Investment in Consolidated and Unconsolidated Entities

3 Months Ended

Mar. 31, 2019

Investment in Partially Owned Entities [Abstract]

Investment in Consolidated and Unconsolidated Entities

Consolidated Entities

During the fourth quarter of 2018, the Company entered into purchase agreements structured as a reverse like-kind exchange under Section 1031 of the Internal Revenue Code of 1986, as amended ("Reverse 1031 Exchange") in order to acquire Sandy Plains Centre, which was the Company's only consolidated VIE as of March 31, 2019 and December 31, 2018. The liabilities of the VIE are nonrecourse to the Company, and the assets must first be used to settle obligations of the VIE. The following table presents the net assets of the VIE:



	March 31, 2019			December 31, 2018
Net investment properties	$	39,392		$	39,634
Other assets	4,368			4,457
Total assets	43,760			44,091
Liabilities	(555		)	(385		)
Net assets	$	43,205		$	43,706

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 %	March 31, 2019		December 31, 2018
IAGM Retail Fund I, LLC	Multi-tenant retail shopping centers	55%	$	124,750	$	126,195
Downtown Railyard Venture, LLC	Land development	90%	30,000		30,049
Other unconsolidated entities	Various real estate investments	Various	—		(112		)
			$	154,750	$	156,132

On April 17, 2013, the Company entered into a joint venture, IAGM, with PGGM 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 their 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, when those gains may have been deferred under prior GAAP. As of January 1, 2018, with the adoption of ASU No. 2017-05, the Company's remaining $12,756 of the aforementioned deferred gain had been recognized through beginning distributions in excess of accumulated net income.

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. The Company's share of the provision for asset impairment was $370 and loss on sale was $2,148 for the three months ended March 31, 2018.

On September 30, 2015, the Company was admitted as a member to Downtown Railyard Venture, LLC ("DRV"), which is a joint venture established for the purpose of developing and selling a land development in Sacramento, California. During the three months ended March 31, 2019, DRV disposed of a land parcel, for a gross disposition price of $33,374, and recognized a loss on sale of $4,981. The Company's share of the loss on sale of $4,483 was recognized as a part of other-than-temporary impairment as of December 31, 2018. As a result, the loss on sale of real estate reduced the Company's outside basis difference related to the investments in DRV.

Combined Financial Information

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



	As of
	March 31, 2019			December 31, 2018
Assets:
Real estate assets, net of accumulated depreciation	$	477,174		$	494,583
Other assets	127,059			103,565
Total assets	$	604,233		$	598,148
Liabilities and equity:
Mortgages payable, net	272,814			272,629
Other liabilities	57,335			42,569
Equity	274,084			282,950
Total liabilities and equity	$	604,233		$	598,148

Company's share of equity	$	180,009		$	185,814
Outside basis difference (a)	(25,259		)	(29,682		)
Carrying value of investments in unconsolidated entities	$	154,750		$	156,132


(a)	Outside basis difference principally relates to other-than-temporary impairment recorded in 2018.



	Three months ended March 31,
	2019			2018
Revenues	$	13,641		$	15,689
Expenses:
Interest expense and loan cost amortization	2,894			3,386
Depreciation and amortization	5,276			5,655
Operating and general and administrative expenses	4,590			6,356
Provision for asset impairment	—			672
Total expenses	12,760			16,069
Net income (loss) before loss on sale of real estate	881			(380		)
Loss on sale of real estate	(4,981		)	(3,905		)
Net loss	$	(4,100	)	$	(4,285	)

Company's share of net loss	$	(3,944	)	$	(2,315	)
Distributions from unconsolidated entities in excess of the investments' carrying value	—			274
Outside basis adjustment for investee's sale of real estate	4,403			—
Equity in earnings (losses) of unconsolidated entities	$	459		$	(2,041	)

The following table shows the scheduled maturities of IAGM's mortgages payable as of March 31, 2019, for the remainder of 2019, each of the next four years, and thereafter.



	Maturities during the year ending December 31,
	2019		2020	2021	2022	2023	Thereafter	Total
Mortgages payable	$	31,353	—	23,150	—	180,125	40,680	$	275,308

At March 31, 2019 and December 31, 2018, none of IAGM's mortgages payable are recourse to the Company. It is anticipated that the joint venture will be able to repay, refinance or extend all of its debt on a timely basis.