XML 93 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Investments in Real Estate Partnerships
 12 Months Ended
Dec. 31, 2011
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments Disclosure [Text Block]
Investments in Real Estate Partnerships

The Company invests in real estate partnerships, which primarily include five co-investment partners and a closed-end real estate fund (“Regency Retail Partners” or the “Fund”). In addition to earning its pro-rata share of net income or loss in each of these real estate partnerships, the Company received recurring market-based fees for asset management, property management, and leasing as well as fees for investment and financing services, of $29.0 million, $25.1 million, and $29.1 million and transaction fees of $5.0 million, $2.6 million, and $7.8 million for the years ended December 31, 2011, 2010, and 2009, respectively.

Investments in real estate partnerships as of December 31, 2011 consist of the following (in thousands): 

Ownership
 
Total Investment
 
Total Assets of the Partnership
 
Net Income (Loss) of the Partnership
 
The Company's Share of Net Income (Loss) of the Partnership
GRI - Regency, LLC (GRIR)(1)
40.00
%
$
262,018

 
2,001,526

 
18,244

 
7,266

Macquarie CountryWide-Regency III, LLC (MCWR III)(1)
24.95
%
 
195

 
61,867

 
(493
)
 
(123
)
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)(3)
—
%
 
—

 
—

 
(1,752
)
 
(293
)
Columbia Regency Retail Partners, LLC (Columbia I)(2)
20.00
%
 
20,335

 
259,225

 
14,554

 
2,775

Columbia Regency Partners II, LLC (Columbia II)(2)
20.00
%
 
9,686

 
317,720

 
910

 
179

Cameron Village, LLC (Cameron)
30.00
%
 
17,110

 
104,314

 
1,101

 
322

RegCal, LLC (RegCal)(2)
25.00
%
 
18,128

 
180,490

 
7,615

 
1,904

Regency Retail Partners, LP (the Fund)
20.00
%
 
16,430

 
333,013

 
265

 
268

US Regency Retail I, LLC (USAA)(2)
20.01
%
 
3,093

 
127,763

 
1,215

 
243

Other investments in real estate partnerships
50.00
%
 
39,887

 
115,857

 
3,601

 
(2,898
)
Total
 
$
386,882

 
3,501,775

 
45,260

 
9,643

(1) Effective January 1, 2010, this partnership agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company will apply the Restricted Gain Method for additional properties sold to this partnership on or after January 1, 2010. During 2011, the Company did not sell any properties to this real estate partnership.
(2) This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2011, the Company did not sell any properties to this real estate partnership.
(3) At December 31, 2010, the Company's ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011.

Investments in real estate partnerships as of December 31, 2010 consist of the following (in thousands): 
 
Ownership
 
Total Investment
 
Total Assets of the Partnership
 
Net Income (Loss) of the Partnership
 
The Company's Share of Net Income (Loss) of the Partnership
GRI - Regency, LLC (GRIR)(1)(3)(4)
40.00
%
$
277,235

 
2,077,240

 
(15,113
)
 
(6,672
)
Macquarie CountryWide-Regency III, LLC (MCWR III)(1)
24.95
%
 
63

 
63,575

 
(432
)
 
(108
)
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)
16.35
%
 
20,050

 
366,766

 
(4,913
)
 
(819
)
Columbia Regency Retail Partners, LLC (Columbia I)(2)
20.00
%
 
20,025

 
277,859

 
(14,922
)
 
(2,970
)
Columbia Regency Partners II, LLC (Columbia II)(2)
20.00
%
 
9,815

 
302,394

 
(330
)
 
(69
)
Cameron Village, LLC (Cameron)
30.00
%
 
17,604

 
105,953

 
(708
)
 
(221
)
RegCal, LLC (RegCal)(2)
25.00
%
 
15,340

 
183,507

 
858

 
194

Regency Retail Partners, LP (the Fund)
20.00
%
 
17,478

 
341,109

 
(18,942
)
 
(3,565
)
US Regency Retail I, LLC (USAA)(2)
20.01
%
 
3,941

 
134,294

 
(441
)
 
(88
)
Other investments in real estate partnerships
50.00
%
 
47,041

 
130,425

 
3,180

 
1,434

Total
 
$
428,592

 
3,983,122

 
(51,763
)
 
