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Investments in Unconsolidated Joint Ventures
 9 Months Ended
Sep. 30, 2021
Investments In Unconsolidated Joint Ventures [Abstract]  
Investments In Unconsolidated Joint Ventures
5. Investments in Unconsolidated Joint Ventures
The investments in unconsolidated joint ventures consist of the following at September 30, 2021 and December 31, 2020:
 Carrying Value of Investment (1)
EntityPropertiesNominal % OwnershipSeptember 30,
2021		December 31,
2020
(in thousands)
Square 407 Limited PartnershipMarket Square North50.00 %$(1,917)$(3,766)
BP/CRF Metropolitan Square LLCMetropolitan Square20.00 %(14,568)(13,584)
901 New York, LLC901 New York Avenue25.00 %(2) (12,390)(12,264)
WP Project Developer LLC
Wisconsin Place Land and Infrastructure
33.33 %(3) 34,104 35,297 
Annapolis Junction NFM LLCAnnapolis Junction50.00 %(4) N/A13,463 
540 Madison Venture LLC540 Madison Avenue60.00 %(5) — 122 
500 North Capitol Venture LLC500 North Capitol Street, NW30.00 %(7,700)(6,945)
501 K Street LLC
1001 6th Street
50.00 %(6) 42,669 42,499 
Podium Developer LLCThe Hub on Causeway - Podium50.00 %48,970 48,818 
Residential Tower Developer LLCHub50House50.00 %47,934 50,943 
Hotel Tower Developer LLC
The Hub on Causeway - Hotel Air Rights
50.00 %11,402 10,754 
Office Tower Developer LLC100 Causeway Street50.00 %56,714 56,312 
1265 Main Office JV LLC1265 Main Street50.00 %3,855 3,787 
BNY Tower Holdings LLCDock 72 50.00 %28,079 29,536 
BNYTA Amenity Operator LLC Dock 72 50.00 %1,151 1,846 
CA-Colorado Center Limited Partnership
Colorado Center50.00 %230,535 227,671 
7750 Wisconsin Avenue LLC 7750 Wisconsin Avenue 50.00 %59,734 58,112 
BP-M 3HB Venture LLC3 Hudson Boulevard25.00 %116,537 113,774 
SMBP Venture LPSanta Monica Business Park55.00 %155,679 145,761 
Platform 16 Holdings LPPlatform 1655.00 %(7)108,098 108,393 
Gateway Portfolio Holdings LLCGateway Commons50.00 %(8)328,367 336,206 
Rosecrans-Sepulveda Partners 4, LLCBeach Cities Media Campus50.00 %27,124 27,184 
Safeco Plaza REIT LLCSafeco Plaza33.67 %(9)72,570 N/A
$1,336,947 $1,273,919 
 _______________
(1)Investments with deficit balances aggregating approximately $36.6 million at September 30, 2021 and December 31, 2020 are included within Other Liabilities in the Company’s Consolidated Balance Sheets.
(2)The Company’s economic ownership has increased based on the achievement of certain return thresholds. At September 30, 2021 and December 31, 2020, the Company’s economic ownership was approximately 50%.
(3)The Company’s wholly-owned subsidiary that owns Wisconsin Place Office also owns a 33.33% interest in the joint venture entity that owns the land, parking garage and infrastructure of the project.
(4)On March 30, 2021, the Company sold its interest in the joint venture to the partner. See below for additional details.
(5)The property was sold on June 27, 2019. As of December 31, 2020, the investment consisted of undistributed cash. All remaining cash has been distributed as of September 30, 2021.
(6)Under the joint venture agreement for this land parcel, the partner will be entitled to up to two additional payments from the venture based on increases in total entitled square footage of the project above 520,000 square feet and achieving certain project returns at stabilization.
(7)This entity is a VIE (See Note 2).
(8)As a result of the partner’s deferred contribution, the Company owned an approximately 52% and 55% interest in the joint venture at September 30, 2021 and December 31, 2020, respectively.
(9)The Company’s ownership includes (1) a 33.0% direct interest in the joint venture, and (2) an additional 1% interest in each of the two entities (each, a “Safeco Partner Entity”) through which each partner owns its interest in the joint venture.
Certain of the Company’s unconsolidated 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. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners or the Company will be entitled to an additional promoted interest or payments.
The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows: 
September 30,
2021		December 31,
2020
 (in thousands)
ASSETS
Real estate and development in process, net (1)$5,244,585 $4,708,571 
Other assets561,722 531,071 
Total assets$5,806,307 $5,239,642 
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net$2,995,161 $2,637,911 
Other liabilities (2)639,980 650,433 
Members’/Partners’ equity2,171,166 1,951,298 
Total liabilities and members’/partners’ equity$5,806,307 $5,239,642 
Company’s share of equity$995,995 $936,087 
Basis differentials (3)340,952 337,832 
Carrying value of the Company’s investments in unconsolidated joint ventures (4)$1,336,947 $1,273,919 
_______________
(1)At September 30, 2021 and December 31, 2020, this amount included right of use assets - finance leases totaling approximately $248.9 million, and right of use assets - operating leases totaling approximately $22.6 million and $22.5 million, respectively.
(2)At September 30, 2021 and December 31, 2020, this amount included lease liabilities - finance leases totaling approximately $386.3 million and $388.7 million, respectively, and lease liabilities - operating leases totaling approximately $30.4 million and $29.0 million, respectively.
