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UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT | 12 Months Ended
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Dec. 31, 2018
Equity Method Investments and Joint Ventures [Abstract] |
UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT | UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT Unconsolidated Affiliates Although the Company had majority ownership of certain joint ventures during 2018, 2017 and 2016, 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. At December 31, 2018, the Company had investments in 21 entities, which are accounted for using the equity method of accounting. The Company's ownership interest in these unconsolidated affiliates ranges from 10.0% to 65.0%. Of these entities, 15 are owned in 50/50 joint ventures. 2018 Activity - Unconsolidated Affiliates Continental 425 Fund LLC In December 2018, the Company contributed land valued at $6,000 and cash of $7 in exchange for a 43.5% interest in Continental 425 Fund LLC. The land contributed is adjacent to The Pavilion at Port Orange, a community center located in Port Orange, FL, and will be used in the development of an apartment complex. The unconsolidated affiliate is a variable interest entity. G&I VIII CBL Triangle LLC In September 2018, G&I VIII CBL Triangle LLC recognized an impairment of $89,826 to write down Triangle Town Center's net book value of $123,453 to its estimated fair value of approximately $33,600. Management determined the fair value using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of 10 years, with a sale occurring at the end of the holding period, a capitalization rate of 15% and a discount rate of 15%. The mall has experienced declining tenant sales over the past few years and is facing challenges from store closures. The Company recorded $1,022 as its share of the loss on impairment recognized by the unconsolidated joint venture, which reduced the carrying value of the Company's investment in the joint venture to zero in the third quarter of 2018. Self Storage at Mid Rivers, LLC In April 2018, the Company entered into a 50/50 joint venture, Self Storage at Mid Rivers, LLC, to develop a self-storage facility adjacent to Mid Rivers Mall. The Company recorded a $387 gain related to land that it contributed to the joint venture. The unconsolidated affiliate is a variable interest entity. In conjunction with the formation of the joint venture, the unconsolidated affiliate closed on a construction loan. See details below under 2018 Financings. 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 located in Cookeville, TN. In the third quarter of 2017, the land was acquired and construction began. The community center opened in November 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. The self-storage facility opened in September 2018. 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 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 4 for more information. The property was sold in March 2018. See Note 5 for details. 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. 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. 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. The loan is in default as of December 31, 2018. 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. 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. 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 5 and Note 16 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. Condensed Combined Financial Statements - Unconsolidated Affiliates Condensed combined financial statement information of the unconsolidated affiliates is as follows:
| December 31,
| 2018 |  | 2017
ASSETS: |  |  |
Investment in real estate assets | $ | 2,097,088 |  |  | $ | 2,089,262 |
Accumulated depreciation | (674,275 | ) |  | (618,922 | )
| 1,422,813 |  |  | 1,470,340 |
Developments in progress | 12,569 |  |  | 36,765 |
Net investment in real estate assets | 1,435,382 |  |  | 1,507,105 |
Other assets | 188,521 |  |  | 201,114 |
Total assets | $ | 1,623,903 |  |  | $ | 1,708,219 |
LIABILITIES: |  |  |
Mortgage and other indebtedness, net | $ | 1,319,949 |  |  | $ | 1,248,817 |
Other liabilities | 39,777 |  |  | 41,291 |
Total liabilities | 1,359,726 |  |  | 1,290,108 |
OWNERS' EQUITY: |  |  |
The Company | 191,050 |  |  | 216,292 |
Other investors | 73,127 |  |  | 201,819 |
Total owners' equity | 264,177 |  |  | 418,111 |
Total liabilities and owners’ equity | $ | 1,623,903 |  |  | $ | 1,708,219 |
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
Total revenues | $ | 225,073 |  |  | $ | 236,607 |  |  | $ | 250,361 |
Depreciation and amortization | (78,174 | ) |  | (80,102 | ) |  | (83,640 | )
Other operating expenses | (72,056 | ) |  | (71,293 | ) |  | (76,328 | )
Interest and other income | 1,415 |  |  | 1,671 |  |  | 1,352 |
Interest expense | (52,803 | ) |  | (51,843 | ) |  | (55,227 | )
Gain on extinguishment of debt | — |  |  | — |  |  | 62,901 |
Loss on impairment | (89,826 | ) |  | — |  |  | — |
Gain on sales of real estate assets | 3,056 |  |  | 555 |  |  | 160,977 |
Net income (loss) (1) | $ | (63,315 | ) |  | $ | 35,595 |  |  | $ | 260,396 |
(1) | The Company's pro rata share of net income is $14,677, $22,939 and $117,533 for the years ended December 31, 2018, 2017 and 2016, respectively, and is included in equity in earnings of unconsolidated affiliates in the consolidated statements of operations.
