Investment in Consolidated and Unconsolidated Entities

Consolidated Entities

During the three months ended June 30, 2018, the Company entered into purchase agreements structured as Reverse 1031 Exchanges and loaned $152,300 to the VIEs to acquire PGA Plaza and Kennesaw Marketplace, which were the Company's only active Reverse 1031 Exchanges. As of June 30, 2018, the Company was deemed to be the primary beneficiary as it has the ability to direct the activities of the entities that most significantly impact economic performance and has all of the risks and rewards of ownership. Accordingly, the Company consolidated each active Reverse 1031 Exchange at June 30, 2018. The liabilities of the VIEs are non-recourse to the Company, and the assets must have first been used to settle obligations of the VIEs. The following table presents the net assets of the VIEs as of June 30, 2018.



	June 30, 2018
Net investment properties	$	143,296
Other assets	14,180
Total assets	157,476
Other liabilities	(6,090		)
Net assets	$	151,386

Unconsolidated Entities

The entities listed below are owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these entities are allocated to the Company and its joint venture partners in accordance with the respective partnership agreements.



			Carrying Value of Investment as of
Entity	Description	Ownership %	June 30, 2018			December 31, 2017
IAGM Retail Fund I, LLC	Multi-tenant retail shopping centers	55%	$	129,519		$	123,693
Downtown Railyard Venture, LLC	Land development	90%	59,040			57,183
Other unconsolidated entities	Various real estate investments	Various	(112		)	(112		)
			$	188,447		$	180,764

On April 17, 2013, the Company entered into a joint venture, IAGM Retail Fund I, LLC ("IAGM"), with PGGM Private Real Estate Fund, for the purpose of acquiring, owning, managing, supervising, and disposing of retail properties and sharing in the profits and losses from those retail properties and its activities. The Company contributed 14 properties to IAGM during the year ended December 31, 2013 and treated the contribution as a partial sale under Topic 360-20, "Property, Plant and Equipment - Real Estate Sales," and deferred an aggregate gain of $15,625 as a result of the property sales into the joint venture. Through December 31, 2017, the Company was amortizing the basis adjustment over 30 years, consistent with the depreciation period of the investee's underlying assets.

In accordance with the provisions of ASU No. 2017-05, full gain recognition may be required for property sales in which the Company has continuing involvement, where those gains may have been deferred under prior GAAP. As of January 1, 2018, the Company's remaining $12,756 of the aforementioned deferred gain has been recognized through beginning distributions in excess of accumulated net income.

During the three months ended June 30, 2018, IAGM recognized a provision for asset impairment of $1,596 on two retail properties. During the six months ended June 30, 2018, IAGM disposed of Bryant Square, a 268,000 square foot retail property, on February 28, 2018 for a gross disposition price of $38,000 and recognized a provision for asset impairment of $672 and a loss on sale of $3,905 related to this retail property. For the three and six months ended June 30, 2018 the Company's share of IAGM's provision for asset impairment was $878 and $1,248, respectively, and its share of the loss on sale for the six months ended June 30, 2018 was $2,148.

Combined Financial Information

The following tables present the combined condensed financial information for the Company's unconsolidated entities.



	As of
	June 30, 2018		December 31, 2017
Assets:
Real estate assets, net of accumulated depreciation	$	546,337	$	586,671
Other assets	97,744		73,423
Total assets	$	644,081	$	660,094
Liabilities and equity:
Debt, net	311,657		311,574
Other liabilities	44,456		49,032
Equity	287,968		299,488
Total liabilities and equity	$	644,081	$	660,094

Company's share of equity	$	188,237	$	193,572
Cost of investments (underlying net book value) in excess of underlying net book value (cost of investments), net of accumulated amortization of $0 and $2,647, respectively.	210		(12,808		)
Carrying value of investments in unconsolidated entities	$	188,447	$	180,764



	Three months ended June 30,					Six months ended June 30,
	2018			2017		2018			2017
Revenues	$	14,175		$	16,944	$	29,864		$	33,764
Expenses:
Interest expense and loan cost amortization	3,420			3,276		6,806			6,527
Depreciation and amortization	5,622			6,422		11,277			12,614
Operating expenses, ground rent and general and administrative expenses	4,652			5,986		11,008			12,270
Provision for asset impairment	1,596			—		2,268
Total expenses	15,290			15,684		31,359			31,411
Net (loss) income before loss on sale of real estate	(1,115		)	1,260		(1,495		)	2,353
Loss on sale of real estate	—			—		(3,905		)	—
Net (loss) income	$	(1,115	)	$	1,260	$	(5,400	)	$	2,353

Company's share of net (loss) income, net of excess basis depreciation of $0, $130, $0 and $260, respectively	$	(661	)	$	675	$	(2,976	)	$	1,247
Distributions from unconsolidated entities in excess of the investments' carrying value	(50		)	—		224			—
Equity in (losses) earnings of unconsolidated entities	$	(711	)	$	675	$	(2,752	)	$	1,247

The following table shows the scheduled maturities of IAGM's mortgages payable as of June 30, 2018, for the remainder of 2018, each of the next four years, and thereafter.



	Maturities during the year ending December 31,
	2018		2019	2020	2021	2022	Thereafter	Total
Mortgages payable	$	188,925	31,353	—	23,150	—	68,805	$	312,233

On June 30, 2018, IAGM entered into a one year extension on a non-recourse mortgage loan with a balance of $15,103 related to one retail property. The original maturity date of June 30, 2018 has been extended to June 30, 2019. IAGM plans to address its upcoming 2018 debt maturities by refinancing its existing debt and paying down a portion of the debt using cash on hand. However, there is no assurance that IAGM will be able to refinance the existing debt to address the upcoming maturities. As of June 30, 2018, $23,000 of mortgages payable by the joint venture are recourse to the Company.