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Investments in and Advances to Unconsolidated Affiliates | 9 Months Ended
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Sep. 30, 2021
Equity Method Investments and Joint Ventures [Abstract] |
Investments in and Advances to Unconsolidated Affiliates | 4. Investments in and Advance s to Unconsolidated Affiliates The Company accounts for its investments in and advances to unconsolidated affiliates primarily under the equity method of accounting as it has the ability to exercise significant influence, but does not have financial or operating control over the investment, which is maintained by each of the unaffiliated partners who co-invest with the Company. The Company’s investments in and advances to unconsolidated affiliates consist of the following (dollars in thousands):
|  |  |  | Ownership Interest |  | September 30, |  |  | December 31, |
Portfolio |  | Property |  | September 30, 2021 |  | 2021 |  |  | 2020 |
Core: |  | 840 N. Michigan (a) |  | 88.43% |  | $ | 52,797 |  |  | $ | 55,863 |
|  | Renaissance Portfolio |  | 20% |  |  | 28,669 |  |  |  | 29,270 |
|  | Gotham Plaza |  | 49% |  |  | 28,892 |  |  |  | 28,683 |
|  | Georgetown Portfolio |  | 50% |  |  | 4,078 |  |  |  | 4,624 |
|  | 1238 Wisconsin Avenue |  | 80% |  |  | 4,385 |  |  |  | 2,571 |
|  |  |  |  |  |  | 118,821 |  |  |  | 121,011 |
Mervyns I & II: |  | KLA/ABS (b) |  | 36.7% |  |  | 128,186 |  |  |  | 72,391 |
Fund III: |  | Self Storage Management (c) |  | 95% |  |  | 207 |  |  |  | 207 |
Fund IV: |  | Fund IV Other Portfolio |  | 98.57% |  |  | 12,638 |  |  |  | 11,719 |
|  | 650 Bald Hill Road |  | 90% |  |  | 11,692 |  |  |  | 12,550 |
|  |  |  |  |  |  | 24,330 |  |  |  | 24,269 |
Fund V: |  | Family Center at Riverdale (a) |  | 89.42% |  |  | 12,612 |  |  |  | 11,824 |
|  | Tri-City Plaza |  | 90% |  |  | 6,992 |  |  |  | 7,024 |
|  | Frederick County Acquisitions |  | 90% |  |  | 10,817 |  |  |  | 10,837 |
|  |  |  |  |  |  | 30,421 |  |  |  | 29,685 |
Various: |  | Due from (to) Related Parties |  |  |  |  | 527 |  |  |  | 363 |
|  | Other (d) |  |  |  |  | 3,176 |  |  |  | 1,881 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 305,668 |  |  | $ | 249,807 |
Core: |  | Crossroads (e) |  | 49% |  | $ | 15,456 |  |  | $ | 15,616 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 15,456 |  |  | $ | 15,616 |
a) Represents a tenancy-in-common interest. b) Includes an interest in Albertsons (at fair value, as described below) (Note 8). c) Represents a variable interest entity for which the Company was determined not to be the primary beneficiary. d) Includes cost-method investments in Storage Post, Fifth Wall and other investments. e) Distributions have exceeded the Company’s investment; however, the Company recognizes a liability balance as it may be required to return distributions to fund future obligations of the entity. During the nine months ended September 30, 2021, the Company:  monetized $1.2 million at Mervyns II related to distributions from its Investment in Albertsons and recorded a net unrealized holding gain of $55.8 million reflecting the change in fair value of its Investment in Albertsons  on January 4, 2021, Fund V sold two land parcels at its unconsolidated Family Center at Riverdale property for a total of $10.5 million, repaid $7.9 million of the related mortgage and the venture recognized a gain of $3.2 million, of which the Company's share was $0.6 million; and  increased its investment in Fifth Wall by $1.3 million pursuant to its subscription agreement. During the year ended December 31, 2020, the Company:  exchanged the remaining $38.7 million of Brandywine Notes Receivable (Note 3), plus accrued interest of $2.0 million for the remaining 24.78% interest in Town Center on April 1, 2020, thereby obtaining a 100% controlling interest in the property. The property was then consolidated (Note 2) and the Company recorded the remaining interest in the property investment at the carrying value of the notes;  increased its investment in Fifth Wall by $0.4 million pursuant to its subscription agreement;  impaired $0.4 million of its investment in Fifth Wall (Note 8) during the fourth quarter of 2020, reflecting management’s estimate of fair value at that date;  recorded realized gains at Mervyns II of approximately $22.8 million and $0.4 million, during the second and fourth quarters of 2020, respectively, from its Investment in Albertsons. The realized gains during the second quarter of 2020 resulted from the issuance and distribution of proceeds from a preferred equity