Investment in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2011

Investment in Unconsolidated Joint Ventures [Abstract]

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The following information summarizes financial data and principal activities of the Company’s unconsolidated joint ventures. The information included in the following table entitled Summary of Financial Position is as of December 31, 2011 and 2010. The information included in the Summary of Operations table is for the years ended December 31, 2011, 2010 and 2009. Dollars in both tables are in thousands.

		000000		000000		000000		000000		000000			000000			000000			000000
	Total Assets				Total Debt				Total Equity						Company's Investment
SUMMARY OF FINANCIAL POSITION:	2011		2010		2011		2010		2011			2010			2011			2010
CP Venture IV Holdings LLC	$	301,352	$	313,603	$	36,031	$	36,620	$	255,881		$	267,085		$	14,694		$	15,364
Charlotte Gateway Village, LLC		146,854		154,200		83,097		97,030		62,423			54,834			10,333			10,366
CF Murfreesboro Associates		125,668		129,738		98,922		103,378		24,810			24,263			14,421			14,246
Palisades West LLC		124,588		129,378		—		—		81,635			80,767			42,616			42,256
CP Venture LLC entities		102,178		106,066		—		—		99,942			104,067			3,343			3,779
MSREF/ Cousins Terminus 200 LLC		92,421		65,164		68,562		46,169		17,967			13,956			3,593			2,791
CL Realty, L.L.C.		44,481		86,657		1,056		2,663		42,932			82,534			22,413			39,928
Cousins Watkins LLC		56,096		57,184		28,571		28,850		26,893			28,334			16,321			14,850
Temco Associates, LLC		23,653		60,608		2,787		2,929		20,646			57,475			7,363			22,713
EP I LLC		33,343		—		1		—		29,137			—			24,827			—
Crawford Long—CPI, LLC		32,739		34,408		47,631		48,701		(16,137	)		(15,341	)		(6,873	)*		(6,431	)*
Ten Peachtree Place Associates		22,523		20,980		26,192		26,782		(4,145	)		(6,263	)		(3,679	)*		(4,581	)*
Wildwood Associates		21,224		21,220		—		—		21,221			21,216			(1,639	)*		(1,642	)*
TRG Columbus Development Venture, Ltd.		2,450		3,574		—		—		1,857			2,115			31			58
Terminus 200 LLC		789		789		—		—		789			789			—			—
Pine Mountain Builders, LLC		429		1,559		—		896		153			403			632			757
	$	1,130,788	$	1,185,128	$	392,850	$	394,018	$	666,004		$	716,234		$	148,396		$	154,454

		Septe		Septe		Septe		Septe			Septe			Septe			Septe			Septe			Septe
	Total Revenues						Net Income (Loss)									Company's Share of Net Income (Loss)
SUMMARY OF OPERATIONS:	2011		2010		2009		2011			2010			2009			2011			2010			2009
CP Venture IV Holdings LLC	$	31,020	$	31,343	$	32,698	$	4,008		$	3,955		$	4,555		$	1,054		$	1,034		$	1,142
Charlotte Gateway Village, LLC		32,442		31,812		31,276		8,802			7,829			6,997			1,176			1,176			1,176
CF Murfreesboro Associates		13,081		13,785		12,205		547			1,032			1,474			25			280			539
Palisades West LLC		16,230		13,588		12,677		5,858			4,668			5,303			2,858			2,265			2,588
CP Venture LLC entities		19,061		18,394		18,038		8,459			8,899			8,552			860			921			882
MSREF/ Cousins Terminus 200 LLC		6,093		1,873		—		(3,453	)		(1,967	)		—			(693	)		(393	)		—
CL Realty, L.L.C.		9,141		28,013		2,698		(28,508	)		227			(8,500	)		(11,971	)		3,543			(2,552	)
Cousins Watkins LLC		4,831		—		—		42			(1,072	)		—			2,410			—			—
Temco Associates, LLC		653		2,180		1,420		(37,494	)		210			(2,728	)		(15,074	)		104			(1,357	)
EP I LLC		—		—		—		(6	)		—			—			(4	)		—			—
Crawford Long—CPI, LLC		11,904		11,415		11,324		2,404			1,939			1,784			1,199			969			890
Ten Peachtree Place Associates		7,178		7,776		7,436		1,161			981			718			596			506			375
Wildwood Associates		1		55		—		(155	)		(129	)		(133	)		(77	)		(65	)		(67	)
TRG Columbus Development Venture, Ltd.		26		1,091		506		(7	)		783			30			72			473			115
Terminus 200 LLC		—		533		654		1			55			(82,441	)		—			—			(20,954	)
Pine Mountain Builders, LLC		2,931		6,339		2,143		(250	)		(2,541	)		(254	)		(125	)		(1,316	)		(142	)
Other		—		—		—		—			—			(316	)		3			(4	)		(274	)
	$	154,592	$	168,197	$	133,075	$	(38,591	)	$	24,869		$	(64,959	)	$	(17,691	)	$	9,493		$	(17,639	)

