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Investments in and Advances to Unconsolidated Affiliates | 3 Months Ended
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Mar. 31, 2025
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. 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, 2025 |  | 2025 |  |  | 2024 |
Core: |  | Renaissance Portfolio (a) |  | 68% |  | $ | — |  |  | $ | 28,250 |
|  | Gotham Plaza |  | 49% |  |  | 30,509 |  |  |  | 30,561 |
|  | Georgetown Portfolio (b) |  | 50% |  |  | 4,141 |  |  |  | 4,214 |
|  | 1238 Wisconsin Avenue (b, c) |  | 80% |  |  | 18,822 |  |  |  | 19,048 |
|  | 840 N. Michigan Avenue (d, e) |  | 94.35% |  |  | 29,748 |  |  |  | 28,111 |
|  |  |  |  |  |  | 83,220 |  |  |  | 110,184 |
Investment Management: |  |  |  |  |  |  |  |  |  |
Fund IV: (i) |  | Fund IV Other Portfolio |  | 90% |  |  | 5,175 |  |  |  | 5,291 |
|  | 650 Bald Hill Road |  | 90% |  |  | 9,166 |  |  |  | 9,220 |
|  |  |  |  |  |  | 14,341 |  |  |  | 14,511 |
Fund V: (i) |  | Family Center at Riverdale (d) |  | 89.42% |  |  | 1,031 |  |  |  | 1,832 |
|  | Tri-City Plaza |  | 90% |  |  | 6,381 |  |  |  | 6,914 |
|  | Frederick County Acquisitions (f) |  | 90% |  |  | 5,245 |  |  |  | 4,375 |
|  | Wood Ridge Plaza |  | 90% |  |  | 8,827 |  |  |  | 9,313 |
|  | La Frontera Village |  | 90% |  |  | 12,503 |  |  |  | 13,389 |
|  | Shoppes at South Hills |  | 90% |  |  | 9,656 |  |  |  | 10,139 |
|  | Mohawk Commons |  | 90% |  |  | 11,076 |  |  |  | 12,350 |
|  |  |  |  |  |  | 54,719 |  |  |  | 58,312 |
Other: |  | Shops at Grand |  | 5% |  |  | 2,437 |  |  |  | 2,452 |
|  | Walk at Highwoods Preserve |  | 20% |  |  | 2,141 |  |  |  | 2,279 |
|  | LINQ Promenade |  | 15% |  |  | 16,383 |  |  |  | 16,508 |
|  |  |  |  |  |  | 20,961 |  |  |  | 21,239 |
Various: |  | Due (to) from Related Parties |  |  |  |  | 757 |  |  |  | 446 |
|  | Other (g) |  |  |  |  | 3,971 |  |  |  | 4,540 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 177,969 |  |  | $ | 209,232 |
Core: |  | Crossroads (h) |  | 49% |  | $ | 16,878 |  |  | $ | 16,514 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 16,878 |  |  | $ | 16,514 |
(a) On January 23, 2025, the Company acquired an additional 48% economic ownership interest, and increased its existing 20% interest to 68%, in the Renaissance Portfolio primarily located in Washington D.C. Prior to the acquisition, the Company accounted for its 20% interest under the equity method of accounting. Due to the Company gaining a controlling financial interest as a result of this acquisition, the Company determined that the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary, and it should consolidate its investment within its Core Portfolio effective January 23, 2025. Accordingly, the Company recognized a loss on change in control of $9.6 million (Note 2). (b) Represents a variable interest entity for which the Company is not the primary beneficia ry (Note 15). (c) 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 March 31, 2025 and December 31, 2024 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 $0.1 million as of March 31, 2025 and December 31, 2024. 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, 2027. The Company recognized interest income of $0.1 million for each of the three months ended March 31, 2025 and 2024, respectively, related to this note receivable. (d) Represents a tenancy-in-common interest. (e) In February 2025, the Company acquired an additional 2.5% interest in the 840 North Michigan Avenue venture increasing its ownership interest from 91.85% to 94.35%. The note receivable from the 840 North Michigan Avenue venture partners had a balance of $1.4 million and $2.3 million as of March 31, 2025 and December 31, 2024, respectively and matures in July 2025 (Note 3). (f) 