INVESTMENT IN UNCONSOLIDATED VENTURES

As of March 31, 2014, the Company had an aggregate investment of approximately $180.2 million in 17 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 or residential properties. As of March 31, 2014, 11 of the Real Estate Ventures owned 55 office buildings that contain an aggregate of approximately 5.7 million net rentable square feet; two Real Estate Ventures owned 3.8 acres of undeveloped parcels of land; three Real Estate Venture owned 22.5-acres of land under active development and one Real Estate Venture owned 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 March 31, 2014 and December 31, 2013 (in thousands):



	March 31, 2014			December 31, 2013
Net property	$	988,378		$	965,475
Other assets	144,871			164,152
Other liabilities	45,126			49,442
Debt	720,609			699,860
Equity	367,514			380,325

Company’s share of equity (Company’s basis) (a)	180,237		(b)	180,512

(a) This amount includes the effect of the basis difference between the Company's historical cost basis and the basis recorded at the real estate venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from the impairment of investments, purchases of third party interests in existing Real Estate Ventures and upon the transfer of assets that were previously owned by the Company into a Real Estate Venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the Real Estate Venture level.

(b) Does not include the negative investment balance of one real estate venture totaling $1.2 million as of March 31, 2014, which was included in other liabilities.

The Company held interests in 17 Real Estate Ventures containing an aggregate of approximately 5.7 million net rentable square feet and 19 Real Estate Ventures containing an aggregate of approximately 6.4 million net rentable square feet as of the three-month periods ended March 31, 2014 and 2013, respectively. The following is a summary of results of operations of the Real Estate Ventures in which the Company had interests during these periods (in thousands):



	Three month periods ended March 31,
	2014			2013
Revenue	$	34,385		$	40,889
Operating expenses	13,982			18,266
Interest expense, net	8,100			9,772
Depreciation and amortization	13,598			12,906
Net loss	(1,295		)	(55		)
Company’s share of income (Company’s basis)	242			1,535

Guarantees

As of March 31, 2014, the Company had provided guarantees on behalf of certain real estate ventures, consisting of (i) a $24.7 million payment guaranty on the construction loan for the project being undertaken by evo at Cira; (ii) a $3.2 million payment guarantee on the construction loan for the development project being undertaken by TB-BDN Plymouth Apartments; and (iii) a $0.5 million payment guarantee on a loan provided to PJP VII. In addition, during construction undertaken by Real Estate Ventures, the Company has provided and expects to continue to provide cost overrun and completion guarantees, with rights of contribution among partners in the real estate venture, as well as customary environmental indemnities and guarantees of customary exceptions to nonrecourse provisions in loan agreements. For additional information regarding these real estate ventures, see "Investments in Unconsolidated Ventures" in notes to the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.