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Investments in and Advances to Joint Ventures | 12 Months Ended
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Dec. 31, 2016
Equity Method Investments And Joint Ventures [Abstract] |
Investments in and Advances to Joint Ventures |
2. | Investments in and Advances to Joint Ventures
The Company’s equity method joint ventures, which are included in Investments in and Advances to Joint Ventures in the Company’s consolidated balance sheet at December 31, 2016, are as follows:
Unconsolidated Real Estate Ventures |  | Effective Ownership Percentage |  |  | Assets Owned
BRE DDR Retail Holdings III |  |  | 5% |  |  | 50 shopping centers in several states
BRE DDR Retail Holdings IV |  | 5 |  |  | 6 shopping centers in several states
DDRTC Core Retail Fund, LLC |  | 15 |  |  | 25 shopping centers in several states
DDR Domestic Retail Fund I |  | 20 |  |  | 55 shopping centers in several states
DDR – SAU Retail Fund, LLC |  | 20 |  |  | 12 shopping centers in several states
Other Joint Venture Interests |  | 26–79 |  |  | 3 shopping centers in 2 states
Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):
| December 31, |
| 2016 |  |  | 2015 |
Condensed Combined Balance Sheets |  |  |  |  |  |  |
Land | $ | 1,287,675 |  |  | $ | 1,343,889 |
Buildings |  | 3,376,720 |  |  |  | 3,551,227 |
Fixtures and tenant improvements |  | 203,824 |  |  |  | 191,581 |
|  | 4,868,219 |  |  |  | 5,086,697 |
Less: Accumulated depreciation |  | (884,356 | ) |  |  | (817,235 | )
|  | 3,983,863 |  |  |  | 4,269,462 |
Construction in progress and land |  | 56,983 |  |  |  | 52,390 |
Real estate, net |  | 4,040,846 |  |  |  | 4,321,852 |
Cash and restricted cash |  | 50,378 |  |  |  | 58,916 |
Receivables, net |  | 50,685 |  |  |  | 52,768 |
Other assets, net |  | 248,664 |  |  |  | 318,546 |
| $ | 4,390,573 |  |  | $ | 4,752,082 |
Mortgage debt | $ | 3,034,399 |  |  | $ | 3,177,603 |
Notes and accrued interest payable to the Company |  | 1,584 |  |  |  | 1,556 |
Other liabilities |  | 206,949 |  |  |  | 219,799 |
|  | 3,242,932 |  |  |  | 3,398,958 |
Redeemable preferred equity |  | 393,338 |  |  |  | 395,156 |
Accumulated equity |  | 754,303 |  |  |  | 957,968 |
| $ | 4,390,573 |  |  | $ | 4,752,082 |
Company's share of accumulated equity | $ | 97,977 |  |  | $ | 115,871 |
Redeemable preferred equity |  | 393,338 |  |  |  | 395,156 |
Basis differentials |  | (36,117 | ) |  |  | (42,402 | )
Deferred development fees, net of portion related to the Company's interest |  | (2,651 | ) |  |  | (2,449 | )
Amounts payable to the Company |  | 1,584 |  |  |  | 1,556 |
Investments in and Advances to Joint Ventures | $ | 454,131 |  |  | $ | 467,732 |
| For the Year Ended December 31, |
| 2016 |  |  | 2015 |  |  | 2014 |
Condensed Combined Statements of Operations |  |  |  |  |  |  |  |  |  |  |
Revenues from operations | $ | 513,365 |  |  | $ | 524,697 |  |  | $ | 485,764 |
Expenses from operations: |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | 144,984 |  |  |  | 146,924 |  |  |  | 140,615 |
Impairment charges(A) |  | 13,598 |  |  |  | 52,700 |  |  |  | 21,583 |
Depreciation and amortization |  | 195,198 |  |  |  | 207,816 |  |  |  | 151,651 |
Interest expense |  | 132,943 |  |  |  | 140,701 |  |  |  | 171,803 |
Preferred share expense |  | 33,418 |  |  |  | 25,991 |  |  |  | 7,355 |
Other (income) expense, net |  | 23,513 |  |  |  | 30,235 |  |  |  | 37,970 |
|  | 543,654 |  |  |  | 604,367 |  |  |  | 530,977 |
Loss before tax expense and discontinued operations |  | (30,289 | ) |  |  | (79,670 | ) |  |  | (45,213 | )
Income tax expense (primarily Sonae Sierra Brasil), net |  | — |  |  |  | — |  |  |  | (6,565 | )
Loss from continuing operations |  | (30,289 | ) |  |  | (79,670 | ) |  |  | (51,778 | )
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |
Loss from discontinued operations(A) |  | — |  |  |  | — |  |  |  | (13,955 | )
Gain on disposition of real estate, net of tax |  | — |  |  |  | — |  |  |  | 55,020 |
Loss before gain on disposition of real estate, net |  | (30,289 | ) |  |  | (79,670 | ) |  |  | (10,713 | )
Gain on disposition of real estate, net |  | 57,261 |  |  |  | 17,188 |  |  |  | 10,116 |
Net income (loss) attributable to unconsolidated joint ventures | $ | 26,972 |  |  | $ | (62,482 | ) |  | $ | (597 | )
Income attributable to non-controlling interests |  | — |  |  |  | — |  |  |  | (2,022 | )
Net income (loss) attributable to unconsolidated joint ventures | $ | 26,972 |  |  | $ | (62,482 | ) |  | $ | (2,619 | )
Company's share of equity in net income (loss) of joint ventures(B) | $ | 11,650 |  |  | $ | (5,289 | ) |  | $ | 9,218 |
Basis differential adjustments(B) |  | 4,049 |  |  |  | 2,154 |  |  |  | 1,771 |
Equity in net income (loss) of joint ventures(B) | $ | 15,699 |  |  | $ | (3,135 | ) |  | $ | 10,989 |
(A) | For the years ended December 31, 2016, 2015 and 2014, the Company’s proportionate share was $2.7 million, $10.5 million and $4.4 million, respectively. Impairment charges included in discontinued operations related to asset sales were $11.1 million for the year ended December 31, 2014, of which the Company’s proportionate share was $0.8 million. The Company’s share of the impairment charges was reduced by the impact of the other than temporary impairment charges recorded on these investments, as appropriate, as discussed below. Reflected in discontinued operations are 37 properties sold in 2014.
