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Investments in Unconsolidated Joint Ventures | 12 Months Ended
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Dec. 31, 2020
Investments In Unconsolidated Joint Ventures [Abstract] |
Investments In Unconsolidated Joint Ventures | 6. Investments in Unconsolidated Joint Ventures The investments in unconsolidated joint ventures consist of the following at December 31, 2020 and December 31, 2019:
|  |  |  |  |  | Carrying Value of Investment (1)
Entity |  | Properties |  | Nominal % Ownership |  | December 31, 2020 |  | December 31, 2019
|  |  |  |  |  | (in thousands)
Square 407 Limited Partnership |  | Market Square North |  | 50.0 | % |  | $ | (3,766) |  |  | $ | (4,872) |
BP/CRF Metropolitan Square, LLC |  | Metropolitan Square |  | 20.0 | % |  | (13,584) |  |  | 9,134 |
901 New York, LLC |  | 901 New York Avenue |  | 25.0 | % | (2) | (12,264) |  |  | (12,113) |
WP Project Developer LLC |  | Wisconsin Place Land and Infrastructure |  | 33.3 | % | (3) | 35,297 |  |  | 36,789 |
Annapolis Junction NFM LLC |  | Annapolis Junction |  | 50.0 | % | (4) | 13,463 |  |  | 25,391 |
540 Madison Venture LLC |  | 540 Madison Avenue |  | 60.0 | % | (5) | 122 |  |  | 2,953 |
500 North Capitol Venture LLC |  | 500 North Capitol Street, NW |  | 30.0 | % |  | (6,945) |  |  | (5,439) |
501 K Street LLC |  | 1001 6th Street |  | 50.0 | % | (6) | 42,499 |  |  | 42,496 |
Podium Developer LLC |  | The Hub on Causeway - Podium |  | 50.0 | % |  | 48,818 |  |  | 49,466 |
Residential Tower Developer LLC |  | Hub50House |  | 50.0 | % |  | 50,943 |  |  | 55,092 |
Hotel Tower Developer LLC |  | The Hub on Causeway - Hotel Air Rights |  | 50.0 | % |  | 10,754 |  |  | 9,883 |
Office Tower Developer LLC |  | 100 Causeway Street |  | 50.0 | % |  | 56,312 |  |  | 56,606 |
1265 Main Office JV LLC |  | 1265 Main Street |  | 50.0 | % |  | 3,787 |  |  | 3,780 |
BNY Tower Holdings LLC |  | Dock 72 |  | 50.0 | % |  | 29,536 |  |  | 94,804 |
BNYTA Amenity Operator LLC |  | Dock 72 |  | 50.0 | % |  | 1,846 |  |  | N/A
CA-Colorado Center Limited Partnership |  | Colorado Center |  | 50.0 | % |  | 227,671 |  |  | 252,069 |
7750 Wisconsin Avenue LLC |  | 7750 Wisconsin Avenue |  | 50.0 | % |  | 58,112 |  |  | 56,247 |
BP-M 3HB Venture LLC |  | 3 Hudson Boulevard |  | 25.0 | % |  | 113,774 |  |  | 67,499 |
SMBP Venture LP |  | Santa Monica Business Park |  | 55.0 | % |  | 145,761 |  |  | 163,937 |
Platform 16 Holdings LP |  | Platform 16 |  | 55.0 | % | (7) | 108,393 |  |  | 29,501 |
Gateway Portfolio Holdings LLC |  | Gateway Commons |  | 50.0 | % | (8) | 336,206 |  |  | N/A
Rosecrans-Sepulveda Partners 4, LLC |  | Beach Cities Media Campus |  | 50.0 | % |  | 27,184 |  |  | N/A
|  |  |  |  |  | $ | 1,273,919 |  |  | $ | 933,223 |
_______________ (1)Investments with deficit balances aggregating approximately $36.6 million and $22.4 million at December 31, 2020 and 2019, respectively, are included 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. At December 31, 2020 and 2019, the Company’s economic ownership was approximately 50%. (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 two in-service buildings. (5)T he property was sold on June 27, 2019. As of December 31, 2020 and 2019, the investment consisted of undistributed cash. (6)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. (7)This entity is a VIE (See Note 1). (8)As a result of the partner’s deferred contribution, the Company owns an approximately 55% interest in the joint venture at December 31, 2020. Future development projects will be owned 49% by the Company and 51% by its partner. 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 or the Company 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:
| December 31, 2020 |  | December 31, 2019
| (in thousands)
ASSETS |  |  |
Real estate and development in process, net (1) | $ | 4,708,571 |  |  | $ | 3,904,400 |
Other assets | 531,071 |  |  | 502,706 |
Total assets | $ | 5,239,642 |  |  | $ | 4,407,106 |
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY |  |  |
Mortgage and notes payable, net | $ | 2,637,911 |  |  | $ | 2,218,853 |
Other liabilities (2) | 650,433 |  |  | 749,675 |
Members’/Partners’ equity | 1,951,298 |  |  | 1,438,578 |
Total liabilities and members’/partners’ equity | $ | 5,239,642 |  |  | $ | 4,407,106 |
Company’s share of equity | $ | 936,087 |  |  | $ | 591,905 |
Basis differentials (3) | 337,832 |  |  | 341,318 |
Carrying value of the Company’s investments in unconsolidated joint ventures (4) | $ | 1,273,919 |  |  | $ | 933,223 |
