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INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES | 12 Months Ended
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Dec. 31, 2012
Equity Method Investments and Joint Ventures [Abstract] |
Investments in and Advances to Unconsolidated Affiliates | Investments In and Advances to Unconsolidated Affiliates Core Portfolio The Company owns a 22.2% interest in an approximately one million square foot retail portfolio (the “Brandywine Portfolio”) located in Wilmington, Delaware, a 49% interest in a 311,000 square foot shopping center located in White Plains, New York (“Crossroads”) and a 50% interest in an approximately 28,000 square foot retail portfolio located in Georgetown, Washington D.C. (the "Georgetown Portfolio"). These investments are accounted for under the equity method. Opportunity Funds RCP Venture The Opportunity Funds, along with Klaff Realty, LP (“Klaff”) and Lubert-Adler Management, Inc. ("Lubert-Adler"), formed an investment group, the RCP Venture, for the purpose of making investments in surplus or underutilized properties owned by retailers. The RCP Venture is neither a single entity nor a specific investment. Any member of this group has the option of participating, or not, in any individual investment and each individual investment has been made on a stand-alone basis through a separate limited liability company (“LLC”). These investments have been made through different investment vehicles with different affiliated and unaffiliated investors and different economics to the Company. Investments under the RCP Venture are structured as separate joint ventures as there may be other investors participating in certain investments in addition to Klaff, Lubert-Adler and Acadia. The Company has made these investments through its subsidiaries, Mervyns I, Mervyns II and Fund II, (together the “Acadia Investors”), all on a non-recourse basis. Through December 31, 2012, the Acadia Investors have made investments in Mervyns Department Stores (“Mervyns”) and Albertson’s, as well as additional investments in locations that are separate from these original investments (“Add-On Investments”). Additionally, they have invested in Shopko, Marsh and Rex Stores Corporation (collectively “Other RCP Investments”). Mervyns Department Stores Through Mervyns I and Mervyns II, the Company invested in a consortium to acquire Mervyns, consisting of 262 stores (“REALCO”) and its retail operations (“OPCO”), from Target Corporation. The Company’s share of this investment was $23.2 million. Subsequent to the initial acquisition, the Company, through Mervyns I and Mervyns II, made additional investments of $3.9 million. Through December 31, 2012, REALCO has disposed of a significant portion of the portfolio. In addition, in November 2007, the Company sold its interest in OPCO and, as a result, has no further investment in OPCO. Through December 31, 2012, the Company has received distributions from this investment totaling $46.0 million. Through December 31, 2012, the Company, through Mervyns I and Mervyns II, made Add-On Investments in Mervyns totaling $6.5 million and have received distributions totaling $3.6 million. During the year ended December 31, 2012, the Company recorded an impairment charge of $2.0 million on its investment in Mervyn's relating to a reduction in the fair value of the remaining assets of the portfolio. The Operating Partnership's share of this impairment, net of taxes, was $0.2 million. Albertson’s The RCP Venture made its second investment as part of an investment consortium, acquiring Albertson’s and Cub Foods, of which the Company’s share was $20.7 million. Through December 31, 2012, the Company has received distributions from this investment totaling $81.7 million, including $2.4 million and $4.5 million received in 2012 and 2011, respectively. Through December 31, 2012, the Company, through Mervyns II, made Add-On Investments in Albertson’s totaling $2.4 million and received distributions totaling $4.8 million, including $3.1 million received in 2012. Other RCP Investments Through December 31, 2012, the Company, through Fund II, made investments of $1.1 million in Shopko, $0.7 million in Marsh, and $2.0 million in Marsh Add-On Investments. As of December 31, 2012, the Company has received distributions totaling $1.7 million from its Shopko investment and $2.6 million from its Marsh and Marsh Add-On Investments. During July of 2007, the RCP Venture acquired a portfolio of 87 retail properties from Rex Stores Corporation, which the Company invested through Mervyns II. The Company’s share of this investment was $2.7 million. As of December 31, 2012, the Company has received distributions totaling $2.0 million, including $1.1 million received in 2012. ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Investments In and Advances to Unconsolidated Affiliates, continued The following table summarizes activity related to the RCP Venture investments from inception through December 31, 2012:
|  |  |  |  |  |  |  | Operating Partnership Share
Investment |  | Year Acquired |  | Invested Capital and Advances |  | Distributions |  | Invested Capital and Advances |  | Distributions
Mervyns |  | 2004 |  | $ | 27,088 |  |  | $ | 45,966 |  |  | $ | 4,901 |  |  | $ | 11,251 |
Mervyns Add-On investments |  | 2005/2008 |  | 6,517 |  |  | 3,558 |  |  | 1,252 |  |  | 819 |
Albertsons |  | 2006 |  | 20,717 |  |  | 81,680 |  |  | 4,239 |  |  | 16,318 |
Albertsons Add-On investments |  | 2006/2007 |  | 2,416 |  |  | 4,778 |  |  | 388 |  |  | 972 |
Shopko |  | 2006 |  | 1,108 |  |  | 1,659 |  |  | 222 |  |  | 332 |
Marsh and Add-On investments |  | 2006/2008 |  | 2,667 |  |  | 2,639 |  |  | 533 |  |  | 528 |
Rex Stores |  | 2007 |  | 2,701 |  |  | 1,956 |  |  | 535 |  |  | 392 |
