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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 9 Months Ended
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Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 4. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES As of September 30, 2023, the Company held ownership interests in twelve unconsolidated real estate ventures, with a net aggregate investment balance of $593.0 million, which includes a negative investment balance in one unconsolidated real estate venture of $45.1 million, reflected within “Other liabilities” on the consolidated balance sheets. As of September 30, 2023, five of the real estate ventures owned properties that contained an aggregate of approximately 9.1 million net rentable square feet of office space; two real estate ventures owned 1.4 acres of land held for development; four real estate ventures owned 7.5 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. The Company accounts for its interests in the unconsolidated real estate ventures, which range from 15% to 78%, 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 $2.2 million for the three months ended September 30, 2023 and 2022, respectively, and $6.2 million for both the nine months ended September 30, 2023 and 2022, respectively. The Company earned leasing commissions from the unconsolidated real estate ventures of $1.5 million and $0.7 million for the three months ended September 30, 2023 and 2022, respectively, and $2.9 million and $2.6 million for the nine months ended September 30, 2023 and 2022, respectively The Company had outstanding accounts receivable balances from the unconsolidated real estate ventures of $3.4 million and $2.9 million for both September 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022 (in thousands):
| September 30, 2023 |  | December 31, 2022 |
Net property | $ | 2,317,405 |  |  | $ | 2,117,226 |  |
Other assets | 533,540 |  |  | 506,213 |  |
Other liabilities | 444,052 |  |  | 446,101 |  |
Debt, net | 1,378,347 |  |  | 1,198,213 |  |
Equity (a) | 1,028,546 |  |  | 979,125 |  |
(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, 2023 and 2022 (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Revenue | $ | 58,986 |  |  | $ | 63,800 |  |  | $ | 175,939 |  |  | $ | 181,973 |
Operating expenses | (31,641) |  |  | (32,735) |  |  | (90,531) |  |  | (92,998) |
Interest expense, net | (21,591) |  |  | (14,012) |  |  | (55,769) |  |  | (33,144) |
Depreciation and amortization | (24,635) |  |  | (28,064) |  |  | (73,636) |  |  | (77,274) |
Net loss | $ | (18,881) |  |  | $ | (11,011) |  |  | $ | (43,997) |  |  | $ | (21,443) |
Ownership interest % | Various |  | Various |  | Various |  | Various
Company's share of net loss | $ | (10,130) |  |  | $ | (6,092) |  |  | $ | (23,782) |  |  | $ | (15,531) |
Basis adjustments and other | (609) |  |  | (168) |  |  | (722) |  |  | (273) |
Equity in loss of unconsolidated real estate ventures | $ | (10,739) |  |  | $ | (6,260) |  |  | $ | (24,504) |  |  | $ | (15,804) |
Commerce Square Venture The properties held by the Commerce Square Venture were encumbered by secured mortgage loans that were set to mature on April 5, 2023. The lender provided the venture with an extension of the maturity date of these loans until June 5, 2023. On June 2, 2023, the loans were refinanced through a new $220.0 million secured mortgage loan facility. The new loan facility bears an all-in fixed interest rate of 7.79% per annum and matures in June 2028. In connection with the refinancing, the Company contributed $46.5 million to the Commerce Square Venture in exchange for an additional 8% equity interest in the venture. MAP Venture The MAP Venture owns 58 office properties that contain an aggregate of 3,924,783 net rentable square feet located in the Pennsylvania Suburbs, New Jersey/Delaware, Metropolitan Washington, D.C. and Richmond, Virginia (the “MAP Venture”). The MAP Venture leases the land parcels under the 58 office properties through a ground lease that extends through February 2115. The properties held by the MAP Venture are encumbered by a mortgage on the MAP Venture's leasehold interest in the buildings ("MAP Collateral") and the assignment of the related rents and leases and is nonrecourse to the Company. The mortgage loan had an original maturity date of August 1, 2023. The lender provided the MAP Venture with two successive two-month extensions until December 1, 2023. At September 30, 2023, the mortgage balance was $180.4 million. The Company and its partner are actively working to recapitalize the MAP Venture and the mortgage debt prior to maturity, but there can be no assurances that the debt will be satisfied or additional extension options will be provided by the existing lender. At September 30, 2023, the Company's negative investment balance was $45.1 million. The Company has no obligation to fund additional equity to the MAP Venture. 3025 JFK Venture During the three months ended September 30, 2023, the Company contributed $6.7 million to the 3025 JFK Venture increasing Company's equity ownership from 55% to 58%. Utilizing the proceeds from the contribution, the 3025 JFK Venture entered into an interest rate cap agreement to help mitigate the interest rate volatility associated with the variable interest rate on the 3025 JFK Venture's construction loan, which is scheduled to mature in July 2025. The interest rate cap has an initial notional value of $148.0 million which accretes up to $187.0 million following the projected draw schedule. The strike rate of the interest rate cap is 3.00% and the stated interest rate of the construction loan is SOFR + 3.6%. With the interest rate cap in-place, the maximum interest rate due by the 3025 JFK Venture is 6.60%. One Uptown - Office Venture On September 29, 2023, the Company contributed of $2.1 million to the One Uptown - Office Venture, increasing the Company's aggregate investment balance to $41.8 million at September 30, 2023 the Company's equity ownership from 50% to 54%. The contribution was used to pay interest on the One Uptown - Office Venture construction loan and arose from higher than budgeted interest carry costs.

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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 -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 323 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481543/323-740-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org//323/tableOfContent + Details
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