Redeemable Noncontrolling Interests

6 Months Ended

Jun. 30, 2021

Redeemable Noncontrolling Partnership Units

Redeemable noncontrolling partnership units are primarily comprised of Class A Operating Partnership units held by third parties and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership.

Below is a table summarizing the activity of redeemable noncontrolling partnership units.


(Amounts in thousands)	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Beginning balance	$	640,193	$	623,799	$	511,747	$	888,915
Net income (loss)	3,536		(14,364)		3,865		(13,974)
Other comprehensive income (loss)	704		5		1,590		(2,978)
Distributions	(7,408)		(9,100)		(14,869)		(17,998)
Redemption of Class A units for Vornado common shares, at redemption value	(4,206)		(824)		(8,309)		(2,464)
Redeemable Class A unit measurement adjustment	16,012		18,291		142,948		(248,879)
Other, net	5,940		6,997		17,799		22,182
Ending balance	$	654,771	$	624,804	$	654,771	$	624,804

As of June 30, 2021 and December 31, 2020, the aggregate redemption value of redeemable Class A units of the Operating Partnership, which are those units held by third parties, was $650,236,000 and $507,212,000, respectively, based on Vornado's quarter-end closing common share price.

Redeemable noncontrolling partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC Topic 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $50,267,000 and $50,002,000 as of June 30, 2021 and December 31, 2020, respectively. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income.

Redeemable Noncontrolling Interest in a Consolidated Subsidiary

A consolidated joint venture in which we own a 95% interest is developing Farley Office and Retail (the "Project"). During 2020, a historic tax credit investor (the "Tax Credit Investor") funded $92,400,000 of capital contributions and is expected to make additional capital contributions in future periods.

The arrangement includes a put option whereby the joint venture may be obligated to purchase the Tax Credit Investor’s ownership interest in the Project at a future date. The put price is calculated based on a pre-determined formula. As exercise of the put option is outside of the joint venture’s control, the Tax Credit Investor’s interest, together with the put option, have been recorded to “redeemable noncontrolling interest in a consolidated subsidiary” on our consolidated balance sheets as of June 30, 2021 and December 31, 2020. The redeemable noncontrolling interest is recorded at the greater of the carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. There was no adjustment required for the three and six months ended June 30, 2021 and 2020.

Below is a table summarizing the activity of the redeemable noncontrolling interest in a consolidated subsidiary.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2021		2020		2021		2020
Beginning balance	$	94,437	$	—	$	94,520	$	—
Net income	476		136		393		136
Contributions	—		92,400		—		92,400
Other, net	—		1,576		—		1,576
Ending balance	$	94,913	$	94,112	$	94,913	$	94,112