Note 4 - Investments and Advances in Real Estate Joint Ventures

3 Months Ended

Mar. 31, 2013

Investments And Advances In Real Estate Joint Ventures [Text Block]

4. Investments and Advances in Real Estate Joint Ventures

The Company and its subsidiaries have investments in and advances to various real estate joint ventures.  These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. The Company and the joint venture partners have joint approval rights for major decisions, including those regarding property operations.  As such, the Company holds noncontrolling interests in these joint ventures and accounts for them under the equity method of accounting.  The table below presents joint venture investments for which the Company held an ownership interest at March 31, 2013 and December 31, 2012 (in millions, except number of properties):

	As of March 31, 2013											As of December 31, 2012
Venture	Average Ownership Interest			Number of Properties		GLA		Gross Real Estate		The Company's Investment		Average Ownership Interest			Number of Properties		GLA		Gross Real Estate		The Company's Investment
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2)		15.0	%		61		10.7	$	2,733.0	$	170.2		15.0	%		61		10.7	$	2,744.9	$	170.1
Kimco Income Opportunity Portfolio (“KIR”) (2)		45.0	%		58		12.4		1,544.3		140.5		45.0	%		58		12.4		1,543.2		140.3
UBS Programs (“UBS”) (2)(7)*		17.9	%		39		5.6		1,260.1		58.0		17.9	%		40		5.7		1,260.1		58.4
BIG Shopping Centers (2)*		37.9	%		21		3.4		518.4		32.4		37.7	%		22		3.6		547.7		31.3
The Canada Pension Plan Investment Board     (“CPP”) (2)		55.0	%		6		2.4		436.0		148.7		55.0	%		6		2.4		436.1		149.5
Kimco Income Fund (2)(6)		29.8	%		12		1.5		287.3		32.2		15.2	%		12		1.5		287.0		12.3
SEB Immobilien (2)		15.0	%		13		1.8		361.4		1.3		15.0	%		13		1.8		361.2		1.5
Other Institutional Programs (2) (8)	Various				57		2.5		451.6		16.9	Various				58		2.6		499.2		21.3
RioCan		50.0	%		45		9.3		1,349.3		103.5		50.0	%		45		9.3		1,379.3		111.0
Intown (3)		-			138		N/A		844.1		83.1		-			138		N/A		841.0		86.9
Latin America	Various				131		18.0		1,192.2		342.6	Various				131		18.0		1,198.1		334.2
Other Joint Venture Programs (4) (5)	Various				86		13.1		1,819.4		312.8	Various				87		13.2		1,846.7		311.4
Total					667		80.7	$	12,797.1	$	1,442.2					671		81.2	$	12,944.5	$	1,428.2

*  Ownership % is a blended rate

The table below presents the Company’s share of net income/(loss) for the above investments which is included in the Company’s Consolidated Statements of Income in Equity in income of joint ventures, net for the three months ended March 31, 2013 and 2012 (in millions):

	Three months ended March 31,
	2013			2012
KimPru and KimPru II (12)	$	2.0		$	2.0
KIR		7.1			6.0
UBS Programs		0.9			(0.2	)
BIG Shopping Centers (9)		2.0			(0.7	)
CPP		1.5			1.3
Kimco Income Fund		0.7			0.8
SEB Immobilien		0.3			0.1
Other Institutional Programs		0.3			3.0
RioCan		6.2			5.2
Intown		(0.2	)		0.5
Latin America (14)		1.6			2.7
Other Joint Venture Programs (5) (8) (10) (11) (13)		1.7			14.0
Total	$	24.1		$	34.7

(1)   This venture represents four separate joint ventures, with four separate accounts managed by Prudential Real Estate Investors (“PREI”), three of these ventures are collectively referred to as KimPru and the remaining venture is referred to as KimPru II.

(2)   The Company manages these joint venture investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, asset management fees and construction management fees.

(3)   The Company’s share of this investment is subject to fluctuation and is dependent upon property cash flows.

(4)   During the three months ended March 31, 2013, the Company amended one of its Canadian preferred equity investment agreements to restructure the investment as a pari passu joint venture in which the Company holds a noncontrolling interest.  As a result of this transaction, the Company continues to account for its investment in this joint venture under the equity method of accounting and includes this investment in Investments and advances to real estate joint ventures within the Company’s Condensed Consolidated Balance Sheets.

