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v3.23.1

Investments in and Advances to Unconsolidated Affiliates | 3 Months Ended
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Mar. 31, 2023
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 |  | March 31, |  |  | December 31, |
Portfolio |  | Property |  | March 31, 2023 |  | 2023 |  |  | 2022 |
Core: |  | Renaissance Portfolio |  | 20% |  | $ | 28,975 |  |  | $ | 28,755 |
|  | Gotham Plaza |  | 49% |  |  | 30,293 |  |  |  | 30,112 |
|  | Georgetown Portfolio (a) |  | 50% |  |  | 4,101 |  |  |  | 4,048 |
|  | 1238 Wisconsin Avenue (a, b) |  | 80% |  |  | 16,223 |  |  |  | 14,502 |
|  |  |  |  |  |  | 79,592 |  |  |  | 77,417 |
Mervyns II: |  | KLA/ABS (c) |  | 36.7% |  |  | — |  |  |  | 85,403 |
Fund IV: |  | Fund IV Other Portfolio |  | 98.57% |  |  | 7,344 |  |  |  | 7,914 |
|  | 650 Bald Hill Road |  | 90% |  |  | 9,721 |  |  |  | 10,203 |
|  | Paramus Plaza |  | 50% |  |  | 807 |  |  |  | 936 |
|  |  |  |  |  |  | 17,872 |  |  |  | 19,053 |
Fund V: |  | Family Center at Riverdale (d) |  | 89.42% |  |  | 4,574 |  |  |  | 4,995 |
|  | Tri-City Plaza |  | 90% |  |  | 7,665 |  |  |  | 8,422 |
|  | Frederick County Acquisitions |  | 90% |  |  | 11,510 |  |  |  | 12,240 |
|  | Wood Ridge Plaza |  | 90% |  |  | 12,295 |  |  |  | 12,751 |
|  | La Frontera Village |  | 90% |  |  | 20,078 |  |  |  | 20,803 |
|  | Shoppes at South Hills (e) |  | 90% |  |  | 13,189 |  |  |  | 44,677 |
|  | Mohawk Commons |  | 90% |  |  | 20,158 |  |  |  | 775 |
|  |  |  |  |  |  | 89,469 |  |  |  | 104,663 |
Various: |  | Due from (to) Related Parties |  |  |  |  | 277 |  |  |  | 305 |
|  | Other (f) |  |  |  |  | 4,342 |  |  |  | 4,315 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 191,552 |  |  | $ | 291,156 |
Core: |  | Crossroads (g) |  | 49% |  | $ | 8,750 |  |  | $ | 8,832 |
|  | 840 N. Michigan Avenue (d, g) |  | 88.43% |  | $ | 626 |  |  | $ | 1,673 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 9,376 |  |  | $ | 10,505 |
a) Represents a VIE for which the Company is not the primary beneficiary (Note 15). b) Includes a $12.8 million construction commitment from the Company to the venture that holds its investm ent in 1238 Wisconsin. As of March 31, 2023 and December 31, 2022 the note receivable from a related party had a balance of $9.6 million and $7.5 million, net of CECL allowance of $0.1 million, an d $0.1 million, respectively. The loan is collateralized by the venture members' equity interest in the entity that holds the 1238 Wisconsin development property, bears interest at Prime + 1.0% subject to a 4.5% floor, and matures on December 28, 2023. Interest is recognized over the life of the loan. c) At December 31, 2022, Mervyns II had an effective indirect ownership of approximately 4.1 million shares (approximately 1% interest) through its Investment in Albertsons Companies Inc. ("Albertsons"), which is accounted for at fair value (Note 8). Mervyns II distributed the shares to its investors upon expiration of the lock-up agreement in January 2023, as further described below. d) Represents a tenancy-in-common interest. e) At December 31, 2022, includes a $31.7 million bridge loan from the Company to the venture that holds the property in its investment in Shoppes at South Hills. During the first quarter of 2023 the bridge loan was repaid, as further described below. f) Includes cost-method investments in Storage Post, Fifth Wall, and other investments. g) Distributions have exceeded the Company’s investment; however, the Company recognizes a liability balance as it may elect to contribute capital to the entity. During the three months ended March 31, 2023, the Company: • funded $2.0 million of a $12.8 million construction loan commitment to the 1238 Wisconsin venture; • through Fund V, acquired a 90% interest in a venture for $20.2 million, which acquired Mohawk Commons, a shopping center located in Schenectady, New York for $62.1 million. In addition, on January 27, 2023, the Mohawk Commons venture entered into a $39.7 million mortgage loan; • through Fund V, received payment on a bridge loan from the Shoppes at South Hills venture for $31.7 million which matured in February 2023. Upon maturity of the bridge loan, the venture entered into a $36.0 million mortgage loan, of which $31.8 million was funded at closing. • received cash dividends from its investment in Albertsons totaling $28.5 million on January 20, 2023, of