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

9 Months Ended

Sep. 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 purchasers receive a 3.25% current annual return, plus a 0.25% non-compounding annual return paid at redemption. Our joint venture may, at its option, redeem this equity interest. If it is not redeemed within five years, the current annual return increases to 8%. The venture received $42.0 million in gross proceeds ($41.4 million net of issuance costs) during the nine months ended September 30, 2014, and the remaining $3.0 million will be received as investors’ visas are approved. We used our 95% share of the proceeds to repay borrowings under our line of credit.