* Negative balances are included in Deposits and Deferred Income on the Balance Sheets.

See Note 5 herein for a discussion of impairments taken by the Company on certain of its investments in joint ventures. The Company’s share of income above includes results of operations and any impairments that were recognized at the venture level, and excludes impairments taken at the Company’s ownership level related to its investment in these entities.

CP Venture IV Holdings LLC (“CPV IV”) – See Note 8 for further description related to venture formation and structure. CPV IV was formed in June 2006, and the Company recorded its investment in CPV IV at an amount equal to 11.5% of its original cost basis in the contributed properties. CPV IV wholly owns CP Venture Five LLC which owns five retail properties totaling approximately 1.2 million rentable square feet; three in suburban Atlanta, Georgia, and two in Viera, Florida. In 2010, CP Venture Five LLC refinanced the mortgage note payable secured by The Avenue East Cobb by entering into a note with an original principal of $36.6 million ($36.0 million outstanding as of December 31, 2011) and a fixed interest rate of 4.52%. Principal and interest payments are made based on a 30-year amortization, and the maturity date is December 1, 2017. The assets of CPV IV in the above table include a cash balance of approximately $2.2 million at December 31, 2011.

Charlotte Gateway Village, LLC (“Gateway”) – Gateway is a joint venture between the Company and Bank of America Corporation (“BOA”), which owns and operates Gateway Village, a 1.1 million square foot office building complex in downtown Charlotte, North Carolina. The project is 100% leased to BOA through 2016. Gateway’s net income or loss and cash distributions are allocated to the members as follows: first to the Company so that it receives a cumulative compounded return equal to 11.46% on its capital contributions, second to BOA until it receives an amount equal to the aggregate amount distributed to the Company and then 50% to each member. The Company’s total project return on Gateway is ultimately limited to an internal rate of return of 17% on its invested capital. Gateway has a mortgage note payable with an outstanding balance at December 31, 2011 of $83.1 million, a maturity of December 1, 2016 and an interest rate of 6.41%. The assets of the venture in the above table include a cash balance of approximately $1.6 million at December 31, 2011.

CF Murfreesboro Associates (“CF Murfreesboro”)—CF Murfreesboro is a 50-50 joint venture between the Company and an affiliate of Faison Associates, that owns and operates The Avenue Murfreesboro, a 751,000 square foot retail center in suburban Nashville, Tennessee. The development of the center was financed mainly by a construction loan, with a maximum amount available of $131 million, an interest rate of LIBOR plus 1.15% and an original maturity date of July 20, 2010. In June 2010, the construction loan was modified to extend the maturity date to July 20, 2013, adjust the interest rate to LIBOR plus 3% and decrease the capacity under the loan to $113.2 million. The venture made principal payments of $8.2 million and paid $1 million in fees as part of this modification. Approximately $98.9 million has been drawn on the construction loan as of December 31, 2011, and the venture must make quarterly principal payments based on cash flows from the center, plus an additional annual payment, if necessary, based on a defined debt service coverage ratio. In addition, the Company has a repayment guarantee on the loan of $26.2 million. The assets of the venture in the above table include cash and restricted cash balances of approximately $6.7 million at December 31, 2011.

