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Investments in and Advances to Unconsolidated Affiliates | 12 Months Ended
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Dec. 31, 2021
Equity Method Investments And Joint Ventures [Abstract] |
Investments in and Advances to Unconsolidated Affiliates | . 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 |  | December 31, |
Portfolio |  | Property |  | December 31, 2021 |  | 2021 |  |  | 2020 |
|  |  |  |  |  |  |  |  | (As Restated) |
Core: |  | 840 N. Michigan (a) |  | 88.43% |  | $ | 51,513 |  |  | $ | 55,863 |
|  | Renaissance Portfolio |  | 20% |  |  | 28,466 |  |  |  | 29,270 |
|  | Gotham Plaza |  | 49% |  |  | 29,187 |  |  |  | 28,683 |
|  | Georgetown Portfolio |  | 50% |  |  | 4,089 |  |  |  | 4,624 |
|  | 1238 Wisconsin Avenue |  | 80% |  |  | 5,895 |  |  |  | 2,571 |
|  |  |  |  |  |  | 119,150 |  |  |  | 121,011 |
Mervyns I & II: |  | KLA/ABS (b) |  | 36.7% |  |  | 124,316 |  |  |  | 72,391 |
Fund III: |  | Self Storage Management (c) |  | 95% |  |  | 207 |  |  |  | 207 |
|  | 640 Broadway (d) |  | 63.13% |  |  | 17,825 |  |  |  | 17,457 |
|  |  |  |  |  |  | 18,032 |  |  |  | 17,664 |
Fund IV: |  | Fund IV Other Portfolio |  | 98.57% |  |  | 12,675 |  |  |  | 11,719 |
|  | 650 Bald Hill Road |  | 90% |  |  | 11,677 |  |  |  | 12,550 |
|  | Paramus Plaza |  | 50% |  |  | 1,975 |  |  |  | 5,565 |
|  |  |  |  |  |  | 26,327 |  |  |  | 29,834 |
Fund V: |  | Family Center at Riverdale (a) |  | 89.42% |  |  | 12,449 |  |  |  | 11,824 |
|  | Tri-City Plaza |  | 90% |  |  | 6,827 |  |  |  | 7,024 |
|  | Frederick County Acquisitions |  | 90% |  |  | 10,748 |  |  |  | 10,837 |
|  |  |  |  |  |  | 30,024 |  |  |  | 29,685 |
Various: |  | Due from (to) Related Parties |  |  |  |  | 666 |  |  |  | 363 |
|  | Other (e) |  |  |  |  | 3,811 |  |  |  | 1,881 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 322,326 |  |  | $ | 272,829 |
Core: |  | Crossroads (f) |  | 49% |  | $ | 9,939 |  |  | $ | 15,616 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 9,939 |  |  | $ | 15,616 |
a) Represents a tenancy-in-common interest. b) Includes an interest in Albertsons (at fair value, as described below). c) Represents a variable interest entity for which the Company was determined not to be the primary beneficiary. d) In January 2022, the Company obtained the partner's interest and now owns 100% and consolidates the entity (Note 18). e) Includes cost-method investments in, Storage Post, Fifth Wall and other investments. f) 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 year ended December 31, 2021, the Company: • received dividends of $1.7 million at Mervyns II related to distributions from its Investment in Albertsons and recorded a net unrealized holding gain of $51.9 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; • called capital for its Crossroads investment of $7.5 million, of which the venture partner's share was $5.4 million; and • increased its investment in Fifth Wall by $1.9 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 4), 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 3) 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 9) 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. Core Portfolio Fifth Wall On August 8, 2019, the Company invested $1.8 million in Fifth Wall Ventures Retail Fund, L.P. (“Fifth Wall”). During the fourth quarter of 2019, the Company invested another $0.2 million. During 2021 and 2020, the Company increased its investment in Fifth Wall by $1.9 million and $0.4 million, respectively. The Company’s total commitment is $5.0 million. The Company accounts for its interest at cost less impairment given its ownership is less than five percent, and the Company has virtually no influence over the partnership’s operating and financial policies. During the fourth quarter of 2020, the Company impaired $0.4 million for this investment (Note 9) reflecting management’s estimate of fair value at that date. At December 31, 2021, the Company’s investment was $3.7 million. Brandywine Portfolio, Market Square and Town Center The Company now owns a 100% interest in an approximately one million square-foot retail portfolio (the “Brandywine Portfolio” joint venture) located in Wilmington, Delaware, which includes two properties referred to as “Market Square” and “Town Center.” Through a series of exchange transactions from 2017 through 2020, the Company converted a $140.0 million non-recourse note receivable and interest thereon (Note 4), which was collateralized by the Brandywine Portfolio, into ownership of the tenancy-in-common interests held by co-investors in the property ventures. The Brandywine Portfolio and Market Square ventures do not include the property held by Acadia Brandywine Holdings, LLC (“Brandywine Holdings”), an entity in which the Company had a 22.22% controlling interest (until it acquired the noncontrolling interest during 2020 as discussed in Note 8) and which is consolidated by the Company. 