XML 38 R21.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 3 Months Ended
--- | ---
Mar. 31, 2024
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 4. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES As of March 31, 2024, the Company held ownership interests in twelve unconsolidated real estate ventures, with a net aggregate investment balance of $565.8 million, which includes a negative investment balance in one unconsolidated real estate venture of $52.2 million, reflected within “Other liabilities” on the consolidated balance sheets. As of March 31, 2024, 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 $1.9 million and $2.1 million for the three months ended March 31, 2024 and 2023, respectively. The Company earned leasing commissions from the unconsolidated real estate ventures of $0.6 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively. The Company had outstanding accounts receivable balances from the unconsolidated real estate ventures of $2.7 million and $3.5 million as of March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023 (in thousands):
| March 31, 2024 (b) |  | December 31, 2023 |
Net property | $ | 1,959,104 |  |  | $ | 2,339,921 |  |
Other assets | 416,628 |  |  | 534,658 |  |
Other liabilities | 413,416 |  |  | 443,536 |  |
Debt, net | 1,067,443 |  |  | 1,407,858 |  |
Equity (a) | 894,873 |  |  | 1,023,185 |  |
(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. (b)Excludes amounts related to the Mid-Atlantic Office JV and Herndon Innovation Center Metro Portfolio Venture, LLC, as the Company discontinued applying the equity method of accounting after December 31, 2023. The following is a summary of results of operations of the unconsolidated real estate ventures in which the Company held interests during the three-month periods ended March 31, 2024 and 2023 (in thousands):
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Revenue | $ | 45,949 |  |  | $ | 57,886 |  |  |  |  |
Operating expenses | (24,881) |  |  | (28,851) |  |  |  |  |
Interest expense, net | (17,363) |  |  | (15,891) |  |  |  |  |
Depreciation and amortization | (20,889) |  |  | (24,174) |  |  |  |  |
Loss on property disposition | (490) |  |  |  |  |  |  |
Net loss | $ | (17,674) |  |  | $ | (11,030) |  |  |  |  |
Ownership interest % | Various |  | Various |  |  |  |
Company's share of net loss | $ | (13,814) |  |  | $ | (6,124) |  |  |  |  |
Basis adjustments and other | 226 |  |  | (43) |  |  |  |  |
Equity in loss of unconsolidated real estate ventures | $ | (13,588) |  |  | $ | (6,167) |  |  |  |  |
MAP Venture The MAP Venture owns 57 office properties that contain an aggregate of 3,868,811 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 57 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 that is nonrecourse to the Company and the assignment of the related rents and leases. The mortgage loan had an original maturity date of August 1, 2023. The lender provided the MAP Venture with three successive two-month extensions that matured on February 27, 2024. At March 31, 2024, the mortgage balance was $179.1 million. The Company and its partners are in active discussions, including with the mortgage lender, as to a potential extension of the loan or other restructuring of the venture. At present, there can be no assurance as to the outcome of these discussions. At March 31, 2024, the Company's negative investment balance was $52.2 million. The Company has no obligation to fund additional equity to the MAP Venture. Mid-Atlantic Office JV On December 21, 2020, the Company contributed a portfolio of 12 properties containing an aggregate of 1,128,645 net rentable square feet, nine of which are located in the Pennsylvania Suburbs segment and three located in the Company's former Metropolitan Washington, D.C. segment, to the Mid-Atlantic Office JV, for a gross sales price of $192.9 million. Upon consummation of the transaction, the Company owned approximately 40% of the equity interest in the venture. On the closing date, Mid-Atlantic Office JV obtained $147.4 million of third-party debt financing secured by the 12 properties within the venture, with an initial advance of $120.8 million. The loan bears interest at SOFR + 3.25% per annum and matured on January 9, 2024. The Company and its partners are in active discussions, including with the mortgage lender, as to a potential extension of the loan or other restructuring of the venture. At present, there can be no assurance as to the outcome of these discussions. As of March 31, 2024, the Company's investment in the Mid-Atlantic Office JV was zero, and the Company has discontinued applying the equity method of accounting on these assets as the Company has not guaranteed the venture's obligations or otherwise committed to providing financial support. Herndon Innovation Center Metro Portfolio Venture, LLC The Herndon Innovation Center Metro Portfolio Venture, LLC (“Herndon Innovation Center”) consists of eight properties containing an aggregate of 1,293,197 net rentable square feet, located in the Company's former Metropolitan Washington, D.C. segment. The Company and its partner own 15% and 85% equity interests in the Herndon Innovation Center, respectively. The properties held by Herndon Innovation Center are encumbered by a $233.4 million secured mortgage loan that matured on March 29, 2024 and is nonrecourse to the Company. The Company and its partners are in active discussions, including with the mortgage lender, as to a potential extension of the loan or other restructuring of the venture. At present, there can be no assurance as to the outcome of these discussions. As of March 31, 2024, the Company's investment in the Herndon Innovation Center was zero, and the Company has discontinued applying the equity method of accounting on these assets as the Company has not guaranteed the venture's obligations or otherwise committed to providing financial support. Cira Square On March 17, 2022, the Company formed a joint venture, Cira Square REIT, LLC (“Cira Square Venture”), for the purpose of acquiring Cira Square, an office property located at 2970 Market Street in Philadelphia, Pennsylvania containing 862,692 net rentable square feet for a gross purchase price of $383.0 million. The Company owns a 20% equity interest in Cira Square Venture and provided an initial capital contribution of $28.6 million on the closing date. On the closing date, Cira Square Venture obtained $257.7 million of third-party debt financing secured by the property which is nonrecourse to the Company. The loan bears interest at 3.50% over one-month term SOFR per annum, and matured on April 1, 2024. On April 1, 2024, the venture's loan received an extension to July 1, 2024. The Company and its partners are in active discussions, including with the mortgage lender, as to a potential extension of the loan or other restructuring of the venture. At present, there can be no assurance as to the outcome of these discussions. At March 31, 2024, the Company's investment balance was $25.1 million.

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration