Acquisitions and Dispositions

6 Months Ended

Jun. 30, 2022

Acquisitions And Dispositions [Abstract]


3. Acquisitions and Dispositions

Acquisitions On March 1, 2022, the Company acquired a 25% interest in Jean-Georges Restaurants for $45.0 million and paid $10.0 million for the option to acquire up to an additional 20% interest in Jean-Georges Restaurants through March 2026. Jean-Georges Restaurants currently has over 40 hospitality offerings and a pipeline of new concepts. See Note 2 - Investment in Real Estate and Other Affiliates for additional information.

Douglas Ranch In October 2021, the Company announced the acquisition of Douglas Ranch, a new large-scale master planned community in the West Valley of Phoenix, Arizona. The Company closed on the all-cash purchase of approximately 33,810 acres (Douglas Ranch Property) for a purchase price of $541.0 million. Pursuant to the purchase and sale agreement, $33.8 million of the purchase price was held in escrow related to a six-month option for the seller, or permitted assignee, to repurchase up to 50% interest in the Douglas Ranch Property. The total repurchase price payable pursuant to the option was $270.5 million, which consisted of a payment of $236.7 million and the $33.8 million withheld at the initial closing, plus 50% of any costs incurred to manage and maintain the Douglas Ranch Property from the time of the original closing through the date that the option is exercised.

On April 13, 2022, the purchase and sale agreement was amended to extend the term of the option to June 17, 2022, and grant a minimum purchase of a 9.24% interest in the Douglas Ranch Property for $50.0 million and up to a maximum purchase of a 50% interest for $270.5 million. On June 17, 2022, the seller’s assignee, JDM Member, exercised the minimum purchase option and purchased a 9.24% interest in the Douglas Ranch Property for $50.0 million, inclusive of the $33.8 million previously held in escrow to reduce the seller’s purchase price.

Immediately following the execution of the minimum purchase option, the Company entered into a Limited Liability Company Agreement (LLC Agreement) with JDM Member to form Douglas Ranch Development Holding Company (Douglas Ranch). The Company and JDM Member then contributed their interests in the Douglas Ranch Property to Douglas Ranch in exchange for an equity interest, resulting in member equity interest of 90.76% for the Company and 9.24% for JDM Member. Douglas Ranch was determined to be a VIE, and as the Company has the power to direct the activities that most significantly impact its economic performance, the Company is considered the primary beneficiary and will continue to consolidate Douglas Ranch. Under the terms of the LLC agreement, cash distributions and the recognition of income producing activities will be pro rata based on economic ownership interest. As of June 30, 2022, the Company’s Condensed Consolidated Balance Sheets include $541.2 million of Master Planned Community assets and $50.0 million of Noncontrolling interest related to Douglas Ranch.

Also in conjunction with the execution of the minimum purchase option, JDM Member paid $10.0 million for the option to repurchase up to the remaining 40.76% interest in Douglas Ranch for $220.5 million on or before August 18, 2022. The $10.0 million deposit is nonrefundable and there is no additional minimum purchase requirement associated with this option. The $10.0 million will be applied to reduce JDM Member’s purchase price upon exercise of the additional option; however, if the option is not exercised on or before August 18, 2022, JDM Member forfeits the $10.0 million. As of June 30, 2022, the $10.0 million is not held in escrow and the Company has no restrictions on the use of the cash; however, the amount will be included in Accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets until the option is exercised or expires on August 18, 2022.

Trillium Simultaneous with the Douglas Ranch land acquisition, the Company closed on the acquisition of a 50% interest in Trillium Development Holding Company, LLC, for $59.0 million. Trillium Development Holding Company, LLC owns approximately 3,029 acres of land in the greater Phoenix, Arizona area. See Note 2 - Investment in Real Estate and Other Affiliates for additional information.

Dispositions On June 16, 2022, the Company completed the sale of the Outlet Collection at Riverwalk, a 264,080-square-foot outlet center located in downtown New Orleans, Louisiana, for $34.0 million resulting in a gain on sale of $4.0 million, inclusive of $0.5 million in related transaction costs. The gain on sale is included in Gain (loss) on sale or disposal of real estate and other assets, net in the Consolidated Statements of Operations.

On March 30, 2022, the Company completed the sale of its ownership interest in 110 North Wacker for $208.6 million. See Note 2 - Investment in Real Estate and Other Affiliates for additional information.

On December 22, 2021, the Company completed the sale of Century Park, a 63-acre, 1,302,597-square-foot campus with 17 office buildings in the West Houston Energy Corridor, for $25.0 million resulting in a loss on sale of $7.4 million, inclusive of approximately $0.4 million in related transaction costs. The loss on sale is included in Gain (loss) on sale or disposal of real estate and other assets, net in the Consolidated Statements of Operations. This asset was previously impaired during the second quarter of 2021.

On September 16, 2021, the Company completed the sale of The Woodlands Resort, The Westin at The Woodlands and Embassy Suites at Hughes Landing for $252.0 million resulting in a gain on sale of $39.1 million, inclusive of approximately $2.9 million in related transaction costs. The gain on sale is included in Gain (loss) on sale or disposal of real estate and other assets, net in the Consolidated Statements of Operations. Additionally, as part of the sale, the Company repaid $132.3 million of debt directly associated with the properties sold.

On May 7, 2021, the Company completed the sale of Monarch City, a property comprised of approximately 229 acres of undeveloped land in Collin County, Texas, for $51.4 million, resulting in a gain on sale of $21.3 million, inclusive of approximately $1.5 million in related transaction costs. The gain on sale is included in Gain (loss) on sale or disposal of real estate and other assets, net in the Consolidated Statements of Operations.