Investment in Unconsolidated Entities

12 Months Ended

Dec. 31, 2021

Investment in Partially Owned Entities [Abstract]

Joint Venture Interest in IAGM

As of December 31, 2021 and 2020, the Company owned a 55% interest in one unconsolidated entity, IAGM Retail Fund I, LLC ("IAGM"), a joint venture partnership between the Company and PGGM Private Real Estate Fund ("PGGM"). IAGM was formed on April 17, 2013 for the purpose of acquiring, owning, managing, and disposing of retail properties and sharing in the profits and losses from those retail properties and their activities.

The Company analyzed the joint venture agreement and determined that IAGM was not a VIE. The Company also considered the joint venture partners' participating rights under the joint venture agreement and determined that the joint venture partners have the ability to participate in major decisions, which equates to shared decision making. Accordingly, the Company has significant influence but does not control IAGM. Therefore, IAGM was not consolidated by the Company, and the equity method of accounting was applied. Under the equity method of accounting, the net equity investment of the Company and the Company's share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and comprehensive income (loss).

The following table reflects the retail properties disposed by IAGM of during the years ended December 31, 2021 and 2020:


Date	Property	Metropolitan Area	Square Feet	Gross Disposition Price		Gain on Sale
March 10, 2020	Antoine Town Center (a)	Houston, TX	110	$	22,254	$	1,741
July 12, 2021	Prestonwood Town Center (b)	Dallas, TX	233	$	52,800	$	12,428
September 3, 2021	Westover Marketplace	San Antonio, TX	243	$	28,775	$	399
December 1, 2021	South Frisco Village	Frisco, TX	227	$	32,600	$	5,467

(a)The Company purchased Antoine Town Center from IAGM at a purchase price determined by a third party real estate valuation specialist. The Company deferred its share of IAGM's gain on sale of $958 and began amortizing it over 30 years as an increase to equity in earnings of unconsolidated entities. The Company completed a subsequent sale of an outparcel at this retail property to an unrelated third party which resulted in recognizing $54 of previously deferred gain.

(b)The Company purchased Prestonwood Town Center from IAGM at a purchase price determined by a third party real estate valuation specialist. The Company deferred its share of IAGM's gain on sale of $6,835 and began amortizing it over 30 years as an increase to equity in earnings of unconsolidated entities.

The following table reflects the mortgage paydowns by IAGM of during the years ended December 31, 2021 and 2020:


Date	Mortgaged Property	Contractual Interest Rate			Mortgage Paydown (a)		Loss on Debt Extinguishment
January 22, 2020	South Frisco Village	1.70	%	+ 1M LIBOR	$	14,872	$	8
March 26, 2021	Westover Marketplace	4.08	%		$	23,150	$	14
July 12, 2021	Senior secured pooled loan	1.55	%	+ 1M LIBOR	$	54,103	$	215

(a)Mortgage paydowns were funded by cash on hand and proceeds from the sale of properties.

During the year ended December 31, 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 December 31, 2021, the interest rate swaps were recorded as a asset with a fair value of $530 on IAGM's consolidated balance sheet, of which the Company's share was $291.

During the year ended December 31, 2020, IAGM recognized a provision for asset impairment of $11,016 on one retail property, of which the Company's share of this provision for asset impairment was $6,059, as disclosed in "Note 9. Fair Value Measurements".

Condensed Financial Information

The following table presents condensed balance sheet information for IAGM.


	As of
	December 31, 2021		December 31, 2020
Assets:
Net investment properties	$	288,014	$	387,394
Other assets	98,696		72,453
Total assets	386,710		459,847
Liabilities and equity:
Mortgage debt, net	165,831		242,388
Other liabilities	12,409		19,144
Equity	208,470		198,315
Total liabilities and equity	386,710		459,847
Company's share of equity	115,513		109,928
Outside basis difference, net (a)	(7,569)		(877)
Carrying value of investments in unconsolidated entities	$	107,944	$	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 and disposed joint ventures.


	Year ended December 31,
IAGM	2021		2020		2019
Total income	$	42,145	$	46,259	$	53,396
Depreciation and amortization	(14,437)		(16,303)		(20,135)
Property operating	(7,265)		(7,143)		(8,372)
Real estate taxes	(7,507)		(8,687)		(9,426)
Asset management fees	(1,128)		(1,098)		(1,073)
Interest expense, net	(5,637)		(7,455)		(10,882)
Other (expense) and income, net	(422)		(307)		157
Loss on debt extinguishment	(229)		(8)		—
Provision for asset impairment	—		(11,016)		(1,443)
Gain (loss) on sale of real estate, net	18,294		1,741		(559)
Net income (loss)	23,814		(4,017)		1,663
Disposed joint venture
Net loss	—		—		(4,869)
Total net income (loss) of unconsolidated entities	$	23,814	$	(4,017)	$	(3,206)

Company's share of net income (loss)	$	13,089	$	(2,264)	$	(3,446)
Outside basis adjustment for investee's sale of real estate, net	(6,691)		(877)		4,403
Equity in earnings (losses) of unconsolidated entities	$	6,398	$	(3,141)	$	957

The following table summarizes the scheduled maturities of IAGM's mortgages payable as of December 31, 2021:


Scheduled maturities by year:	As of December 31, 2021
2022	$	—
2023	126,022
2024	—
2025	22,880
2026	17,800
Thereafter	—
Total	$	166,702

As of December 31, 2021, 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.