Financings - Unconsolidated Affiliates See Note 15 for a description of guarantees the Operating Partnership has issued related to the unconsolidated affiliates listed below. 2018 Financings The Company's unconsolidated affiliates had the following loan activity in 2018:
Date |  | Property |  | Stated Interest Rate |  | Maturity Date (1) |  | Total Borrowing Capacity at 100%
April |  | CoolSprings Galleria (2) |  | 4.84% |  | May 2028 |  | $ | 155,000 |
April |  | Self-storage development - Mid Rivers Mall (3) |  | LIBOR + 2.75% |  | April 2023 |  | 5,987 |
May |  | Hammock Landing - Phase I |  | LIBOR + 2.25% |  | February 2021 (4) |  | 41,997 |
May |  | Hammock Landing - Phase II |  | LIBOR + 2.25% |  | February 2021 (4) |  | 16,217 |
May |  | The Pavilion at Port Orange |  | LIBOR + 2.25% |  | February 2021 (4) |  | 56,738 |
(1) | Excludes any extension options.
(2) | CBL/T-C, LLC, a 50/50 joint venture, closed on a non-recourse loan secured by CoolSprings Galleria. Proceeds from the loan were used to retire an existing $97,732 loan, which was due to mature in June 2018. See 2018 Loan Repayments below for more information. The Company's share of excess proceeds were used to reduce outstanding balances on its credit facilities.
(3) | Self Storage at Mid Rivers, LLC, a 50/50 joint venture, closed on a construction loan with a total borrowing capacity of up to $5,987 for the development of a climate controlled self-storage facility adjacent to Mid Rivers Mall in St. Peters, MO. The Operating Partnership has guaranteed 100% of the loan.
(4) | The loans were amended to extend the maturity date to February 2021. Each loan has two one-year extension options, available at the unconsolidated affiliate's election, for an outside maturity date of February 2023. The interest rate increased from a variable rate of LIBOR plus 2.0%. The Operating Partnership's guaranty also increased to 50%.
2017 Financings The Company's unconsolidated affiliates had the following loan activity in 2017:
Date |  | Property |  | Stated Interest Rate |  | Maturity Date (1) |  | Total Borrowing Capacity at 100%
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. Construction was completed in the fourth quarter of 2018. The interest rate will be reduced to a variable-rate of LIBOR plus 2.35% once 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. The Operating Partnership has guaranteed 100% of the loan.
2018 Loan Repayment The loan, secured by the related unconsolidated Property, was retired in 2018:
Date |  | Property |  | Interest Rate at Repayment Date |  | Scheduled Maturity Date |  | Principal Balance Repaid
April |  | CoolSprings Galleria (1) |  | 6.98% |  | June 2018 |  | $ | 97,732 |
(1) | The loan secured by the Property was retired using a portion of the net proceeds from a $155,000 fixed-rate loan. See 2018 Financings above for more information.
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 4 above for more information. This intercompany loan was eliminated in consolidation as of December 31, 2017 since the Property became wholly-owned by the Company.
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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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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