Quarterly report pursuant to Section 13 or 15(d)

Investments in Unconsolidated Real Estate Joint Ventures

v3.7.0.1
Investments in Unconsolidated Real Estate Joint Ventures
3 Months Ended
Mar. 31, 2017
Investments In Unconsolidated Real Estate Joint Ventures [Abstract]  
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:

As of March 31, 2017
Joint Venture
 
Outlet Center Location
 
Ownership %
 
Square Feet
(in 000's)
 
Carrying Value of Investment (in millions)
 
Total Joint Venture Debt, Net
(in millions)(1)
Columbus
 
Columbus, OH
 
50.0
%
 
355

 
$
6.6

 
$
84.2

National Harbor
 
National Harbor, MD
 
50.0
%
 
341

 
3.2

 
86.2

RioCan Canada
 
Various
 
50.0
%
 
926

 
118.1

 
11.0

 
 
 
 
 
 
 
 
$
127.9

 
$
181.4

 
 
 
 
 
 
 
 
 
 
 
Charlotte(2)
 
Charlotte, NC
 
50.0
%
 
398

 
$
(2.6
)
 
$
89.8

Galveston/Houston (2)
 
Texas City, TX
 
50.0
%
 
353

 
(4.5
)
 
64.9

 
 
 
 
 
 
 
 
$
(7.1
)
 
$
154.7



As of December 31, 2016
Joint Venture
 
Outlet Center Location
 
Ownership %
 
Square Feet
(in 000's)
 
Carrying Value of Investment (in millions)
 
Total Joint Venture Debt, Net
(in millions)
(1)
Columbus
 
Columbus, OH
 
50.0
%
 
355

 
$
6.7

 
$
84.2

National Harbor
 
National Harbor, MD
 
50.0
%
 
341

 
4.1

 
86.1

RioCan Canada
 
Various
 
50.0
%
 
901

 
117.3

 
11.1

 
 
 
 
 
 
 
 
$
128.1

 
$
181.4

 
 
 
 
 
 
 
 
 
 
 
Charlotte(2)
 
Charlotte, NC
 
50.0
%
 
398

 
$
(2.5
)
 
$
89.7

Galveston/Houston(2)
 
Texas City, TX
 
50.0
%
 
353

 
(3.8
)
 
64.9

 
 
 
 
 
 
 
 
$
(6.3
)
 
$
154.6

(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.
(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):
 
 
Three months ended
 
 
March 31,
 
 
2017
 
2016
Fee:
 
 
 
 
Management and marketing
 
$
542

 
$
747

Development and leasing
 
32

 
192

Loan guarantee
 
5

 
182

Total Fees
 
$
579

 
$
1,121



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):
Condensed Combined Balance Sheets - Unconsolidated Joint Ventures
 
March 31, 2017
 
December 31, 2016
Assets
 
 

 
 

Land
 
$
89,517

 
$
88,015

Buildings, improvements and fixtures
 
512,294

 
503,548

Construction in progress, including land under development
 
7,218

 
13,037

 
 
609,029

 
604,600

Accumulated depreciation
 
(73,431
)
 
(67,431
)
Total rental property, net
 
535,598

 
537,169

Cash and cash equivalents
 
20,609

 
27,271

Deferred lease costs, net
 
12,612

 
13,612

Prepaids and other assets
 
13,832

 
12,567

Total assets
 
$
582,651

 
$
590,619

Liabilities and Owners' Equity
 
 

 
 

Mortgages payable, net
 
$
336,066

 
$
335,971

Accounts payable and other liabilities
 
14,113

 
20,011

Total liabilities
 
350,179

 
355,982

Owners' equity
 
232,472

 
234,637

Total liabilities and owners' equity
 
$
582,651

 
$
590,619






 
 
Three months ended
Condensed Combined Statements of Operations (1)
 
March 31,
 - Unconsolidated Joint Ventures
 
2017
 
2016
Revenues
 
$
24,062

 
$
27,698

Expenses:
 
 
 
 
Property operating
 
9,378

 
10,318

General and administrative
 
120

 
117

Depreciation and amortization
 
7,513

 
8,799

Total expenses
 
17,011

 
19,234

Operating income
 
7,051

 
8,464

Interest expense
 
(2,260
)
 
(2,554
)
Other non-operating income
 
2

 
1

Net income
 
$
4,793

 
$
5,911

 
 
 
 
 
The Company and Operating Partnership's share of:
Net income
 
$
2,318

 
$
3,499

Depreciation and amortization expense (real estate related)
 
$
3,838

 
$
5,339


(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.