Property Acquisitions |
Property Acquisitions 2017 Acquisitions During the year ended December 31, 2017, we did not acquire any properties from a third party. 2016 Acquisitions During the year ended December 31, 2016, the property listed below was acquired from a third party. The following summarizes our final allocation of the purchase price of the assets acquired and liabilities assumed upon the closing of this acquisition (in thousands): | | | | | | 183 Broadway | Acquisition Date | March 2016 | Ownership Type | Fee Interest | Property Type | Retail/Residential | | | Purchase Price Allocation: | | Land | $ | 5,799 |
| Building and building leasehold | 23,431 |
| Above-market lease value | — |
| Acquired in-place leases | 773 |
| Other assets, net of other liabilities | 20 |
| Assets acquired | 30,023 |
| Mark-to-market assumed debt | — |
| Below-market lease value | (1,523 | ) | Derivatives | — |
| Liabilities assumed | (1,523 | ) | Purchase price | $ | 28,500 |
| Net consideration funded by us at closing, excluding consideration financed by debt | $ | 28,500 |
| Equity and/or debt investment held | $ | — |
| Debt assumed | $ | — |
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2015 Acquisitions During the year ended December 31, 2016, we finalized the purchase price allocations for the following 2015 acquisitions based on facts and circumstances that existed at the acquisition date for each property (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | 600 Lexington Avenue (1)(2) | | 187 Broadway and 5 & 7 Dey Street (1)(3) | | 11 Madison Avenue (1) | | 110 Greene Street (1)(4) | | Upper East Side Residential
(1)(5) | | 1640 Flatbush Avenue(1) | Acquisition Date | December 2015 | | August 2015 | | August 2015 | | July 2015 | | June 2015 | | March 2015 | Ownership Type | Fee Interest | | Fee Interest | | Fee Interest | | Fee Interest | | Fee Interest | | Fee Interest | Property Type | Office | | Residential/Retail | | Office | | Office | | Residential/Retail | | Retail | | | | | | | | | | | | | Purchase Price Allocation: | | | | | | | | | | | | Land | $ | 81,670 |
| | $ | 20,266 |
| | $ | 675,776 |
| | $ | 45,120 |
| | $ | 48,152 |
| | $ | 6,226 |
| Building and building leasehold | 182,447 |
| | 42,468 |
| | 1,553,602 |
| | 215,470 |
| | — |
| | 501 |
| Above-market lease value | 3,320 |
| | 17 |
| | 19,764 |
| | — |
| | — |
| | — |
| Acquired in-place leases | 22,449 |
| | 3,621 |
| | 366,949 |
| | 8,967 |
| | 1,922 |
| | 146 |
| Other assets, net of other liabilities | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Assets acquired | 289,886 |
| | 66,372 |
| | 2,616,091 |
| | 269,557 |
| | 50,074 |
| | 6,873 |
| Mark-to-market assumed debt | (55 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| Below-market lease value | (5,831 | ) | | (3,226 | ) | | (187,732 | ) | | (14,557 | ) | | — |
| | (73 | ) | Derivatives | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Liabilities assumed | (5,886 | ) | | (3,226 | ) | | (187,732 | ) | | (14,557 | ) | | — |
| | (73 | ) | Purchase price | $ | 284,000 |
| | $ | 63,146 |
| | $ | 2,428,359 |
| | $ | 255,000 |
| | $ | 50,074 |
| | $ | 6,800 |
| Net consideration funded by us at closing, excluding consideration financed by debt | $ | 79,085 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| Equity and/or debt investment held | $ | 54,575 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| Debt assumed | $ | 112,795 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
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| | (1) | Based on our preliminary analysis of the purchase price, we had allocated $97.0 million and $180.2 million to land and building, respectively, at 600 Lexington Avenue, $22.1 million and $41.0 million to land and building, respectively, at 187 Broadway and 5&7 Dey Street, $849.9 million and $1.6 billion to land and building, respectively, at 11 Madison Avenue, $89.3 million and $165.8 million to land and building, respectively, at 110 Greene Street, and $17.5 million and $32.5 million to land and building, respectively, at the Upper Eastside Residential Property and $6.1 million and $0.7 million to land and building, respectively, at 1640 Flatbush Avenue. The impact to our consolidated statements of operations for the twelve months ended December 31, 2015 was an increase in rental revenue of $7.8 million for the amortization of aggregate below-market leases and an additional $18.5 million of depreciation expense. |
| | (2) | In December 2015, we acquired Canada Pension Plan Investment Board's 45% interest in this property, thereby consolidating full ownership of the property. The transaction valued the consolidated interests at $277.3 million. We recognized a purchase price fair value adjustment of $40.1 million upon closing of this transaction. This property, which we initially acquired in May 2010, was previously accounted for as an investment in unconsolidated joint ventures. |
| | (3) | We acquired this property for consideration that included the issuance of $10.0 million and $26.9 million aggregate liquidation preferences of Series R and S Preferred Units, respectively, of limited partnership interest of the Operating Partnership and cash. |
| | (4) | We acquired a 90.0% controlling interest in this property for consideration that included the issuance of $5.0 million and $6.7 million aggregate liquidation preferences of Series P and Q Preferred Units, respectively, of limited partnership interest of the Operating Partnership and cash. |
| | (5) | We, along with our joint venture partner, acquired this property for consideration that included the issuance of $13.8 million aggregate liquidation preference of Series N Preferred Units of limited partnership interest of the Operating Partnership and cash. We hold a 95.1% controlling interest in this joint venture. |
For business combinations achieved in stages, the acquisition-date fair value of our equity interest in a property immediately before the acquisition date is determined based on estimated cash flow projections that utilize available market information and discount and capitalization rates that we deem appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquisition-date fair value of the equity interest in 600 Lexington Avenue, which was acquired in 2015, immediately before the acquisition date and the resulting purchase price fair value adjustment, as determined in accordance with the methodology set out in the prior sentence, are as follows (in thousands): | | | | | | 600 Lexington Avenue | Contract purchase price | $ | 284,000 |
| Net consideration funded by us at closing, excluding consideration financed by debt | (79,085 | ) | Debt assumed | (112,795 | ) | Fair value of retained equity interest | 92,120 |
| Equity and/or debt investment held | (54,575 | ) | Other(1) | 2,533 |
| Purchase price fair value adjustment | $ | 40,078 |
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| | (1) | Includes the acceleration of a deferred leasing commission from the joint venture to the Company. |
Pro Forma Unaudited The following table summarizes, on an unaudited pro forma basis, the results of operations of 11 Madison Avenue, which are included in the consolidated results of operations for year ended December 31, 2015 as though the acquisition of 11 Madison Avenue was completed on January 1, 2015. The supplemental pro forma data is not necessarily indicative of what the actual results of operations would have been assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods. | | | | | (in thousands, except per share/unit amounts) | | Actual revenues since acquisition | $ | 29,865 |
| Actual net income since acquisition | 159 |
| Pro forma revenues | 1,657,937 |
| Pro forma income from continuing operations (1) | 102,440 |
| Pro forma basic earnings per share | $ | 0.76 |
| Pro forma diluted earnings per share | $ | 0.75 |
| Pro forma basic earnings per unit | $ | 0.76 |
| Pro forma diluted earnings per unit | $ | 0.75 |
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| | (1) | The pro forma income from continuing operations for the year ended December 31, 2015 includes the effect of the incremental borrowings, including a $1.4 billion, 10-year, interest only, fixed rate mortgage financing carrying a per annum stated interest rate of 3.838% to complete the acquisition and the preliminary allocation of purchase price. |
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