1238 Wisconsin Avenue On December 28, 2021, the Company provided a $12.8 million construction loan commitment to an unconsolidated entity, collateralized by the membership interest in the joint venture that owns the property. The loan, which had not been funded at December 31, 2021, matures in December 2023 with one twelve-month extension option. The Company earned an origination fee of $0.1 million at closing. Fund Investments Broughton Street Portfolio During 2014, Fund IV acquired 50% interests in two joint ventures referred to as “BSP I” and “BSP II” with the same venture partner to acquire and operate a total of 23 properties in Savannah, Georgia referred to as the “Broughton Street Portfolio.” Since that time, as described below, the ventures have sold eight of the properties and terminated the master leases on two of the properties. In October 2018, the venture partner relinquished its interest in BSP I, resulting in Fund IV becoming the 100% owner of the BSP I venture, which holds 11 consolidated properties (Note 3). On May 26, 2020, pursuant to the buy-sell provisions of the operating agreement of the Broughton Street Portfolio, Fund IV acquired all of the third-party equity of BSP II, which underlies two properties within Broughton Street Portfolio, for $1.3 million in a non-monetary exchange. These two BSP II properties were consolidated during the second quarter of 2020. Storage Post On June 29, 2019, Fund III’s Storage Post venture, which is a cost method investment with no carrying value distributed $1.6 million, of which the Operating Partnership’s share was $0.4 million. Albertsons During 2006, as part of a series of investments with a consortium of other investors known as the “RCP Venture”, Mervyns II acquired an indirect interest in Albertsons Companies, Inc., a private chain of grocery stores (“Albertsons”) through two 36.67% owned entities (KLA A Investments, LLC and ABS Opportunities, LLC, “KLA/ABS”). The investment (the “Investment in Albertsons”) has been accounted for under the cost method as Mervyns II has no influence over operating and financial policies of KLA/ABS. Subsequent to the initial investment in 2006, Mervyns II received distributions from its Investment in Albertsons in excess of its initial contribution, which have been recognized in earnings. During the second and fourth quarters of 2020, Mervyns II realized gains of approximately $22.8 million and $0.4 million, 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. Following these transactions, Mervyns II has retained an effective indirect 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 given the readily determinable fair value. During 2021, Mervyns II realized gains of approximately $1.7 million related to distributions from its Investment in Albertsons. The Company has an effective ownership interest of 28.33% in Mervyns II. Fees from Unconsolidated Affiliates The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated partnerships totaling $0.6 million, $1.1 million and $0.7 million for the years ended December 31, 2021, 2020 and 2019, respectively, which is included in other revenues in the consolidated statements of operations. In addition, the Company paid certain unaffiliated partners of its joint ventures, $1.4 million and $2.1 million and $1.4 million for the years ended December 31, 2021, 2020 and 2019, 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 December 31, 2021, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
|  | December 31, |
|  | 2021 |  |  | 2020 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 631,661 |  |  | $ | 633,375 |
Real estate under development |  |  | 8,112 |  |  |  | 14,664 |
Other assets |  |  | 78,300 |  |  |  | 70,710 |
Total assets |  | $ | 718,073 |  |  | $ | 718,749 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 571,461 |  |  | $ | 569,040 |
Other liabilities |  |  | 69,166 |  |  |  | 76,341 |
Partners’ equity |  |  | 77,446 |  |  |  | 73,368 |
Total liabilities and partners’ equity |  | $ | 718,073 |  |  | $ | 718,749 |
Company's share of accumulated equity |  | $ | 113,285 |  |  | $ | 112,088 |
Basis differential |  |  | 66,031 |  |  |  | 66,724 |
Deferred fees, net of portion related to the Company's interest |  |  | 4,071 |  |  |  | 3,559 |
Amounts receivable/payable by the Company |  |  | 666 |  |  |  | 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 |  |  | 184,053 |  |  |  | 182,734 |
Investments carried at fair value or cost |  |  | 128,334 |  |  |  | 74,479 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 9,939 |  |  |  | 15,616 |
Investments in and advances to unconsolidated affiliates |  | $ | 322,326 |  |  | $ | 272,829 |
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Combined and Condensed Statements of Operations |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 80,823 |  |  | $ | 78,054 |  |  | $ | 77,507 |
Operating and other expenses |  |  | (28,572 | ) |  |  | (28,718 | ) |  |  | (24,894 | )
Interest expense |  |  | (21,228 | ) |  |  | (22,651 | ) |  |  | (25,660 | )
Depreciation and amortization |  |  | (30,518 | ) |  |  | (30,917 | ) |  |  | (25,012 | )
Loss on extinguishment of debt |  |  | (35 | ) |  |  | — |  |  |  | — |
Gain on disposition of properties (a) |  |  | 3,206 |  |  |  | — |  |  |  | — |
Net income (loss) attributable to unconsolidated affiliates |  | $ | 3,676 |  |  | $ | (4,232 | ) |  | $ | 1,941 |
Company’s share of equity in net income (loss) of unconsolidated affiliates |  | $ | 6,023 |  |  | $ | (2,503 | ) |  | $ | 1,118 |
Income attributable to unconsolidated affiliates recently sold or consolidated |  |  | — |  |  |  | 1,280 |  |  | $ | 6,155 |
Basis differential amortization |  |  | (693 | ) |  |  | (1,834 | ) |  |  | (1,374 | )
Company’s equity in earnings (losses) of unconsolidated affiliates |  | $ | 5,330 |  |  | $ | (3,057 | ) |  | $ | 5,899 |
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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