Investment in Unconsolidated Ventures

At third quarter-end 2014, we have ownership interests in 14 ventures that we account for using the equity method.

In third quarter 2014, we acquired full ownership in the Eleven venture for $21,500,000. The acquisition-date fair value was $55,275,000, including debt of $23,936,000. Our investment in the Eleven venture prior to acquiring our partner’s interest was $2,229,000. At third quarter-end 2014, we no longer have an equity method investment in the Eleven venture.

On July 15, 2014, we entered into the FMF Littleton LLC venture with AIGGRE Littleton Common Investor LLC (AIGGRE), to develop a 385-unit multifamily property in Littleton, Colorado. We own a 25 percent interest and AIGGRE owns remaining 75 percent interest. We contributed $4,900,000 of land and pre-development costs to the venture, net of $9,852,000 of reimbursements received from the venture for land and pre-development costs we previously incurred. The venture obtained a senior secured construction loan in the amount of $46,384,000 that bears interest at 30-day LIBOR plus 1.90% payable monthly, of which none was outstanding at third quarter-end 2014. We provided the lender a construction completion guaranty; a guaranty of repayment of 25 percent of the principal balance and unpaid accrued interest; and a nonrecourse carve-out guaranty. The principal guaranty will reduce from 25 percent of principal to ten percent upon achievement of certain conditions. At third quarter-end 2014, our investment in this venture is $5,465,000.

In first quarter 2014, we entered into the CREA FMF Nashville LLC venture with Massachusetts Mutual Life Insurance Co. to develop a 320-unit multifamily property in Nashville, Tennessee. We contributed $5,897,000 of land and pre-development costs to the venture, net of $7,191,000 of reimbursements received from the venture for pre-development costs we previously incurred. The venture obtained a senior secured construction loan in the amount of $51,950,000 that bears interest at 30-day LIBOR plus 2.50% per annum, of which $20,289,000 was outstanding at third quarter-end 2014. We provided the lender a construction completion guaranty; a guaranty of repayment of 25 percent of the principal balance and unpaid accrued interest; and a nonrecourse carve-out guaranty. The principal guaranty will reduce from 25 percent of principal to zero upon achievement of certain conditions. At third quarter-end 2014, our investment in this venture is $5,655,000.

Combined summarized balance sheet information for our ventures accounted for using the equity method follows:



	Venture Assets				Venture Borrowings^(a)				Venture Equity						Our Investment
	Third Quarter-End		Year-End		Third Quarter-End		Year-End		Third Quarter-End			Year-End			Third Quarter-End		Year-End
	2014		2013		2014		2013		2014			2013			2014		2013
	(In thousands)
242, LLC ^(b)	$	26,139	$	23,751	$	2,934	$	921	$	19,286		$	19,838		$	8,819	$	9,084
CJUF III, RH Holdings	—		36,320		—		18,492		—			15,415			—		3,235
CL Ashton Woods ^(c)	11,671		10,473		—		—		10,277			9,704			4,370		3,544
CL Realty	8,085		8,298		—		—		7,916			8,070			3,958		4,035
CREA FMF Nashville ^(b)	28,962		—		20,289		—		6,126			—			5,655		—
FMF Littleton	21,599		—		—		—		21,148			—			5,465		—
FMF Peakview	40,137		30,673		21,088		12,533		17,617			16,620			3,605		3,406
HM Stonewall Estates ^(c)	3,367		3,781		286		63		3,081			3,718			1,751		2,128
LM Land Holdings ^(c)	32,824		33,298		9,502		9,768		19,349			13,347			9,843		8,283
PSW Communities	12,604		—		7,377		—		4,270			—			3,795		—
Temco	12,756		13,320		—		—		12,518			13,160			6,259		6,580
Other ventures^(d)	12,383		12,723		29,730		29,699		(32,022		)	(31,357		)	189		852
	$	210,527	$	172,637	$	91,206	$	71,476	$	89,566		$	68,515		$	53,709	$	41,147

Combined summarized income statement information for our ventures accounted for using the equity method follows:



	Venture Revenues								Venture Earnings (Loss)												Our Share of Earnings (Loss)
	Third Quarter				First Nine Months				Third Quarter						First Nine Months						Third Quarter						First Nine Months
	2014		2013		2014		2013		2014			2013			2014			2013			2014			2013			2014			2013
	(In thousands)
242, LLC	$	88	$	37	$	1,563	$	3,168	$	(32	)	$	(20	)	$	448		$	817		$	(15	)	$	(10	)	$	236		$	438
CJUF III, RH Holdings	1,098		4		2,168		7		(305		)	(133		)	(956		)	(357		)	(305		)	(133		)	(956		)	(357		)
CL Ashton Woods ^(c)	790		1,355		1,859		4,246		277			477			573			1,027			373			677			826			1,817
CL Realty	413		445		1,240		1,246		294			350			846			802			147			175			423			401
CREA FMF Nashville	—		—		—		—		—			—			(25		)	—			—			—			(25		)	—
FMF Peakview	3		200		3		200		(109		)	(98		)	(261		)	(137		)	(21		)	(19		)	(52		)	(27		)
HM Stonewall Estates ^(c)	292		696		1,727		1,794		91			255			613			655			36			100			245			276
LM Land Holdings ^(c)	4,604		9,387		13,897		14,651		3,397			5,515			10,368			9,274			1,200			2,344			3,097			3,998
PSW Communities	—		—		—		—		(11		)	—			(231		)	—			(9		)	—			(204		)	—
Temco	79		162		793		437		42			42			158			48			21			21			79			24
Other ventures	1,329		21		1,378		5,171		691			(120		)	502			(642		)	589			(30		)	296			34
	$	8,696	$	12,307	$	24,628	$	30,920	$	4,335		$	6,268		$	12,035		$	11,487		$	2,016		$	3,125		$	3,965		$	6,604

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^(a)	Total includes current maturities of $61,936,000 at third quarter-end 2014, of which $40,697,000 is non-recourse to us, and $37,966,000 at year-end 2013, of which $37,822,000 is non-recourse to us.


^(b)	Includes unamortized deferred gains on real estate contributed by us to ventures. We recognize deferred gains as income as real estate is sold to third parties. Deferred gains of $1,648,000 are reflected as a reduction to our investment in unconsolidated ventures at third quarter-end 2014.


^(c)	Includes unrecognized basis difference of $2,011,000 which is reflected as a reduction of our investment in unconsolidated ventures at third quarter-end 2014. The difference will be accreted as income or expense over the life of the investment and included in our share of earnings (loss) from the respective ventures.


^(d)	Our investment in other ventures reflects our ownership interests, excluding venture losses that exceed our investment where we are not obligated to fund those losses. Please read Note 16—Variable Interest Entities for additional information.

In first nine months 2014, we contributed cash of $5,016,000 to these ventures and received $4,418,000 in cash distributions, and in first nine months 2013, we contributed cash of $819,000 to these ventures and received $2,140,000 in cash distributions. Distributions include both return of investments and distribution of earnings.

From time to time, we provide performance bonds and letters of credit on behalf of certain ventures that could be drawn on due to failure to satisfy construction obligations as general contractor or for failure to timely deliver streets and utilities in accordance with local codes and ordinances. At third quarter-end 2014, we have no outstanding performance bonds or letters of credit.