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Investments in Unconsolidated Joint Ventures | 12 Months Ended
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Dec. 31, 2023
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Unconsolidated Joint Ventures | Investments in Unconsolidated Joint Ventures We have investments in several real estate joint ventures with various partners. As of December 31, 2023, the book value of these investments was $3.0 billion, net of investments with negative book values totaling $149.1 million for which we have an implicit commitment to fund future capital needs. As of December 31, 2023, 800 Third Avenue and 625 Madison Avenue are VIEs in which we are not the primary beneficiary. As of December 31, 2022, 800 Third Avenue and 21 East 66th Street are VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $437.9 million as of December 31, 2023 and $86.2 million as of December 31, 2022. Our maximum loss is limited to the amount of our equity investment in these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies". All other investments below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity method of accounting. The table below provides general information on each of our joint ventures as of December 31, 2023:
Property | Partner | Ownership Interest (1) | Economic Interest (1) | Unaudited Approximate Square Feet
100 Park Avenue | Prudential Real Estate Investors | 49.90% | 49.90% | 834,000 |
717 Fifth Avenue (2) (3) | Wharton Properties / Private Investor | 10.92% | 10.92% | 119,500 |
800 Third Avenue | Private Investors | 60.52% | 60.52% | 526,000 |
919 Third Avenue | New York State Teacher's Retirement System | 51.00% | 51.00% | 1,454,000 |
11 West 34th Street (2) | Private Investor / Wharton Properties | 30.00% | 30.00% | 17,150 |
280 Park Avenue | Vornado Realty Trust | 50.00% | 50.00% | 1,219,158 |
1552-1560 Broadway (2) (4) | Wharton Properties | 50.00% | 50.00% | 57,718 |
10 East 53rd Street | Canadian Pension Plan Investment Board | 55.00% | 55.00% | 354,300 |
650 Fifth Avenue (2) (5) | Wharton Properties | 50.00% | 50.00% | 69,214 |
11 Madison Avenue | PGIM Real Estate | 60.00% | 60.00% | 2,314,000 |
One Vanderbilt Avenue | National Pension Service of Korea / Hines Interest LP | 71.01% | 71.01% | 1,657,198 |
Worldwide Plaza (2) | RXR Realty / New York REIT | 24.95% | 24.95% | 2,048,725 |
1515 Broadway | Allianz Real Estate of America | 56.87% | 56.87% | 1,750,000 |
2 Herald Square (2) (6) | Israeli Institutional Investor | 51.00% | 51.00% | 369,000 |
115 Spring Street (2) | Private Investor | 51.00% | 51.00% | 5,218 |
15 Beekman (7) | A fund managed by Meritz Alternative Investment Management | 20.00% | 20.00% | 221,884 |
85 Fifth Avenue | Wells Fargo | 36.27% | 36.27% | 12,946 |
One Madison Avenue (8) | National Pension Service of Korea / Hines Interest LP / International Investor | 25.50% | 25.50% | 1,048,700 |
220 East 42nd Street | A fund managed by Meritz Alternative Investment Management | 51.00% | 51.00% | 1,135,000 |
450 Park Avenue (9) | Korean Institutional Investor / Israeli Institutional Investor | 50.10% | 25.10% | 337,000 |
5 Times Square (2) | RXR Realty led investment group | 31.55% | 31.55% | 1,131,735 |
245 Park Avenue (10) | U.S. Affiliate of Mori Trust Co., Ltd | 50.10% | 50.10% | 1,782,793 |
625 Madison Avenue (11) | Private Investor | 90.43% | 90.43% | 563,000 |
