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Investments in and Advances to Unconsolidated Affiliates | 9 Months Ended
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Sep. 30, 2022
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, 2022 |  | 2022 |  |  | 2021 |
Core: |  | 840 N. Michigan Avenue (a) |  | 88.43% |  | $ | 341 |  |  | $ | 51,513 |
|  | Renaissance Portfolio |  | 20% |  |  | 28,904 |  |  |  | 28,466 |
|  | Gotham Plaza |  | 49% |  |  | 29,666 |  |  |  | 29,187 |
|  | Georgetown Portfolio (b) |  | 50% |  |  | 4,109 |  |  |  | 4,089 |
|  | 1238 Wisconsin Avenue (b) |  | 80% |  |  | 10,993 |  |  |  | 5,895 |
|  |  |  |  |  |  | 74,013 |  |  |  | 119,150 |
Mervyns II: |  | KLA/ABS (c) |  | 36.7% |  |  | 102,368 |  |  |  | 124,316 |
Fund III: |  | Self Storage Management (b) |  | 0% |  |  | — |  |  |  | 207 |
|  | 640 Broadway (d) |  | 100% |  |  | — |  |  |  | 17,825 |
|  |  |  |  |  |  | — |  |  |  | 18,032 |
Fund IV: |  | Fund IV Other Portfolio |  | 98.57% |  |  | 11,877 |  |  |  | 12,675 |
|  | 650 Bald Hill Road |  | 90% |  |  | 10,220 |  |  |  | 11,677 |
|  | Paramus Plaza |  | 50% |  |  | 1,022 |  |  |  | 1,975 |
|  |  |  |  |  |  | 23,119 |  |  |  | 26,327 |
Fund V: |  | Family Center at Riverdale (a) |  | 89.42% |  |  | 11,852 |  |  |  | 12,449 |
|  | Tri-City Plaza |  | 90% |  |  | 8,983 |  |  |  | 6,827 |
|  | Frederick County Acquisitions |  | 90% |  |  | 13,096 |  |  |  | 10,748 |
|  | Wood Ridge Plaza |  | 90% |  |  | 13,289 |  |  |  | — |
|  | La Frontera Village |  | 90% |  |  | 21,097 |  |  |  | — |
|  | Shoppes at South Hills |  | 90% |  |  | 45,436 |  |  |  | — |
|  |  |  |  |  |  | 113,753 |  |  |  | 30,024 |
Various: |  | Due from (to) Related Parties |  |  |  |  | 175 |  |  |  | 666 |
|  | Other (e) |  |  |  |  | 3,994 |  |  |  | 3,811 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 317,422 |  |  | $ | 322,326 |
Core: |  | Crossroads (f) |  | 49% |  | $ | 8,880 |  |  | $ | 9,939 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 8,880 |  |  | $ | 9,939 |
a) Represents a tenancy-in-common interest. b) Represents a VIE for which the Company is not the primary beneficiary. The Company's involvement with such entities is in the form of equity interests and fee arrangements. The maximum exposure to loss is limited to the amount of the Company's equity investment in these VIEs. Total unconsolidated VIE assets of $38.4 million and $32.2 million at September 30, 2022 and December 31, 2021, respectively. Total unconsolidated VIE liabilities of $46.1 million and $41.9 million at September 30, 2022 and December 31, 2021, respectively. c) Includes an interest in Albertsons at fair value, as described below ("Investment in Albertsons") (Note 8). d) In January 2022, the Company foreclosed on partner's interest and now owns 100% and consolidates the entity (Note 2). 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 nine months ended September 30, 2022, the Company: • through Fund V, acquired a 90% interest in a venture fo r $15.9 m illion, which acquired Shoppes at South Hills, a shopping center located in Poughkeepsie, New York for $47.6 m illion. In addition, Fund V made a bridge loan to the entity for $31.7 million during the third quarter; • impaired $50.8 million of its 840 N. Michigan Avenue investment during the third quarter, which is included in Equity in (losses) earnings of unconsolidated affiliates in the consolidated statements of operations, reflecting management’s estimate of fair value at that date; • through Fund V, acquired a 90% interest in a venture for $26.5 million, which acquired La Frontera Village, a shopping center located in Round Rock, Texas for $81.4 million. In addition, Fund V made a bridge loan to the entity for $52.0 million during the first quarter, which was repaid during the second quarter. On June 10, 2022, the venture entered into a $57.0 million mortgage loan, of which $55.5 million was funded at closing; • through Fund V, acquired a 90% interest in a venture for $15.3 million, which acquired Wood Ridge Plaza, a shopping center located in Houston, Texas for $49.3 million during the first quarter. In addition, on March 21, 2022 the Wood Ridge Plaza venture entered into a $36.6 million mortgage loan, of which $32.3 million was funded at