_______________ (1)At December 31, 2020 and 2019, this amount included right of use assets - finance leases totaling approximately $248.9 million and $383.9 million, respectively, and right of use assets - operating leases totaling approximately $22.5 million and $12.1 million, respectively. (2)At December 31, 2020 and 2019, this amount included lease liabilities - finance leases totaling approximately $388.7 million and $510.8 million, respectively, and lease liabilities - operating leases totaling approximately $29.0 million and $17.3 million, respectively. (3)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 December 31, 2020 and 2019, there was an aggregate basis differential of approximately $307.3 million and $311.3 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. At December 31, 2020, there was an aggregate basis differential of approximately $51.9 million between the carrying value of the Company’s investment in the joint venture that owns Gateway Commons and the joint venture’s basis in the assets and liabilities. At December 31, 2020, there was an aggregate basis differential of approximately $(52.2) million between the carrying value of the Company’s investment in the joint venture that owns Dock 72 and the joint venture’s basis in the assets and liabilities. These basis differentials (excluding land) will be amortized over the remaining lives of the related assets and liabilities. (4)Investments with deficit balances aggregating approximately $36.6 million and $22.4 million at December 31, 2020 and 2019, respectively, are 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:
|  |  | Year ended December 31,
|  |  |  |  | 2020 |  | 2019 |  | 2018
|  |  |  |  | (in thousands)
Total revenue (1) |  |  |  |  | $ | 319,560 |  |  | $ | 322,817 |  |  | $ | 271,951 |
Expenses |  |  |  |  |  |  |  |  |
Operating |  |  |  |  | 144,347 |  |  | 122,992 |  |  | 106,610 |
Transaction costs |  |  |  |  | 1,027 |  |  | 1,000 |  |  | — |
Depreciation and amortization (2) |  |  |  |  | 141,853 |  |  | 102,296 |  |  | 103,079 |
Total expenses |  |  |  |  | 287,227 |  |  | 226,288 |  |  | 209,689 |
Other income (expense) |  |  |  |  |  |  |  |  |
Interest expense |  |  |  |  | (98,051) |  |  | (84,409) |  |  | (71,308) |
Gains on sales of real estate (3) |  |  |  |  | 11,737 |  |  | 32,706 |  |  | 16,951 |
Net income (loss) |  |  |  |  | $ | (53,981) |  |  | $ | 44,826 |  |  | $ | 7,905 |
Company’s share of net income (loss) |  |  |  |  | $ | (16,256) |  |  | $ | 24,423 |  |  | $ | 8,084 |
Impairment loss on investment (4) |  |  |  |  | (60,524) |  |  | — |  |  | — |
Basis differential (3)(4)(5) |  |  |  |  | (8,330) |  |  | 22,169 |  |  | (5,862) |
(Loss) income from unconsolidated joint ventures |  |  |  |  | $ | (85,110) |  |  | $ | 46,592 |  |  | $ | 2,222 |
_______________ (1)Includes straight-line rent adjustments of approximately $(10.1) million, $32.4 million and $15.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. Due primarily to the impact of COVID-19, for the year ended December 31, 2020, write-offs of accounts receivable and accrued rent balances totaled approximately $51.7 million. (2)During the year ended December 31, 2018, the joint venture that owns Metropolitan Square in Washington, DC, commenced a renovation project and recorded accelerated depreciation expense of approximately $22.4 million related to the remaining book value of the assets to be replaced. The Company’s share of the accelerated depreciation expense totaled approximately $4.5 million. (3)For the year ended December 31, 2019, represents the gain on sale of 540 Madison Avenue recognized by the joint venture. During 2008, the Company recognized an other-than-temporary impairment loss on its investment in the unconsolidated joint venture resulting in a basis differential between the carrying value of the Company’s investment in the joint venture and the joint venture’s basis in the assets and liabilities of the property. As a result of the historical basis difference, the Company recognized a gain on sale of real estate totaling approximately $47.2 million for the year ended December 31, 2019, which consists of its share of the gain on sale reported by the joint venture as well as an adjustment for the basis differential. The gain on sale of real estate is included in Income from Unconsolidated Joint Ventures in the Company’s Consolidated Statements of Operations. (4)During the year ended December 31, 2020, the Company recognized an other-than-temporary impairment loss on its investment in the unconsolidated joint venture that owns Dock 72 in Brooklyn, New York totaling approximately $60.5 million. (5)Includes straight-line rent adjustments of approximately $1.8 million, $2.1 million and $2.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. Also includes net above-/below-market rent adjustments of approximately $0.9 million, $1.7 million and $1.