and $65.5 million as of December 31, 2020 and 2019, 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.

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


	December 31,
(in millions)	2020		2019
Property and equipment, net	$	117.4	126.3
Investments in real estate ventures	9.0		13.2
Other assets	21.0		14.3
Total assets	$	147.4	153.8
Other current liabilities	$	1.9	3.2
Mortgage indebtedness (included in Other liabilities)	60.3		69.7

Total liabilities	62.2		72.9
Members' equity (included in Noncontrolling interest)	85.2		80.9
Total liabilities and members' equity	$	147.4	153.8


	Year Ended December 31,
(in millions)	2020		2019	2018
Revenue	$	13.9	7.6	5.8
Operating and other expenses	(15.6)		(8.6)	(5.1)
Net gains on sale of investments(1)	22.1		—	2.0
Net income (loss)	$	20.4	(1.0)	2.7

(1) $12.3 million of the 2020 year-to-date gain is included in Equity earnings; the remaining $9.8 million is included in Other income. The 2018 year-to-date gain is included in Other income.

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

The following tables summarize the combined financial information for our unconsolidated real estate ventures accounted for under equity method or at fair value.


				December 31,
(in millions)				2020		2019
Balance Sheets:
	Investments in real estate, net of depreciation			$	24,320.4	22,006.6
	Total assets			28,129.3		24,784.8
	Mortgage indebtedness			7,980.2		7,345.1
	Other borrowings			1,332.9		1,118.2
	Total liabilities			10,720.5		9,853.9
	Total equity			17,408.8		14,930.9

		Year Ended December 31,
(in millions)		2020		2019		2018
Statements of Operations:
	Revenue	$	1,702.3	1,247.6		1,199.5
	Net income	241.5		831.2		1,046.3

Impairment

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for each of the years in the three-year period ended December 31, 2020.

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 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.


	Year Ended December 31,
(in millions)	2020		2019	2018
Fair value investments as of January 1,	$	328.6	247.3	242.3
Investments	51.7		144.9	55.2
Distributions	(46.8)		(101.7)	(63.8)
Change in fair value	(1.0)		35.3	13.9
Foreign currency translation adjustments, net	7.8		2.8	(0.3)
Fair value investments as of December 31,	$	340.3	328.6	247.3

See Note 9, Fair Value Measurements, for further discussion of our investments in real estate ventures reported at fair value.