XML 63 R31.htm IDEA: XBRL DOCUMENT

Variable Interest Entities, Contingent Liability and Consolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Variable Interest Entities through ground leases and carrying amount and maximum exposure to loss

Note 7 – Variable Interest Entities, Contingent Liability and Consolidated Joint Ventures (Continued)

The following chart details the VIE through the Company’s ground lease and the aggregate carrying amount and maximum exposure to loss as of September 30, 2019 (dollars in thousands):

Owner/

Carrying

Land

Operator

Amount and

Contract

# Units in

Mortgage

Maximum

Purchase

Apartment

from

Type of

Exposure to

Description of Property(a)

Date Acquired

Price

Complex

Third Party(b)

Exposure

Loss

The Vue Apartments,

Beachwood, Ohio

August 16, 2016

13,896

348

67,444

Land

13,901

(a)

Simultaneously with the purchase, the Company entered into a triple net ground lease with affiliates of Strategic Properties of North America, the owner/operator of this property.

(b)

Simultaneously with the closing of the acquisition, the owner/operator obtained a mortgage from a third party which, together with the Company’s purchase of the land, provided substantially all of the funds to acquire the complex. The Company provided its land as collateral for the owner/operator’s mortgage loan; accordingly, the land position is subordinated to the mortgage. No other financial support has been provided by the Company to the owner/operator.

Consolidated Joint Venture-VIEs

Variable Interest Entities

Summary of Variable Interest Entities carrying amounts and classification carrying amounts and balance sheet classification

The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands):


	September 30,		December 31,
	2019		2018 (a)
Land	$	12,158	$	14,722
Buildings and improvements, net of accumulated depreciation of $4,109 and $4,119, respectively		24,426		27,642
Cash		1,029		1,020
Unbilled rent receivable		870		1,211
Unamortized intangible lease assets, net		776		890
Escrow, deposits and other assets and receivables		715		810
Mortgages payable, net of unamortized deferred financing costs of $328 and $391, respectively		24,404		26,850
Accrued expenses and other liabilities		708		761
Unamortized intangible lease liabilities, net		613		1,694
Accumulated other comprehensive (loss) income		(85)		31
Non-controlling interests in consolidated joint ventures		1,172		1,449

(a)

Includes a consolidated joint venture, in which the Company held a 90% interest located in Clemmons, North Carolina which was sold in June 2019 (see Note 6).

Note 7 – Variable Interest Entities, Contingent Liability and Consolidated Joint Ventures (Continued)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details