(5)   During the three months ended March 31, 2013, a joint venture in which the Company held a noncontrolling interest sold an operating property to the Company for a sales price of $98.0 million.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  As such, the Company recognized a gain of $22.7 million, before income tax, from the fair value adjustment associated with its original ownership due to a change in control and now consolidates this operating property.

(6)   During the three months ended March 31, 2013, the Company purchased an additional 14.49% interest in Kimco Income Fund for $19.9 million.

(7)   During the three months ended March 31, 2013, UBS sold an operating property to the Company for a sales price of $32.7 million, which was equal to the remaining debt balance.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  As such the Company recognized no gain or loss from the fair value adjustment associated with it’s the Company’s original ownership due to a change in control and now consolidates this operating property.

(8)  During the three months ended March 31, 2013, a joint venture in which the Company held a noncontrolling interest sold an operating property to the Company for a sales price of $14.2 million.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  As such the Company recognized a gain of $0.5 million from the fair value adjustment associated with the Company’s original ownership due to a change in control and now consolidates this operating property.

(9)   During the three months ended March 31, 2013, BIG recognized a gain on early extinguishment of debt of $13.7 million related to a property that was foreclosed on by a third party lender.  The Company’s share of this gain was $2.4 million.

(10) During the three months ended March 31, 2012, three joint ventures in which the Company holds noncontrolling interests sold three properties, in separate transactions, for an aggregate sales price of $180.0 million.  The Company’s share of income related to these transactions was an aggregate gain of  $8.3 million.

(11) During the three months ended March 31, 2012, a joint venture in which the Company holds a noncontrolling interest sold two encumbered operating properties to the Company for an aggregate sales price of $75.5 million.  As a result of this transaction, the Company recognized promote income of $2.6 million.  Additionally, the Company evaluated these transactions pursuant to the FASB’s Consolidation guidance.  As such, the Company recognized a gain of $2.0 million from the fair value adjustment associated with its original ownership due to a change in control and now consolidates these operating properties.

(12) During the three months ended March 31, 2013, KimPru recognized an impairment charge of $3.7 million related to the pending sale of a property to the Company, based on the estimated sales price.  The Company’s share of this impairment charge for the three months ended March 31, 2013 was $0.5 million.

(13) During the three months ended March 31, 2013, a joint venture in which the Company has a noncontrolling interest recognized an impairment charge of $1.8 million related to the pending sale of one property.  The Company’s share of this impairment charge was $0.9 million.

(14) During April 2013, the Company entered into an agreement to sell nine operating properties located throughout Mexico which are held in unconsolidated joint ventures in which the Company has noncontrolling interests.  This transaction is expected to result in a net gain of approximately $53.2 million, after tax, of which the Company’s share is estimated to be approximately $26.6 million.  However, based upon the allocation of the purchase price to the individual properties, three of these properties are expected to result in losses aggregating $4.6 million, of which the Company’s share is estimated to be $2.3 million.  As such, the Company has recorded impairment charges equal to its share of these estimated losses during the three months ended March 31, 2013.

The table below presents debt balances within the Company’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at March 31, 2013 and December 31, 2012 (dollars in millions):

	As of March 31, 2013							As of December 31, 2012
Venture	Mortgages and Notes Payable		Weighted Average Interest Rate			Weighted Average Remaining Term (months)**		Mortgages and Notes Payable		Weighted Average Interest Rate		Weighted Average Remaining Term (months)**
KimPru and KimPru II	$	1,009.2		5.54	%		41.6	$	$1,010.2		5.54%		44.5
KIR		927.5		5.11	%		80.0		914.6		5.22%		78.6
UBS Programs		656.0		5.40	%		35.7		691.9		5.40%		39.1
BIG Shopping Centers		406.3		5.52	%		42.5		443.8		5.52%		45.5
CPP		140.8		5.18	%		28.0		141.5		5.19%		31.0
Kimco Income Fund		160.6		5.45	%		17.8		161.4		5.45%		20.7
SEB Immobilien		243.8		5.11	%		52.3		243.8		5.11%		55.3
RioCan		904.0		5.06	%		41.9		923.2		5.16%		41.2
Intown		612.1		4.48	%		43.2		614.4		4.46%		46.1
Other Institutional Programs		300.7		5.25	%		36.5		310.5		5.24%		39.0
Other Joint Venture Programs		1,577.9		5.73	%		59.4		1,612.2		5.70%		57.8
Total	$	6,938.9						$	7,067.5

** Average Remaining Term includes extension options