(1)Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2023. Changes in ownership or economic interests within the current year are disclosed in the notes below. (2)Included in the Company's alternative strategy portfolio. (3)In January 2024, together with its joint venture partner, the Company closed on the sale of the retail condominium at 717 Fifth Avenue for total consideration of $963.0 million. (4)The joint venture owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway. In December 2023, following an assessment of the investment for recoverability, the Company recorded a charge of $8.1 million, which is included in Depreciable real estate reserves and impairments in the consolidated statements of operations. (5)The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue. (6)In December 2023, following an assessment of the property and the investment for recoverability, the Company recorded a charge of $101.7 million, which is included in Depreciable real estate reserves and impairments in the consolidated statements of operations. In January 2024, the Company closed on the acquisition of interests in the joint venture that owns the leasehold interest for no consideration, which increases the Company's interest in the joint venture to 95.0%. In addition, the joint venture entered into an agreement to satisfy the existing $182.5 million mortgage on the property for a net payment of $7.0 million, which closed in February 2024. (7)In 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company. (8)In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of our remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment of $187.5 million. The fair value of our investment was determined by the terms of the joint venture agreement governing the capitalization of the project. In 2021, the Company admitted an additional partner to the development project with the partner's indirect ownership in the joint venture totaling 25.0%. The transaction did not meet sale accounting under ASC 860 and, as a result, was treated as a secured borrowing for accounting purposes and is included in Other liabilities in our consolidated balance sheets at December 31, 2023 and 2022. (9)The 50.1% ownership interest reflected in this table is comprised of our 25.1% economic interest and a 25.0% economic interest held by a third-party. The third-party's economic interest is held within a joint venture that we consolidate and recognize in Noncontrolling interests in other partnerships on our consolidated balance sheet. An additional third-party owns the remaining 49.9% economic interest in the property. (10)In June 2023, the Company sold a 49.9% interest, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of the 50.1% interest we retained. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of ($17.0 million) during the year ended December 31, 2023. The fair value of our investment was determined by the terms of the joint venture agreement. (11)In September 2023, following a UCC foreclosure, the Company converted its previous mezzanine debt investments in the fee interest to a 90.43% ownership interest. See Note 5, "Debt and Preferred Equity Investments." In December 2023, together with its joint venture, the Company entered into a contract to sell the fee ownership in the property. In connection with this contract, the Company recorded a charge of $23.1 million, which is included in Depreciable real estate reserves and impairments in the consolidated statements of operations. This transaction is expected to close in the first quarter of 2024. Disposition of Joint Venture Interests or Properties The following table summarizes the investments in unconsolidated joint ventures sold during the years ended December 31, 2023, 2022, and 2021:
Property |  | Ownership Interest Sold |  | Disposition Date |  | Gross Asset Valuation (in millions) |  | (Loss) Gain on Sale (in millions) (1) (2)
21 East 66th Street |  | 32.28% |  | December 2023 |  | $ | 40.6 |  |  | $ | (12.7) |
121 Greene Street |  | 50.00% |  | February 2023 |  | 14.0 |  |  | (0.3) |
Stonehenge Portfolio |  | Various |  | April 2022 |  | 1.0 |  |  | — |
400 East 57th Street (3) |  | 41.00% |  | September 2021 |  | 133.5 |  |  | (1.0) |
605 West 42nd Street - Sky |  | 20.00% |  | June 2021 |  | 858.1 |  |  | 8.9 |
