| Investments in Unconsolidated Joint Ventures |
Investments in Unconsolidated Joint Ventures We have investments in several real estate joint ventures with various partners. As of March 31, 2020, the book value of these investments was $2.8 billion, net of investments with negative book values totaling $80.0 million for which we have an implicit commitment to fund future capital needs. As of March 31, 2020 and December 31, 2019, 800 Third Avenue, 21 East 66th Street, 605 West 42nd Street, 333 East 22nd Street, and certain properties within the Stonehenge Portfolio are VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $138.1 million and $145.9 million as of March 31, 2020 and December 31, 2019, respectively. Our maximum loss is limited to the amount of our equity investment in these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies". All other investments below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity method of accounting. The table below provides general information on each of our joint ventures as of March 31, 2020: | | | | | | | Property | Partner | Ownership
Interest(1) | Economic
Interest(1) | Unaudited Approximate Square Feet | 100 Park Avenue | Prudential Real Estate Investors | 49.90% | 49.90% | 834,000 |
| 717 Fifth Avenue | Wharton Properties/Private Investor | 10.92% | 10.92% | 119,500 |
| 800 Third Avenue | Private Investors | 60.52% | 60.52% | 526,000 |
| 919 Third Avenue | New York State Teacher's Retirement System | 51.00% | 51.00% | 1,454,000 |
| 11 West 34th Street | Private Investor/Wharton Properties | 30.00% | 30.00% | 17,150 |
| 280 Park Avenue | Vornado Realty Trust | 50.00% | 50.00% | 1,219,158 |
| 1552-1560 Broadway(2) | Wharton Properties | 50.00% | 50.00% | 57,718 |
| 10 East 53rd Street | Canadian Pension Plan Investment Board | 55.00% | 55.00% | 354,300 |
| 21 East 66th Street(3) | Private Investors | 32.28% | 32.28% | 13,069 |
| 650 Fifth Avenue(4) | Wharton Properties | 50.00% | 50.00% | 69,214 |
| 121 Greene Street | Wharton Properties | 50.00% | 50.00% | 7,131 |
| 55 West 46th Street | Prudential Real Estate Investors | 25.00% | 25.00% | 347,000 |
| Stonehenge Portfolio | Various | Various | Various | 1,439,016 |
| 605 West 42nd Street | The Moinian Group | 20.00% | 20.00% | 927,358 |
| 11 Madison Avenue | PGIM Real Estate | 60.00% | 60.00% | 2,314,000 |
| 333 East 22nd Street | Private Investors | 33.33% | 33.33% | 26,926 |
| 400 East 57th Street(5) | BlackRock, Inc and Stonehenge Partners | 51.00% | 41.00% | 290,482 |
| One Vanderbilt | National Pension Service of Korea/Hines Interest LP | 71.01% | 71.01% | — |
| Worldwide Plaza | RXR Realty / New York REIT / Private Investor | 24.35% | 24.35% | 2,048,725 |
| 1515 Broadway | Allianz Real Estate of America | 56.87% | 56.87% | 1,750,000 |
| 2 Herald Square | Israeli Institutional Investor | 51.00% | 51.00% | 369,000 |
| 115 Spring Street | Private Investor | 51.00% | 51.00% | 5,218 |
|
| | (1) | Ownership interest and economic interest represent the Company's interests in the joint venture as of March 31, 2020. Changes in ownership or economic interests within the current year are disclosed in the notes below. |
| | (2) | The acquisition price represents only the purchase of the 1552 Broadway interest, which comprised approximately 13,045 square feet. The joint venture also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway. Beginning in April 2020, debt service and ground rent payments for this investment were not made primarily as a result of the failure of the primary tenant to pay rent. The Company, on behalf of the venture, is in discussions with the lessor and lender. |
| | (3) | We hold a 32.28% interest in three retail units and one residential unit at the property and a 16.14% interest in three residential units at the property. |
| | (4) | The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue. |
| | (5) | In October 2016, we sold a 49% interest in this property. Our interest in the property was sold within a consolidated joint venture owned 90% by the Company and 10% by Stonehenge. The transaction resulted in the deconsolidation of the venture's remaining 51% interest in the property. Our joint venture with Stonehenge remains consolidated resulting in the combined 51% interest being shown within investments in unconsolidated joint ventures on our balance sheet. |
