8.	Equity Investments

The Trust’s equity investments consist of the following at December 31, 2013 and December 31, 2012 (in thousands):


Venture Partner	Equity Investment	Nominal % Ownership at December 31, 2013			December 31, 2013		December 31, 2012

Gancar Trust (1)	Vintage Housing Holdings LLC		75.0	%	$	34,153	$	30,534
Elad Canada Ltd	WRT-Elad One South State Equity LP		50.0	%		—		460
Elad Canada Ltd	WRT-One South State Lender LP		50.0	%		23,661		24,644
Mack-Cali	WRT-Stamford LLC		20.0	%		9,064		8,501
Atrium/Northstar	10 Metrotech Loan LLC		33.3	%		11		10,845
Atrium Holding	RE CDO Management LLC		50.0	%		992		1,779
Freed	Mentor Retail LLC		49.9	%		635		551
Inland/Lexington	Concord Debt Holdings LLC		33.3	%		—		—
Inland/Lexington	CDH CDO LLC		24.8	%		—		—
Inland (2)	Concord Debt Holdings LLC		33.3	%		966		3,974
Inland (2)	CDH CDO LLC		24.8	%		4,215		322
Sealy (1)	Northwest Atlanta Partners LP		60.0	%		7,635		8,104
Sealy (1)	Newmarket GP LLC		68.0	%		—		—
Sealy (1)	Airpark Nashville GP		50.0	%		—		—
Marc Realty (1)	Brooks Building LLC		50.0	%		6,551		7,983
Marc Realty (1)	High Point Plaza LLC		50.0	%		—		2,241
Marc Realty (1)	1701 Woodfield LLC		50.0	%		150		1,977
Marc Realty (1)	Enterprise Center LLC		50.0	%		50		2,679
Marc Realty (1)	Atrium Mall		50.0	%		3,845		—
ROIC	WRT-ROIC Lakeside Eagle LLC		50.0	%		—		—
New Valley/Starwood (3)	Socal Office Portfolio Loan LLC		73.0	%		—		8
New Valley/Witkoff	701 7th WRT Investors LLC		70.5	%		55,259		28,735
Fenway	WRT-Fenway Wateridge LLC		50.0	%		1,898		1,522

					$	149,085	$	134,859

(1)	The Trust has determined that these equity investments are investments in VIEs. The Trust has determined that it is not the primary beneficiary of these VIEs since the Trust does not have the power to direct the activities that most significantly impact the VIEs economic performance.

(2)	Represents the interests acquired from Lexington Realty Trust on May 1, 2012.

(3)	The underlying loan investment was satisfied at par in September 2012.

The following table reflects the activity of the Trust’s equity investments for the year ended December 31, 2013 (in thousands):


Investment	Balance at December 31, 2012		Contributions		Equity Income (loss)			Distributions			Sales Price			Balance at December 31, 2013

Vintage Housing Holdings, LLC (2)	$	30,534	$	—	$	9,174		$	(5,555	)	$	—		$	34,153
WRT-Elad One South State Equity LP (2)		460		2,358		(2,818	)		—			—			—
WRT-One South State Lender LP (2)		24,644		—		4,133			(5,116	)		—			23,661
WRT-Stamford LLC		8,501		—		930			(367	)		—			9,064
10 Metrotech Loan LLC		10,845		—		3,284			(14,118	)		—			11
RE CDO Management LLC		1,779		—		3,709			(4,496	)		—			992
Concord Debt Holdings LLC		—		—		3,072			(3,072	)		—			—
CDH CDO LLC		—		—		1,033			(1,020	)		(13	)		—
Concord Debt Holdings LLC (1)		3,974		—		64			(3,072	)		—			966
CDH CDO LLC (1)		322		—		4,926			(1,020	)		(13	)		4,215
Mentor Retail LLC		551		—		84			—			—			635
701 7th WRT Investors LLC (3)		28,735		25,913		3,424			(2,813	)		—			55,259
WRT-Fenway Wateridge LLC (2)		1,522		193		183			—			—			1,898
Sealy		8,104		—		(469	)		—			—			7,635
Marc Realty		14,880		—		(7,971	)		(158	)		—			6,751
WRT-ROIC Lakeside Eagle LLC		—		25		(25	)		—			—			—
SoCal Office Portfolio Loan LLC		8		—		(2	)		(6	)		—			—
Atrium Mall		—		3,935		(90	)		—			—			3,845


Total	$	134,859	$	32,424	$	22,641		$	(40,813	)	$	(26	)	$	149,085

(1)	Represents the interests acquired from Lexington Realty Trust on May 1, 2012.

