Investments In Unconsolidated Joint Ventures

4. Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at March 31, 2012:


Entity	Properties	Nominal % Ownership
Square 407 Limited Partnership	Market Square North		50.0	%
The Metropolitan Square Associates LLC	Metropolitan Square		51.0	%
BP/CRF 901 New York Avenue LLC	901 New York Avenue		25.0	%(1)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure		33.3	%(2)
RBP Joint Venture LLC	Eighth Avenue and 46th Street		50.0	%(3)
Boston Properties Office Value-Added Fund, L.P.	300 Billerica Road and Mountain View Research and Technology Parks		37.6	%(1)(4)
Annapolis Junction NFM, LLC	Annapolis Junction		50.0	%(5)
767 Venture, LLC	The General Motors Building		60.0	%
2 GCT Venture LLC	Two Grand Central Tower		60.0	%(6)
540 Madison Venture LLC	540 Madison Avenue		60.0	%
125 West 55^thStreet Venture LLC	125 West 55^thStreet		60.0	%
500 North Capitol LLC	500 North Capitol Street, NW		30.0	%(7)

(1)	The Company's economic ownership can increase based on the achievement of certain return thresholds.

(2)	The Company's wholly-owned entity that owns the office component of the project owns a 33.3% interest in the entity owning the land and infrastructure of the project.

(3)	This property is not in operation and consists of assembled land.

(4)	Represents the Company's effective ownership interest. The Company has a 25.0% interest in the 300 Billerica Road property and a 39.5% interest in the Mountain View Research and Technology Park properties.

(5)	Comprised of one building, one building under construction and two undeveloped land parcels.

(6)	The property was sold on October 25, 2011. As of March 31, 2012, the investment is comprised of working capital and a portion of the sale proceeds.

(7)	This property is under construction.

Certain of the Company's joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures at an agreed upon fair value. Under these provisions, the Company is not compelled to purchase the interest of its outside joint venture partners.

The combined summarized balance sheets of the unconsolidated joint ventures are as follows:


	March 31, 2012			December 31, 2011
	(in thousands)
ASSETS
Real estate and development in process, net	$	4,536,222		$	4,542,594
Other assets		658,851			668,113

Total assets	$	5,195,073		$	5,210,707

LIABILITIES AND MEMBERS'/PARTNERS' EQUITY
Mortgage and notes payable	$	3,001,945		$	2,988,894
Other liabilities		829,981			854,257
Members'/Partners' equity		1,363,147			1,367,556

Total liabilities and members'/partners' equity	$	5,195,073		$	5,210,707

Company's share of equity	$	796,668		$	799,479
Basis differentials(1)		(129,291	)		(129,757	)

Carrying value of the Company's investments in unconsolidated joint ventures	$	667,377		$	669,722

(1)

This amount represents the aggregate difference between the Company's historical cost basis and the basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from impairment of investments and upon the transfer of assets that were previously owned by the Company into a joint venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level.

The combined summarized statements of operations of the joint ventures are as follows:


	For the three months ended March 31,
	2012		2011
	(in thousands)
Total revenue(1)	$	139,100	$	145,645
Expenses
Operating		38,892		42,842
Depreciation and amortization		41,899		50,637

Total expenses		80,791		93,479
Operating income		58,309		52,166
Other expense
Interest expense		55,362		57,761

Net income (loss)	$	2,947	$	(5,595	)

Company's share of net income (loss)	$	1,371	$	(3,055	)
Basis differential		466		1,756
Elimination of inter-entity interest on partner loan		9,884		9,275

Income from unconsolidated joint ventures	$	11,721	$	7,976

(1)	Includes straight-line rent adjustments of $4.3 million and $4.1 million for the three months ended March 31, 2012 and 2011, respectively. Includes net "below-" market rent adjustments of $25.3 million and $29.5 million for the three months ended March 31, 2012 and 2011, respectively.

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

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