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. On January 28, 2020, the Company entered into a joint venture with a third party to own, operate and develop properties at its Gateway Commons complex located in South San Francisco, California. The Company contributed its 601, 611 and 651 Gateway properties and development rights with an agreed upon value aggregating approximately $350.0 million for its 50% interest in the joint venture (See Note 3). 601, 611 and 651 Gateway consist of three Class A office properties aggregating approximately 768,000 net rentable square feet. The partner contributed three properties and development rights with an agreed upon value aggregating approximately $280.8 million at closing and will contribute cash totaling approximately $69.2 million in the future for its 50% ownership interest in the joint venture. As a result of the partner’s deferred contribution, the Company had an initial approximately 55% interest in the joint venture. Future development projects will be owned 49% by the Company and 51% by its partner. On February 20, 2020, a joint venture in which the Company has a 55% interest acquired the land underlying the ground lease at its Platform 16 property located in San Jose, California for a purchase price totaling approximately $134.8 million. The joint venture had previously made a deposit totaling $15.0 million, which was credited against the purchase price. Platform 16 consists of a parcel of land totaling approximately 5.6 acres that is expected to support the development of approximately 1.1 million square feet of commercial office space. On June 9, 2020, a joint venture in which the Company has a 20% interest refinanced with a new lender the mortgage loan collateralized by its Metropolitan Square property located in Washington, DC. The outstanding balance of the loan totaled approximately $155.9 million, bore interest at a fixed rate of 5.75% per annum and was scheduled to mature on August 5, 2020. The new mortgage loan totaling $325.0 million, of which $288.0 million was advanced at closing, bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.65%, plus (2) 4.75% per annum, and matures on July 7, 2022, with two, one-year extension options, subject to certain conditions. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the LIBOR at a cap of 3.00% per annum on a notional amount of $325.0 million through July 7, 2022. The joint venture distributed excess loan proceeds from the new mortgage loan totaling approximately $112.7 million, of which the Company’s share totaled approximately $22.5 million. Metropolitan Square is a Class A office property with approximately 654,000 net rentable square feet. On Jun e 25, 2020, a joint venture in which the Company has a 50% interest completed the sale of Annapolis Junction Building Eight and two land parcels located in Annapolis, Maryland for a gross sale price of $47.0 million. Net cash proceeds totaled approximately $45.8 million after the payment of transaction costs. The Company recognized a gain on sale of real estate totaling approximately $5.8 million, which is included in Income (Loss) from Unconsolidated Joint Ventures in the accompanying Consolidated Statements of Operations. The joint venture distributed approximately $36.8 million of available cash and the net proceeds from the sale after the pay down of the mortgage loan, of which the Company’s share totaled approximately $18.4 million. Annapolis Junction Building Eight is an approximately 126,000 net rentable square foot Class A office property, which is vacant. The two land parcels will support the development of approximately 300,000 square feet of commercial office space with one parcel currently containing surface parking for approximately 511 vehicles. On June 25, 2020, in conjunction with the joint venture’s sale of Annapolis Junction Building Eight, the joint venture in which the Company has a 50% interest modified the mortgage loan collateralized by Annapolis Junction Building Seven and Building Eight with the release of Annapolis Junction Building Eight as collateral under the loan in exchange for a principal pay down of approximately $16.1 million using a portion of the net proceeds from the sale of the property. At the time of the modification, the outstanding balance of the loan totaled approximately $34.5 million, bore interest at a variable rate equal to LIBOR plus 2.35% per annum and was scheduled to mature on June 30, 2020. The modified mortgage loan totaling approximately $18.4 million is collateralized by Annapolis Junction Building Seven, continues to bear interest at a variable rate equal to LIBOR plus 2.35% per annum and matures on March 25, 2021. Annapolis Junction Building Seven is a Class A office property with approximately 127,000 net rentable square feet located in Annapolis, Maryland. On July 