(2)	The Trust has elected to report its share of earnings on a one month lag period.

(3)	The Trust has elected to report its share of earnings on a three month lag.

The following table reflects the activity of the Trust’s equity investments for the year ended December 31, 2012 (in thousands):


Investment	Balance at December 31, 2011		Contributions		Equity Income (loss)			Distributions			Sales Price		Balance at December 31, 2012

Vintage Housing Holdings LLC (2)	$	29,887	$	2,067	$	4,603		$	(6,023	)	$	—	$	30,534
WRT-Elad One South State Equity LP (2)		—		2,838		(2,378	)		—			—		460
WRT-One South State Lender LP (2)		10,150		11,213		3,281			—			—		24,644
WRT-Stamford LLC		—		8,036		769			(304	)		—		8,501
10 Metrotech Loan LLC		—		10,915		335			(405	)		—		10,845
RE CDO Management LLC		1,296		550		67			(134	)		—		1,779
Mentor Retail LLC		—		505		46			—			—		551
Concord Debt Holdings LLC		—		—		422			(422	)		—		—
CDH CDO LLC		—		—		1,715			(1,715	)		—		—
701 7th WRT Investors LLC (3)		—		29,025		—			(290	)		—		28,735
WRT-Fenway Wateridge LLC (2)		—		1,522		—			—			—		1,522
CDH CDO LLC (1)		—		2,500		(997	)		(1,181	)		—		322
Sealy		11,348		—		(3,199	)		(45	)		—		8,104
Marc Realty		27,145		11,833		33			(4,116	)		20,015		14,880
WRT-ROIC Lakeside Eagle LLC		7		35		(42	)		—			—		—
WRT-ROIC Riverside LLC		7,883		—		706			(8,589	)				—
SoCal Office Portfolio Loan LLC		72,626		—		9,706			(82,324	)		2,032		8
FII Co-invest LLC		1,800		—		232			—					—
Concord Debt Holdings (1)		—		4,501		(456	)		(71	)		—		3,974


Total	$	162,142	$	85,540	$	14,843		$	(105,619	)	$	22,047	$	134,859

(1)	Represents the interests acquired from Lexington Realty Trust on May 1, 2012.

(2)	The Trust has elected to report its share of earnings on a one month lag period.

(3)	The Trust has elected to report its share of earnings on a three month lag period.

See Note 4 for information relating to 2013 activity with respect to equity investments.

Sullivan Center - There is a basis differential of $11,196,000 between the Trust’s carrying value of its investments in Sullivan Center and the basis reflected at the joint venture level, which is amortized over the life of the related assets. The basis differential primarily relates to a bargain purchase gain recognized at the joint venture level upon acquisition.

Concord - During the years ended December 31, 2013 and 2012, the Trust received cash distributions from Concord Debt Holdings LLC of $3,072,000 and $422,000, respectively. The Trust recognized equity income for the full amount of the distributions. The Trust has suspended losses of $40,493,000 to offset against future equity income from Concord at December 31, 2013.

During the years ended December 31, 2013 and 2012, the Trust received cash distributions from CDH CDO LLC of $1,020,000 and $1,715,000, respectively. The Trust recognized equity income for the full amount of the distribution. The Trust has suspended losses of $19,605,000 to offset against future equity income from CDH CDO LLC at December 31, 2013.

Sealy - On May 30, 2013 the Trust contributed its interest in Newmarket GP and its interest in Airpark Nashville GP to TRS. The Trust’s carrying value of both investments was zero at the time of the contributions and the transaction had no effect on the financial statements of the Trust. On October 7, 2013 the lender foreclosed on the loan that was collateralized by Sealy Airpark Property. On December 2, 2013 the lender foreclosed on the loan that was collateralized by the Sealy Newmarket Property. These transactions had no effect on the financial statements of the Trust.

