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Investments in and Advances to Unconsolidated Affiliates | 9 Months Ended
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Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract] |
Investments in and Advances to Unconsolidated Affiliates | 4. Investments in and Advances 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. Certain of the Company’s unconsolidated joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners or the Company will be entitled to an additional promoted interest or payments. 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, 2023 |  | 2023 |  |  | 2022 |
Core: |  | Renaissance Portfolio |  | 20% |  | $ | 28,050 |  |  | $ | 28,755 |
|  | Gotham Plaza |  | 49% |  |  | 30,405 |  |  |  | 30,112 |
|  | Georgetown Portfolio (a) |  | 50% |  |  | 4,170 |  |  |  | 4,048 |
|  | 1238 Wisconsin Avenue (a, b) |  | 80% |  |  | 17,995 |  |  |  | 14,502 |
|  |  |  |  |  |  | 80,620 |  |  |  | 77,417 |
Mervyns II: |  | KLA/ABS (c) |  | 36.7% |  |  | — |  |  |  | 85,403 |
Fund IV: |  | Fund IV Other Portfolio |  | 98.57% |  |  | 5,400 |  |  |  | 7,914 |
|  | 650 Bald Hill Road |  | 90% |  |  | 9,698 |  |  |  | 10,203 |
|  | Paramus Plaza |  | 50% |  |  | 203 |  |  |  | 936 |
|  |  |  |  |  |  | 15,301 |  |  |  | 19,053 |
Fund V: |  | Family Center at Riverdale (d) |  | 89.42% |  |  | 3,641 |  |  |  | 4,995 |
|  | Tri-City Plaza |  | 90% |  |  | 7,163 |  |  |  | 8,422 |
|  | Frederick County Acquisitions |  | 90% |  |  | 12,037 |  |  |  | 12,240 |
|  | Wood Ridge Plaza |  | 90% |  |  | 11,395 |  |  |  | 12,751 |
|  | La Frontera Village |  | 90% |  |  | 19,062 |  |  |  | 20,803 |
|  | Shoppes at South Hills (e) |  | 90% |  |  | 11,522 |  |  |  | 44,677 |
|  | Mohawk Commons |  | 90% |  |  | 18,634 |  |  |  | 775 |
|  |  |  |  |  |  | 83,454 |  |  |  | 104,663 |
Various: |  | Due from (to) Related Parties |  |  |  |  | 262 |  |  |  | 305 |
|  | Other (f) |  |  |  |  | 4,397 |  |  |  | 4,315 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 184,034 |  |  | $ | 291,156 |
Core: |  | Crossroads (g) |  | 49% |  | $ | 8,324 |  |  | $ | 8,832 |
|  | 840 N. Michigan Avenue (d, g) |  | 88.43% |  |  | 221 |  |  |  | 1,673 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 8,545 |  |  | $ | 10,505 |
(a) Represents a VIE for which the Company is not the primary beneficiary (Note 15). (b) Includes the amounts advanced against a $12.8 million construction commitment from the Company to the venture that holds its investment in 1238 Wisconsin. As of September 30, 2023 and December 31, 2022 the note receivable from a related party had a balance of $12.3 million and $7.7 million, net of an allowance for credit losses of $0.1 million, and $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. The loan has a one-year extension option and 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 (Note 2), as further described below. (f) Includes cost-method investments in Fifth Wall. (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 nine months ended September 30, 2023, the Company: • funded $4.6 million of a $12.8 million construction loan commitment to the 1238 Wisconsin venture. The total outstanding balance of the loan was $12.3 million as of September 30, 2023; • through Fund IV, modified a property mortgage with an outstanding balance of $21.9 million with a new loan of $24.1 million at an unconsolidated property, Eden Square; • through Fund V, acquired a 90% interest in a venture 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. • through Mervyns II, 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. 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, of which the Company received 1.6 million shares. The shares are classified as Marketable securities on the Company's condensed consolidated balance sheets (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 September 30, 2023 and 2022, and $0.3 million for each of the nine months ended September 30, 2023 and 2022, which are included in Other revenues in the condensed consolidated statements of operations. In addition, the Company's joint ventures paid to certain unaffiliated partners of its joint ventures $0.9 million and $0.5 million for the three months ended September 30, 2023 and 2022, respectively, and $2.1 million and $1.1 million for the nine months ended September 30, 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 September 30, 2023, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
|  | September 30, |  |  | December 31, |
|  | 2023 |  |  | 2022 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 718,145 |  |  | $ | 650,997 |
Real estate under development |  |  | 5,560 |  |  |  | 17,359 |
Other assets |  |  | 130,238 |  |  |  | 127,070 |
Total assets |  | $ | 853,943 |  |  | $ | 795,426 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 688,978 |  |  | $ | 609,923 |
Other liabilities |  |  | 97,373 |  |  |  | 96,532 |
Partners’ equity |  |  | 67,592 |  |  |  | 88,971 |
Total liabilities and partners’ equity |  | $ | 853,943 |  |  | $ | 795,426 |
Company's share of accumulated equity |  | $ | 115,358 |  |  | $ | 131,878 |
Basis differential |  |  | 52,071 |  |  |  | 52,813 |
Deferred fees, net of portion related to the Company's interest |  |  | 3,401 |  |  |  | 5,937 |
Amounts receivable/payable by the Company |  |  | 262 |  |  |  | 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 |  |  | 171,092 |  |  |  | 190,933 |
Investments carried at fair value or cost |  |  | 4,397 |  |  |  | 89,718 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 8,545 |  |  |  | 10,505 |
Investments in and advances to unconsolidated affiliates |  | $ | 184,034 |  |  | $ | 291,156 |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Combined and Condensed Statements of Operations |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 24,490 |  |  | $ | 25,096 |  |  | $ | 81,375 |  |  | $ | 72,167 |
Operating and other expenses |  |  | (9,189 | ) |  |  | (8,443 | ) |  |  | (26,538 | ) |  |  | (23,768 | )
Interest expense |  |  | (10,742 | ) |  |  | (7,130 | ) |  |  | (29,877 | ) |  |  | (18,458 | )
Depreciation and amortization |  |  | (11,567 | ) |  |  | (9,708 | ) |  |  | (31,700 | ) |  |  | (24,867 | )
Impairment of Investment |  |  | — |  |  |  | (57,423 | ) |  |  | — |  |  |  | (57,423 | )
Net loss attributable to unconsolidated affiliates |  | $ | (7,008 | ) |  | $ | (57,608 | ) |  | $ | (6,740 | ) |  | $ | (52,349 | )
Company’s share of equity in net losses of unconsolidated affiliates |  | $ | (4,617 | ) |  | $ | (50,331 | ) |  | $ | (5,531 | ) |  | $ | (45,416 | )
Basis differential amortization |  |  | (248 | ) |  |  | (248 | ) |  |  | (742 | ) |  |  | (753 | )
Company’s equity in losses of unconsolidated affiliates |  | $ | (4,865 | ) |  | $ | (50,579 | ) |  | $ | (6,273 | ) |  | $ | (46,169 | )

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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/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14(Column E)(Footnote 6)(b)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480032/946-320-S99-6 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14(Column E)(Footnote 6)(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480032/946-320-S99-6 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14(Column A)(Footnote 1)(b)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480032/946-320-S99-6 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//946-320/tableOfContent + Details
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