investment and a sale of a portion of its investment in an initial public offering of Albertsons, both of which occurred in June 2020;  recorded an unrealized gain of approximately $64.9 million during the second quarter of 2020 at Mervyns II reflecting the initial market value of its ownership of approximately 4.1 million shares (approximately 1% interest) through its Investment in Albertsons, which it has accounted for at fair value following the initial public offering;  recorded an additional net unrealized holding gain of $7.5 million at Mervyns II reflecting the change in fair value of its Investment in Albertsons from the initial public offering through December 31, 2020; and  acquired all of the third-party equity of BSP II at Fund IV, which underlies two properties within Broughton Street Portfolio, for $1.3 million on May 26, 2020, pursuant to the buy-sell provisions of the operating agreement of the Broughton Street Portfolio. These two BSP II properties were consolidated during the second quarter of 2020. Fees from Unconsolidated Affiliates The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated partnerships totaling $0.1 million for each of the three months ended September 30, 2021 and 2020, and $0.3 million for each of the nine months ended September 30, 2021 and 2020, which are included in other revenues in the consolidated statements of operations. In addition, the Company's joint ventures paid to certain unaffiliated partners of its joint ventures, $0.3 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $1.0 million and $1.7 million for the nine months ended September 30, 2021 and 2020, respectively, for leasing commissions, development, management, construction and overhead fees. Summarized Financial Information of 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 that were held as of September 30, 2021, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
|  | September 30, 2021 |  |  | December 31, 2020 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 557,892 |  |  | $ | 563,997 |
Real estate under development |  |  | 10,768 |  |  |  | 14,517 |
Other assets |  |  | 63,461 |  |  |  | 61,969 |
Total assets |  | $ | 632,121 |  |  | $ | 640,483 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 507,396 |  |  | $ | 512,490 |
Other liabilities |  |  | 71,937 |  |  |  | 74,872 |
Partners’ equity |  |  | 52,788 |  |  |  | 53,121 |
Total liabilities and partners’ equity |  | $ | 632,121 |  |  | $ | 640,483 |
Company's share of accumulated equity |  | $ | 100,015 |  |  | $ | 100,767 |
Basis differential |  |  | 54,065 |  |  |  | 55,017 |
Deferred fees, net of portion related to the Company's interest |  |  | 4,036 |  |  |  | 3,565 |
Amounts receivable/payable by the Company |  |  | 527 |  |  |  | 363 |
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 158,643 |  |  |  | 159,712 |
Investments carried at fair value or cost |  |  | 131,569 |  |  |  | 74,479 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 15,456 |  |  |  | 15,616 |
Investments in and advances to unconsolidated affiliates |  | $ | 305,668 |  |  | $ | 249,807 |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Combined and Condensed Statements of Operations |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 17,912 |  |  | $ | 17,302 |  |  | $ | 54,734 |  |  | $ | 53,170 |
Operating and other expenses |  |  | (6,845 | ) |  |  | (6,234 | ) |  |  | (19,878 | ) |  |  | (18,996 | )
Interest expense |  |  | (4,733 | ) |  |  | (4,865 | ) |  |  | (14,136 | ) |  |  | (15,135 | )
Depreciation and amortization |  |  | (6,320 | ) |  |  | (7,947 | ) |  |  | (20,797 | ) |  |  | (20,831 | )
Gain on disposition of properties (a) |  |  | — |  |  |  | — |  |  |  | 3,206 |  |  |  | — |
Net income (loss) attributable to unconsolidated affiliates |  | $ | 14 |  |  | $ | (1,744 | ) |  | $ | 3,129 |  |  | $ | (1,792 | )
Company’s share of equity in net income (loss) of unconsolidated affiliates |  | $ | 899 |  |  | $ | 21 |  |  | $ | 4,965 |  |  | $ | (153 | )
Income attributable to unconsolidated affiliates recently sold or consolidated |  |  | — |  |  |  | (11 | ) |  |  | — |  |  |  | 1,280 |
Basis differential amortization |  |  | (255 | ) |  |  | (634 | ) |  |  | (952 | ) |  |  | (1,282 | )
Company’s equity in earnings (losses) of unconsolidated affiliates |  | $ | 644 |  |  | $ | (624 | ) |  | $ | 4,013 |  |  | $ | (155 | )
a) Represents the gain on the sale of two land parcels by the Family Center at Riverdale on January 4, 2021.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 + Details
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