Investments in Unconsolidated Joint Ventures

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

As of June 30, 2020, the Company held 20% ownership interests in three unconsolidated joint ventures.

During the second quarter of 2014, the Company entered into a joint venture with the Alaska Permanent Fund Corporation (the “Alaska JV”) to invest in homes acquired through traditional acquisition channels and during the third quarter of 2018, the Company entered into a joint venture with another leading institutional investor (the “Institutional Investor JV”) to invest in newly constructed single-family rental homes. In evaluating the Company’s 20% ownership interests in these joint ventures, we concluded that the joint ventures are not VIEs after applying the variable interest model and, therefore, we account for our interests in the joint ventures as investments in unconsolidated subsidiaries after applying the voting interest model using the equity method of accounting.

During the first quarter of 2020, the Company entered into a $253.1 million strategic joint venture with institutional investors advised by J.P. Morgan Asset Management (the “J.P. Morgan JV”) focused on constructing and operating newly built rental homes, which was subsequently upsized to $625.0 million during the second quarter of 2020. The Company holds a 20% ownership interest in the joint venture, which has an evergreen term. In evaluating the Company’s 20% ownership interest in the joint venture, we concluded that the Company does not have a controlling financial interest and, therefore, we account for our interest in the joint venture as an investment in an unconsolidated subsidiary using the equity method of accounting.

The following table summarizes our investments in unconsolidated joint ventures (in thousands, except percentages and property data):


Joint Venture Description	% Ownership at June 30, 2020		Completed Homes at June 30, 2020	Balances at June 30, 2020		Balances at December 31, 2019
Alaska JV	20	%	380	$	27,528	$	29,326
Institutional Investor JV	20	%	542	39,712		33,757
J.P. Morgan JV	20	%	14	2,739		—
Other ⁽¹⁾	N/A		N/A	—		4,852
			936	$	69,979	$	67,935

(1) Includes legacy joint ventures, which the Company acquired as part of the American Residential Properties, Inc. merger in February 2016, that were liquidated during the first quarter of 2020.

The Company provides various services to these joint ventures, which are considered to be related parties, including property management and development services and has opportunities to earn promoted interests. Management fee and development fee income from unconsolidated joint ventures was $1.3 million and $0.7 million for the three months ended June 30, 2020 and 2019, respectively, and $2.2 million and $1.4 million for the six months ended June 30, 2020 and 2019, respectively, and was included in other revenues within the condensed consolidated statements of operations.