INVESTMENT IN VAA

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN VAA

NOTE 2. INVESTMENT IN VAA

The Company accounts for its investment in VAA under the equity method of accounting. Under the equity method of accounting, our net equity in the investment is reflected within the Consolidated Balance Sheets in the caption ‘Investment in VAA’, and our share of the net income or loss from the joint venture is included within the Consolidated Statements of Operations in the caption ‘Equity earnings from VAA’. The joint venture agreements may designate different percentage allocations among investors for profits and losses; however, our recognition of joint venture income or loss generally follows the joint venture’s distribution priorities, which may change upon the achievement of certain investment return thresholds and other agreed upon adjustments.

The following is a summary of the financial position and results of operations of VAA (dollars in thousands):

	For the period ended June 30,
	2020			2019
Balance Sheet
Net real estate assets	$	1,232,160		$	1,247,535
Other assets		57,160			56,474
Debt, net		(834,766	)		(812,010	)
Other liabilities		(270,647	)		(272,716	)
Total equity		(183,907	)		(219,283	)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Results of Operations
Total revenue	$	29,725		$	28,927		$	59,284		$	56,328
Total property, operating, and maintenance expenses		(15,541	)		(14,313	)		(29,282	)		(28,482	)
Interest expense		(14,193	)		(14,799	)		(29,267	)		(29,869	)
Depreciation and Amortization		(7,763	)		(15,523	)		(15,420	)		(30,756	)
Total other expense		(95	)		(327	)		(1,076	)		(1,002	)
Net loss	$	(7,867	)	$	(16,035	)	$	(15,761	)	$	(33,781	)

Below is a reconciliation of our allocation of income or loss from VAA.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
VAA net loss	$	(7,867	)	$	(16,035	)	$	(15,761	)	$	(33,781	)
Adjustments to reconcile to income (loss) from VAA
Interest expense on mezzanine loan		5,264			6,401			11,137			12,490
In-place lease intangibles - amortization expense		—			8,429			—			16,765
Depreciation basis differences		1,133			733			2,402			1,944
Net loss	$	(1,470	)	$	(472	)	$	(2,222	)	$	(2,582	)
Percentage ownership in VAA		50	%		50	%		50	%		50	%
Loss from VAA	$	(735	)	$	(236	)	$	(1,111	)	$	(1,291	)