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UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT | 12 Months Ended
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Dec. 31, 2017
Equity Method Investments and Joint Ventures [Abstract] |
UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT | UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT Unconsolidated Affiliates At December 31, 2017, the Company had investments in the following 17 entities, which are accounted for using the equity method of accounting:
Unconsolidated Affiliates |  | Property Name |  | Company's Interest
Ambassador Infrastructure, LLC |  | Ambassador Town Center - Infrastructure Improvements |  | 65.0%
Ambassador Town Center JV, LLC |  | Ambassador Town Center |  | 65.0%
CBL/T-C, LLC |  | CoolSprings Galleria, Oak Park Mall and West County Center |  | 50.0%
CBL-TRS Joint Venture, LLC |  | Friendly Center and The Shops at Friendly Center |  | 50.0%
EastGate Storage, LLC |  | EastGate Mall self-storage development |  | 50.0%
El Paso Outlet Outparcels, LLC |  | The Outlet Shoppes at El Paso (vacant land) |  | 50.0%
Fremaux Town Center JV, LLC |  | Fremaux Town Center - Phases I and II |  | 65.0%
G&I VIII CBL Triangle LLC |  | Triangle Town Center and Triangle Town Commons |  | 10.0%
Governor’s Square IB |  | Governor’s Square Plaza |  | 50.0%
Governor’s Square Company |  | Governor’s Square |  | 47.5%
Kentucky Oaks Mall Company |  | Kentucky Oaks Mall |  | 50.0%
Mall of South Carolina L.P. |  | Coastal Grand |  | 50.0%
Mall of South Carolina Outparcel L.P. |  | Coastal Grand Crossing and vacant land |  | 50.0%
Port Orange I, LLC |  | The Pavilion at Port Orange - Phase I |  | 50.0%
Shoppes at Eagle Point, LLC |  | The Shoppes at Eagle Point |  | 50.0%
West Melbourne I, LLC |  | Hammock Landing - Phases I and II |  | 50.0%
York Town Center, LP |  | York Town Center |  | 50.0%
Although the Company had majority ownership of certain joint ventures during 2017, 2016 and 2015, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:
• | the pro forma for the development and construction of the project and any material deviations or modifications thereto;
• | the site plan and any material deviations or modifications thereto;
• | the conceptual design of the project and the initial plans and specifications for the project and any material deviations or modifications thereto;
• | any acquisition/construction loans or any permanent financings/refinancings;
• | the annual operating budgets and any material deviations or modifications thereto;
• | the initial leasing plan and leasing parameters and any material deviations or modifications thereto; and
• | any material acquisitions or dispositions with respect to the project.
As a result of the joint control over these joint ventures, the Company accounts for these investments using the equity method of accounting. 2017 Activity - Unconsolidated Affiliates River Ridge Mall JV, LLC T he Company sold its 25% interest in River Ridge Mall JV, LLC ("River Ridge") to its joint venture partner for $9,000 in cash and the Company recorded a $5,843 loss on investment related to the sale of its interest and recorded an additional $354 loss on investment upon the sale closing in August 2017. The loss on investment is included in gain on investments in the consolidated statements of operations. The Company's property management agreement with River Ridge Mall JV, LLC ended September 30, 2017. Shoppes at Eagle Point, LLC The Company formed a 50/50 unconsolidated joint venture, Shoppes at Eagle Point, LLC, to develop, own and operate a community center development located in Cookeville, TN. In the third quarter of 2017, the land was acquired and construction began, with completion of the first phase expected in October 2018. The partners contributed aggregate initial equity of $1,031. See 2017 Financings below for information on a construction loan. EastGate Storage, LLC In November 2017, the Company entered into a 50/50 joint venture, EastGate Storage, LLC with an unaffiliated partner to develop a self-storage facility adjacent to EastGate Mall. The Company contributed land with a fair value of $1,134 and the partner is equalizing through cash contributions. In conjunction with the formation of the joint venture, the unconsolidated affiliate closed on a construction loan. See details below in 2017 Financings. JG Gulf Coast Town Center LLC - Phase III In December 2017, the Company entered into an assignment and assumption agreement with the Company's partner in the JG Gulf Coast Town Center LLC 50/50 joint venture. Under the terms of the agreement, the Company was assigned the rights and assumed the obligations of its joint venture partner with respect to its 50% interest in Gulf Coast Town Center - Phase III, a community center located in Ft. Meyers, FL. See Note 3 for more information. 