Palisades West LLC (“Palisades”) – Palisades is a joint venture that was formed with the Company holding a 50% interest, Dimensional Fund Advisors (“DFA”) holding a 25% interest and Forestar (USA) Real Estate Group Inc. (“Forestar”) holding a 25% interest. Palisades owns and operates two office buildings totaling 373,000 square feet in Austin, Texas. One of the buildings contains 216,000 square feet and is 100% leased to DFA. The other building contains 157,000 square feet, is 21% leased to Forestar, 3% leased to Cousins and 73% leased to third parties. The assets of the venture in the above table include a cash balance of approximately $1.2 million at December 31, 2011. Subsequent to December 31, 2011, DFA purchased Forestar’s interest in Palisades. DFA has the option to purchase the Company’s interest in the venture during a certain time period late in 2012 for fair market value.

CP Venture LLC Entities (“CPV”) – See Note 8 for further description related to venture formation and structure. The Company’s effective ownership in CPV is 10.4%. As of December 31, 2011, CPV owned one office building totaling 69,000 rentable square feet and three retail properties totaling approximately 934,000 rentable square feet. The assets of the venture in the above table include a cash balance of approximately $1.8 million at December 31, 2011.

Terminus 200 LLC (“T200”) and MSREF/Cousins Terminus 200 LLC (“MSREF/T200”) – T200 developed and operated a 566,000 square foot office building within the Terminus project in Atlanta, Georgia. The partners of T200 guaranteed the construction loan up to an amount of $17.25 million each, plus any unpaid interest. During 2009, the Company accrued this guarantee amount and recorded impairment charges equal to its full investment in T200. In the second quarter of 2010, the Company paid this guarantee. Concurrently, the Company entered into a transaction where the partner in T200 withdrew, and the Company and Morgan Stanley formed a new venture, MSREF/T200. In connection with this transaction, the Company and Morgan Stanley contributed equity to MSREF/T200, T200 conveyed the office building to MSREF/T200, and the new venture assumed the construction loan. Also in connection with this transaction, the term of the loan was extended to December 31, 2013, the interest rate was adjusted to LIBOR + 2.5%, and the availability under the loan was reduced to $92 million. The Company’s ownership interest in MSREF/T200 is 20%.

CL Realty, L.L.C. (“CL Realty”) – CL Realty is a 50-50 joint venture between the Company and Forestar Realty Inc. As of December 31, 2011, CL Realty, either directly or through investments in joint ventures, owned interests in 14 residential projects, 10 of which were in Texas, one in Georgia and three in Florida. CL Realty sold 445, 330 and 128 lots in 2011, 2010 and 2009, respectively, and 3,141 lots are projected to be developed and/or sold in future periods. The venture also sold 20, 657 and 4 acres of land in 2011, 2010 and 2009, respectively, and has interests in approximately 1,124 remaining acres of land. The assets of the venture in the above table include a cash balance of approximately $797,000 at December 31, 2011. CL Realty has a construction loan secured by a project totaling approximately $1.1 million scheduled to mature in November 2012, which was prepaid in January 2012. CL Realty recorded impairment charges in 2010 and 2009, the Company’s share of which was $2.2 million and $2.6 million, respectively.

During the fourth quarter of 2011, CL Realty adjusted the cash flow projections of each of its assets based on a higher probability that certain assets would be sold in the short term as opposed to being held for development or long-term investment. Based on these cash flow revisions, CL Realty recorded impairment losses in 2011 to record the assets at fair value where undiscounted cash flows were less than their carrying amounts. The Company’s share of the impairment was $13.6 million. In February 2012, CL Realty entered into a contract with its 50% partner, Forestar Realty Inc., to sell all of the venture’s residential projects and the remaining land acreage, with the exception of the Padre Island land holding and the mineral rights related to a certain project. The contract price approximates the adjusted carrying value of the applicable assets, and the venture does not expect a significant gain or loss on this transaction. After this contract closes, CL Realty will own the assets described above, and the Company’s investment in CL Realty is expected to equal approximately $3.4 million.