23, 2020, the Company acquired a 50% interest in a joint venture entity that owns Beach Cities Media Campus, a 6.4-acre parcel of land located in El Segundo, California, for a purchase price of approximately $21.2 million. Beach Cities Media Campus is expected to support the development of approximately 275,000 square feet of Class A office space. On July 24, 2020, a joint venture in which the Company has a 50% interest completed and fully placed in-service Hub50House, an approximately 320,000 square foot project comprised of 440 residential units located in Boston, Massachusetts. On September 1, 2020, the Company entered into an agreement with its partner in the joint venture that owns 1265 Main Street located in Waltham, Massachusetts to (1) form additional joint ventures to own and develop a mixed-use property containing approximately 1,200,000 square feet to be developed in phases on an approximately 41-acre site adjacent to 1265 Main Street and (2) share the costs of certain offsite infrastructure improvements with its joint venture partner and other third-party abutting land owners. The Company will serve as the development manager and expects to own a 50% interest in each of the joint ventures. On September 30, 2020, a joint venture in which the Company has a 50% interest extended the mortgage loan collateralized by its Market Square North property. At the time of the extension, the outstanding balance of the loan totaled approximately $114.2 million, bore interest at a fixed rate of 4.85% per annum and was scheduled to mature on October 1, 2020. The extended loan was scheduled to mature on November 1, 2020. On October 30, 2020, the joint venture refinanced the mortgage loan. The new mortgage loan totals $125.0 million, bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.50%, plus (2) 2.30% per annum, and matures on November 10, 2025, with one, one-year extension option, subject to certain conditions. Market Square North is a Class A office property with approximately 418,000 net rentable square feet. On October 1, 2020, a joint venture in which the Company has a 50% interest completed and fully placed in-service Dock 72, a Class A office project with approximately 669,000 net rentable square feet located in Brooklyn, New York that is 33% leased. During December 2020, the Company recognized a non-cash impairment charge totaling approximately $60.5 million, which represented the other-than temporary decline in the fair value below the carrying value of the Company’s investment in the unconsolidated joint venture that owns Dock 72. The non-cash impairment charge was the result of an increase in costs, an extension of the projected period to fully lease the property and lower projected rental rates due to the COVID-19 pandemic, resulting in a current fair value that was less than the carrying value of the Company’s investment. The Company assessed the impairment and concluded that it was other than temporary. The Company determined that its valuation of the investment was categorized within Level 3 of the fair value hierarchy, as it utilized significant unobservable inputs in its assessment including an exit capitalization rate of 5.25%, a discount rate on the Company’s equity investment (the property is encumbered by mortgage debt) of 8.0% and an average lease commencement on currently vacant space of mid-2023. In addition, on December 14, 2020, the joint venture extended the mortgage loan collateralized by the property. At the time of the extension, the outstanding balance of the loan totaled approximately $198.6 million, bore interest at a variable rate equal to LIBOR plus 2.25% per annum and was scheduled to mature on December 18, 2020. The extended mortgage loan has a total commitment amount of $250.0 million, bears interest at an initial variable rate equal to (1) the greater of (x) LIBOR or (y) 0.25%, plus (2) 2.85% per annum and matures on December 18, 2023. On November 13, 2020, a joint venture in which the Company has a 50% interest extended the mortgage loan collateralized by its Annapolis Junction Building Six property located in Annapolis, Maryland. At the time of the extension, the outstanding balance of the loan totaled approximately $12.0 million, bore interest at a variable rate equal to LIBOR plus 2.00% per annum and was scheduled to mature on November 17, 2020. The extended mortgage loan has a total commitment amount of approximately $13.2 million, bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.50%, plus (2) 2.50% per annum and matures on November 16, 2021. Annapolis Junction Building Six is a Class A office property with approximately 119,000 net rentable square feet.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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