2016 Activity - Unconsolidated Affiliates CBL-TRS Joint Venture, LLC In December 2016, CBL-TRS Joint Venture, LLC, sold four office buildings, located in Greensboro, NC, for a gross sales price of $26,000 and net proceeds of approximately $25,406, of which $12,703 represented each partner's share. The unconsolidated affiliate recognized a gain on sale of real estate assets of $51, of which each partner's share was approximately $25. The Company's share of the gain is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations. G&I VIII CBL Triangle LLC In December 2016, G&I VIII CBL Triangle LLC, sold Triangle Town Place, an associated center located in Raleigh, NC, for a gross sales price of $30,250 and net proceeds of approximately $29,802. Net proceeds from the sale were used to retire the outstanding principal balance of the $29,342 loan secured by the Property. See 2016 Loan Repayments below for additional information on this loan. The unconsolidated affiliate recognized a gain on sale of real estate assets of $2,820, of which the Company's share was approximately $282 and the joint venture partner's share was $2,538. The Company's share of the gain is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations. G&I VIII CBL Triangle LLC is a 10/90 joint venture, formed in the first quarter of 2016, between the Company and DRA Advisors, which acquired Triangle Town Center, Triangle Town Commons and Triangle Town Place from an existing 50/50 joint venture, Triangle Town Member LLC, between the Company and The R.E. Jacobs Group for $174,000, including the assumption of the $171,092 loan, of which each selling partner's share was $85,546 as of the closing date. Triangle Town Member LLC recognized a gain on sale of real estate assets of $80,979 in connection with the sale of its interests to G&I VIII CBL Triangle LLC. Concurrent with the formation of the new joint venture, the new entity closed on a modification and restructuring of the $171,092 loan, of which the Company's share was $17,109. See information on the new loan under 2016 Financings below. The Company also made an equity contribution of $3,060 to the joint venture at closing. The Company continues to lease and manage the remaining Properties. High Pointe Commons In the third quarter of 2016, High Pointe Commons, LP and High Pointe Commons II-HAP, LP, two 50/50 subsidiaries of the Company, and their joint venture partner closed on the sale of High Pointe Commons, a community center located in Harrisburg, PA, for a gross sales price of $33,800 and net proceeds of $14,962, of which $7,481 represented each partner's share. The existing mortgages secured by the property, which had an aggregate balance of $17,388 at the time of closing, were paid off in conjunction with the sale. See 2016 Loan Repayments below for additional information on these loans. The unconsolidated affiliate recognized a gain on sale of real estate assets of $16,649, of which each partner's share was approximately $8,324. Additionally, the unconsolidated affiliates recorded a loss on extinguishment of debt of $393, of which each partner's share was approximately $197. The Company's share of the gain and share of the loss on extinguishment of debt is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations. CBL-TRS Joint Venture II, LLC In the second quarter of 2016, CBL-TRS Joint Venture II, LLC, sold Renaissance Center, a community center located in Durham, NC, for a gross sales price of $129,200 and net proceeds of $80,324, of which $40,162 represented each partner's share. In conjunction with the sale, the buyer assumed the $16,000 loan secured by the Property's second phase. The loan secured by the first phase, which had a principal balance of $31,484 as of closing, was retired. See 2016 Loan Repayments below for additional information on this loan. The unconsolidated affiliate recognized a gain on sale of real estate assets of $59,977, of which each partner's share was approximately $29,989. The Company's share of the gain is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations. JG Gulf Coast Town Center LLC - Phases I and II In the second quarter of 2016, the foreclosure process was completed and the mortgage lender received title to the mall in satisfaction of the non-recourse mortgage loan secured by Phases I and II of Gulf Coast Town Center in Ft. Myers, FL. Gulf Coast Town Center generated insufficient cash flow to cover the debt service on the mortgage, which had a balance of $190,800 (of which the Company's 50% share was $95,400) and a contractual maturity date of July 2017. In the third quarter of 2015, the lender on the loan began receiving the net operating cash flows of the property each month in lieu of scheduled monthly mortgage payments. The joint venture recognized a gain on extinguishment of debt of $63,294 upon the disposition of Gulf Coast. The Company recognized a gain on the net investment in Gulf Coast of $29,267 upon the disposition of the Property, which is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations. River Ridge Mall JV, LLC In the first quarter of 2016, the Company entered into a 25/75 joint venture, River Ridge with an unaffiliated partner. The Company contributed River Ridge Mall, located in Lynchburg, VA, to River Ridge and the partner contributed $33,500 of cash and an anchor parcel at River Ridge Mall that it already owned having a value of $7,000. The $33,500 of cash was distributed to the Company and, after closing costs, $32,819 was used to reduce outstanding balances on its lines of credit. Following the initial formation, all required future contributions were funded on a pro rata basis. The Company had accounted for the formation of River Ridge as the sale of a partial interest and recorded a loss on impairment of $9,594 in 2016, which included a reserve of $2,100 for future capital expenditures. See Note 4 and Note 15 for more information. The Company continued to manage and lease the ma ll until the sale of its 25% interest in the third quarter of 2017 as described above. T he Company had the right to require its 75% partner to purchase its 25% interest in River Ridge if the Company ceased to manage the Property at the partner's election. Condensed Combined Financial Statements - Unconsolidated Affiliates Condensed combined financial statement information of the unconsolidated affiliates is as follows:
| December 31,
| 2017 |  | 2016
ASSETS: |  |  |
Investment in real estate assets | $ | 2,089,262 |  |  | $ | 2,137,666 |
Accumulated depreciation | (618,922 | ) |  | (564,612 | )
| 1,470,340 |  |  | 1,573,054 |
Developments in progress | 36,765 |  |  | 9,210 |
Net investment in real estate assets | 1,507,105 |  |  | 1,582,264 |
Other assets | 201,114 |  |  | 223,347 |
Total assets | $ | 1,708,219 |  |  | $ | 1,805,611 |
LIABILITIES: |  |  |
Mortgage and other indebtedness, net | $ | 1,248,817 |  |  | $ | 1,266,046 |
Other liabilities | 41,291 |  |  | 46,160 |
Total liabilities | 1,290,108 |  |  | 1,312,206 |
OWNERS' EQUITY: |  |  |
The Company | 216,292 |  |  | 228,313 |
Other investors | 201,819 |  |  | 265,092 |
Total owners' equity | 418,111 |  |  | 493,405 |
Total liabilities and owners’ equity | $ | 1,708,219 |  |  | $ | 1,805,611 |
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Total revenues | $ | 236,607 |  |  | $ | 250,361 |  |  | $ | 253,399 |
Depreciation and amortization | (80,102 | ) |  | (83,640 | ) |  | (79,870 | )
Other operating expenses | (71,293 | ) |  | (76,328 | ) |  | (75,875 | )
Income from operations | 85,212 |  |  | 90,393 |  |  | 97,654 |
Interest and other income | 1,671 |  |  | 1,352 |  |  | 1,337 |
Interest expense | (51,843 | ) |  | (55,227 | ) |  | (75,485 | )
Gain on extinguishment of debt | — |  |  | 62,901 |  |  | — |
Gain on sales of real estate assets | 555 |  |  | 160,977 |  |  | 2,551 |
Net income (1) | $ | 35,595 |  |  | $ | 260,396 |  |  | $ | 26,057 |
(1) | The Company's pro rata share of net income is $22,939, $117,533 and $18,200 for the years ended December 31, 2017, 2016 and 2015, respectively, and is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations.
Financings - Unconsolidated Affiliates See Note 14 for a description of guarantees the Operating Partnership has issued related to the unconsolidated affiliates listed below. 2017 Financings The Company's unconsolidated affiliates had the following loan activity in 2017:
Date |  | Property |  | Stated Interest Rate |  | Maturity Date (1) |  | Amount Financed or Extended
August |  | Ambassador Town Center - Infrastructure Improvements (2) |  | LIBOR + 2.0% |  | August 2020 |  | $ | 11,035 |
October |  | The Shoppes at Eagle Point (3) |  | LIBOR + 2.75% |  | October 2020 |  | 36,400 |
December |  | Self-storage development - EastGate Mall (4) |  | LIBOR + 2.75% |  | December 2022 |  | 6,500 |
(1) | Excludes any extension options.
(2) | The loan was amended and modified to extend the maturity date. The Operating Partnership has guaranteed 100% of the loan. The unconsolidated affiliate has an interest rate swap on the notional amount of the loan, amortizing to $9,360 over the term of the swap, to effectively fix the interest rate to 3.74%.