55 West 46th Street - Tower 46 |  | 25.00% |  | March 2021 |  | 275.0 |  |  | (15.2) |
885 Third Avenue (4) |  | N/A |  | January 2021 |  | N/A |  | N/A
(1)Represents the Company's share of the gain or loss (2)For the years ended December 31, 2023 and December 31, 2021, the (losses) gains on sale are net of $2.0 million and $1.4 million, respectively, of employee compensation accrued in connection with the realization of the investment dispositions. There was no amount accrued for employee compensation in the year ended December 31, 2022. Additionally, amounts do not include adjustments for expenses recorded in subsequent periods. (3)In connection with our agreement to sell the property in April 2021, we recorded a charge of $5.7 million, which is included in Depreciable real estate reserves and impairments in the consolidated statements of operations. (4)In January 2021, pursuant to the partnership documents, certain participating rights of the common member expired. As a result, it was determined that we are the primary beneficiary of the VIE and the investment was consolidated in our financial statements. See Note 3, "Property Acquisitions." Joint Venture Mortgages and Other Loans Payable We generally finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases as of December 31, 2023 and 2022, respectively, are as follows (dollars in thousands):
|  |  |  |  |  |  |  |  |  | Principal Outstanding |  | Principal Outstanding
|  | Economic |  | Current Maturity | Final Maturity |  | Interest |  | December 31, 2023 |  | December 31, 2022
Property |  | Interest (1) |  | Date | Date (2) |  | Rate (3) |  | Gross |  | SLG Share |  | Gross |  | SLG Share
Fixed Rate Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
717 Fifth Avenue (4)(5) |  | 10.92 | % |  | July 2022 (5) | July 2022 (5) |  |  | 5.02% |  | $ | 655,328 |  |  | $ | 71,536 |  |  | $ | 655,328 |  |  | $ | 71,536 |
650 Fifth Avenue (4) |  | 50.00 | % |  | October 2023 (6) | January 2024 (6) |  |  | 5.45% |  | 65,000 |  |  | 32,500 |  |  | 65,000 |  |  | 32,500 |
220 East 42nd Street |  | 51.00 | % |  | June 2024 | June 2025 |  |  | 5.86% |  | 505,412 |  |  | 257,760 |  |  | 510,000 |  |  | 260,100 |
5 Times Square (4) |  | 31.55 | % |  | September 2024 | September 2026 |  |  | 7.13% |  | 477,783 |  |  | 150,740 |  |  | 400,000 |  |  | 126,200 |
10 East 53rd Street |  | 55.00 | % |  | February 2025 | February 2025 |  |  | 5.45% |  | 220,000 |  |  | 121,000 |  |  | 220,000 |  |  | 121,000 |
1515 Broadway |  | 56.87 | % |  | March 2025 | March 2025 |  |  | 3.93% |  | 762,002 |  |  | 433,344 |  |  | 782,321 |  |  | 444,898 |
115 Spring Street (4) |  | 51.00 | % |  | March 2025 | March 2025 |  |  | 5.50% |  | 65,550 |  |  | 33,431 |  |  | — |  |  | — |
450 Park Avenue |  | 25.10 | % |  | June 2025 | June 2027 |  |  | 6.10% |  | 271,394 |  |  | 68,120 |  |  | 267,000 |  |  | 67,017 |
11 Madison Avenue |  | 60.00 | % |  | September 2025 | September 2025 |  |  | 3.84% |  | 1,400,000 |  |  | 840,000 |  |  | 1,400,000 |  |  | 840,000 |
One Madison Avenue (7) |  | 25.50 | % |  | November 2025 | November 2026 |  |  | 3.59% |  | 733,103 |  |  | 186,941 |  |  | 467,008 |  |  | 119,087 |
800 Third Avenue |  | 60.52 | % |  | February 2026 | February 2026 |  |  | 3.37% |  | 177,000 |  |  | 107,120 |  |  | 177,000 |  |  | 107,120 |
919 Third Avenue |  | 51.00 | % |  | April 2026 | April 2028 |  |  | 6.11% |  | 500,000 |  |  | 255,000 |  |  | 500,000 |  |  | 255,000 |
625 Madison Avenue (8) |  | 90.43 | % |  | December 2026 | December 2026 |  |  | 5.11% |  | 199,987 |  |  | 180,848 |  |  | — |  |  | — |
245 Park Avenue |  | 50.10 | % |  | June 2027 | June 2027 |  |  | 4.30% |  | 1,768,000 |  |  | 885,768 |  |  | — |  |  | — |
Worldwide Plaza (4) |  | 24.95 | % |  | November 2027 | November 2027 |  |  | 3.98% |  | 1,200,000 |  |  | 299,400 |  |  | 1,200,000 |  |  | 299,400 |
