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Investments in Unconsolidated Joint Ventures | 6 Months Ended
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Jun. 30, 2018
Investments In Unconsolidated Joint Ventures [Abstract] |
Investments In Unconsolidated Joint Ventures | 4. Investments in Unconsolidated Joint Ventures The investments in unconsolidated joint ventures consist of the following at June 30, 2018 and December 31, 2017:
|  |  |  | Nominal % Ownership |  | Carrying Value of Investment (1)
Entity |  | Properties |  |  | June 30, 2018 |  | December 31, 2017
|  |  |  |  |  | (in thousands)
Square 407 Limited Partnership |  | Market Square North |  | 50.0 | % |  | $ | (7,371 | ) |  | $ | (8,258 | )
The Metropolitan Square Associates LLC |  | Metropolitan Square |  | 20.0 | % |  | 4,628 |  |  | 3,339 |
BP/CRF 901 New York Avenue LLC |  | 901 New York Avenue |  | 25.0 | % | (2) | (12,824 | ) |  | (13,811 | )
WP Project Developer LLC |  | Wisconsin Place Land and Infrastructure |  | 33.3 | % | (3) | 39,015 |  |  | 39,710 |
Annapolis Junction NFM, LLC |  | Annapolis Junction |  | 50.0 | % | (4) | 17,597 |  |  | 18,381 |
540 Madison Venture LLC |  | 540 Madison Avenue |  | 60.0 | % |  | 66,385 |  |  | 66,179 |
500 North Capitol Venture LLC |  | 500 North Capitol Street, NW |  | 30.0 | % |  | (4,416 | ) |  | (3,876 | )
501 K Street LLC |  | 1001 6th Street |  | 50.0 | % | (5) | 42,646 |  |  | 42,657 |
Podium Developer LLC |  | The Hub on Causeway |  | 50.0 | % |  | 72,900 |  |  | 67,120 |
Residential Tower Developer LLC |  | The Hub on Causeway - Residential |  | 50.0 | % | (6) | 38,958 |  |  | 28,212 |
Hotel Tower Developer LLC |  | The Hub on Causeway - Hotel Air Rights |  | 50.0 | % |  | 2,046 |  |  | 1,690 |
1265 Main Office JV LLC |  | 1265 Main Street |  | 50.0 | % |  | 4,413 |  |  | 4,641 |
BNY Tower Holdings LLC |  | Dock 72 at the Brooklyn Navy Yard |  | 50.0 | % |  | 71,651 |  |  | 72,104 |
CA-Colorado Center Limited Partnership |  | Colorado Center |  | 50.0 | % |  | 253,864 |  |  | 254,440 |
7750 Wisconsin Avenue LLC |  | 7750 Wisconsin Avenue |  | 50.0 | % | (6) | 68,404 |  |  | 21,452 |
|  |  |  |  |  | $ | 657,896 |  |  | $ | 593,980 |
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(1) | Investments with deficit balances aggregating approximately $24.6 million and $25.9 million at June 30, 2018 and December 31, 2017, 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 subsidiary that owns Wisconsin Place Office also owns a 33.3% interest in the joint venture entity that owns 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) | This entity is a VIE (See Note 2).
Certain of the Company’s unconsolidated 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. With limited exceptions, under these provisions, the Company is not compelled to purchase the interest of its outside joint venture partners. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners will be entitled to an additional promoted interest or payments. The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows:
| June 30, 2018 |  | December 31, 2017
| (in thousands)
ASSETS |  |  |
Real estate and development in process, net | $ | 1,938,438 |  |  | $ | 1,768,996 |
Other assets | 397,442 |  |  | 367,743 |
Total assets | $ | 2,335,880 |  |  | $ | 2,136,739 |
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY |  |  |
Mortgage and notes payable, net | $ | 1,524,951 |  |  | $ | 1,437,440 |
Other liabilities | 126,179 |  |  | 99,215 |
Members’/Partners’ equity | 684,750 |  |  | 600,084 |
Total liabilities and members’/partners’ equity | $ | 2,335,880 |  |  | $ | 2,136,739 |
Company’s share of equity | $ | 349,576 |  |  | $ | 286,495 |
Basis differentials (1) | 308,320 |  |  | 307,485 |
Carrying value of the Company’s investments in unconsolidated joint ventures (2) | $ | 657,896 |  |  | $ | 593,980 |
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(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 June 30, 2018 and December 31, 2017, there was an aggregate basis differential of approximately $319.7 million and $322.5 million, respectively, 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 $24.6 million and $25.9 million at June 30, 2018 and December 31, 2017, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.
