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Investments in and Advances to Unconsolidated Affiliates (Tables)

9 Months Ended

Sep. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

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, 2024	2024		2023

Core:	Renaissance Portfolio	20%	$	29,121	$	30,745
	Gotham Plaza	49%		30,605		30,772
	Georgetown Portfolio (a)	50%		4,201		4,230
	1238 Wisconsin Avenue (a, b)	80%		19,020		19,719
	840 N. Michigan Avenue (c)	91.85%		25,659		15,761
				108,606		101,227
Investment Management:
Fund IV:	Fund IV Other Portfolio	90%		5,435		5,221
	650 Bald Hill Road	90%		9,234		9,486
	Paramus Plaza	50%		—		70
				14,669		14,777

Fund V:	Family Center at Riverdale (c)	89.42%		1,163		2,552
	Tri-City Plaza	90%		4,747		6,452
	Frederick County Acquisitions (d)	90%		5,012		11,345
	Wood Ridge Plaza	90%		9,167		10,313
	La Frontera Village	90%		13,856		17,483
	Shoppes at South Hills	90%		10,355		11,707
	Mohawk Commons	90%		12,869		16,434
				57,169		76,286

Other:	Shops at Grand	5%		2,449		—

Various:	Due (to) from Related Parties			102		396
	Other (e)			4,368		4,554
	Investments in and advances to unconsolidated affiliates		$	187,363	$	197,240

Core:	Crossroads (f)	49%	$	7,797	$	7,982
	Distributions in excess of income from, and investments in, unconsolidated affiliates		$	7,797	$	7,982

(a)

Represents a variable interest entity (“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, 2024 and December 31, 2023 the note receivable from a related party had a balance of $12.8 million, as of each period, net of an allowance for credit losses of $0.2 million and $0.1 million as of September 30, 2024 and December 31, 2023, 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, 2024.

(c)

Represents a tenancy-in-common interest.

(d)

On September 25, 2024 the venture which Fund V holds a 90% interest in sold a 300,000 square foot property in Frederick County, Maryland commonly referred to as Frederick Crossing. Fund V maintains its 90% interest in the venture which retains its interest in the remaining property of the Frederick County Acquisitions portfolio, commonly referred to as Frederick County Square.

(e)

Includes cost-method investment in Fifth Wall.

(f)

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, 2024, the Company:

•

on May 16, 2024, sold a 95% interest in the Shops at Grand property for a total of $48.3 million and retained a 5% interest through an investment in a newly formed joint venture which had a fair value of $2.4 million upon deconsolidation (Note 2);

•

on June 28, 2024, through Fund IV, sold its investment in Paramus Plaza for $36.8 million and repaid the related $27.9 million mortgage loan. The venture recognized a gain of $8.5 million, of which Fund IV’s proportionate share was $4.1 million. The Company’s proportionate share was $1.0 million;

•

on September 25, 2024, through Fund V, sold its investment in Frederick Crossing for $47.2 million and repaid the related $23.2 million mortgage loan. The venture recognized a gain of $12.9 million, of which Fund V’s proportionate share was $11.6 million. The Company’s proportionate share was $2.3 million; and

•

on September 19, 2024, refinanced a $17.1 million property mortgage loan at Gotham Plaza with a new lender upon maturity. The new $28.0 million property mortgage loan bears interest at 5.9 % and matures in October 2034.

Schedule of Condensed Balance Sheet

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, 2024 (in thousands):


	September 30,		December 31,
	2024		2023
Combined and Condensed Balance Sheets
Assets:
Rental property, net	$	699,878	$	723,411
Other assets		124,846		125,699
Total assets	$	824,724	$	849,110
Liabilities and partners’ equity:
Mortgage notes payable	$	613,341	$	662,552
Other liabilities		94,608		100,270
Partners’ equity		116,775		86,288
Total liabilities and partners’ equity	$	824,724	$	849,110

Company's share of accumulated equity	$	119,790	$	128,690
Basis differential		51,092		51,824
Deferred fees, net of portion related to the Company's interest		4,264		3,794
Amounts receivable/payable by the Company		102		396
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates		175,248		184,704
Investments carried at cost		4,318		4,554
Company's share of distributions in excess of income from and investments in unconsolidated affiliates		7,797		7,982
Investments in and advances to unconsolidated affiliates	$	187,363	$	197,240

Schedule of Condensed Income Statement


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Combined and Condensed Statements of Operations
Total revenues	$	27,792		$	24,490		$	83,977		$	81,375
Operating and other expenses		(9,488	)		(9,189	)		(29,624	)		(26,538	)
Interest expense		(9,895	)		(10,742	)		(30,514	)		(29,877	)
Depreciation and amortization		(10,266	)		(11,567	)		(32,062	)		(31,700	)
Gain on extinguishment of debt		952			—			2,963			—
Gain on disposition of properties		12,849			—			21,368			—
Net income (loss) attributable to unconsolidated affiliates	$	11,944		$	(7,008	)	$	16,108		$	(6,740	)

Company’s share of equity in net earnings (losses) of unconsolidated affiliates	$	12,028		$	(4,617	)	$	16,684		$	(5,531	)
Basis differential amortization		(244	)		(248	)		(732	)		(742	)
Company’s equity in earnings (losses) of unconsolidated affiliates	$	11,784		$	(4,865	)	$	15,952		$	(6,273	)