One Vanderbilt Avenue |  | 71.01 | % |  | July 2031 | July 2031 |  |  | 2.95% |  | 3,000,000 |  |  | 2,130,300 |  |  | 3,000,000 |  |  | 2,130,300 |
280 Park Avenue |  |  |  |  |  |  |  |  |  | — |  |  | — |  |  | 1,200,000 |  |  | 600,000 |
21 East 66th Street |  |  |  |  |  |  |  |  |  | — |  |  | — |  |  | 12,000 |  |  | 3,874 |
Total fixed rate debt |  |  |  |  |  |  |  | $ | 12,000,559 |  |  | $ | 6,053,808 |  |  | $ | 10,855,657 |  |  | $ | 5,478,032 |
Floating Rate Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
11 West 34th Street (4) |  | 30.00 | % |  | February 2023 (9) | February 2023 (9) |  | L+ | 1.45% |  | $ | 23,000 |  |  | $ | 6,900 |  |  | $ | 23,000 |  |  | $ | 6,900 |
650 Fifth Avenue (4) |  | 50.00 | % |  | October 2023 (6) | January 2024 (6) |  | S+ | 2.25% |  | 210,000 |  |  | 105,000 |  |  | 210,000 |  |  | 105,000 |
2 Herald Square (4)(10) |  | 51.00 | % |  | November 2023(10) | November 2023(10) |  | S+ | 2.06% |  | 182,500 |  |  | 93,075 |  |  | 182,500 |  |  | 93,075 |
100 Park Avenue |  | 49.90 | % |  | January 2024 (11) | December 2025 |  | S+ | 2.36% |  | 360,000 |  |  | 179,640 |  |  | 360,000 |  |  | 179,640 |
15 Beekman (12) |  | 20.00 | % |  | January 2024 (13) | July 2025 |  | S+ | 1.61% |  | 124,137 |  |  | 24,827 |  |  | 86,738 |  |  | 17,348 |
1552 Broadway (4) |  | 50.00 | % |  | February 2024 | February 2024 |  | S+ | 2.75% |  | 193,133 |  |  | 96,567 |  |  | 193,132 |  |  | 96,566 |
5 Times Square (4) |  | 31.55 | % |  | September 2024 | September 2026 |  | S+ | 5.65% |  | 610,010 |  |  | 192,458 |  |  | 495,924 |  |  | 156,464 |
280 Park Avenue |  | 50.00 | % |  | September 2024 | September 2024 |  | S+ | 2.03% |  | 1,200,000 |  |  | 600,000 |  |  | — |  |  | — |
21 East 66th Street |  |  |  |  |  |  |  |  |  | — |  |  | — |  |  | 586 |  |  | 188 |
115 Spring Street |  |  |  |  |  |  |  |  |  | — |  |  | — |  |  | 65,550 |  |  | 33,431 |
121 Greene Street |  |  |  |  |  |  |  |  |  | — |  |  | — |  |  | 12,550 |  |  | 6,275 |
Total floating rate debt |  |  |  |  |  |  |  | $ | 2,902,780 |  |  | $ | 1,298,467 |  |  | $ | 1,629,980 |  |  | $ | 694,887 |
Total joint venture mortgages and other loans payable |  |  |  |  | $ | 14,903,339 |  |  | $ | 7,352,275 |  |  | $ | 12,485,637 |  |  | $ | 6,172,919 |
Deferred financing costs, net |  |  |  |  | (104,062) |  |  | (54,865) |  |  | (136,683) |  |  | (66,910) |
Total joint venture mortgages and other loans payable, net |  |  |  |  | $ | 14,799,277 |  |  | $ | 7,297,410 |  |  | $ | 12,348,954 |  |  | $ | 6,106,009 |
(1)Economic interest represents the Company's interests in the joint venture as of December 31, 2023. Changes in ownership or economic interests, if any, within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above. (2)Reflects exercise of all available options. The ability to exercise extension options may be subject to certain conditions, including meeting tests based on the operating performance of the property. (3)Interest rates as of December 31, 2023, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated spread over Term SOFR ("S"). (4)Included in the Company's alternative strategy portfolio. (5)The asset was sold and associated debt repaid in January 2024. (6)In January 2024, the maturity date of the loan was extended by two months to March 2024. (7)The loan is a $1.25 billion construction facility with an initial term of five years with one, one year extension option. Advances under the loan are subject to costs incurred. In conjunction with the loan, the Company provided partial guarantees for interest and principal payments, the amounts of which are based on certain construction milestones and operating metrics. In July 2023, the facility was modified, which will allow the partnership to utilize the final tranche of the facility for an expanded range of uses, including additional amenities funded by construction cost savings