(3) | Shoppes at Eagle Point, LLC closed on a construction loan for the development of The Shoppes at Eagle Point, a community center located in Cookeville, TN. The Operating Partnership has guaranteed 100% of the loan. The loan has one two-year extension option available at the unconsolidated affiliate's election, subject to compliance with the terms of the loan. The interest rate will be reduced to a variable-rate of LIBOR plus 2.35% once construction is complete and certain debt and operational metrics are met.
(4) | EastGate Storage, LLC closed on a construction loan for the development of a climate controlled self-storage facility adjacent to EastGate Mall in Cincinnati, OH. The loan is interest only through November 2020. Thereafter, monthly principal payments of $10, in addition to interest, will be due. The Operating Partnership has guaranteed 100% of the loan.
Subsequent to December 31, 2017, several operating Property loans were extended. See Note 19 for more information. 2016 Financings The Company's unconsolidated affiliates had the following loan activity in 2016:
Date |  | Property |  | Stated Interest Rate |  | Maturity Date (1) |  | Amount Financed or Extended |
February |  | The Pavilion at Port Orange (2) |  | LIBOR + 2.0% |  | February 2018 | (3) | $ | 58,628 |  |
February |  | Hammock Landing - Phase I (2) |  | LIBOR + 2.0% |  | February 2018 | (3) | 43,347 |  | (4)
February |  | Hammock Landing - Phase II (2) |  | LIBOR + 2.0% |  | February 2018 | (3) | 16,757 |  |
February |  | Triangle Town Center, Triangle Town Place, Triangle Town Commons (5) |  | 4.00% | (6) | December 2018 | (7) | 171,092 |  |
June |  | Fremaux Town Center (8) |  | 3.70% | (9) | June 2026 |  | 73,000 |  |
June |  | Ambassador Town Center (10) |  | 3.22% | (11) | June 2023 |  | 47,660 |  |
December |  | The Shops at Friendly Center (12) |  | 3.34% |  | April 2023 |  | 60,000 |  |
(1) | Excludes any extension options.
(2) | The guaranty was reduced from 25% to 20% in conjunction with the refinancing.
(3) | The loan was modified and extended to February 2018 with a one-year extension option, at the joint venture's election, to February 2019.
(4) | The capacity was increased from $39,475 to fund an expansion.
(5) | The loan was amended and modified in conjunction with the sale of the Properties to a newly formed joint venture as described above.
(6) | The interest rate was reduced from 5.74% to 4.00% interest-only payments through the initial maturity date.
(7) | The loan was extended to December 2018 with two one-year extension options to December 2020. Under the terms of the loan agreement, the joint venture must pay the lender $5,000 to reduce the principal balance of the loan and an extension fee of 0.50% of the remaining outstanding loan balance if it exercises the first extension. If the joint venture elects to exercise the second extension, it must pay the lender $8,000 to reduce the principal balance of the loan and an extension fee of 0.75% of the remaining outstanding principal loan balance. Additionally, the interest rate would increase to 5.74% during the extension period.
(8) | Net proceeds from the non-recourse loan were used to retire the existing construction loans, secured by Phase I and Phase II of Fremaux Town Center, with an aggregate balance of $71,125.
(9) | The joint venture had an interest rate swap on a notional amount of $73,000, amortizing to $52,130 over the term of the swap, related to Fremaux Town Center to effectively fix the interest rate on the variable-rate loan. In October 2016, the joint venture made an election under the loan agreement to convert the loan from a variable-rate to a fixed-rate loan which bears interest at 3.70%.
(10) | The non-recourse loan was used to retire an existing construction loan with a principal balance of $41,885 and excess proceeds were utilized to fund remaining construction costs.
(11) | The joint venture has an interest rate swap on a notional amount of $47,660, amortizing to $38,866 over the term of the swap, related to Ambassador Town Center to effectively fix the interest rate on the variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate.
(12) | CBL-TRS Joint Venture, LLC closed on a non-recourse loan secured by The Shops at Friendly Center in Greensboro, NC. The new loan has a maturity date with a term of six years to coincide with the maturity date of the existing loan secured by Friendly Center. A portion of the net proceeds were used to retire a $37,640 fixed-rate loan that bore interest at 5.90% and was due to mature in January 2017.
