Investments in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of Equity Method Investments [Line Items]

Investments In Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at September 30, 2016 and December 31, 2015:



		Nominal % Ownership			Carrying Value of Investment (1)
Entity	Properties	Nominal % Ownership			September 30, 2016			December 31, 2015
					(in thousands)
Square 407 Limited Partnership	Market Square North	50.0	%		$	(8,483	)	$	(9,951	)
The Metropolitan Square Associates LLC	Metropolitan Square	51.0	%		9,552			9,179
BP/CRF 901 New York Avenue LLC	901 New York Avenue	25.0	%	(2)	(10,898		)	(11,958		)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure	33.3	%	(3)	42,073			43,524
Annapolis Junction NFM, LLC	Annapolis Junction	50.0	%	(4)	21,075			29,009
540 Madison Venture LLC	540 Madison Avenue	60.0	%		69,602			68,983
500 North Capitol Venture LLC	500 North Capitol Street, NW	30.0	%		(3,395		)	(3,292		)
501 K Street LLC	1001 6th Street	50.0	%	(5)	42,541			42,584
Podium Developer LLC	The Hub on Causeway	50.0	%		33,820			18,508
1265 Main Office JV LLC	1265 Main Street	50.0	%		23,757			11,916
BNY Tower Holdings LLC (6)	Dock72 at the Brooklyn Navy Yard	50.0	%		25,980			11,521
CA-Colorado Center Limited Partnership	Colorado Center	49.8	%		507,259			N/A
					$	752,883		$	210,023

_______________


(1)	Investments with deficit balances aggregating approximately $22.8 million and $25.2 million at September 30, 2016 and December 31, 2015, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.


(2)	The Company’s economic ownership has increased based on the achievement of certain return thresholds.


(3)	The Company’s wholly-owned entity that owns the office component of the project also owns a 33.3% interest in the entity owning the land, parking garage and infrastructure of the project.


(4)	The joint venture owns four in-service buildings and two undeveloped land parcels.


(5)	Under the joint venture agreement for this land parcel, the partner will be entitled to up to two additional payments from the venture based on increases in total entitled square footage of the project above 520,000 square feet and achieving certain project returns at stabilization.


(6)	The entity is a VIE (See Note 2).

Schedule Of Balance Sheets Of The Unconsolidated Joint Ventures [Text Block]

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



	September 30, 2016		December 31, 2015
	(in thousands)
ASSETS
Real estate and development in process, net	$	1,460,808	$	1,072,412
Other assets	294,912		252,285
Total assets	$	1,755,720	$	1,324,697
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net	$	826,807	$	830,125
Other liabilities	54,390		44,549
Members’/Partners’ equity	874,523		450,023
Total liabilities and members’/partners’ equity	$	1,755,720	$	1,324,697
Company’s share of equity	$	449,351	$	237,070
Basis differentials (1)	303,532		(27,047		)
Carrying value of the Company’s investments in unconsolidated joint ventures (2)	$	752,883	$	210,023

_______________

(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 result from impairments of investments, acquisitions through joint ventures with no change in control 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. At September 30, 2016, there is an aggregate basis differential of approximately $330.1 million between the carrying value of the Company’s investment in the joint venture that owns Colorado Center and the joint venture’s basis in the assets and liabilities, which differential (excluding land) shall be amortized over the remaining lives of the related assets and liabilities.


(2)	Investments with deficit balances aggregating approximately $22.8 million and $25.2 million at September 30, 2016 and December 31, 2015, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.

Statements Of Operations Of The Joint Ventures

The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:



	Three months ended September 30,					Nine months ended September 30,
	2016			2015		2016			2015
	(in thousands)
Total revenue (1)	$	49,002		$	38,197	$	125,039		$	116,881
Expenses
Operating	21,753			15,896		54,779			47,995
Depreciation and amortization	12,038			8,832		30,306			26,854
Total expenses	33,791			24,728		85,085			74,849
Operating income	15,211			13,469		39,954			42,032
Other expense
Interest expense	8,400			8,019		25,172			23,985
Net income	$	6,811		$	5,450	$	14,782		$	18,047

Company’s share of net income	$	3,179		$	2,481	$	6,830		$	20,025	(2)
Basis differential (3)	(1,715		)	166		(1,341		)	534
Income from unconsolidated joint ventures	$	1,464		$	2,647	$	5,489		$	20,559

_______________


(1)	Includes straight-line rent adjustments of approximately $5.2 million and $(0.3) million for the three months ended September 30, 2016 and 2015, respectively, and approximately $11.0 million and $1.7 million for the nine months ended September 30, 2016 and 2015, respectively.

(2)

During the nine months ended September 30, 2015, the Company received a distribution of approximately $24.5 million, which was generated from the excess loan proceeds from the refinancing of 901 New York Avenue’s mortgage loan to a new 10-year mortgage loan totaling $225.0 million. The Company’s allocation of income and distributions for the nine months ended September 30, 2015 was not proportionate to its nominal ownership interest as a result of the achievement of specified investment return thresholds, as provided for in the joint venture agreement.


(3)	Includes a straight-line rent adjustment of approximately $0.7 million and a net above-/below-market rent adjustment of approximately $0.5 million for the three and nine months ended September 30, 2016.

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following table summarizes the allocation of the aggregate purchase price of 3625-3635 Peterson Way at the date of acquisition (in thousands).



Land	$	63,206
Building and improvements	7,210
Tenant improvements	7,669
In-place lease intangibles	4,262
Below-market lease intangible	(4,347		)
Net assets acquired	$	78,000

Colorado Center [Member]

Schedule of Equity Method Investments [Line Items]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]



Land and improvements	$	189,597
Site improvements	9,050
Building and improvements	259,592
Tenant improvements	17,234
In-place lease intangibles	43,157
Above-market lease intangible	819
Below-market lease intangible	(16,461		)
Net assets	$	502,988