Real Estate Partnership

9 Months Ended

Sep. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

REAL ESTATE PARTNERSHIP

REAL ESTATE PARTNERSHIP

We have a joint venture arrangement (the “Partnership”) with affiliates of a discretionary fund created and advised by ING Clarion Partners (“Clarion”). We own 30% of the equity in the Partnership and Clarion owns 70%. We hold a general partnership interest, however, Clarion also holds a general partnership interest and has substantive participating rights. We cannot make significant decisions without Clarion’s approval. Accordingly, we account for our interest in the Partnership using the equity method. As of September 30, 2014, the Partnership owned six retail real estate properties. We are the manager of the Partnership and its properties, earning fees for acquisitions, dispositions, management, leasing, and financing. Intercompany profit generated from fees is eliminated in consolidation. We also have the opportunity to receive performance-based earnings through our Partnership interest. Accounting policies for the Partnership are similar to accounting policies followed by the Trust. The Partnership is subject to a buy-sell provision which is customary for real estate joint venture agreements and the industry. Either partner may initiate this provision at any time, which could result in either the sale of our interest or the use of available cash or borrowings to acquire Clarion’s interest.

The following tables provide summarized operating results and the financial position of the Partnership:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
	(In thousands)
OPERATING RESULTS
Revenue	$	4,434	$	4,642	$	13,921	$	14,215
Expenses
Other operating expenses	1,158		1,321		4,658		4,456
Depreciation and amortization	1,304		1,369		4,381		4,099
Interest expense	617		840		2,237		2,523
Total expenses	3,079		3,530		11,276		11,078
Net income before gain on sale of real estate	1,355		1,112		2,645		3,137
Gain on sale of real estate	14,507		—		14,507		—
Net income	$	15,862	$	1,112	$	17,152	$	3,137
Our share of net income before gain on sale of real estate in real estate partnership	$	446	$	381	$	909	$	1,065
Our share of gain on sale of real estate	$	4,401	$	—	$	4,401	$	—

	September 30,		December 31,
	2014		2013
	(In thousands)
BALANCE SHEETS
Real estate, net	$	149,955	$	170,867
Cash	2,515		2,210
Other assets	6,020		5,668
Total assets	$	158,490	$	178,745
Mortgages payable	$	34,385	$	56,922
Other liabilities	3,169		4,100
Partners’ capital	120,936		117,723
Total liabilities and partners’ capital	$	158,490	$	178,745
Our share of unconsolidated debt	$	10,316	$	17,077
Our investment in real estate partnership	$	32,717	$	32,264

On June 5, 2014, the Partnership repaid an $11.9 million mortgage loan secured by one of its properties at par prior to the original maturity date of July 5, 2014. The partners made additional capital contributions totaling $11.9 million to repay the mortgage loan, of which our contribution was $3.6 million.

On July 24, 2014, the Partnership sold the fee interest in Pleasant Shops in Weymouth, Massachusetts for a sales price of$34.3 million, resulting in a gain on sale of$14.5 million.Our share of the gain was$4.4 million. The partners received distributions totaling$32.8 million as a result of the sale, of which our distribution was $10.4 million.

On September 2, 2014, the Partnership repaid a $10.5 million mortgage loan secured by one of its properties at par prior to the original maturity date of December 1, 2014. The partners made additional capital contributions totaling $10.5 million to repay the mortgage loan, of which our contribution was $3.2 million.