Sealy Impairments

During 2011 the Trust determined that, as a result of current market conditions, including current occupancy levels, current rental rates and an increase in terminal capitalization rates, the fair value of its equity investments in Sealy were below the carrying values. Accordingly, the Trust assessed whether this decline in value was other-than-temporary. In making this determination, the Trust considered the length of time which the decline has occurred, the length of time before an expected recovery and the lack of any comparable in the market. The Trust determined the fair value of its investments utilizing an unleveraged cash flow methodology and an estimated terminal capitalization rate. The cash flows were then discounted using an estimated market rate. Based on the foregoing, all of which requires significant judgment, the Trust concluded that the declines in value were other-than-temporary, and during 2011 the Trust recorded other-than-temporary impairment charges of $2,900,000, $900,000 and $1,494,000 on its investments in Sealy Northwest Atlanta, Sealy Newmarket, and Sealy Nashville, respectively.

The Trust has determined that the fair value of certain of its equity investments each marginally exceed their carrying values. While the ventures continue to aggressively market available space for lease and work with existing tenants for lease renewal, declines in occupancy could cause impairment of these ventures that could be material to the Trust’s future results of operations.

Marc Realty - On January 1, 2012, the Trust restructured one of its investments (180 North Michigan) and converted its investment from loans receivable ($2,938,000) and preferred equity ($3,923,000) to equity investments ($6,861,000) which is included in contributions in the above table.

On March 1, 2012, the Trust sold to Marc Realty its interest in 3701 Algonquin for $250,000. On May 31, 2012, the Trust sold to Marc Realty its interests in Salt Creek, River Road and Ridgebrook for $0, $1,000,000 and $1,100,000, respectively.

On May 31, 2012, the Trust sold to Marc Realty its interest in the 30 North Michigan property for $10,300,000. The purchase was financed with a $6,550,000 secured promissory note. The note was fully satisfied on August 3, 2012.

Marc Realty Impairments

During the fourth quarter of 2013, the Trust’s equity investments in the Brooks Building, LLC (“223 West Jackson”), High Point Plaza, LLC (“High Point”), 1701 Woodfield, LLC (“1701 Woodfield”), and Enterprise Center, LLC ( individually “Enterprise” and the aforementioned investments collectively the “Marc Investments”) suffered declines in occupancy, increasing competition for tenants, and increasing costs to operate the investments. Additionally, recent discussions related to marketing available space to potential tenants, along with lease renewals with existing tenants, indicated a capital infusion from the Trust would be necessary to upgrade the investments to achieve rental rates in-line with the suburban Chicago, Illinois office market. The factors above along with increasing capital demands and rising cost of capital caused the Trust to reassess its business plan associated with the Marc Investments in the fourth quarter of 2013.

Subsequent to year end the Trust entered into an agreement with Marc Realty, its joint venture partner in these equity investments, to sell its interests in High Point, 1701 Woodfield, Enterprise Center along with its controlling interest in the River City property, located in Chicago, Illinois, which is consolidated, for a gross sales price of $6,000,000. The Trust considered the underlying investment characteristics and negotiations with Marc Realty in allocating the purchase price to the specific assets included in the transaction. Additionally, the Trust granted Marc Realty an option exercisable within two years to acquire its interest in 223 West Jackson for a purchase price ranging from $5,000,000 to $6,600,000. The purchase price for 223 West Jackson is dependent upon when the option is exercised and certain operating characteristics of the investment at the time of exercise.

Based on the factors noted above, the Trust concluded that each of the Marc Investments were other-than-temporarily impaired in the aggregate by $7,687,000 at December 31, 2013, when comparing each of their carrying values of $14,438,000 in the aggregate to each of their fair values of $6,751,000 in the aggregate and a corresponding impairment charge has been included in Equity in income (loss) of equity investments in the Consolidated Statement of Operations and Comprehensive Income (Loss) for the year then ended. The Trust separately tested the River City property for impairment and determined that the carrying value of River City was recoverable at December 31, 2013 when comparing the portion of the gross sales price attributable to the River City property to its carrying value.

SoCal Office Portfolio Loan – On September 28, 2012, the loan held by SoCal Office Portfolio Loan (“SoCal”) was paid off at par. The Trust’s joint venture WRT-SoCal Lender LLC (“SoCal Lender”) which held the equity investment on SoCal received a return of capital distribution of $44,224,000 on its investment from this transaction. The Trust’s allocable share of the distribution was $38,407,000. SoCal acquired the loan on November 4, 2011. Earlier in 2012, SoCal obtained a recourse repurchase facility and received net proceeds of approximately $38,100,000 which was distributed entirely to the Trust in partial redemption of its interest. The SoCal balance sheet consisted of total assets of $13,000 and $97,989,000 at December 31, 2012 and 2011, respectively and total liabilities of $0 and $269,000 as of December 31, 2012 and 2011, respectively. SoCal had net income of $16,892,000 and $366,000 for the years ended December 31, 2012 and 2011, respectively. A majority of the proceeds from the payoff of the loan were distributed in 2012. Remaining funds were utilized to wind up and dissolve SoCal in 2013.

Vintage Housing Holdings LLC - The Trust has made additional investments in the aggregate of $6,779,000 to the Vintage platform during 2012. The venture’s new investments included a $5,500,000 contribution to a planned 345 unit multi-family project in Lynnwood, Washington, a $750,000 contribution to a planned 204-unit multi-family property in Marysville, Washington and $529,000 contribution to complete the acquisition of interests in the general partners of two multifamily properties comprising approximately 490 units located in California and Nevada.

ROIC – Riverside Loan – On September 18, 2012, the loan was paid off at par. The joint venture received a return of capital distribution of $15,600,000 on its investment. The Trust’s allocable share of the distribution was $7,800,000.

Separate Financial Statements for Unconsolidated Subsidiaries

The Trust has determined that for the periods presented in the Trust’s financial statements, certain of its unconsolidated subsidiaries have met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X for which the Trust is required, pursuant to Rule 3-09 of Regulation S-X, to attach separate financial statements as exhibits to its Annual Report on Form 10-K as follows:


Entity	Year(s) determined significant	Exhibit

Concord Debt Holdings LLC	2011	99.1

CDH CDO LLC	2013	99.2

Sealy Northwest Atlanta Partners LP	2011	99.3

Sealy Newmarket General Partnership	2011	99.4

Combined Financial Statements for Unconsolidated Subsidiaries

Pursuant to Rule 4-08(g), the following summarized financial data for unconsolidated subsidiaries includes information for the following entities: Vintage Housing Holdings, LLC, WRT-Elad One South State Equity LP, WRT-Stamford LLC, 10 Metrotech Loan LLC, Mentor Retail LLC, 701 Seventh WRT Investors LLC, WRT-Fenway Wateridge LLC, Brooks Building LLC, High Point Plaza LLC, 1701 Woodfield LLC, Enterprise Center LLC, Atrium Mall LLC and WRT-ROIC Lakeside Eagle LLC.


	For the Year Ended December 31, 2013		For the Year Ended December 31, 2012		For the Year Ended December 31, 2011

Income Statements
Rental Revenue		57,890		70,686		54,600
Interest, dividends and discount accretion		14,538		6,513		3,745
Expenses		43,672		68,286		59,190
Income from continuing operations		28,756		8,913		(845	)

Trust’s share of net income		16,679		6,472		(35	)


	As of December 31, 2013		As of December 31, 2012
Balance Sheets
Investment in real estate		913,894		542,124
Total assets		1,022,352		631,481

Total debt		734,856		401,040
Total liabilities		799,949		463,218
Non controlling interests		34,071		15,997
Trust share of equity		119,304		65,311

The Trust was granted a waiver of the requirements to provide S-X 3-09 financial statements for its equity method joint venture investee WRT – One South State Lender LP (“Lender LP”) by the U.S. Securities and Exchange Commission. Lender LP met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X for 2013 solely due to the transaction as discussed in Note 4.

Lender LP holds a single loan receivable with a face amount of $51,716,000 at December 31, 2013. The loan bears interest at a rate of 15% per annum, requires payments of interest only and matures December 2017. The loan was acquired at a discount to face and the discount is being accreted into income over the life of the loan.

The balance sheets of Lender LP are as follows (in thousands):


	December 31
	2013		2012
Assets
Loan Receivable	$	42,173	$	41,519
Other assets, net		5,028		7,784

Total Assets	$	47,201	$	49,303


Liabilities and Equity
Accounts payable and accrued expenses	$	23	$	427
Other liabilities		—		—

Total Liabilities		23		427

Equity		47,178		48,876

Total Liabilities and Equity	$	47,201	$	49,303

The statements of operations for Lender LP are as follows (in thousands):


	Year Ended December 31
	2013		2012		2011 (1)
Revenue
Interest Income	$	8,506	$	7,378	$	—
Management Fee Income		—		—		—