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. (g) Includes cost-method investment in Fifth Wall. The Company recorded an impairment charge of $0.1 million for the three months ended March 31, 2025, which is included in Realized and unrealized holding gains (losses) on investments and other in the Company’s condensed consolidated Statements of Operations. (h) Distributions have exceeded the Company’s investment; however, the Company recognizes a liability balance as it may elect to contribute capital to the entity. (i) The Company owns 23.12% and 20.10% in Funds IV and V, respectively (Note 1). For the ventures within these funds, the ownership interest percentage represents the Fund’s ownership interest and not the Company’s proportionate share. Fees earned from and paid to Unconsolidated Affiliates The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated affiliates totaling $0.7 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively, which are included in Other revenues in the Condensed Consolidated Statements of Operations. In addition, the Company’s unconsolidated joint ventures paid fees to the Company’s unaffiliated joint venture partners of $0.8 million and $1.1 million for the three months ended March 31, 2025 and 2024, 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, summarized the financial information of the Company’s investments in unconsolidated affiliates that were held as of March 31, 2025 (in thousands):
|  | March 31, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 940,652 |  |  | $ | 1,016,229 |
Other assets |  |  | 139,686 |  |  |  | 162,713 |
Total assets |  | $ | 1,080,338 |  |  | $ | 1,178,942 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 658,288 |  |  | $ | 815,045 |
Other liabilities |  |  | 133,015 |  |  |  | 140,743 |
Partners’ equity |  |  | 289,035 |  |  |  | 223,154 |
Total liabilities and partners’ equity |  | $ | 1,080,338 |  |  | $ | 1,178,942 |
Company's share of accumulated equity |  | $ | 142,566 |  |  | $ | 131,793 |
Basis differential |  |  | 9,154 |  |  |  | 50,851 |
Deferred fees, net of portion related to the Company's interest |  |  | 4,697 |  |  |  | 5,400 |
Amounts receivable/payable by the Company |  |  | 757 |  |  |  | 446 |
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 157,174 |  |  |  | 188,490 |
Investments carried at cost |  |  | 3,917 |  |  |  | 4,228 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 16,878 |  |  |  | 16,514 |
Investments in and advances to unconsolidated affiliates |  | $ | 177,969 |  |  | $ | 209,232 |
|  | Three Months Ended March 31, |
|  | 2025 |  |  | 2024 |
Combined and Condensed Statements of Operations |  |  |  |  |  |
Total revenues |  | $ | 32,126 |  |  | $ | 28,004 |
Operating and other expenses |  |  | (12,249 | ) |  |  | (9,986 | )
Interest expense |  |  | (11,450 | ) |  |  | (10,414 | )
Depreciation and amortization |  |  | (12,852 | ) |  |  | (11,666 | )
Gain on extinguishment of debt (a) |  |  | 971 |  |  |  | 1,158 |
Net loss attributable to unconsolidated affiliates |  | $ | (3,454 | ) |  | $ | (2,904 | )
Company’s share of equity in net (losses) earnings of unconsolidated affiliates |  | $ | (1,615 | ) |  | $ | (68 | )
Basis differential amortization |  |  | (98 | ) |  |  | (244 | )
Company’s equity in losses of unconsolidated affiliates |  | $ | (1,713 | ) |  | $ | (312 | )
(a) Includes the gain on debt extinguishment related to the restructuring at 840 N. Michigan Avenue for the three months ended March 31, 2025 and 2024.

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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/1943274/2147477271/946-320-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/1943274/2147477271/946-320-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/1943274/2147477271/946-320-S99-6 + Details
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