Total |  |  |  | $ | 63,214 |  |  | $ | 142,236 |  |  | $ | 12,070 |  |  | $ | 30,612 |
The Company accounts for the original investments in Mervyns and Albertson’s under the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operating control. The Company accounts for the Add-On Investments and Other RCP Investments under the cost method. Due to its minor ownership interest, based on the size of the investments as well as the terms of the underlying operating agreements, the Company has no influence over such entities' operating and financial policies. Other than the minority investor rights to which the Company is entitled pursuant to statute, it has no rights other than to receive its pro-rata share of cash distributions as declared by the managers of the Add-On Investments and Other RCP Investments. The Company has no rights with respect to the control and operation of these investment vehicles, nor with the formulation and execution of business and investment policies. The Acadia Investors have non-controlling interests in the individual investee LLC’s as follows:
|  |  |  |  |  | Acadia Investors Ownership % in:
Investment |  | Investee LLC |  | Acadia Investors Entity |  | Investee LLC |  | Underlying entity(s)
Mervyns |  | KLA/Mervyn's, L.L.C |  | Mervyns I and Mervyns II |  | 10.5% |  | 5.8%
Mervyns Add-On Investments |  | KLA/Mervyn's, L.L.C |  | Mervyns I and Mervyns II |  | 10.5% |  | 5.8%
Albertsons |  | KLA A Markets, LLC |  | Mervyns II |  | 18.9% |  | 5.7%
Albertsons Add-On Investments |  | KLA A Markets, LLC |  | Mervyns II |  | 20.0% |  | 6.0%
Shopko |  | KA-Shopko, LLC |  | Fund II |  | 20.0% |  | 2.0%
Marsh and Add-On Investments |  | KA Marsh, LLC |  | Fund II |  | 20.0% |  | 3.3%
Rex Stores |  | KLAC Rex Venture, LLC |  | Mervyns II |  | 13.3% |  | 13.3%
ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Investments In and Advances to Unconsolidated Affiliates, continued Other Opportunity Fund Investments Fund II Investments Prior to June 30, 2010, Fund II had a 24.75% interest in CityPoint, a redevelopment project located in downtown Brooklyn, NY, which was accounted for under the equity method. On June 30, 2010, Fund II acquired the remaining interest in the project from its unaffiliated partner and, as a result, has consolidated the CityPoint investment since that point. Fund III Investments The unaffiliated venture partners for the Lincoln Road, Arundel Plaza, Parkway Crossing and the White City Shopping Center investments maintain control over these entities and, as such, the Company accounts for these investments under the equity method. During June 2010, Fund III, in a joint venture with an unaffiliated partner, invested in an entity for the purpose of providing management services to owners of self-storage properties. Fund III has a 50% interest in the entity. This entity was determined to be a variable interest entity but it was determined that the Company was not the primary beneficiary. As such, the Company accounts for this investment under the equity method. Fund IV Investments The unaffiliated venture partners for 1701 Belmont Avenue (Note 2) and Lincoln Road (Note 2) investment maintain control over the entity and, as such, the Company accounts for these investments under the equity method. Summary of Investments in Unconsolidated Affiliates The following combined and condensed Balance Sheets and Statements of Operations, in each period, summarize the financial information of the Company’s investments in unconsolidated affiliates. Summary of Investments in Unconsolidated Affiliates, continued
(dollars in thousands) |  | December 31, 2012 |  | December 31, 2011
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 441,611 |  |  | $ | 280,470 |
Investment in unconsolidated affiliates |  | 93,923 |  |  | 156,421 |
Other assets |  | 39,035 |  |  | 29,587 |
Total assets |  | $ | 574,569 |  |  | $ | 466,478 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 326,296 |  |  | $ | 319,425 |
Other liabilities |  | 24,267 |  |  | 16,902 |
Partners’ equity |  | 224,006 |  |  | 130,151 |
Total liabilities and partners’ equity |  | $ | 574,569 |  |  | $ | 466,478 |
Company’s investment in and advances to unconsolidated affiliates |  | $ | 221,694 |  |  | $ | 84,568 |
Company's share of distributions in excess of share of income and investments in unconsolidated affiliates |  | $ | (22,707 | ) |  | $ | (21,710 | )
ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Investments In and Advances to Unconsolidated Affiliates, continued
|  | Years Ended December 31,
(dollars in thousands) |  | 2012 |  | 2011 |  | 2010
Combined and Condensed Statements of Operations |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 49,729 |  |  | $ | 42,185 |  |  | $ | 29,460 |
Operating and other expenses |  | 18,919 |  |  | 15,924 |  |  | 10,617 |
Interest expense |  | 18,547 |  |  | 17,099 |  |  | 13,525 |
Equity in earnings of unconsolidated affiliates |  | 583 |  |  | 7,243 |  |  | 56,482 |
Depreciation and amortization |  | 9,551 |  |  | 8,837 |  |  | 4,839 |
Loss on debt extinguishment |  | 293 |  |  | — |  |  | — |
Gain (loss) on sale of property, net |  | 3,402 |  |  | — |  |  | (2,957 | )
Net income |  | $ | 6,404 |  |  | $ | 7,568 |  |  | $ | 54,004 |
Company’s share of net income |  | $ | 1,971 |  |  | $ | 1,946 |  |  | $ | 11,363 |
Amortization of excess investment |  | (392 | ) |  | (391 | ) |  | (392 | )
Company’s equity in earnings of unconsolidated affiliates |  | $ | 1,579 |  |  | $ | 1,555 |  |  | $ | 10,971 |

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- Definition The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14) -URI http://asc.fasb.org/extlink&oid=6955306&loc=d3e611322-123010 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 14 -Article 12 + Details
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