		8,506		7,378		—

Expenses
General and Administrative		86		127		—
Other expenses		—		—		—

		86		127		—

Other Income and Expense
Other Income		—		—		—

Net Income	$	8,420	$	7,251	$	—

Statement of Cash Flows (in thousands)


	Year Ended December 31
	2013			2012			2011 (1)
Net cash provided by (used in) operating activities	$	879		$	4,967		$	—
Net cash provided by (used in) investment	$	—		$	(21,369	)	$	(20,150	)
Net cash provided by (used in) financing activities	$	(5,952	)	$	21,475		$	20,150
Cash and cash equivalents, end of year	$	—		$	5,073		$	—
Non cash investing and financing activity
Distribution to partners	$	(4,166	)	$	—		$	—

(1)	The year ended December 31, 2011 represents the period December 23, 2011 through December 31, 2011, the period of our ownership.

The Trust was granted a waiver of the requirements to provide S-X 3-09 financial statements for its equity method joint venture investee RE CDO Management LLC (“RE CDO”) by the U.S. Securities and Exchange Commission. RE CDO met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X for 2013 solely due to the transactions as discussed in Note 4.

RE CDO holds a 5.52% interest in (i) a first priority mortgage loan collateralized by land located in Las Vegas, Nevada (the “Land”), which loan bears interest at LIBOR plus 40% with a current pay rate of 7.5% and the balance accruing and compounding and which had an outstanding balance of $21,227,000 at December 31, 2013, and (ii) a second priority mortgage loan collateralized by the Land which bears interest at 10% per annum, all of which accrues, and which had an outstanding balance of $30,401,000 at December 31, 2013. The interest in the loan was acquired for $1,093,000 and RE CDO accounts for this investment on the cost recovery method.

RE CDO also holds the collateral management agreement for a collateralized debt obligation entity that holds loans and loan securities.

The balance sheets of RE CDO are as follows (in thousands):


	December 31
	2013		2012
Assets
Loan Receivable	$	1,033	$	1,070
Other assets, net		965		2,523

Total Assets	$	1,998	$	3,593


Liabilities and Equity
Accounts payable and accrued expenses	$	16	$	36
Other liabilities		—		—

Total Liabilities		16		36

Equity		1,982		3,557

Total Liabilities and Equity	$	1,998	$	3,593

The statements of operations for RE CDO are as follows (in thousands) :


	Year Ended December 31
	2013		2012		2011 (1)
Revenue
Management Fee Income	$	226	$	618	$	324
Interest Income		—		—		—

		226		618		324

Expenses
General and Administrative		290		354		164
Other expenses		1,459		129		67

		1,749		483		231

Other Income and Expense
Gain on sale of assets		8,940		—		—

Net Income	$	7,417	$	135	$	93

Statement of Cash Flows (in thousands)


	Year Ended December 31
	2013			2012			2011 (1)
Net cash provided by (used in) operating activities	$	(7	)	$	292		$	119
Net cash provided by (used in) investment	$	8,940		$	(1,093	)	$	(2,525	)
Net cash provided by (used in) financing activities	$	(8,993	)	$	830		$	2,500
Cash and cash equivalents, end of year	$	63		$	123		$	94

(1)	The year ended December 31, 2011 represents the period from June 28, 2011 through December 31, 2011, the period of our ownership.

The Trust was granted a waiver of the requirements to provide S-X 3-09 financial statements for its equity method joint venture investee SoCal by the U.S. Securities and Exchange Commission. SoCal met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X for 2012 solely due to the early payoff of its sole investment in a loan asset. The proceeds from the loan payoff have been distributed, and SoCal was dissolved in 2013.

The balance sheets of SoCal are as follows (in thousands):


	December 31, 2012
ASSETS
Cash and cash equivalents	$	11
Real estate debt investments		—
Receivables and other assets		2

Total Assets	$	13


LIABILITIES AND MEMBERS’ CAPITAL
Other current liabilities	$	—
Members’ Capital		13

Total Liabilities and Members’ Capital	$	13


Carrying value of the Trust’s investments in the equity investments	$	8

The statements of operations for SoCal are as follows (in thousands):


	For the Year Ended
	December 31, 2012
Interest, dividends and discount accretion	$	25,122

Expenses
Interest		7,794
General and administrative		424
Other expenses		12

Total expenses		8,230


Net income	$	16,892


Trust’s share of net income	$	9,706