Cousins Watkins LLC – In 2010, Cousins Watkins LLC was formed between an affiliate of the Company and Watkins Retail Group (“Watkins”) for the purpose of owning and operating four retail centers in Tennessee and Florida. Watkins contributed the properties to the venture, and the Company contributed cash of approximately $14.9 million. Upon formation, the venture obtained four mortgage loans with a total borrowing capacity of $33.5 million, with $28.6 million outstanding at December 31, 2011. The loans bear interest at LIBOR plus a spread ranging from 2.65% to 2.85%. The loans mature January 1, 2016 and may be extended for two, one-year terms, provided certain conditions are met. The Company guaranteed 25% of two of these loans, the maximum amount of which is approximately $4.1 million. The Company assessed the fair value of these guarantees as $40,750. The guarantees will be released if certain metrics at the centers are achieved. The Company receives a preferred return on operating cash flows and is entitled to receive proceeds from capital transactions that equate to a 16% return on its invested capital, prior to Watkins receiving any distributions from capital transactions. The assets of the venture in the above table include cash and restricted cash balances of approximately $513,000 at December 31, 2011.

Temco Associates, LLC (“Temco”) – Temco is a 50-50 joint venture between the Company and Forestar Realty Inc. As of December 31, 2011, Temco owned four single-family residential communities in Georgia with 1,513 remaining lots projected to be developed and/or sold. Temco sold 11 lots in 2011, two lots in 2010, and no lots in 2009. Temco sold 19 acres of land in 2011, did not sell any land in 2010 and sold 42 acres of land during 2009. The venture has interests in approximately 5,800 remaining acres of land. Temco has debt of $2.8 million secured by a golf course at one of its residential developments. This debt matures in May 2012 and carries an interest rate of LIBOR plus 6.5%. In 2009, Temco recorded impairment charges on certain of its residential properties, the Company’s share of which was $631,000.

During the fourth quarter of 2011, Temco adjusted the cash flow projections of each of its assets based on a higher probability that certain assets would be sold in the short term as opposed to being held for development or long-term investment. Based on these cash flow revisions, Temco recorded impairment losses in 2011 to record the assets at fair value where the undiscounted cash flows were less than their carrying amounts. The Company’s share of the impairment losses was $14.6 million. In February 2012, Temco entered into a contract with its 50% partner, Forestar Realty Inc., to sell all of the venture’s residential projects and the remaining land acreage, with the exception of tracts of land in Paulding County, Georgia and the Bentwater Links golf course and related debt. The contract price approximates the adjusted carrying value of the applicable assets, and the venture does not expect a significant gain or loss on this transaction. After this contract closes, the Company’s investment in Temco is expected to equal approximately $2.9 million.

EP I LLC (“EP I”)—On June 28, 2011, EP I was formed between the Company, with a 75% ownership interest, and Lion Gables Realty Limited Partnership (“Gables”), with a 25% ownership interest, for the purpose of developing and operating Emory Point, the first phase of a mixed-use property in Atlanta, Georgia. Operating cash flows and proceeds from capital transactions of EP I are allocated to the partners pro rata based on their percentage ownership interests. Upon formation, the Company contributed approximately $8.1 million in cash and $6.2 million in predevelopment assets, and Gables contributed a total of approximately $3.8 million in cash and other assets. The Company anticipates it will make approximately $6.5 million in additional cash contributions to the venture subsequent to December 31, 2011 for project development. Upon formation, EP I also entered into a construction loan agreement, secured by the project, to provide for up to $61.1 million to fund construction. The venture may select from two interest rate options, as defined in the loan agreement, which are based on floating-rate indices plus a spread. The loan matures June 28, 2014 and may be extended for two, one-year periods if certain conditions are met. The Company and Gables guarantee up to approximately $11.5 million and $3.8 million of the construction loan, respectively. These guarantees may be eliminated after project completion, based on certain conditions.

Crawford Long—CPI, LLC (“Crawford Long”) – Crawford Long is a 50-50 joint venture between the Company and Emory University and owns the Emory University Hospital Midtown Medical Office Tower, a 358,000 square foot medical office building located in Midtown Atlanta, Georgia. Crawford Long has a mortgage note payable with an outstanding balance of $47.6 million at December 31, 2011, a maturity of June 1, 2013 and an interest rate of 5.9%. Upon closing, the net proceeds from the mortgage note were distributed to the partners in accordance with the operating agreement. The amounts distributed to the Company were greater than the Company’s investment balance which created negative equity. The assets of the venture in the above table include a cash balance of approximately $2.3 million at December 31, 2011.

