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Investment in Unconsolidated Ventures
12 Months Ended
Dec. 31, 2014
Equity Method Investments and Joint Ventures [Abstract]  
Investment in Unconsolidated Ventures
Investment in Unconsolidated Ventures
At year-end 2014, we had ownership interests in 15 ventures that we account for using the equity method.
In 2014, we formed three new multifamily unconsolidated ventures:
FMF Littleton LLC was formed with AIGGRE Littleton Common Investor LLC (AIGGRE) to develop a 385-unit multifamily property in Littleton, Colorado. We own a 25 percent interest and AIGGRE owns the remaining 75 percent interest. We contributed $4,900,000 of land and pre-development costs to the venture, net of $9,852,000 of reimbursements received from the venture for land and pre-development costs we previously incurred. The venture obtained a senior secured construction loan in the amount of $46,384,000 that bears interest at 30-day LIBOR plus 1.90% payable monthly, of which none was outstanding at year-end 2014. We provided the lender a construction completion guaranty; a guaranty of repayment of 25 percent of the principal balance and unpaid accrued interest; and a nonrecourse carve-out guaranty. The principal guaranty will reduce from 25 percent of principal to 10 percent upon achievement of certain conditions. At year-end 2014, our investment in this venture is $6,287,000.
CREA FMF Nashville LLC was formed with Massachusetts Mutual Life Insurance Co. (MassMutual) to develop a 320-unit multifamily property in Nashville, Tennessee. We own a 30 percent interest and MassMutual owns the remaining 70 percent interest. We contributed $5,897,000 of land and pre-development costs to the venture, net of $7,191,000 of reimbursements received from the venture for pre-development costs we previously incurred. The venture obtained a senior secured construction loan in the amount of $51,950,000 that bears interest at 30-day LIBOR plus 2.50% per annum, of which $29,660,000 was outstanding at year-end 2014. MassMutual is obligated to make a capital contribution to the venture in an amount equal to its equity commitment under the construction loan in an amount not to exceed $14,220,000. Such capital contribution shall be paid upon the earlier of (i) March 17, 2015 (ii) two months after the issuance of final certificates of occupancy with respect to the entire project, or (iii) ten business days after the date on which the long-term credit rating of MassMutual is less than AA- from Standard & Poor's or A1 from Moody's. We provided the lender a construction completion guaranty; a guaranty of repayment of 25 percent of the principal balance and unpaid accrued interest; and a nonrecourse carve-out guaranty. The principal guaranty will reduce from 25 percent of principal to zero upon achievement of certain conditions. At year-end 2014, our investment in this venture is $5,516,000.
Elan 99, LLC was formed with GS Elan 99 Holdings, LLC (Greystar) to develop a 360-unit multifamily property in Katy, Texas. We own a 90 percent non-managing member interest and Greystar owns the remaining 10 percent managing member interest. We contributed $8,757,000 in cash to the venture. The venture obtained a senior secured construction loan in the amount of $37,275,000 that bears interest at LIBOR plus 2.50% per annum which reduces to 2.30% upon meeting a debt coverage ratio test, of which $1,000 was outstanding at year-end 2014. Greystar will act as the guarantor for the construction loan as a developer and general contractor for the benefit of the Elan 99, LLC venture and Forestar as the investor member. At year-end 2014, our investment in this venture is $8,679,000.
Combined summarized balance sheet information for our ventures accounted for using the equity method follows:
 
Venture Assets
 
Venture Borrowings(a)
 
Venture Equity
 
Our Investment
 
At Year-End
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
(In thousands)
242, LLC(b)
$
33,021

 
$
23,751

 
$
6,940

 
$
921

 
$
21,789

 
$
19,838

 
$
10,098

 
$
9,084

CJUF III, RH Holdings(c)

 
36,320

 

 
18,492

 

 
15,415

 

 
3,235

CL Ashton Woods, LP(d)
13,269

 
10,473

 

 

 
11,453

 
9,704

 
6,015

 
3,544

CL Realty, LLC
7,960

 
8,298

 

 

 
7,738

 
8,070

 
3,869

 
4,035

CREA FMF Nashville LLC(b)
40,014

 

 
29,660

 

 
5,987

 

 
5,516

 

Elan 99, LLC
10,070

 

 
1

 

 
9,643

 

 
8,679

 

FMF Littleton LLC
26,953

 

 

 

 
24,435

 

 
6,287

 

FMF Peakview LLC
43,638

 
30,673

 
23,070

 
12,533

 
17,464

 
16,620

 
3,575

 
3,406

HM Stonewall Estates, Ltd.(d)
3,750

 
3,781

 
669

 
63

 
3,081

 
3,718

 
1,752

 
2,128

LM Land Holdings, LP(d)
25,561

 
33,298

 
4,448

 
9,768

 
18,500

 
13,347

 
9,322

 
8,283

PSW Communities, LP
16,045

 

