Note 11 - Variable Interest Entities ("VIE")

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

11. Variable Interest Entities (“VIE”)

Included within the Company’s consolidated operating properties at both March 31, 2021 and December 31, 2020, are 23 and 22 consolidated entities, respectively, that are VIEs, for which the Company is the primary beneficiary. These entities have been established to own and operate real estate property. The Company’s involvement with these entities is through its majority ownership and management of the properties. The entities were deemed VIEs primarily because the unrelated investors do not have substantive kick-out rights to remove the general or managing partner by a vote of a simple majority or less, and they do not have substantive participating rights. The Company determined that it was the primary beneficiary of these VIEs as a result of its controlling financial interest. At March 31, 2021, total assets of these VIEs were $1.1 billion and total liabilities were $96.7 million. At December 31, 2020, total assets of these VIEs were $1.0 billion and total liabilities were $62.1 million.

The majority of the operations of these VIEs are funded with cash flows generated from the properties. The Company has not provided financial support to any of these VIEs that it was not previously contractually required to provide, which consists primarily of funding any capital expenditures, including tenant improvements, which are deemed necessary to continue to operate the entity and any operating cash shortfalls the entity may experience.

All liabilities of these consolidated VIEs are non-recourse to the Company (“VIE Liabilities”). The assets of the unencumbered VIEs are not restricted for use to settle only the obligations of these VIEs. The remaining VIE assets are encumbered by third party non-recourse mortgage debt. The assets associated with these encumbered VIEs (“Restricted Assets”) are collateral under the respective mortgages and are therefore restricted and can only be used to settle the corresponding liabilities of the VIE. The table below summarizes the consolidated VIEs and the classification of the Restricted Assets and VIE Liabilities on the Company’s Condensed Consolidated Balance Sheets as follows (dollars in millions):

	As of March 31, 2021		As of December 31, 2020
Number of unencumbered VIEs		20		19
Number of encumbered VIEs		3		3
Total number of consolidated VIEs		23		22
Restricted Assets:
Real estate, net	$	97.1	$	97.7
Cash and cash equivalents		1.6		1.8
Accounts and notes receivable, net		1.6		1.9
Other assets		1.6		1.1
Total Restricted Assets	$	101.9	$	102.5
VIE Liabilities:
Mortgages payable, net	$	36.2	$	36.5
Operating lease liabilities		5.5		5.5
Other liabilities		55.0		20.1
Total VIE Liabilities	$	96.7	$	62.1