Investments in Unconsolidated Real Estate Joint Ventures |
Investments in Unconsolidated Real Estate Joint Ventures
The equity method of accounting is used to account for each of the individual joint ventures. We have an ownership interest in the following unconsolidated real estate joint ventures:
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As of March 31, 2017 |
Joint Venture |
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Outlet Center Location |
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Ownership % |
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Square Feet
(in 000's)
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Carrying Value of Investment (in millions) |
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Total Joint Venture Debt, Net
(in millions)(1)
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Columbus |
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Columbus, OH |
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50.0 |
% |
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355 |
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$ |
6.6 |
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$ |
84.2 |
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National Harbor |
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National Harbor, MD |
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50.0 |
% |
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341 |
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3.2 |
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86.2 |
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RioCan Canada |
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Various |
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50.0 |
% |
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926 |
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118.1 |
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11.0 |
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$ |
127.9 |
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$ |
181.4 |
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Charlotte(2)
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Charlotte, NC |
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50.0 |
% |
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398 |
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$ |
(2.6 |
) |
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$ |
89.8 |
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Galveston/Houston (2)
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Texas City, TX |
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50.0 |
% |
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353 |
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(4.5 |
) |
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64.9 |
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$ |
(7.1 |
) |
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$ |
154.7 |
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As of December 31, 2016 |
Joint Venture |
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Outlet Center Location |
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Ownership % |
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Square Feet
(in 000's)
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Carrying Value of Investment (in millions) |
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Total Joint Venture Debt, Net (in millions)(1)
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Columbus |
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Columbus, OH |
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50.0 |
% |
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355 |
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$ |
6.7 |
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$ |
84.2 |
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National Harbor |
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National Harbor, MD |
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50.0 |
% |
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341 |
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4.1 |
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86.1 |
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RioCan Canada |
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Various |
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50.0 |
% |
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901 |
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117.3 |
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11.1 |
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$ |
128.1 |
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$ |
181.4 |
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Charlotte(2)
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Charlotte, NC |
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50.0 |
% |
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398 |
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$ |
(2.5 |
) |
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$ |
89.7 |
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Galveston/Houston(2)
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Texas City, TX |
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50.0 |
% |
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353 |
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(3.8 |
) |
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64.9 |
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$ |
(6.3 |
) |
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$ |
154.6 |
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(1) |
Net of debt origination costs and including premiums of $1.5 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively.
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(2) |
The negative carrying value is due to the distributions of proceeds from mortgage loans and quarterly distributions of excess cash flow exceeding the original contributions from the partners. |
Fees we received for various services provided to our unconsolidated joint ventures were recognized in management, leasing and other services as follows (in thousands):
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Three months ended |
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March 31, |
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2017 |
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2016 |
Fee: |
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Management and marketing |
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$ |
542 |
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$ |
747 |
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Development and leasing |
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32 |
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192 |
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Loan guarantee |
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5 |
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182 |
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Total Fees |
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$ |
579 |
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$ |
1,121 |
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Our investments in real estate joint ventures are reduced by the percentage of the profits earned for leasing and development services associated with our ownership interest in each joint venture. Our carrying value of investments in unconsolidated joint ventures differs from our share of the assets reported in the "Summary Balance Sheets - Unconsolidated Joint Ventures" shown below due to adjustments to the book basis, including intercompany profits on sales of services that are capitalized by the unconsolidated joint ventures. The differences in basis (totaling $3.6 million and $3.7 million as of March 31, 2017 and December 31, 2016, respectively) are amortized over the various useful lives of the related assets.
Condensed combined summary financial information of unconsolidated joint ventures accounted for using the equity method is as follows (in thousands):
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Condensed Combined Balance Sheets - Unconsolidated Joint Ventures |
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March 31, 2017 |
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December 31, 2016 |
Assets |
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Land |
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$ |
89,517 |
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$ |
88,015 |
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Buildings, improvements and fixtures |
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512,294 |
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503,548 |
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Construction in progress, including land under development |
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7,218 |
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13,037 |
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609,029 |
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604,600 |
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Accumulated depreciation |
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(73,431 |
) |
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(67,431 |
) |
Total rental property, net |
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535,598 |
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537,169 |
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Cash and cash equivalents |
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20,609 |
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27,271 |
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Deferred lease costs, net |
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12,612 |
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13,612 |
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Prepaids and other assets |
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13,832 |
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12,567 |
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Total assets |
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$ |
582,651 |
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$ |
590,619 |
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Liabilities and Owners' Equity |
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Mortgages payable, net |
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$ |
336,066 |
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$ |
335,971 |
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Accounts payable and other liabilities |
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14,113 |
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20,011 |
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Total liabilities |
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350,179 |
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355,982 |
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Owners' equity |
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232,472 |
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234,637 |
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Total liabilities and owners' equity |
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$ |
582,651 |
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$ |
590,619 |
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Three months ended |
Condensed Combined Statements of Operations (1)
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March 31, |
- Unconsolidated Joint Ventures |
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2017 |
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2016 |
Revenues |
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$ |
24,062 |
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$ |
27,698 |
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Expenses: |
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Property operating |
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9,378 |
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10,318 |
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General and administrative |
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120 |
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117 |
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Depreciation and amortization |
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7,513 |
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8,799 |
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Total expenses |
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17,011 |
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19,234 |
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Operating income |
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7,051 |
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8,464 |
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Interest expense |
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(2,260 |
) |
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(2,554 |
) |
Other non-operating income |
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2 |
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1 |
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Net income |
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$ |
4,793 |
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$ |
5,911 |
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The Company and Operating Partnership's share of: |
Net income |
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$ |
2,318 |
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$ |
3,499 |
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Depreciation and amortization expense (real estate related) |
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$ |
3,838 |
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$ |
5,339 |
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(1) |
The three months ended March 31, 2017 includes results from the Columbus outlet center, which opened in June 2016. The three months ended March 31, 2016 includes results from our Westgate and Savannah outlet centers, which were previously held in unconsolidated joint ventures prior to acquiring our partners' interest in each venture in June 2016 and August 2016, respectively. |
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