 
10,515

 

 
4,415

 

 
3,924

 

TEMCO Associates, LLC
11,756

 
13,320

 

 

 
11,556

 
13,160

 
5,778

 
6,580

Other ventures (4)(e)
8,453

 
12,723

 
26,944

 
29,699

 
(25,614
)
 
(31,357
)
 
190

 
852

 
$
240,490

 
$
172,637

 
$
102,247

 
$
71,476

 
$
110,447

 
$
68,515

 
$
65,005

 
$
41,147



Combined summarized income statement information for our ventures accounted for using the equity method follows:
 
Revenues
 
Earnings (Loss)
 
Our Share of Earnings (Loss)
 
For the Year
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
 
(In thousands)
242, LLC(b)
$
5,612

 
$
6,269

 
$
4,868

 
$
2,951

 
$
1,512

 
$
1,040

 
$
1,514

 
$
805

 
$
572

CJUF III, RH Holdings(c)
2,168

 
120

 

 
(956
)
 
(652
)
 
(241
)
 
(956
)
 
(652
)
 
(241
)
CL Ashton Woods, LP(d)
5,431

 
9,018

 
3,353

 
1,748

 
2,660

 
1,472

 
2,471

 
4,169

 
2,024

CL Realty, LLC
1,573

 
1,603

 
2,667

 
1,068

 
1,028

 
1,060

 
534

 
514

 
530

CREA FMF Nashville LLC(b)

 

 

 
(163
)
 

 

 
(163
)
 

 

Elan 99, LLC

 

 

 
(87
)
 

 

 
(78
)
 

 

FMF Littleton LLC

 

 

 
(239
)
 

 

 
(60
)
 

 

FMF Peakview LLC
4

 
1

 

 
(410
)
 
(252
)
 
(116
)
 
(83
)
 
(50
)
 
(23
)
HM Stonewall Estates, Ltd.(d)
1,728

 
2,922

 
2,500

 
613

 
1,082

 
829

 
248

 
452

 
332

LM Land Holdings, LP(d)
21,980

 
25,426

 
10,268

 
15,520

 
11,012

 
1,895

 
4,827

 
3,418

 
257

PSW Communities, LP

 

 

 
(86
)
 

 

 
(76
)
 

 

TEMCO Associates, LLC
2,155

 
630

 
702

 
494

 
96

 
(80
)
 
247

 
48

 
(40
)
Other ventures (4)(f)
1,792

 
5,994

 
8,790

 
4,835

 
176

 
10,032

 
260

 
33

 
11,058

 
$
42,443

 
$
51,983

 
$
33,148

 
$
25,288

 
$
16,662

 
$
15,891

 
$
8,685

 
$
8,737

 
$
14,469

_____________________
(a) 
Total includes current maturities of $65,795,000 at year-end 2014, of which $42,566,000 is non-recourse to us, and $37,966,000 at year-end 2013, of which $37,822,000 is non-recourse to us.
(b) 
Includes unamortized deferred gains on real estate contributed by us to ventures. We recognize deferred gains as income as real estate is sold to third parties. Deferred gains of $1,621,000 are reflected as a reduction to our investment in unconsolidated ventures at year-end 2014.
(c) 
In 2014, we acquired full ownership in the Eleven venture for $21,500,000. The acquisition-date fair value was $55,275,000, including debt of $23,936,000. Our investment in the Eleven venture prior to acquiring our partner’s interest was $2,229,000. At year-end 2014, we no longer have an equity method investment in the Eleven venture.
(d) 
Includes unrecognized basis difference of $1,517,000 which is reflected as a reduction of our investment in unconsolidated ventures at year-end 2014. This difference between estimated fair value of the equity investment and our capital account within the respective ventures at closing will be accreted as income or expense over the life of the investment and included in our share of earnings (loss) from the respective ventures.
(e) 
Our investment in other ventures reflects our ownership interests generally ranging from 25 to 50 percent, excluding venture losses that exceed our investment where we are not obligated to fund those losses. Please read Note 16 — Variable Interest Entities for additional information.
(f) 
In 2012, other ventures earnings include $5,307,000 related to a consolidated venture’s share of the gain associated with Round Rock Luxury Apartment's sale of Las Brisas. Our share of these earnings was $2,541,000 and we allocated $2,766,000 to net income attributable to noncontrolling interests.
In 2014, we invested $14,692,000 in these ventures and received $7,518,000 in distributions; in 2013, we invested $857,000 in these ventures and received $9,854,000 in distributions; in 2012, we invested $2,318,000 in these ventures and received $15,905,000 in distributions. Distributions include both return of investments and distributions of earnings.
We provide construction and development services for some of these ventures for which we receive fees. Fees for these services were $2,275,000 in 2014, $1,068,000 in 2013 and $935,000 in 2012 and are included in real estate revenues.