Investment in Unconsolidated Entities

9 Months Ended

Sep. 30, 2020

Investment in Partially Owned Entities [Abstract]

Joint Venture Interests

IAGM Retail Fund I, LLC

As of September 30, 2020 and December 31, 2019, the Company owned a 55% interest in one unconsolidated entity, IAGM Retail Fund I, LLC ("IAGM"), a retail joint venture partnership between the Company and PGGM Private Real Estate Fund ("PGGM"). As of September 30, 2020 and December 31, 2019, the carrying value of the Company's investment in IAGM was $116,706 and $118,861, respectively.

During the nine months ended September 30, 2019, IAGM disposed of Rockwell Plaza, a 255,000 square foot retail property, for a gross disposition price of $20,500 and recognized a provision for asset impairment of $1,443 and a loss on sale of $559. The Company's share of IAGM's provision for asset impairment was $794 and its share of the loss on sale was $307. Proceeds from the sale were used to extinguish the related $16,250 non-recourse mortgage loan.

During the nine months ended September 30, 2020, IAGM prepaid a $14,872 mortgage payable on one retail property with cash on hand.

During the nine months ended September 30, 2020, the Company purchased Antoine Town Center from IAGM for $22,254, a fair value determined by independent appraisal, which resulted in IAGM recognizing a gain on sale of $1,741. The Company deferred its share of IAGM's gain on sale of $958 and will amortize the gain over 30 years as an increase to equity in earnings (losses) of unconsolidated entities.

During the nine months ended September 30, 2020, IAGM entered into two interest rate swap agreements to achieve fixed interest rates on debt with a variable rate of 1-Month LIBOR plus 1.55%. Each of the interest rate swaps have an effective date of April 1, 2020 and a termination date of November 2, 2023. One interest rate swap has a notional amount of $45,000 and achieves a fixed interest rate of 1.979%. The other interest rate swap has a notional amount of $30,000 and achieves a fixed interest rate of 1.956%. The Company recognizes its share of gains or losses resulting from IAGM's interest rate swaps as an adjustment to the Company's investment in IAGM and an increase or decrease in comprehensive income. As of September 30, 2020, the interest rate swaps were deemed to be liabilities of $631 on a fair value basis, of which the Company's share was $347.

Combined Condensed Financial Information

As of September 30, 2020 and December 31, 2019, the Company's sole joint venture interest is in IAGM. Another joint venture was disposed of in 2019. The following table presents condensed balance sheet information for IAGM.


	As of
	September 30, 2020		December 31, 2019
Assets:
Real estate assets, net of accumulated depreciation	$	400,521	$	425,585
Other assets	71,437		66,437
Total assets	471,958		492,022
Liabilities and equity:
Mortgages payable, net	242,252		256,732
Other liabilities	17,368		20,765
Equity	212,338		214,525
Total liabilities and equity	471,958		492,022

Company's share of equity	117,645		118,861
Deferred gain, net of accumulated amortization of $19	(939)		—
Carrying value of investments in unconsolidated entities	$	116,706	$	118,861

Combined Condensed Financial Information, continued

The following table presents condensed income statement information of IAGM and the joint venture that was disposed in 2019.


	Three months ended September 30,				Nine months ended September 30,
IAGM	2020		2019		2020		2019
Total income	$	11,911	$	13,284	$	34,449	$	40,037
Depreciation and amortization	(3,837)		(4,687)		(12,495)		(15,626)
Property operating	(2,234)		(2,341)		(6,057)		(6,364)
Real estate taxes	(2,267)		(2,472)		(6,875)		(7,433)
Interest expense, net	(1,744)		(2,630)		(5,712)		(8,418)
General and administrative	(114)		(113)		(358)		(358)
Gain (loss) on sale of real estate, net	—		—		1,741		(559)
Loss on debt extinguishment	—		—		(8)		—
Provision for asset impairment	—		—		—		(1,443)
Net income (loss)	1,715		1,041		4,685		(164)
Other joint venture interest
Net loss	—		—		—		(4,869)
Total net income (loss) of unconsolidated entities	$	1,715	$	1,041	$	4,685	$	(5,033)

Company's share of net income (loss)	$	943	$	572	$	2,530	$	(4,451)
Outside basis adjustment for IAGM's sale of real estate	8		—		(939)		—
Outside basis adjustment for other joint venture's sale of assets	—		—		—		4,403
Equity in earnings (losses) of unconsolidated entities	$	951	$	572	$	1,591	$	(48)

The following table summarizes the scheduled maturities of IAGM's mortgages payable as of September 30, 2020, for the remainder of 2020, each of the next four years and thereafter.


Scheduled maturities by year:	As of September 30, 2020
2020	$	—
2021	23,150
2022	—
2023	180,125
2024	—
Thereafter	40,680
Total	$	243,955

As of September 30, 2020 and December 31, 2019, none of IAGM's mortgages payable are recourse to the Company. It is anticipated that the joint venture will be able to repay, refinance or extend all of its debt on a timely basis.