Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at March 31, 2013:



Entity	Properties	Nominal % Ownership
Square 407 Limited Partnership	Market Square North	50.0	%
The Metropolitan Square Associates LLC	Metropolitan Square	51.0	%
BP/CRF 901 New York Avenue LLC	901 New York Avenue	25.0	%	(1)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure	33.3	%	(2)
RBP Joint Venture LLC	Eighth Avenue and 46th Street	50.0	%	(3)
Boston Properties Office Value-Added Fund, L.P.	Mountain View Research and Technology Parks	39.5	%	(1) (4)
Annapolis Junction NFM, LLC	Annapolis Junction	50.0	%	(5)
767 Venture, LLC	The General Motors Building	60.0	%
2 GCT Venture LLC	Two Grand Central Tower	60.0	%	(6)
540 Madison Venture LLC	540 Madison Avenue	60.0	%
125 West 55^th Street Venture LLC	125 West 55^th Street	60.0	%	(4)
500 North Capitol LLC	500 North Capitol Street, NW	30.0	%

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(1)	The Company’s economic ownership can increase based on the achievement of certain return thresholds.


(2)	The Company’s wholly-owned entity that owns the office component of the project also owns a 33.3% interest in the entity owning the land and infrastructure of the project.


(3)	This property is not in operation and consists of assembled land.


(4)	See Note 12.


(5)	Comprised of two buildings, one building under construction and two undeveloped land parcels.


(6)	The property was sold on October 25, 2011. As of March 31, 2013, the investment is comprised of undistributed cash.

Certain of the Company’s joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures at an agreed upon fair value. Under these provisions, the Company is not compelled to purchase the interest of its outside joint venture partners.

The combined summarized balance sheets of the unconsolidated joint ventures are as follows:



	March 31, 2013			December 31, 2012
	(in thousands)
ASSETS
Real estate and development in process, net	$	4,482,563		$	4,494,971
Other assets	645,517			673,716
Total assets	$	5,128,080		$	5,168,687
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable	$	3,044,389		$	3,039,922
Other liabilities	759,827			792,888
Members’/Partners’ equity	1,323,864			1,335,877
Total liabilities and members’/partners’ equity	$	5,128,080		$	5,168,687
Company’s share of equity	$	780,388		$	787,941
Basis differentials(1)	(127,581		)	(128,025		)
Carrying value of the Company’s investments in unconsolidated joint ventures	$	652,807		$	659,916

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(1)

This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from impairment of investments and upon the transfer of assets that were previously owned by the Company into a joint venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level.

The combined summarized statements of operations of the joint ventures are as follows:



	For the three months ended March 31,
	2013			2012
	(in thousands)
Total revenue (1)	$	135,650		$	139,100
Expenses
Operating	42,366			38,892
Depreciation and amortization	39,277			41,899
Total expenses	81,643			80,791
Operating income	54,007			58,309
Other expense
Interest expense	56,234			55,362
Net income (loss)	$	(2,227	)	$	2,947

Company’s share of net income (loss)	$	(1,858	)	$	1,371
Basis differential	444			466
Elimination of inter-entity interest on partner loan	10,135			9,884
Income from unconsolidated joint ventures	$	8,721		$	11,721

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(1)	Includes straight-line rent adjustments of $4.0 million and $4.3 million for the three months ended March 31, 2013 and 2012, respectively. Includes net below-market rent adjustments of $20.4 million and $25.3 million for the three months ended March 31, 2013 and 2012, respectively.

On February 28, 2013, a joint venture in which the Company has a 50% interest completed and fully placed in-service Annapolis Junction Building Six, a Class A office property with approximately 119,000 net rentable square feet located in Annapolis, Maryland.

On March 31, 2013, a joint venture in which the Company has a 30% interest completed and fully placed in-service 500 North Capitol Street, NW, a Class A office redevelopment project with approximately 231,000 net rentable square feet located in Washington, DC.