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Investment in Unconsolidated Real Estate Ventures | 9 Months Ended
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Sep. 30, 2021
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 4. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES As of September 30, 2021, the Company held ownership interests in ten unconsolidated real estate ventures for a net aggregate investment balance of $427.4 million, which includes a negative investment balance in one unconsolidated real estate venture of $22.2 million, reflected within "Other liabilities" on the consolidated balance sheets. As of September 30, 2021, five of the real estate ventures owned properties that contained an aggregate of approximately 8.4 million net rentable square feet of office space; two real estate ventures owned 1.4 acres of land held for development; one real estate venture owned 1.0 acres of land in active development; one real estate venture owned a mixed used tower comprised of 250 apartment units and 0.2 million net rentable square feet of office/retail space; and one real estate venture owned a residential tower that contained 321 apartment units. The Company accounts for its interests in the unconsolidated real estate ventures, which range from 15% to 70%, using the equity method. Certain of the unconsolidated real estate ventures are subject to specified priority allocations of distributable cash. The Company earned management fees from the unconsolidated real estate ventures of $2.1 million and $1.3 million for the three months ended September 30, 2021 and 2020, respectively, and $6.2 million and $3.2 million for the nine months ended September 30, 2021 and 2020, respectively. The Company earned leasing commissions from the unconsolidated real estate ventures of $0.7 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, and $2.6 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively. The Company had outstanding accounts receivable balances from the unconsolidated real estate ventures of $2.0 million and $1.2 million as of September 30, 2021 and December 31, 2020, respectively. The amounts reflected in the following tables (except for the Company’s share of equity in income) are based on the financial information of the individual unconsolidated real estate ventures. The following is a summary of the financial position of the unconsolidated real estate ventures in which the Company held interests as of September 30, 2021 and December 31, 2020 (in thousands):
| September 30, 2021 |  | December 31, 2020 |
Net property | $ | 1,573,569 |  |  | $ | 1,520,804 |  |
Other assets | 443,610 |  |  | 488,805 |  |
Other liabilities | 328,446 |  |  | 333,049 |  |
Debt, net | 954,213 |  |  | 956,688 |  |
Equity (a) | 734,520 |  |  | 719,872 |  |
(a)This amount does not include the effect of the basis difference between the Company's historical cost basis and the basis recorded at the real estate venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from the impairment of investments, purchases of third party interests in existing real estate ventures and upon the transfer of assets that were previously owned by the Company into a real estate venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the real estate venture level. The following is a summary of results of operations of the unconsolidated real estate ventures in which the Company held interests during the three and nine month periods ended September 30, 2021 and 2020 (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Revenue | $ | 53,991 |  |  | $ | 43,109 |  |  | $ | 160,576 |  |  | $ | 105,554 |
Operating expenses | (29,650) |  |  | (23,870) |  |  | (87,266) |  |  | (59,838) |
Interest expense, net | (8,024) |  |  | (6,175) |  |  | (23,414) |  |  | (16,320) |
Depreciation and amortization | (23,038) |  |  | (22,345) |  |  | (73,431) |  |  | (47,493) |
Provision for impairment | (1,125) |  |  | — |  |  | (1,125) |  |  | — |
Net loss | $ | (7,846) |  |  | $ | (9,281) |  |  | $ | (24,660) |  |  | $ | (18,097) |
Ownership interest % | Various |  | Various |  | Various |  | Various
Company's share of net loss | $ | (6,572) |  |  | $ | (5,812) |  |  | $ | (20,394) |  |  | $ | (9,892) |
Basis adjustments and other | (62) |  |  | 24 |  |  | (404) |  |  | 10 |
Equity in loss of unconsolidated real estate ventures | $ | (6,634) |  |  | $ | (5,788) |  |  | $ | (20,798) |  |  | $ | (9,882) |
Brandywine - AI Venture During the three months ended September 30, 2021, Brandywine - AI Venture, in which the Company owns a 50% interest, recorded a $1.1 million held for sale impairment charge related to 3141 Fairview Park Drive. The Company’s share of the impairment charge was $0.6 million, which is reflected in “Equity in loss of Real Estate Ventures” in the consolidated statements of operations for the three months ended September 30, 2021. The impairment was measured based on an executed sale agreement with a third-party. The Company determined that its investment in the real estate venture is not impaired as the Company's share of the distributable cash is in excess of the Company's basis in the real estate venture. 3025 JFK Venture On February 2, 2021, the Company contributed its investment in a 99-year prepaid leasehold interest in a one-acre land parcel held for development at 3025 JFK Boulevard in Philadelphia, Pennsylvania to the 3025 JFK Venture. The Company's initial investment in this real estate venture at February 2, 2021 was $34.8 million. The real estate venture was formed to develop a 570,000 square foot mixed-use building at property under the long-term ground lease. The estimated project cost is approximately $287.3 million, and the joint venture partner has agreed, subject to customary funding conditions, to fund up to approximately $45.2 million of the project costs in exchange for a 45% preferred equity interest in the venture and the Company will retain a 55% preferred equity interest. In addition to its $34.8 million credit for contribution of the leasehold interest at 3025 JFK Venture, the Company has funded $20.5 million of project costs as of September 30, 2021. On July 23, 2021, the 3025 JFK Venture closed on a $186.7 million construction loan, which will bear interest at 3.50% plus LIBOR (subject to a LIBOR floor of 0.25%) per annum and matures in July 2025. The Company has determined that the 3025 JFK Venture is a variable interest entity ("VIE"). As a result, the Company used the VIE model under the accounting standard for consolidation in order to determine whether to consolidate the 3025 JFK Venture. Based upon each member’s shared power over the activities of 3025 JFK Venture under the operating and related agreements, and the Company’s lack of control over the development and construction phases of the project, 3025 JFK Venture is accounted for under the equity method of accounting.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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