which the Company's share was $11.3 million. The Company has reflected the dividend income as Realized and unrealized holding gains on investments and other within its consolidated statements of income. Additionally, the lock-up period, which restricted the transfer or sale of shares, expired on January 24, 2023, and 4.1 million shares of Albertsons were distributed to the individual investors as a non-cash distribution. The Company now owns 1.6 million shares of Albertsons directly as a result of the distribution, which are presented as Marketable securities on the Company's consolidated balance sheets and are accounted for at fair value (Note 8). During the year ended December 31, 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, which was subsequently repaid in the first quarter of 2023 (Note 3); • recorded an impairment charge of $50.8 million related to 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 income, 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 an affiliate of 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 $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 income; • through Fund IV, sold its investment in Promenade at Manassas for $46.0 million and repaid $27.3 million of the related mortgage. Fund IV recognized a gain of $12.8 million, of which the Company's share was $3.0 million during the fourth quarter; • funde d $0.2 million of its capital commitment to its Fifth Wall investment during the second and third quarter. Funded $7.5 million of its construction commitment to the venture that holds 1238 Wisconsin (Note 3); and • received cash dividends totaling $1.9 million at Mervyns II related to distributions from its Investment in Albertsons and recorded a net unrealized holding loss of $38.9 million reflecting the change in fair value of its Investment in Albertsons (Note 8). 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 March 31, 2023 and 2022, respectively, which are included in Other revenues in the consolidated statements of income. In addition, the Company's joint ventures paid to certain unaffiliated partners of its joint ventures $0.6 million and $0.3 million for the three months ended March 31, 2023 and 2022, 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 March 31, 2023, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
|  | March 31, |  |  | December 31, |
|  | 2023 |  |  | 2022 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 706,731 |  |  | $ | 650,997 |
Real estate under development |  |  | 18,676 |  |  |  | 17,359 |
Other assets |  |  | 140,052 |  |  |  | 127,070 |
Total assets |  | $ | 865,459 |  |  | $ | 795,426 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 683,601 |  |  | $ | 609,923 |
Other liabilities |  |  | 100,757 |  |  |  | 96,532 |
Partners’ equity |  |  | 81,101 |  |  |  | 88,971 |
Total liabilities and partners’ equity |  | $ | 865,459 |  |  | $ | 795,426 |
Company's share of accumulated equity |  | $ | 122,188 |  |  | $ | 131,878 |
Basis differential |  |  | 52,566 |  |  |  | 52,813 |
Deferred fees, net of portion related to the Company's interest |  |  | 2,803 |  |  |  | 5,937 |
Amounts receivable/payable by the Company |  |  | 277 |  |  |  | 305 |
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 177,834 |  |  |  | 190,933 |
Investments carried at fair value or cost |  |  | 4,342 |  |  |  | 89,718 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 9,376 |  |  |  | 10,505 |
Investments in and advances to unconsolidated affiliates |  | $ | 191,552 |  |  | $ | 291,156 |
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Combined and Condensed Statements of Operations |  |  |  |  |  |
Total revenues |  | $ | 28,218 |  |  | $ | 23,118 |
Operating and other expenses |  |  | (8,632 | ) |  |  | (7,258 | )
Interest expense |  |  | (9,233 | ) |  |  | (4,739 | )
Depreciation and amortization |  |  | (8,901 | ) |  |  | (5,911 | )
Net income attributable to unconsolidated affiliates |  | $ | 1,452 |  |  | $ | 5,210 |
Company’s share of equity in net income of unconsolidated affiliates |  | $ | 276 |  |  | $ | 3,383 |
Basis differential amortization |  |  | (247 | ) |  |  | (253 | )
Company’s equity in earnings of unconsolidated affiliates |  | $ | 29 |  |  | $ | 3,130 |

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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 https://asc.fasb.org/subtopic&trid=2324412 + Details
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