(3)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 result from impairments of investments, acquisitions through joint ventures with no change in control 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 majority of the Company’s basis differences are as follows:
September 30,
2021		December 31,
2020
Property(in thousands)
Colorado Center$305,236 $307,328 
Gateway Commons51,566 51,875 
Dock 72(50,599)(52,243)
These basis differentials (excluding land) will be amortized over the remaining lives of the related assets and liabilities.
(4)Investments with deficit balances aggregating approximately $36.6 million at September 30, 2021 and December 31, 2020 are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.
The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows: 
 Three months ended September 30,Nine months ended September 30,
 2021202020212020
 (in thousands)
Total revenue (1)$90,009 $87,724 $268,501 $270,490 
Expenses
Operating40,378 37,572 114,299 106,677 
Transaction costs— — 7 — 
Depreciation and amortization36,036 35,810 103,766 105,235 
Total expenses76,414 73,382 218,072 211,912 
Other income (expense)
Interest expense(27,519)(25,481)(78,711)(71,370)
Gains on sales of real estate— — — 11,720 
Net loss$(13,924)$(11,139)$(28,282)$(1,072)
Company’s share of net income (loss)$(4,491)$(4,421)$(10,268)$855 
Gain on sale of investment (2)— — 10,257 — 
Basis differential (3)(1,106)(2,452)(1,734)(6,265)
Loss from unconsolidated joint ventures$(5,597)$(6,873)$(1,745)$(5,410)
_______________ 
(1)Includes straight-line rent adjustments of approximately $5.5 million and $3.8 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $11.6 million and $22.0 million for the nine months ended September 30, 2021 and 2020, respectively.
(2)During the nine months ended September 30, 2021, the Company completed the sale of its 50% ownership interest in Annapolis Junction NFM LLC. The Company recognized a gain on sale of investment of approximately $10.3 million.
(3)Includes straight-line rent adjustments of approximately $0.1 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $0.7 million and $1.3 million for the nine months ended September 30, 2021 and 2020, respectively. Also includes net above-/below-market rent adjustments of approximately $0.1 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $0.2 million and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively.
On February 25, 2021, a joint venture in which the Company had a 54% interest, commenced the development of 751 Gateway, a speculative laboratory building located in South San Francisco, California, that is expected to be approximately 229,000 net rentable square feet upon completion. 751 Gateway is the first phase of a multi-phase development plan at Gateway Commons. Upon the formation of the joint venture in 2020, the Company had an approximately 55% ownership interest in the joint venture as a result of the partner’s deferred contribution and the partner is obligated to fund all required capital until such time as the Company owns a 50% interest. On September 30, 2021, the Company had a 52% interest in the joint venture. The Company expects the 751 Gateway development project to be transferred to a separate joint venture with the same partner. The Company expects it will own a 49% interest in this new joint venture.
On March 30, 2021, the Company completed the sale of its 50% ownership interest in Annapolis Junction NFM LLC (the “Annapolis Junction Joint Venture”) to the joint venture partner for a gross sales price of $65.9 million. Net cash proceeds to the Company totaled approximately $17.8 million after repayment of the Company's share of debt totaling approximately $15.1 million. The Company recognized a gain on sale of investment totaling approximately $10.3 million, which is included in Loss from Unconsolidated Joint Ventures in the accompanying Consolidated Statements of Operations. In addition to net cash proceeds from the sale, the Company received a distribution of approximately $5.8 million of available cash. Annapolis Junction Buildings Six and Seven are Class A office properties totaling approximately 247,000 net rentable square feet. With the sale of the Company’s ownership interest in the Annapolis Junction Joint Venture, the Company no longer has any assets in Annapolis, Maryland.
On June 11, 2021, a joint venture in which the Company has a 50% interest partially placed in-service 100 Causeway Street, a Class A office project with approximately 632,000 net rentable square feet located in Boston, Massachusetts.
On August 31, 2021, a joint venture in which the Company has a 50% interest extended the construction loan collateralized by its The Hub on Causeway – Podium property. At the time of the extension, the outstanding balance of the loan totaled approximately $174.3 million, bore interest at a variable rate equal to LIBOR plus 2.25% per annum and was scheduled to mature on September 6, 2021, with two, one-year extension options, subject to certain conditions. The extended loan continues to bear interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2023. The Hub on Causeway - Podium is a retail and office property with approximately 382,000 net rentable square feet located in Boston, Massachusetts.
On September 1, 2021, the Company entered into a joint venture to acquire Safeco Plaza, a Class A office property located in Seattle, Washington, for a gross purchase price of approximately $465.0 million. Safeco Plaza is a 50-story, approximately 765,000 net rentable square-foot, Class A office property. The acquisition was completed through a newly formed joint venture with two institutional partners. Each of the institutional partners invested approximately $71.9 million of cash for its 33.165% ownership interest in the joint venture. The Company invested approximately $72.6 million for its 33.67% interest in the joint venture and is providing customary operating, property management and leasing services to the joint venture. The Company’s ownership includes (1) a 33.0% direct interest in the joint venture, and (2) an additional 1% interest in each of the two Safeco Partner Entities through which each partner owns its interest in the joint venture. Subject to the occurrence of certain events and the joint venture achieving certain return thresholds, the Company is entitled to earn promote distributions. Some of the promote distributions may be payable in cash or, at the Company’s election, equity interest(s) in the Safeco Partner Entity(ies). The purchase price was funded with cash and proceeds from a new mortgage loan secured by the property. The mortgage loan has a principal amount of $250.0 million, bears interest at a variable rate equal to the greater of (x) 2.35% or (y) LIBOR plus 2.20% per annum and matures on September 1, 2026.