Disposition of Joint Venture Interests or Properties We did not dispose of any investments in unconsolidated joint ventures during the three months ended March 31, 2020: Joint Venture Mortgages and Other Loans Payable We generally finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases for tenant space, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at March 31, 2020 and December 31, 2019, respectively, are as follows (dollars in thousands): | | | | | | | | | | | | | | | | | | | | Property | | Economic
Interest (1) | | Initial Maturity Date | Final Maturity Date (2) | | Interest Rate (3) | | March 31, 2020 | | December 31, 2019 | Fixed Rate Debt: | | | | | | | | | | | | | 717 Fifth Avenue (mortgage) | | 10.92 | % | | July 2022 | July 2022 | | | 4.45 | % | | $ | 300,000 |
| | $ | 300,000 |
|
| | | | | | | | | | | | | | | | | | | | Property | | Economic
Interest (1) | | Initial Maturity Date | Final Maturity Date (2) | | Interest Rate (3) | | March 31, 2020 | | December 31, 2019 | 717 Fifth Avenue (mezzanine) | | 10.92 | % | | July 2022 | July 2022 | | | 5.50 | % | | 355,328 |
| | 355,328 |
| 650 Fifth Avenue (mortgage) | | 50.00 | % | | October 2022 | October 2022 | | | 4.46 | % | | 210,000 |
| | 210,000 |
| 650 Fifth Avenue (mezzanine) | | 50.00 | % | | October 2022 | October 2022 | | | 5.45 | % | | 65,000 |
| | 65,000 |
| 21 East 66th Street | | 32.28 | % | | April 2023 | April 2028 | | | 3.60 | % | | 12,000 |
| | 12,000 |
| 919 Third Avenue | | 51.00 | % | | June 2023 | June 2023 | | | 5.12 | % | | 500,000 |
| | 500,000 |
| 1515 Broadway | | 56.87 | % | | March 2025 | March 2025 | | | 3.93 | % | | 834,084 |
| | 838,546 |
| 11 Madison Avenue | | 60.00 | % | | September 2025 | September 2025 | | | 3.84 | % | | 1,400,000 |
| | 1,400,000 |
| 800 Third Avenue | | 60.52 | % | | February 2026 | February 2026 | | | 3.37 | % | | 177,000 |
| | 177,000 |
| 400 East 57th Street | | 41.00 | % | | November 2026 | November 2026 | | | 3.00 | % | | 97,202 |
| | 97,735 |
| Worldwide Plaza | | 24.35 | % | | November 2027 | November 2027 | | | 3.98 | % | | 1,200,000 |
| | 1,200,000 |
| Stonehenge Portfolio (4) | | Various |
| | Various | Various | | | 3.50 | % | | 196,112 |
| | 196,112 |
| Total fixed rate debt | | | | | | | | | | $ | 5,346,726 |
| | $ | 5,351,721 |
| Floating Rate Debt: | | | | | | | | | | | | | 280 Park Avenue | | 50.00 | % | | September 2020 | September 2024 | | L+ | 1.73 | % | | $ | 1,200,000 |
| | $ | 1,200,000 |
| 1552 Broadway (5) | | 50.00 | % | | October 2020 | October 2022 | | L+ | 2.65 | % | | 195,000 |
| | 195,000 |
| 121 Greene Street | | 50.00 | % | | November 2020 | November 2021 | | L+ | 1.50 | % | | 15,000 |
| | 15,000 |
| 11 West 34th Street | | 30.00 | % | | January 2021 | January 2023 | | L+ | 1.45 | % | | 23,000 |
| | 23,000 |
| 100 Park Avenue | | 49.90 | % | | February 2021 | February 2021 | | L+ | 1.75 | % | | 356,027 |
| | 356,972 |
| One Vanderbilt (6) | | 71.01 | % | | September 2021 | September 2023 | | L+ | 2.50 | % | | 838,936 |
| | 732,928 |
| 2 Herald Square | | 51.00 | % | | November 2021 | November 2023 | | L+ | 1.55 | % | | 198,629 |
| | 190,000 |
| 55 West 46th Street (7) | | 25.00 | % | | August 2022 | August 2024 | | L+ | 1.25 | % | | 192,524 |
| | 192,524 |
| 115 Spring Street | | 51.00 | % | | September 2023 | September 2023 | | L+ | 3.40 | % | | 65,550 |
| | 65,550 |
| 10 East 53rd Street | | 55.00 | % | | February 2025 | February 2025 | | L+ | 1.35 | % | | 220,000 |
| | 170,000 |
| 605 West 42nd Street | | 20.00 | % | | August 2027 | August 2027 | | L+ | 1.44 | % | | 550,000 |
| | 550,000 |
| 21 East 66th Street | | 32.28 | % | | June 2033 | June 2033 | | 1 Year Treasury+ | 2.75 | % | | 708 |
| | 712 |
| Total floating rate debt | | | | | | | | | | $ | 3,855,374 |
| | $ | 3,691,686 |
| Total joint venture mortgages and other loans payable | | | | | | $ | 9,202,100 |
| | $ | 9,043,407 |
| Deferred financing costs, net | | | | | | | | | | (85,928 | ) | | (91,538 | ) | Total joint venture mortgages and other loans payable, net | | | | | | $ | 9,116,172 |
| | $ | 8,951,869 |
|