Ten Peachtree Place Associates (“TPPA”) – TPPA is a 50-50 joint venture between the Company and a wholly-owned subsidiary of The Coca-Cola Company, and owns Ten Peachtree Place, a 260,000 square foot office building located in midtown Atlanta, Georgia. TPPA has a mortgage note payable with an outstanding balance of $26.2 million as of December 31, 2011, a maturity of April 1, 2015 and an interest rate of 5.39%. Upon closing, the net proceeds from the mortgage note were distributed to the partners in accordance with the operating agreement. The amounts distributed to the Company were greater than the Company’s investment balance which created negative equity. The assets of the venture in the above table include cash and restricted cash balances of approximately $753,000 at December 31, 2011.

Through August 1, 2011, TPPA historically distributed cash flows from operating activities to the partners up to the additional capital contributions made by the partners over time plus 8% interest. After August 1, 2011, cash flows are distributed 15% to the Company and 85% to its partner until TPPA distributes a total of $15.3 million to the partners. Thereafter, each partner is entitled to receive 50% of the cash flows.

Wildwood Associates (“Wildwood”) – Wildwood is a 50-50 joint venture between the Company and IBM which owns approximately 36 acres of undeveloped land in Wildwood Office Park in suburban Atlanta, Georgia. At December 31, 2011, the Company’s investment in Wildwood was a credit balance of $1.6 million. This credit balance resulted from cumulative distributions from Wildwood over time that exceeded the Company’s basis in its contributions, and essentially represents deferred gain not recognized at venture formation. This credit balance will decline as the venture’s remaining land is sold. The Company does not have any obligation to fund Wildwood’s working capital needs.

TRG Columbus Development Venture, Ltd. (“TRG”) – TRG is 40% owned by 50 Biscayne Ventures, LLC (“Biscayne”), and 60% owned by The Related Group of Florida (“Related”). Biscayne is the limited partner in the venture and recognizes 40% of the income, after a preferred return to each partner on their equity investment and return of capital. Biscayne is 88.25% owned by the Company, and is therefore consolidated by the Company, with the results of operations for the remaining 11.75% interest recorded in noncontrolling interest. TRG constructed a 529-unit condominium project in Miami, Florida. All of the condominium unit sales have closed, although TRG financed the sale of five of these units, for which full profit recognition under accounting guidance has not occurred. The majority of the proceeds from the sales have been distributed to the partners. The assets of the venture in the above table include cash and restricted cash balances of approximately $722,000 at December 31, 2011.

Pine Mountain Builders, LLC (“Pine Mountain Builders”) – Pine Mountain Builders is a 50-50 joint venture between the Company and Fortress Construction Company that constructs homes at three of the Company’s residential communities. During 2011, 2010 and 2009, Pine Mountain Builders sold 8, 14 and 4 homes, respectively. In 2010, Pine Mountain Builders recorded an impairment charge on certain of its assets, the Company’s share of which was approximately $1.5 million.

Additional Information – During the development or construction of an asset, the Company and its partners may be committed to provide funds pursuant to a development plan. However, in general, the Company does not have any obligation to fund the working capital needs of its unconsolidated joint ventures. The partners may elect in their discretion to fund cash needs if the venture required additional funds to effect re-leasing or had other specific needs. Additionally, the Company generally does not guarantee the outstanding debt of any of its unconsolidated joint ventures, except for customary “non-recourse carve-out” guarantees of certain mortgage notes and the CF Murfreesboro, Watkins and EP I guarantees discussed in the related sections above.

The Company recognized $10.1 million, $10.4 million, and $8.9 million of development, leasing, and management fees, including salary and expense reimbursements, from unconsolidated joint ventures in 2011, 2010 and 2009, respectively. See Note 2, Fee Income, for a discussion of the accounting treatment for fees and reimbursements from unconsolidated joint ventures.