INVESTMENTS IN PARTNERSHIPS

The following table presents summarized financial information of the equity investments in our unconsolidated partnerships as of June 30, 2018 and December 31, 2017:



(in thousands of dollars)	June 30, 2018			December 31, 2017
ASSETS:
Investments in real estate, at cost:
Operating properties	$	565,907		$	612,689
Construction in progress	370,051			293,102
Total investments in real estate	935,958			905,791
Accumulated depreciation	(204,723		)	(202,424		)
Net investments in real estate	731,235			703,367
Cash and cash equivalents	33,017			26,158
Deferred costs and other assets, net	31,950			34,345
Total assets	796,202			763,870
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable, net	510,820			513,139
FDP Term Loan, net	247,645			—
Other liabilities	41,882			37,971
Total liabilities	800,347			551,110
Net investment	(4,145		)	212,760
Partners’ share	(2,330		)	106,886
PREIT’s share	(1,815		)	105,874
Excess investment⁽¹⁾	14,121			13,081
Net investments and advances	$	12,306		$	118,955


Investment in partnerships, at equity	$	106,945		$	216,823
Distributions in excess of partnership investments	(94,639		)	(97,868		)
Net investments and advances	$	12,306		$	118,955

_________________________


⁽¹⁾	Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the unconsolidated partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in income of partnerships.”

We record distributions from our equity investments using the nature of the distribution approach.

The following table summarizes our share of equity in income of partnerships for the three and six months ended June 30, 2018 and 2017:



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands of dollars)	2018			2017			2018			2017
Real estate revenue	$	23,890		$	29,526		$	49,901		$	57,694
Operating expenses:
Property operating and other expenses	(7,524		)	(8,413		)	(15,705		)	(17,115		)
Interest expense	(5,834		)	(5,433		)	(11,568		)	(10,806		)
Depreciation and amortization	(4,880		)	(6,800		)	(9,869		)	(12,655		)
Total expenses	(18,238		)	(20,646		)	(37,142		)	(40,576		)
Net income	5,652			8,880			12,759			17,118
Partners’ share	(3,089		)	(4,755		)	(6,991		)	(9,246		)
PREIT’s share	2,563			4,125			5,768			7,872
Amortization of and adjustments to excess investment, net	8			29			(59		)	18
Equity in income of partnerships	$	2,571		$	4,154		$	5,709		$	7,890

Dispositions

In February 2018, a partnership in which we hold a 50% ownership share sold its office condominium interest in 907 Market Street in Philadelphia, Pennsylvania for $41.8 million. The partnership recorded a gain on sale of $5.5 million, of which our share was $2.8 million, which is recorded in gain on sale of real estate by equity method investee in the accompanying consolidated statement of operations. The partnership distributed to us proceeds of $19.7 million in connection with this transaction.

Term Loan Activity

In January 2018, we along with The Macerich Company (“Macerich”), our partner in the Fashion District Philadelphia redevelopment project, entered into a $250.0 million term loan (the “FDP Term Loan”). We own a 50% partnership interest in Fashion District Philadelphia. The FDP Term Loan matures in January 2023, and bears interest at a variable rate of LIBOR plus 2.00%. PREIT and Macerich have secured the FDP Term Loan by pledging their respective equity interests in the entities that own Fashion District Philadelphia. The entire $250.0 million available under the FDP Term Loan was drawn during the first quarter of 2018, and we received an aggregate of $123.0 million as distributions of our share of the draws.

Mortgage Activity

In February 2018, the mortgage loan secured by Pavilion at Market East in Philadelphia, Pennsylvania was amended and extended to February 2021 and bears interest at a variable rate of LIBOR plus 2.85%. We own a 40% partnership interest in Pavilion at Market East, which owns non-operating land held for development.

In March 2018, the unconsolidated partnership that owns Gloucester Premium Outlets in Blackwood, New Jersey, in which we own a 25% partnership interest, entered into a $86.0 million interest only mortgage loan secured by the property, with an interest rate of LIBOR plus 1.50% and a maturity date of March 2022, with one option of the unconsolidated partnership to extend by 12 months. The proceeds were used to repay the existing $84.1 million mortgage loan plus accrued interest.

Significant Unconsolidated Subsidiary

We have a 50% ownership interest in Lehigh Valley Associates L.P. (“LVA”), which met the definition of a significant unconsolidated subsidiary for the year ended December 31, 2016. LVA did not meet the definition of a significant subsidiary as of or for the year ended December 31, 2017. The financial information of LVA is included in the amounts above. Summarized balance sheet information as of June 30, 2018 and December 31, 2017, and summarized statement of operations information for the three and six months ended June 30, 2018 and 2017 for this entity, which is accounted for using the equity method, are as follows:



	As of
(in thousands of dollars)	June 30, 2018		December 31, 2017
Summarized balance sheet information
Total assets	$	50,752	$	43,850
Mortgage loan payable, net	197,139		199,451



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands of dollars)	2018			2017			2018			2017
Summarized statement of operations information
Revenue	$	8,472		$	8,647		$	17,604		$	17,456
Property operating expenses	(2,124		)	(2,582		)	(4,529		)	(4,484		)
Interest expense	(2,052		)	(1,861		)	(4,097		)	(3,731		)
Net income	3,616			3,059			7,642			7,262
PREIT’s share of equity in income of partnership	1,808			1,529			3,821			3,631