and for hedging activities in contemplation of a permanent financing. (8)Represents $168.9 million of loan principal and $31.1 million of accrued interest. (9)The Company's joint venture partner is in discussions with the lender on resolution of the past maturity. (10)The Company closed on the acquisition of additional interests in the joint venture in January 2024, which increased the Company's interest to 95%. In addition, the joint venture entered into an agreement to satisfy the existing mortgage for a net payment of $7.0 million, which closed in February 2024. (11)The Company is in discussions with the lender to exercise the available extension option. (12)This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred. (13)In January 2024, the maturity date of the loan was extended to July 2024. We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $21.1 million, $24.0 million and $19.6 million from these services, net of our ownership share of the joint ventures, for the years ended December 31, 2023, 2022, and 2021, respectively. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties. The combined balance sheets for the unconsolidated joint ventures, as of December 31, 2023 and 2022, are as follows (in thousands):
| December 31, 2023 |  | December 31, 2022
Assets (1) |  |  |
Commercial real estate property, net | $ | 18,467,340 |  |  | $ | 15,989,642 |
Cash and restricted cash | 656,038 |  |  | 709,299 |
Tenant and other receivables, related party receivables, and deferred rents receivable | 673,532 |  |  | 601,552 |
Other assets | 2,584,765 |  |  | 2,551,426 |
Total assets | $ | 22,381,675 |  |  | $ | 19,851,919 |
Liabilities and equity (1) |  |  |
Mortgages and other loans payable, net | $ | 14,799,277 |  |  | $ | 12,348,954 |
Deferred revenue | 1,108,180 |  |  | 1,077,901 |
Lease liabilities | 990,276 |  |  | 1,000,356 |
Other liabilities | 447,705 |  |  | 456,537 |
Equity | 5,036,237 |  |  | 4,968,171 |
Total liabilities and equity | $ | 22,381,675 |  |  | $ | 19,851,919 |
Company's investments in unconsolidated joint ventures | $ | 2,983,313 |  |  | $ | 3,190,137 |
(1)As of December 31, 2023, $545.6 million of net unamortized basis differences between the amount at which our investments are carried and our share of equity in net assets of the underlying property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the remaining life of the underlying items having given rise to the differences. The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years ended December 31, 2023, 2022, and 2021 are as follows (unaudited, in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Total revenues | $ | 1,525,044 |  |  | $ | 1,339,364 |  |  | $ | 1,228,364 |
Operating expenses | 253,630 |  |  | 240,002 |  |  | 203,332 |
Real estate taxes | 287,462 |  |  | 252,806 |  |  | 225,104 |
Operating lease rent | 29,048 |  |  | 26,152 |  |  | 22,576 |
Interest expense, net of interest income | 574,032 |  |  | 431,865 |  |  | 342,910 |
Amortization of deferred financing costs | 28,157 |  |  | 27,754 |  |  | 31,423 |
Depreciation and amortization | 516,466 |  |  | 465,100 |  |  | 484,130 |
Total expenses | $ | 1,688,795 |  |  | $ | 1,443,679 |  |  | $ | 1,309,475 |
Loss on early extinguishment of debt | — |  |  | (467) |  |  | (2,017) |
Net loss before (loss) gain on sale | $ | (163,751) |  |  | $ | (104,782) |  |  | $ | (83,128) |
Company's equity in net loss from unconsolidated joint ventures | $ | (76,509) |  |  | $ | (57,958) |  |  | $ | (55,402) |

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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 -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 323 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481543/323-740-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org//323/tableOfContent + Details
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