(12,884
)
(1) As noted above, effective January 1, 2010, this partnership agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company will apply the Restricted Gain Method for additional properties sold to this partnership on or after January 1, 2010. During 2010, the Company did not sell any properties to this real estate partnership.
(2) As noted above, this partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2010, the Company did not sell any properties to this real estate partnership.
(3) During March 2010, an amendment was filed with the state of Delaware to change the name of the real estate partnership from Macquarie CountryWide - Regency II, LLC (“MCWR II”) to GRI - Regency, LLC (“GRIR”).
(4) On April 30, 2010, GRIR prepaid $514.8 million of mortgage debt, without penalty, in order to minimize its future refinancing and interest rate risks. The Company contributed capital of $206.7 million to GRIR for its pro-rata share of the repayment funded from its unsecured line of credit and available cash balances. Simultaneously, GRI closed on the purchase of its remaining 15% interest from CHRR, increasing its total ownership in the real estate partnership to 60%. As a part of this transaction, the Company also received a disposition fee of $2.6 million equal to 1% of gross sales price paid by GRI. The Company retained asset management, property management, and leasing responsibilities. On June 2, 2010, GRIR closed on $202.0 million of new ten year secured mortgage loans. The Company received $79.6 million as its pro-rata share of the proceeds. On September 1, 2010, an additional $47.2 million of mortgage debt was repaid, which also required pro-rata contributions from each joint venture partner.

Summarized financial information for the investments in real estate partnerships on a combined basis, is as follows (in thousands): 
 
 
December 31,
2011
 
December 31,
2010
 
 
 
 
 
Investment in real estate, net
$
3,263,704

 
3,686,565

Acquired lease intangible assets, net
 
85,232

 
120,163

Other assets
 
152,839

 
176,394

      Total assets
$
3,501,775

 
3,983,122

 
 
 
 
 
Notes payable
$
1,874,780

 
2,117,695

Acquired lease intangible liabilities, net
 
49,938

 
75,551

Other liabilities
 
67,495

 
69,230

Capital - Regency
 
512,421

 
557,374

Capital - Third parties
 
997,141

 
1,163,272

      Total liabilities and capital
$
3,501,775

 
3,983,122


The following table reconciles the Company's capital in unconsolidated partnerships to the Company's investments in real estate partnerships (in thousands):

 
 
December 31,
2011
 
December 31,
2010
Capital - Regency
$
512,421

 
557,374

  less: Impairment
 
(5,880
)
 
(8,750
)
  less: Ownership percentage or Restricted Gain Method deferral
 
(41,456
)
 
(41,830
)
  less: Net book equity in excess of purchase price
 
(78,203
)
 
(78,202
)
Investments in real estate partnerships
$
386,882

 
428,592

The Company’s proportionate share of notes payable of the investments in real estate partnerships was $610.4 million and $663.1 million, respectively. The Company does not guarantee these loans with the exception of an $8.8 million loan related to its 50% ownership interest in a single asset real estate partnership where the loan agreement contains “several” guarantees from each partner, which matured and was paid off in April 2011.
As of December 31, 2011, scheduled principal repayments on notes payable of the investments in real estate partnerships were as follows (in thousands): 
Scheduled Principal Payments by Year:
 
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities
 
Total
 
Regency’s
Pro-Rata
Share
2012
$
13,876

 
234,838

 
20,798

 
269,512

 
101,896

2013
 
17,666

 
24,373

 
—

 
42,039

 
15,306

2014
 
18,505

 
77,369

 
—

 
95,874

 
28,582

2015
 
18,599

 
130,796

 
—

 
149,395

 
48,258

2016
 
15,730

 
329,757

 
—

 
345,487

 
104,233

Beyond 5 Years
 
78,156

 
890,081

 
—

 
968,237

 
311,245

Unamortized debt premiums, net
 
—

 
4,236

 
—

 
4,236

 
910

Total
$
162,532

 
1,691,450

1,691.45

20,798

 
1,874,780

 
610,430



The revenues and expenses for the investments in real estate partnerships on a combined basis are summarized as follows (in thousands): 
 
 
For the years ended December 31,
 
 
2011
 
2010
 
2009
 Total revenues
$
399,091

 
437,029

 
434,050

 Operating expenses:
 
 
 
 
 
 
   Depreciation and amortization
 
134,236

 
155,146

 
160,484

   Operating and maintenance
 
62,442

 
67,541

 
63,855

   General and administrative
 
7,905

 
7,383

 
8,247

   Real estate taxes
 
49,103

 
55,926

 
59,339

   Provision for doubtful accounts
 
3,160

 
2,951

 
10,062

   Other expenses
 
317

 
715

 
2,098

     Total operating expenses
 
257,163

 
289,662

 
304,085

 Other expense (income):
 
 
 
 
 
 
   Interest expense, net
 
112,099

 
129,581

 
137,794

   Gain on sale of real estate
 
(7,464
)
 
(8,976
)
 
(6,141
)
   Gain on extinguishment of debt
 
(8,743
)
 
—

 
—

   Provision for impairment
 
—

 
78,908

 
104,416

   Other expense (income)
 
776

 
(383
)
 
72

      Total other expense
 
96,668

 
199,130

 
236,141

      Net income (loss)
$
45,260

 
(51,763
)
 
(106,176
)
Regency's share of net income (loss)
$
9,643

 
(12,884
)
 
(26,373
)