closing; • through Fund III, foreclosed on the remaining 37% interest in 640 Broadway during the first quarter. Accordingly, the Company now consolidates this property (Note 2); • through Fund III, sold its investment in Self Storage Management for $6.0 million and recognized its proportionate gain of approximately $1.5 million during the first quarter, which is included in Realized and unrealized holding (losses) gains on investments and other in the consolidated statements of operations; • funde d $0.2 million of its capital commitment to its Fifth Wall investment during the second and third quarter; and • received cash dividends totaling $1.4 million at Mervyns II related to distributions from its Investment in Albertsons and recorded a net unrealized holding loss of $22.0 million reflecting the change in fair value of its Investment in Albertsons. In addition, the entity that holds the shares of Albertsons extended the expiration of the lockup term through May 2023. 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 • made a capital contribution to its Fifth Wall investment in the amount of $1.9 million. 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, $0.3 million, $0.1 million and $0.4 million for each of the three and nine months ended September 30, 2022 and 2021, respectively, 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, $0.5 million, $1.1 million, $0.3 million and $1.0 million for the three and nine months ended September 30, 2022 and 2021, 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, 2022, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
|  | September 30, |  |  | December 31, |
|  | 2022 |  |  | 2021 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 681,799 |  |  | $ | 631,661 |
Real estate under development |  |  | 14,387 |  |  |  | 8,112 |
Other assets |  |  | 133,731 |  |  |  | 78,300 |
Total assets |  | $ | 829,917 |  |  | $ | 718,073 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 624,043 |  |  | $ | 571,461 |
Other liabilities |  |  | 99,566 |  |  |  | 69,166 |
Partners’ equity |  |  | 106,308 |  |  |  | 77,446 |
Total liabilities and partners’ equity |  | $ | 829,917 |  |  | $ | 718,073 |
Company's share of accumulated equity |  | $ | 145,270 |  |  | $ | 113,285 |
Basis differential |  |  | 53,061 |  |  |  | 66,031 |
Deferred fees, net of portion related to the Company's interest |  |  | 3,674 |  |  |  | 4,071 |
Amounts receivable/payable by the Company |  |  | 175 |  |  |  | 666 |
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 202,180 |  |  |  | 184,053 |
Investments carried at fair value or cost |  |  | 106,362 |  |  |  | 128,334 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 8,880 |  |  |  | 9,939 |
Investments in and advances to unconsolidated affiliates |  | $ | 317,422 |  |  | $ | 322,326 |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Combined and Condensed Statements of Operations |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 25,096 |  |  | $ | 18,974 |  |  | $ | 72,167 |  |  | $ | 59,090 |
Operating and other expenses |  |  | (8,443 | ) |  |  | (7,174 | ) |  |  | (23,768 | ) |  |  | (21,584 | )
Interest expense |  |  | (7,130 | ) |  |  | (4,978 | ) |  |  | (18,458 | ) |  |  | (15,799 | )
Depreciation and amortization |  |  | (9,708 | ) |  |  | (6,785 | ) |  |  | (24,867 | ) |  |  | (23,154 | )
Impairment of Investments |  |  | (57,423 | ) |  |  | — |  |  |  | (57,423 | ) |  |  | — |
Gain on disposition of properties (a) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,206 |
Net (loss) income attributable to unconsolidated affiliates |  | $ | (57,608 | ) |  | $ | 37 |  |  | $ | (52,349 | ) |  | $ | 1,759 |
Company’s share of equity in net (loss) income of unconsolidated affiliates |  | $ | (50,331 | ) |  | $ | 910 |  |  | $ | (45,416 | ) |  | $ | 4,951 |
Income attributable to unconsolidated affiliates recently sold or consolidated |  |  | — |  |  |  | (283 | ) |  |  | — |  |  |  | (845 | )
Basis differential amortization |  |  | (248 | ) |  |  | (255 | ) |  |  | (753 | ) |  |  | (953 | )
Company’s equity in (losses) earnings of unconsolidated affiliates |  | $ | (50,579 | ) |  | $ | 372 |  |  | $ | (46,169 | ) |  | $ | 3,153 |
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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