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Investment in Unconsolidated Ventures | 12 Months Ended
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Dec. 31, 2011
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENT IN UNCONSOLIDATED VENTURES | INVESTMENT IN UNCONSOLIDATED VENTURES As of December 31, 2011, the Company had an aggregate investment of approximately $115.8 million in its 18 actively operating unconsolidated Real Estate Ventures. The Company formed these ventures with unaffiliated third parties, or acquired interests in them, to develop or manage office properties or to acquire land in anticipation of possible development of office properties. As of December 31, 2011, 15 of the Real Estate Ventures own 52 office buildings that contain an aggregate of approximately 6.7 million net rentable square feet, two Real Estate Ventures own four acres of undeveloped land and one Real Estate Venture developed a hotel property that contains 137 rooms in Conshohocken, PA. The Company accounts for its unconsolidated interests in its Real Estate Ventures using the equity method. The Company’s unconsolidated interests range from 20% to 65%, subject to specified priority allocations in certain of the Real Estate Ventures. The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the historical financial information of the individual Real Estate Ventures. One of the Real Estate Ventures, acquired in connection with the Prentiss Properties Trust merger in 2006, had a negative equity balance on a historical cost basis as a result of historical depreciation and distribution of excess financing proceeds. The Company reflected its acquisition of this Real Estate Venture interest at its relative fair value as of the date of the merger. The difference between allocated cost and the underlying equity in the net assets of the investee is accounted for as if the entity were consolidated (i.e., allocated to the Company’s relative share of assets and liabilities with an adjustment to recognize equity in earnings for the appropriate depreciation/amortization). The Company does not record operating losses of the Real Estate Ventures in excess of its investment balance unless the Company is liable for the obligations of the Real Estate Venture or is otherwise committed to provide financial support to the Real Estate Venture. The Company’s investment in Real Estate Ventures as of December 31, 2011 and the Company’s share of the Real Estate Ventures’ income (loss) for the year ended December 31, 2011 was as follows (in thousands):
| Ownership Percentage (a) |  | Carrying Amount |  | Company’s Share of 2011 Real Estate Venture Income (Loss) |  | Real Estate Venture Debt at 100% |  | Current Interest Rate |  | Debt Maturity
Broadmoor Austin Associates | 50 | % |  | $ | 66,150 |  |  | $ | 197 |  |  | $ | 66,810 |  |  | 7.04 | % |  | Apr-2023
Brandywine-AI Venture LLC (b) | 50 | % |  | 24,670 |  |  | (278 | ) |  | 68,000 |  |  | (b) |  |  | (b)
Macquarie BDN Christina LLC | 20 | % |  | 6,168 |  |  | 875 |  |  | 60,000 |  |  | 4.50 | % |  | June-2016
One Commerce Square (c) | 25 | % |  | 5,100 |  |  | 242 |  |  | 128,529 |  |  | 5.67 | % |  | Dec-15
Brandywine 1919 Ventures (d) | 50 | % |  | 4,882 |  |  | — |  |  | — |  |  | N/A |  |  | N/A
Two Commerce Square (c) | 25 | % |  | 3,415 |  |  | 224 |  |  | 107,112 |  |  | 6.30 | % |  | May-13
1000 Chesterbrook Blvd. | 50 | % |  | 1,745 |  |  | 245 |  |  | 26,000 |  |  | 4.75 | % |  | Dec-21
Four Tower Bridge (e) | 65 | % |  | 1,360 |  |  | 702 |  |  | 10,870 |  |  | 5.20 | % |  | Feb-21
G&I Interchange Office LLC (DRA — N. PA) (f) | 20 | % |  | 1,239 |  |  | 76 |  |  | 181,967 |  |  | 5.78 | % |  | Jan-15
Residence Inn Tower Bridge | 50 | % |  | 481 |  |  | 433 |  |  | 14,261 |  |  | 5.63 | % |  | Feb-16
PJP VII | 25 | % |  | 472 |  |  | 190 |  |  | 8,072 |  |  | L+1.55% |  |  | Nov-13
PJP V | 25 | % |  | 361 |  |  | 116 |  |  | 5,789 |  |  | 6.47 | % |  | Aug-19
PJP II | 30 | % |  | 300 |  |  | 138 |  |  | 4,263 |  |  | 6.12 | % |  | Nov-23
Six Tower Bridge (e) | 63 | % |  | 201 |  |  | 126 |  |  | 12,599 |  |  | 7.79 | % |  | Aug-12
Two Tower Bridge | 35 | % |  | 134 |  |  | (364 | ) |  | 13,482 |  |  | (g) |  |  | (g)
Seven Tower Bridge | 20 | % |  | 105 |  |  | — |  |  | 11,182 |  |  | (h) |  |  | (h)
PJP VI | 25 | % |  | 31 |  |  | 67 |  |  | 8,834 |  |  | 6.08 | % |  | Apr-23
Eight Tower Bridge | 3.4 | % |  | — |  |  | 583 |  |  | — |  |  |  |  |  |
Coppell Associates (e) | 50 | % |  | (1,007 | ) |  | (139 | ) |  | 18,060 |  |  | (i) |  |  | (i)
Five Tower Bridge |  |  | — |  |  | 60 |  |  |  |  |  |  |
Invesco, L.P. |  |  | — |  |  | 282 |  |  |  |  |  |  |
|  |  | $ | 115,807 |  |  | $ | 3,775 |  |  | $ | 745,830 |  |  |  |  |
(a) | Ownership percentage represents the Company’s entitlement to residual distributions after payments of priority returns, where applicable.
