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Variable Interest Entities
3 Months Ended
Mar. 31, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Variable Interest Entities

5.

Variable Interest Entities

The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company as of March 31, 2017 and December 31, 2016 are as follows (in thousands):

 

 

March 31,

 

December 31,

 

2017

 

2016

Assets:

 

 

 

 

 

Real estate investment properties, net

$

138,976

 

$

112,929

Real estate under development, including land

$

69,801

 

$

80,473

Intangibles, net

$

2,627

 

$

2,891

Cash

$

1,043

 

$

916

Deferred rent and lease incentives

$

2,993

 

$

3,061

Other assets

$

790

 

$

1,130

Restricted cash

$

20

 

$

20

Liabilities:

 

 

 

 

 

Mortgages and other notes payable, net

$

124,801

 

$

104,890

Accounts payable and accrued liabilities

$

1,916

 

$

1,461

Accrued development costs

$

11,895

 

$

15,369

Other liabilities

$

819

 

$

976

Due to related parties

$

101

 

$

107

The Company’s maximum exposure to loss as a result of its involvement with these VIEs is limited to its net investment in these entities which totaled approximately $74.9 million as of March 31, 2017. The Company’s exposure is limited because of the non-recourse nature of the borrowings of the VIEs.

As of March 31, 2017 and December 31, 2016, the Company had 10 subsidiaries which are classified as VIEs due to the following factors and circumstances:

Three of these subsidiaries are single property entities, designed to own and lease their respective properties to multiple tenants, which are subject to either a ground lease or an air rights lease that include buy-out and put options held by either the tenant or landlord under the applicable lease.  

Four of these subsidiaries are entities with real estate under development or completed developments in which there is insufficient equity at risk due to the development nature of each entity.

Two of these subsidiaries are joint ventures with recently completed real estate under development in which there is insufficient equity at risk due to the development nature of each joint venture.

One of these subsidiaries is a joint venture with equity interest that consists of non-substantive protective voting rights, but not any participating or kick-out rights.

The Company determined it is the primary beneficiary and holds a controlling financial interest in each of the aforementioned property and development entities due to its power to direct the activities that most significantly impact the economic performance of the entities, as well as its obligation to absorb the losses and its right to receive benefits from these entities that could potentially be significant to these entities. As such, the transactions and accounts of these VIEs are included in the accompanying condensed consolidated financial statements.