7. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

As of March 31, 2014, the Company had an aggregate investment of $7,311,247 in its equity method joint ventures with unaffiliated third parties. The Company formed the first of these ventures to invest in first mortgage loans held for investment and acquired an equity interest in the second in connection with the refinancing of a first mortgage loan on an office building campus in Van Buren Township, MI. As of March 31, 2014, the Company owned a 10% limited partnership interest in Ladder Capital Realty Income Partnership I LP (“LCRIP I”) and acted as general partner and Manager to LCRIP I, and owned a 25% membership interest in Grace Lake JV, LLC (“Grace Lake JV”).

The Company accounts for its interest in LCRIP I using the equity method of accounting as it exerts significant influence but the unrelated limited partners have substantive participating rights as well as kick-out rights. The Company accounts for its interest in Grace Lake JV using the equity method of accounting as it has a 25% investment, compared to the 75% investment of its operating partner.

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013

Total assets	$	154,533,364	$	190,415,719
Total liabilities	102,380,310		112,808,701
Partners’/members’ capital	$	52,153,054	$	77,607,018

The following is a summary of the Company’s investments in unconsolidated joint ventures, which we account for using the equity method, as of March 31, 2014 and December 31, 2013:

Entity	March 31, 2014		December 31, 2013

Ladder Capital Realty Income Partnership I LP	$	5,168,349	$	7,119,864
Grace Lake JV, LLC	2,142,898		2,142,898
Company’s investment in unconsolidated joint ventures	$	7,311,247	$	9,262,762

The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014		2013

Total revenues	$	7,112,612	$	9,894,877
Total expenses	$	2,591,047	3,078,030
Net income	$	4,521,565	$	6,816,847

The following is a summary of the Company’s allocated earnings based on its ownership interests from investment in unconsolidated joint ventures for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
Entity	2014		2013

Ladder Capital Realty Income Partnership I LP	$	123,175	$	393,980
Grace Lake JV, LLC	225,000		—
Earnings from investment in unconsolidated joint ventures	$	348,175	$	393,980

Ladder Capital Realty Income Partnership I LP

On April 15, 2011, the Company entered into a limited partnership agreement becoming the general partner and acquiring a 10% limited partnership interest in LCRIP I. Simultaneously with the execution of the LCRIP I Partnership agreement, the Company was engaged as the Manager of LCRIP I and is entitled to a fee based upon the average net equity invested in LCRIP I, which is subject to a fee reduction in the event average net equity invested in LCRIP I exceeds $100,000,000. During the three months ended March 31, 2014 and 2013, the Company recorded $134,460 and $242,480, respectively, in management fees, which is reflected in fee income in the combined consolidated statements of income.

During the three months ended March 31, 2014, there were no sales of loans to LCRIP I. During the three months ended March 31, 2013, the Company sold one loan to LCRIP I for aggregate proceeds of $17,200,000, which exceeded its carrying value by $139,901, and is included in sale of loans, net on the combined consolidated statements of operations. The Company has deferred 10% of the gain on sale of loans to LCRIP I, representing its 10% limited partnership interest, until such loans are subsequently sold by LCRIP I.

The Company is entitled to income allocations and distributions based upon its limited partnership interest of 10% and is eligible for additional distributions of up to 25% if certain return thresholds are met upon asset sale, full prepayment or other disposition. During the three months ended March 31, 2014 and 2013, the return thresholds were met on certain assets that have been fully realized.

Grace Lake JV, LLC

In connection with the origination of a loan in April 2012, the Company received a 25% equity kicker with the right to convert upon a capital event. On March 22, 2013, the loan was refinanced and the Company converted its interest into a 25% limited liability company membership interest in Grace Lake JV, which holds an investment in an office building complex. After taking into account the preferred return of 8.25% and the return of all equity remaining in the property to the Company’s operating partner, the Company is entitled to 25% of the distribution of all excess cash flows and all disposition proceeds upon any sale. The Company does not participate in losses from its investment.