Investment in Partially Owned Entities (Tables)
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12 Months Ended |
Dec. 31, 2012
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Investment in Partially Owned Entities [Abstract] |
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Schedule of Various Consolidated Variable Interest Entities |
| | | | | | | | | December 31, 2012 | December 31, 2011 | Net investment properties | $ | 113,476 |
| $ | 117,235 |
| Other assets | 8,687 |
| 9,167 |
| Total assets | $ | 122,163 |
| $ | 126,402 |
| Mortgages, notes and margins payable | $ | (84,291 | ) | $ | (84,823 | ) | Other liabilities | (49,648 | ) | (49,073 | ) | Total liabilities | $ | (133,939 | ) | $ | (133,896 | ) | Net assets | $ | (11,776 | ) | $ | (7,494 | ) |
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Schedule of net equity investment and share of net income or loss |
| | | | | | | | | | | | Entity | Description | Ownership % | | Investment at December 31, 2012 | | Investment at December 31, 2011 | Net Lease Strategic Asset Fund L.P. | Diversified portfolio of net lease assets | 85%(a) | | $ | — |
| | $ | 26,508 |
| Cobalt Industrial REIT II | Industrial portfolio | 36%(b) | | 102,599 |
| | 113,623 |
| D.R. Stephens Institutional Fund, LLC | Industrial and R&D assets | 90%(c) | | 34,541 |
| | 36,218 |
| Brixmor/IA JV, LLC | Retail Shopping Centers | (d) | | 90,315 |
| | 103,567 |
| Other Unconsolidated Entities (e) | Various Real Estate investments | Various | | 26,344 |
| | 36,795 |
| | | | | $ | 253,799 |
| | $ | 316,711 |
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| | (a) | On August 10, 2007, the Company entered into a joint venture with The Lexington Master Limited Partnership (“LMLP”) and LMLP GP LLC (“LMLP GP”), for the purpose of directly or indirectly acquiring, financing, holding for investment, operating, and leasing real estate assets as acquired by the joint venture. The Company’s initial capital contribution was approximately $127,500 and LMLP’s initial contribution was approximately $22,500. On September 5, 2012, the Company entered into a definitive agreement and sold the Company's interest in Net Lease Strategic Asset Fund L.P. to LMLP. The Company received its final distribution of $9,438 and recorded a loss of $1,556 on the sale of the investment. For the years ended December 31, 2012 and 2011, the Company recorded an impairment of $4,200 and $113,621, respectively, on this investment. |
| | (b) | On June 29, 2007, the Company entered into a joint venture, Cobalt Industrial REIT II (“Cobalt”), to invest $149,000 in shares of common beneficial interest. The investment gives the Company the right to a preferred dividend equal to 9% per annum. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of Cobalt, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control Cobalt. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting. |
| | (c) | On April 23, 2007, the Company entered into a joint venture, D.R. Stephens Institutional Fund, LLC, between the Company and Stephens Ventures III, LLC (“Stephens Member”) for the purpose of acquiring entities engaged in the acquisition, ownership, and development of real property. The Company’s initial capital contribution was limited to approximately $90,000 and the Stephens Member’s initial contribution was limited to approximately $10,000. Stephens & Stephens LLC (“Stephens”), an affiliate of the Stephens Member, is the managing member of D.R. Stephens Institutional Fund, LLC. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of Stephens Member, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control D.R. Stephens Institutional Fund, LLC. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting. As of December 31, 2012, the Company determined that the investment may have a reduction in the expected holding period. Therefore, for the year ended December 31, 2012, the Company recorded an impairment of $2,700 on this investment. |
| | (d) | On December 6, 2010, the Company entered into a Joint Venture with Brixmor Residual Holding LLC (“Brixmor”) (formerly Centro NP Residual Holding LLC), resulting in the creation of Brixmor/IA JV, LLC (formerly Centro/IA JV, LLC). The joint venture structure provides the Company with an equity stake of $121,534, a preferred capital position and preferred return of 11%. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of Brixmor, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control Brixmor/IA JV, LLC. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting. |
| | (e) | On July 7, 2011, a foreclosure sale was held on a hotel property which previously secured one of the Company’s notes receivable. The note had been in default and fully impaired since 2009. A trust, on behalf of the lender group, was the successful bidder at the foreclosure sale and thereby, the Company obtained an equity interest in the trust which is the 100% owner of the hotel property. The Company’s interest is not consolidated and the equity method is used to account for the investment. The Company recorded its equity interest at fair value and recognized a gain of $17,150 in 2011 on the conversion of the note reflected in other income on the consolidated statement of operations and other comprehensive income. |
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Schedule of Combined Financial Information of Investment in Unconsolidated Entities |
The following table presents the combined financial information for the Company’s investment in unconsolidated entities. | | | | | | | | |
| Balance as of December 31, 2012 | | Balance as of December 31, 2011 | Balance Sheets: |
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| Assets: |
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| Real estate assets, net of accumulated depreciation | $ | 1,437,268 |
| | $ | 1,949,035 |
| Other assets | 222,096 |
| | 485,887 |
| Total Assets | $ | 1,659,364 |
| | $ | 2,434,922 |
| Liabilities and Equity: |
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| Mortgage debt | $ | 1,062,086 |
| | $ | 1,402,462 |
| Other liabilities | 89,573 |
| | 94,361 |
| Equity | 507,705 |
| | 938,099 |
| Total Liabilities and Equity | $ | 1,659,364 |
| | $ | 2,434,922 |
| Company’s share of equity | $ | 252,994 |
| | $ | 307,684 |
| Net excess of cost of investments over the net book value of underlying net assets (net of accumulated depreciation of $1,714 and $1,372, respectively) | 805 |
| | 9,027 |
| Carrying value of investments in unconsolidated entities | $ | 253,799 |
| | $ | 316,711 |
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| For the years ended | | December 31, 2012 | | December 31, 2011 | | December 31, 2010 | Statements of Operations: |
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| Revenues | $ | 202,155 |
| | $ | 283,913 |
| | $ | 287,694 |
| Expenses: |
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| Interest expense and loan cost amortization | $ | 63,233 |
| | $ | 91,965 |
| | $ | 90,857 |
| Depreciation and amortization | 83,324 |
| | 111,699 |
| | 99,254 |
| Operating expenses, ground rent and general and administrative expenses | 76,149 |
| | 159,539 |
| | 100,954 |
| Impairments | 553 |
| | 21,017 |
| | 14,019 |
| Total expenses | $ | 223,259 |
| | $ | 384,220 |
| | $ | 305,084 |
| Net loss before gain on sale of real estate | $ | (21,104 | ) | | $ | (100,319 | ) | | $ | (17,390 | ) | Gain on sale of real estate | 9,484 |
| | 9,219 |
| | 553 |
| Net loss | $ | (11,620 | ) | | $ | (91,100 | ) | | $ | (16,837 | ) | Company’s share of: |
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| Net loss, net of excess basis depreciation of $342, $5 and $84 | $ | 1,998 |
| | $ | (12,802 | ) | | $ | (18,684 | ) |
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Schedule of Debt Maturities of the Unconsolidated Entities |
The unconsolidated entities had total third party debt of $1,062,086 at December 31, 2012 that matures as follows: | | | | | 2013 | $ | 143,157 |
| 2014 | 75,458 |
| 2015 | 58,950 |
| 2016 | 4,100 |
| 2017 | 165,100 |
| Thereafter | 615,321 |
| | $ | 1,062,086 |
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