| | (1) | Economic interest represents the Company's interests in the joint venture as of March 31, 2020. Changes in ownership or economic interests, if any, within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above. |
| | (2) | Reflects exercise of all available extension options. The ability to exercise extension options may be subject to certain tests based on the operating performance of the property. |
| | (3) | Interest rates as of March 31, 2020, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated spread over the 30-day LIBOR, unless otherwise specified. |
| | (4) | Amount is comprised of three mortgages totaling $132.6 million that mature in April 2028 and two mortgages totaling $63.5 million that mature in July 2029. |
| | (5) | Beginning in April 2020, debt service and ground rent payments for this investment were not made primarily as a result of the failure of the primary tenant to pay rent. The Company, on behalf of the venture, is in discussions with the lessor and lender. |
| | (6) | This loan is a $1.75 billion construction facility with reductions in interest cost based on meeting conditions, the first of which has been satisfied, and has an initial five-year term with two one-year extension options. Advances under the loan are subject to costs incurred. |
| | (7) | This loan has a committed amount of $198.0 million, of which $5.5 million was unfunded as of March 31, 2020. |
We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $2.2 million from these services, net of our ownership share of the joint ventures, for the three months ended March 31, 2020. We earned $2.5 million from these services, net of our ownership share of the joint ventures, for the three months ended March 31, 2019. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties. The combined balance sheets for the unconsolidated joint ventures, at March 31, 2020 and December 31, 2019 are as follows (in thousands): | | | | | | | | | | March 31, 2020 | | December 31, 2019 | Assets (1) | | | | Commercial real estate property, net | $ | 14,392,907 |
| | $ | 14,349,628 |
| Cash and restricted cash | 329,205 |
| | 336,189 |
| Tenant and other receivables, related party receivables, and deferred rents receivable | 346,837 |
| | 371,065 |
| Other assets | 1,997,553 |
| | 2,039,429 |
| Total assets | $ | 17,066,502 |
| | $ | 17,096,311 |
| Liabilities and equity (1) | | | | Mortgages and other loans payable, net | $ | 9,116,172 |
| | $ | 8,951,869 |
| Deferred revenue | 1,459,796 |
| | 1,501,616 |
| Lease liabilities | 902,161 |
| | 897,380 |
| Other liabilities | 284,364 |
| | 308,304 |
| Equity | 5,304,009 |
| | 5,437,142 |
| Total liabilities and equity | $ | 17,066,502 |
| | $ | 17,096,311 |
| Company's investments in unconsolidated joint ventures | $ | 2,848,363 |
| | $ | 2,912,842 |
|
| | (1) | The combined assets, liabilities and equity for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained, non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018. In addition, at March 31, 2020, $122.6 million of net unamortized basis differences between the amount at which our investments are carried and our share of equity in net assets of the underlying property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the remaining life of the underlying items having given rise to the differences. |
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the three months ended March 31, 2020 and 2019, are as follows (in thousands): | | | | | | | | | | Three Months Ended March 31, | | 2020 | | 2019 | Total revenues | $ | 282,520 |
| | $ | 307,519 |
| Operating expenses | 51,590 |
| | 54,124 |
| Real estate taxes | 53,372 |
| | 54,236 |
| Operating lease rent | 6,361 |
| | 5,901 |
| Interest expense, net of interest income | 86,324 |
| | 96,623 |
| Amortization of deferred financing costs | 4,814 |
| | 5,216 |
| Depreciation and amortization | 98,584 |
| | 104,331 |
| Total expenses | 301,045 |
| | 320,431 |
| Net loss before gain on sale (1) | $ | (18,525 | ) | | $ | (12,912 | ) | Company's equity in net loss from unconsolidated joint ventures (1) | $ | (12,814 | ) | | $ | (5,234 | ) |
(1) The combined statements of operations and the Company's equity in net loss for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.
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