Quarterly report pursuant to Section 13 or 15(d)

Investments in Unconsolidated Real Estate Joint Ventures

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Investments in Unconsolidated Real Estate Joint Ventures
 9 Months Ended
Sep. 30, 2021
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 September 30, 2021
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)
Investments included in investments in unconsolidated joint ventures:
Columbus Columbus, OH 50.0  % 355  $ 1.1  $ 70.9 
RioCan Canada Various 50.0  % 665  84.3  — 
$ 85.4 
Investments included in other liabilities:
Charlotte(2)
Charlotte, NC 50.0  % 399  $ (16.8) $ 99.6 
National Harbor(2)
National Harbor, MD 50.0  % 341  (10.1) 94.5 
Galveston/Houston (2)
Texas City, TX 50.0  % 353  (13.7) 64.4 
$ (40.6)
As of December 31, 2020
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)
Investments included in investments in unconsolidated joint ventures:
Columbus Columbus, OH 50.0  % 355  $ 2.0  $ 70.8 
RioCan Canada Various 50.0  % 765  92.6  — 
$ 94.6 
Investments included in other liabilities:
Charlotte(2)
Charlotte, NC 50.0  % 399  $ (12.8) $ 99.6 
National Harbor(2)
National Harbor, MD 50.0  % 341  (8.4) 94.5 
Galveston/Houston (2)
Texas City, TX 50.0  % 353  (19.5) 80.0 
$ (40.7)
(1)Net of debt origination costs of $1.1 million as of September 30, 2021 and $1.1 million as of December 31, 2020.
(2)The negative carrying value is due to distributions exceeding contributions and increases or decreases from our equity in earnings of the joint venture.

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 Nine months ended
September 30, September 30,
  2021 2020 2021 2020
Fee:    
Management and marketing $ 530  $ 471  $ 1,575  $ 1,156 
Leasing and other fees 72  15  231  50 
Expense reimbursements from unconsolidated joint ventures 1,039  708  2,566  2,156 
Total Fees $ 1,641  $ 1,194  $ 4,372  $ 3,362 

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 $3.4 million and $3.6 million as of September 30, 2021 and December 31, 2020, respectively) are amortized over the various useful lives of the related assets.

Galveston/Houston

In February 2021, the Galveston/Houston joint venture amended its mortgage loan to extend the maturity to July 2023, which required a reduction in principal balance from $80.0 million to $64.5 million. The amendment also changed the interest rate from LIBOR + 1.65% to LIBOR + 1.85%. We are providing property management, marketing and leasing services to the outlet center.

RioCan Canada

In March 2021, the RioCan joint venture closed on the sale of its outlet center in Saint-Sauveur, for net proceeds of approximately $9.4 million. Our share of the proceeds was approximately $4.7 million. As a result of this transaction, we recorded a loss on the sale of $3.7 million. This includes a $3.6 million charge related to the foreign currency effect of the sale recorded in other income (expense), which had been previously recorded in other comprehensive income.
During June 2020, the Rio-Can joint venture recognized an impairment charge related to its Saint-Sauveur property in Quebec. The impairment charge was primarily driven by deterioration of net operating income caused by market competition and the COVID-19 pandemic.

The table below summarizes the impairment charge taken during the second quarter of 2020 (in thousands):
Impairment Charge(1)
Outlet Center Total Our Share
2020 Saint-Sauveur $ 6,181  $ 3,091 
(1)The fair value was determined using an income approach considering the prevailing market income capitalization rates for similar 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 September 30, 2021 December 31, 2020
Assets    
Land $ 83,114  $ 86,861 
Buildings, improvements and fixtures 466,670  471,798 
Construction in progress 847  2,976 
550,631  561,635 
Accumulated depreciation (160,900) (145,810)
Total rental property, net 389,731  415,825 
Cash and cash equivalents 15,760  21,471 
Deferred lease costs and other intangibles, net 3,785  4,849 
Prepaids and other assets 15,850  20,478 
Total assets $ 425,126  $ 462,623 
Liabilities and Owners’ Equity    
Mortgages payable, net $ 329,381  $ 344,856 
Accounts payable and other liabilities 13,459  17,427 
Total liabilities 342,840  362,283 
Owners’ equity 82,286  100,340 
Total liabilities and owners’ equity $ 425,126  $ 462,623 
  Three months ended Nine months ended
Condensed Combined Statements of Operations September 30, September 30,
 - Unconsolidated Joint Ventures 2021 2020 2021 2020
Revenues $ 22,071  $ 16,959  $ 65,664  $ 55,470 
Expenses:  
Property operating 8,735  8,035  25,597  24,023 
General and administrative 87  82  173  344 
Asset impairment —  —  —  6,181 
Depreciation and amortization 5,749  5,877  17,413  17,686 
Total expenses 14,571  13,994  43,183  48,234 
Other income (expense):
Interest expense (2,913) (3,024) (8,769) (9,991)
Gain on sale of assets —  —  503  — 
Other income 2  104  157  165 
Total other expense (2,911) (2,920) (8,109) (9,826)
Net income (loss) $ 4,589  $ 45  $ 14,372  $ (2,590)
The Company and Operating Partnership’s share of:    
Net income (loss) $ 2,261  $ (42) $ 6,758  $ (1,490)
Depreciation and amortization (real estate related) $ 2,908  $ 3,003  $ 8,817  $ 9,038