Investment in Unconsolidated Ventures

6 Months Ended

Jun. 30, 2012

Equity Method Investments and Joint Ventures [Abstract]

As of June 30, 2012, the Company had an aggregate investment of approximately $133.3 million in 18 unconsolidated Real Estate Ventures. The Company formed or acquired interests in these ventures with unaffiliated third parties to develop or manage office properties or to acquire land in anticipation of possible development of office properties. As of June 30, 2012, 15 of the Real Estate Ventures owned 51 office buildings that contain an aggregate of approximately 6.5 million net rentable square feet; two Real Estate Ventures owned four acres of undeveloped parcels of land; and one Real Estate Venture developed a hotel property that contains 137 rooms in Conshohocken, PA.

The Company accounts for its unconsolidated interests in its Real Estate Ventures using the equity method. The Company’s unconsolidated interests range from 20% to 65%, subject to specified priority allocations of distributable cash in certain of the Real Estate Ventures.

The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the historical financial information of the individual Real Estate Ventures. The Company does not record operating losses of the Real Estate Ventures in excess of its investment balance unless the Company is liable for the obligations of the Real Estate Venture or is otherwise committed to provide financial support to the Real Estate Venture.

The following is a summary of the financial position of the Real Estate Ventures as of June 30, 2012 and December 31, 2011 (in thousands):



	June 30, 2012		December 31, 2011
Net property	$	840,292	$	846,643
Other assets	113,449		110,520
Other liabilities	46,225		48,798
Debt	679,026		745,830
Equity	228,490		162,535
Company’s share of equity (Company’s basis)	133,292		115,807

The following is a summary of results of operations of the Real Estate Ventures for the three and six-month periods ended June 30, 2012 and 2011 (in thousands):



	Three-month periods ended June 30,				Six-month periods ended June 30,
	2012		2011		2012		2011
Revenue	$	39,008	$	32,722	$	77,601	$	72,398
Operating expenses	11,000		14,370		27,815		30,544
Interest expense, net	9,840		9,550		21,089		21,673
Depreciation and amortization	13,887		8,487		25,358		18,968
Net income (loss)	4,281		315		3,339		1,213
Company’s share of income (Company’s basis)	838		1,088		882		2,321

As of June 30, 2012, the Company had guaranteed repayment of approximately $0.7 million of loans on behalf of a Real Estate Venture. The Company, from time to time, also provides customary environmental indemnities in connection with construction and permanent financing both for its own account and on behalf of its Real Estate Ventures.

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

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