(b) | See Note 3 for related discussion about the Brandywine-AI Venture, LLC formation.
(c) | During November, 2010, the Company acquired a 25% interest in two partnerships which own One and Two Commerce Square buildings in Philadelphia, PA. The other partner holds the remaining 75% interest in each of the two partnerships. In accordance with the accounting guidance for joint ventures, the Company is currently recognizing its preferred return from the real estate ventures as income on its invested capital. After the other partner has recognized the losses equal to its invested capital, the Company will begin to recognize its share from the results of the real estate ventures in proportion to its ownership interests.
(d) | See Note 3 for related discussion about the Brandywine 1919 Market Ventures formation.
(e) | As a result of the adoption of the new accounting standard for the consolidation of variable interest entities, the Company deconsolidated these three real estate ventures as of January 1, 2010.
(f) | Proceeds received by the Company from the sale of an 80% ownership stake in the properties exceeded the historical cost of those properties. Accordingly, no investment in the real estate venture was reflected on the balance sheet at period end.
(g) | Consists of a $10.1 million fixed rate mortgage with a 5.72% interest rate and May 2013 maturity date; also includes $3.4 million municipal and state borrowings with nominal interest rates (0 — 1%) and maturity dates from 3 to 10 years.
(h) | Comprised of two fixed rate mortgages: $7.0 million and $1.0 million. Both mature in February 2013 and accrue interest at a fixed rate of 4% through February 2012, and 5% through February 2013. The total loan amount of $11.2 million as presented above also includes a 3% fixed rate loan (interest only through maturity) with a balance of $1.2 million as of December 31, 2011. This loan can be increased up to $1.3 million through its maturity date of September 2025. The remaining $2.0 million of the total amount features a 4% fixed rate with interest only through its maturity date of February 2014.
(i) | Comprised of two fixed rate mortgages: a senior fixed rate note of $16.4 million at 5.75% that matures in March 2016 and a junior fixed rate note of $1.6 million at 6.89% that matures in December 2013; 5.89% is the blended rate.
The following is a summary of the financial position of the unconsolidated Real Estate Ventures in which the Company had investment interests as of December 31, 2011 and 2010 (in thousands):
| December 31,
| 2011 |  | 2010
Net property | $ | 846,643 |  |  | $ | 804,705 |
Other assets | 110,520 |  |  | 105,576 |
Other Liabilities | 48,798 |  |  | 44,509 |
Debt | 745,830 |  |  | 748,387 |
Equity | 162,535 |  |  | 117,385 |
Company’s share of equity (Company’s basis) | 115,807 |  |  | 84,372 |
The following is a summary of results of operations of the unconsolidated Real Estate Ventures in which the Company had interests as of December 31, 2011, 2010 and 2009 (in thousands):
| Years ended December 31,
| 2011 (a) |  | 2010 (a) |  | 2009
Revenue | $ | 145,867 |  |  | $ | 118,923 |  |  | $ | 105,236 |
Operating expenses | 63,715 |  |  | 44,942 |  |  | 38,691 |
Interest expense, net | 42,032 |  |  | 37,505 |  |  | 30,858 |
Depreciation and amortization | 39,172 |  |  | 32,703 |  |  | 36,700 |
Net income | 948 |  |  | 3,773 |  |  | (1,012 | )
Company’s share of income (Company’s basis) | 3,775 |  |  | 5,305 |  |  | 4,069 |
(a) - | Includes the three real estate ventures that were deconsolidated upon the adoption of the accounting standard for the consolidation of VIEs on January 1, 2010.
As of December 31, 2011, the aggregate principal payments of recourse and non-recourse debt payable to third-parties are as follows (in thousands):
2011 | $ | 24,228 |
2012 | 143,705 |
2013 | 13,809 |
2014 | 306,051 |
2015 | 97,215 |
Thereafter | 160,822 |
| $ | 745,830 |
As of December 31, 2011, the Company had guaranteed repayment of approximately $0.7 million of loans on behalf of a certain Real Estate Venture. The Company also provides customary environmental indemnities in connection with construction and permanent financing both for its own account and on behalf of its Real Estate Ventures.

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- Definition The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6903645&loc=d3e32787-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 18 -Paragraph 20 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6903645&loc=d3e32847-111569 + Details
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