(B) | The difference between the Company’s share of net income (loss), as reported above, and the amounts included in the Company’s consolidated statements of operations is attributable to the amortization of basis differentials, the recognition of deferred gains and differences in gain (loss) on sale of certain assets recognized due to the basis differentials and other than temporary impairment charges. The Company does not record income or loss from those investments in which its investment basis is zero. There were no such investments at December 31, 2016.
Service fees and income earned by the Company through management, financing, leasing and development activities performed related to all of the Company’s unconsolidated joint ventures are as follows (in millions):
| For the Year Ended December 31, |
| 2016 |  |  | 2015 |  |  | 2014 |
Management and other fees | $ | 28.6 |  |  | $ | 26.0 |  |  | $ | 24.9 |
Interest income |  | 33.4 |  |  |  | 26.0 |  |  |  | 11.0 |
Development fees and leasing commissions |  | 7.5 |  |  |  | 6.8 |  |  |  | 6.4 |
The Company’s joint venture agreements generally include provisions whereby each partner has the right to trigger a purchase or sale of its interest in the joint venture or to initiate a purchase or sale of the properties after a certain number of years or if either party is in default of the joint venture agreements. The Company is not obligated to purchase the interests of its outside joint venture partners under these provisions. Disposition of Shopping Centers In 2016, the Company’s joint ventures sold 17 shopping centers and land for an aggregate sales price of $214.6 million, of which the Company’s share of the gain on sale was $13.8 million. BRE DDR Retail Holdings Joint Venture Acquisitions The Company’s unconsolidated investments with The Blackstone Group L.P. (“Blackstone”), (the “BRE DDR Joint Ventures”), were completed on similar terms. Blackstone owns 95% of the common equity of the BRE DDR Joint Ventures, and consolidated affiliates of DDR own the remaining 5%. The Company’s preferred equity investment was $386.1 million plus $7.2 million of accrued interest at December 31, 2016, with an annual interest rate of 8.5%. The Company is entitled to certain preferential cumulative distributions payable out of operating and capital proceeds pursuant to the terms and conditions of the preferred equity. This distribution is recognized as interest income within the Company’s consolidated statements of operations and classified as a note receivable in Investments in and Advances to Joint Ventures on the Company’s consolidated balance sheets. Blackstone has the right to defer up to 23.5% of the preferred equity fixed distributions, which have an annual interest rate of 8.5% for any deferred and unpaid preferred distributions. The preferred equity is redeemable (1) at Blackstone’s option, in whole or in part, following acquisition of the properties, subject to early redemption premiums; (2) at DDR’s option after seven years; (3) at varying levels based upon specified financial covenants upon a sale of properties over a certain threshold and (4) upon the incurrence of additional indebtedness by the joint venture. The Company provides leasing and property management services to all of the joint venture properties. The Company cannot be removed as the property and leasing manager until the preferred equity is redeemed in full (except for certain specified events). Investment Interests Sold In 2016, the Company sold its approximate 25% membership interest in 10 assets to its joint venture partner and recorded a loss on sale of $1.1 million, which is included in Loss on Sale and Change in Control of Interests, net, in the Company’s consolidated statement of operations. In 2015, the Company sold its 50% membership interest in a property management company to its joint venture partner and recorded a loss on sale of $6.5 million, which is included in Gain on Sale and Change in Control of Interests, net in the Company’s consolidated statements of operations. In addition, in 2015, the Company sold two shopping centers to this former joint venture partner for an aggregate sales price of $112.3 million, and the Company recorded a Gain on Sale of $59.8 million. Sonae Sierra Brazil BV SARL (“SSB”) On April 28, 2014, affiliates of DDR sold to Mr. Alexander Otto and certain of his affiliates the Company’s 50% ownership interest in SSB for approximately $343.6 million, which represented the Company’s entire investment in Brazil. SSB owned an approximate 66% interest in a publicly traded company in Brazil, Sonae Sierra Brasil, S.A., which owned 10 shopping centers in Brazil and had an indirect interest in the Parque Dom Pedro shopping center. The Company’s effective economic ownership in this investment was approximately 33%. The Company recorded a Gain on Sale of Interests of $83.7 million in 2014, which included the reclassification of $19.7 million of foreign currency translation from Accumulated OCI (Note 11). See discussion of related party transactions (Note 14). The weighted-average exchange rate used for recording the equity in net income in U.S. dollars was 2.26 for the Company’s ownership period, January 1, 2014 to April 28, 2014.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66011266&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 35 -URI http://asc.fasb.org/extlink&oid=64825282&loc=d3e32847-111569 Reference 3: 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 4: 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=64825282&loc=d3e32787-111569 + Details
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