Consolidated Joint Venture Preferred Equity/Capital Consolidated Joint Venture Preferred Equity/Capital

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Consolidated Joint Venture Preferred Equity/Capital

Consolidated Joint Venture Preferred Equity/Capital

Our joint venture that is redeveloping the Knickerbocker Hotel raised $45 million through the sale of 3.5% preferred equity/capital under the EB-5 immigrant investor program. The investors in this preferred equity receive a 3.25% current annual return, with a 0.25% non-compounding annual return paid at redemption. Redemption is at the company’s option. If the preferred equity is not redeemed within five years, the current return increases to 8.00%. The venture received $41.6 million in gross proceeds ($41.0 million net of issuance costs) during the six months ended June 30, 2014, and the remaining $3.4 million will be received as investors’ visas are approved by the government. We used our 95% share of the proceeds to repay borrowings under our line of credit.