The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:
| Three months ended June 30, |  | Six months ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (in thousands) |  |  |  |
Total revenue (1) | $ | 57,096 |  |  | $ | 55,862 |  |  | $ | 113,582 |  |  | $ | 110,623 |
Expenses |  |  |  |  |  |  |
Operating | 22,868 |  |  | 22,103 |  |  | 45,717 |  |  | 44,182 |
Depreciation and amortization | 14,527 |  |  | 14,224 |  |  | 29,252 |  |  | 28,533 |
Total expenses | 37,395 |  |  | 36,327 |  |  | 74,969 |  |  | 72,715 |
Operating income | 19,701 |  |  | 19,535 |  |  | 38,613 |  |  | 37,908 |
Other expense |  |  |  |  |  |  |
Interest expense | 14,708 |  |  | 9,427 |  |  | 29,132 |  |  | 18,727 |
Net income | $ | 4,993 |  |  | $ | 10,108 |  |  | $ | 9,481 |  |  | $ | 19,181 |
Company’s share of net income | $ | 2,105 |  |  | $ | 4,344 |  |  | $ | 3,931 |  |  | $ | 8,667 |
Basis differential (2) | (1,336 | ) |  | (1,236 | ) |  | (2,701 | ) |  | (2,475 | )
Income from unconsolidated joint ventures | $ | 769 |  |  | $ | 3,108 |  |  | $ | 1,230 |  |  | $ | 6,192 |
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(1) | Includes straight-line rent adjustments of approximately $3.2 million and $4.3 million for the three months ended June 30, 2018 and 2017, respectively, and $5.0 million and $11.3 million for the six months ended June 30, 2018 and 2017, respectively.
(2) | Includes straight-line rent adjustments of approximately $0.7 million and $0.8 million for the three months ended June 30, 2018 and 2017, respectively, and $1.4 million and $1.5 million for the six months ended June 30, 2018 and 2017, respectively. Also includes net above-/below-market rent adjustments of approximately $0.4 million and $0.4 million for the three months ended June 30, 2018 and 2017, respectively, and $0.8 million and $0.9 million for the six months ended June 30, 2018 and 2017, respectively.
On April 19, 2018, a joint venture in which the Company has a 50% interest obtained construction financing with a total commitment of $180.0 million collateralized by its Hub on Causeway - Residential development project. The construction financing bears interest at a variable rate equal to LIBOR plus 2.00% per annum and matures on April 19, 2022, with two, one-year extension options, subject to certain conditions. The joint venture has not yet drawn any funds under the loan. The Hub on Causeway - Residential is an approximately 320,000 square foot project comprised of 440 residential units located in Boston, Massachusetts. On April 27, 2018, a joint venture in which the Company has a 60% interest refinanced the mortgage loan collateralized by its 540 Madison Avenue property located in New York City totaling $120.0 million. The mortgage loan bears interest at a variable rate equal to LIBOR plus 1.10% per annum and matures on June 5, 2023. The previous mortgage loan bore interest at a variable rate equal to LIBOR plus 1.50% per annum and was scheduled to mature on June 5, 2018. 540 Madison Avenue is an approximately 284,000 net rentable square foot Class A office property.

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- Definition Investments In Unconsolidated Joint Ventures [Abstract] + References No definition available. + Details
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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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