2017 Loan Repayment The loan, secured by the related unconsolidated Property, was retired in 2017:
Date |  | Property |  | Interest Rate at Repayment Date |  | Scheduled Maturity Date |  | Principal Balance Repaid
July |  | Gulf Coast Town Center - Phase III (1) |  | 3.13% |  | July 2017 |  | $ | 4,118 |
(1) | The Company loaned the unconsolidated affiliate, JG Gulf Coast Town Center, LLC, the amount necessary to retire the loan and received a mortgage note receivable in return. In December 2017, the Company's partner assigned its 50% interest in the Property to the Company. See Note 3 and above for more information. This intercompany loan is eliminated in consolidation as of December 31, 2017 since the Property became wholly-owned by the Company.
2016 Loan Repayments The Company's unconsolidated affiliates retired the following loans, secured by the related unconsolidated Properties, in 2016:
Date |  | Property |  | Interest Rate at Repayment Date |  | Scheduled Maturity Date |  | Principal Balance Repaid
April |  | Renaissance Center - Phase I |  | 5.61% |  | July 2016 |  | $ | 31,484 |
July |  | Kentucky Oaks Mall (1) |  | 5.27% |  | January 2017 |  | 19,912 |
September |  | Governor's Square Mall (2) |  | 8.23% |  | September 2016 |  | 14,089 |
September |  | High Pointe Commons - Phase I (3) |  | 5.74% |  | May 2017 |  | 12,401 |
September |  | High Pointe Commons - PetCo (3) |  | 3.20% |  | July 2017 |  | 19 |
September |  | High Pointe Commons - Phase II (3) |  | 6.10% |  | July 2017 |  | 4,968 |
December |  | The Shops at Friendly Center (4) |  | 5.90% |  | January 2017 |  | 37,640 |
December |  | Triangle Town Place (5) |  | 4.00% |  | December 2018 |  | 29,342 |
(1) | The Company's share of the loan was $9,956.
(2) | The Company's share of the loan was $6,692.
(3) | The loan secured by the Property was paid off using proceeds from the sale of the Property in September 2016. See above for more information. The Company's share of the loan was 50%.
(4) | The loan secured by the Property was retired using a portion of the net proceeds from a $60,000 fixed-rate loan. See 2016 Financings above for more information.
(5) | A portion of the net proceeds was used to pay down the balance of a loan for the portion secured by Triangle Town Place upon its sale in December 2016. After the debt reduction associated with the sale of Triangle Town Place, the principal balance of the loan secured by Triangle Town Center and Triangle Town Commons as of December 31, 2016 was $141,126, of which the Company's share was $14,113.
The Company's unconsolidated affiliates retired the following construction loans, secured by the related unconsolidated Properties, in 2016:
Date |  | Property |  | Interest Rate at Repayment Date |  | Scheduled Maturity Date |  | Principal Balance Repaid
June |  | Fremaux Town Center - Phase I (1) |  | 2.44% |  | August 2016 |  | $ | 40,530 |
June |  | Fremaux Town Center - Phase II (1) |  | 2.44% |  | August 2016 |  | 30,595 |
June |  | Ambassador Town Center (2) |  | 2.24% |  | December 2017 |  | 41,885 |
(1) | The construction loan was retired using a portion of the net proceeds from a $73,000 fixed-rate non-recourse mortgage loan. See 2016 Financings above for more information.
(2) | The construction loan was retired using a portion of the net proceeds from a $47,660 fixed-rate non-recourse mortgage loan. Excess proceeds were utilized to fund remaining construction costs. See 2016 Financings above for more information.
Cost Method Investment The Company owned a 6.2% noncontrolling interest in Jinsheng, an established mall operating and real estate development company located in Nanjing, China, which owned controlling interests in home furnishing shopping malls. In the fourth quarter of 2016, the Company received $15,538 from Jinsheng for the redemption of its interest that had a carrying value of $5,325 and recorded a gain on investment of $10,136. The Company had previously recorded an other-than-temporary impairment of $5,306 related to this investment in 2009 upon the decline of China's real estate market. The Company accounted for its noncontrolling interest in Jinsheng using the cost method because the Company did not exercise significant influence over Jinsheng and there was no readily determinable market value of Jinsheng’s shares since they are not publicly traded.

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