Investment in Unconsolidated Entities

9 Months Ended

Sep. 30, 2021

Investment in Partially Owned Entities [Abstract]

Joint Venture Interests

IAGM Retail Fund I, LLC

As of September 30, 2021 and December 31, 2020, the Company owned a 55% interest in one unconsolidated entity, IAGM Retail Fund I, LLC ("IAGM"), a retail joint venture partnership between the Company and PGGM Private Real Estate Fund ("PGGM"). As of September 30, 2021 and December 31, 2020, the carrying value of the Company's investment in IAGM was $104,963 and $109,051, respectively.

During the nine months ended September 30, 2021, the Company purchased Prestonwood Town Center from IAGM for $52,800, a purchase price determined by a third party real estate valuation specialist, which resulted in IAGM recognizing a gain on sale of $12,428. The Company deferred its share of IAGM's gain on sale of $6,835, which is being amortized over 30 years as an increase to equity in earnings of unconsolidated entities.

During the nine months ended September 30, 2021, IAGM disposed of Westover Marketplace, a 243 thousand square foot retail property, for a gross disposal price of $28,775 and recognized a gain on sale of $399. The Company's share of IAGM's gain on sale was $219.

During the nine months ended September 30, 2020, the Company purchased Antoine Town Center from IAGM for $22,254, a purchase price determined by a third party real estate valuation specialist, which resulted in IAGM recognizing a gain on sale of $1,741. The Company deferred its share of IAGM's gain on sale of $958 which is being amortized over 30 years as an increase to equity in earnings of unconsolidated entities. Subsequent to purchasing Antoine Town Center, the Company completed a sale of an outparcel at this retail property to an unrelated third party which resulted in recognizing $54 of previously deferred gain.

During the nine months ended September 30, 2021 and 2020, IAGM prepaid mortgages payable of $23,150 and $14,872, respectively, with cash on hand. IAGM used cash on hand and proceeds from the sale of Prestonwood Town Center to pay down $54,103 of its mortgage debt during the nine months ended September 30, 2021.

During the nine months ended September 30, 2020, IAGM entered into two interest rate swap agreements to achieve fixed interest rates on its senior secured term loan facility previously subject to variability in the London Inter-bank Offered Rate ("LIBOR"). Each of the interest rate swaps have an effective date of April 1, 2020 and a termination date of November 2, 2023. One interest rate swap has a notional amount of $45,000 and achieves a fixed interest rate of 1.979%. The other interest rate swap has a notional amount of $30,000 and achieves a fixed interest rate of 1.956%. The Company recognizes its share of gains or losses resulting from IAGM's interest rate swaps as an adjustment to the Company's investment in IAGM and an increase or decrease in comprehensive income. As of September 30, 2021, the interest rate swaps were recorded as a liability with a fair value of $97 on IAGM's condensed consolidated balance sheet, of which the Company's share was $53.

Condensed Financial Information

The following table presents condensed balance sheet information for IAGM:


	As of
	September 30, 2021		December 31, 2020
Assets:
Net investment properties	$	316,591	$	387,394
Other assets	66,107		72,453
Total assets	382,698		459,847
Liabilities and equity:
Mortgages debt, net	165,728		242,388
Other liabilities	13,813		19,144
Equity	203,157		198,315
Total liabilities and equity	382,698		459,847

Company's share of equity	112,596		109,928
Outside basis difference, net (a)	(7,633)		(877)
Carrying value of investments in unconsolidated entities	$	104,963	$	109,051

(a)The outside basis difference relates to the unamortized deferred gain on sale of Antoine Town Center and Prestonwood Town Center.

The following table presents condensed income statement information of IAGM:


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Total income	$	10,184	$	11,911	$	33,034	$	34,449
Depreciation and amortization	(3,648)		(3,837)		(11,205)		(12,495)
Property operating	(1,586)		(1,984)		(5,715)		(5,356)
Real estate taxes	(1,722)		(2,267)		(6,392)		(6,875)
Asset management fees	(292)		(271)		(859)		(827)
Interest expense, net	(1,254)		(1,744)		(4,415)		(5,712)
Other (expense) and income, net	(79)		(93)		(324)		(232)
Loss on debt extinguishment	(215)		—		(229)		(8)
Gain on sale of real estate	12,827		—		12,827		1,741
Net income	$	14,215	$	1,715	$	16,722	$	4,685

Company's share of net income	$	7,817	$	943	$	9,197	$	2,530
Outside basis adjustment for investee's sale of real estate, net	(6,771)		8		(6,756)		(939)
Equity in earnings of unconsolidated entities	$	1,046	$	951	$	2,441	$	1,591

The following table summarizes the scheduled maturities of IAGM's mortgages payable as of September 30, 2021, for the remainder of 2021, each of the next four years and thereafter:


Scheduled maturities by year:	As of September 30, 2021
2021	$	—
2022	—
2023	126,022
2024	—
2025	22,880
Thereafter	17,800
Total	$	166,702

As of September 30, 2021 and December 31, 2020, 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.