Investments in and Advances to Joint Ventures

12 Months Ended

Dec. 31, 2022

Equity Method Investments And Joint Ventures [Abstract]

Investments in and Advances to Joint Ventures

The Company’s equity method joint ventures, which are included in Investments in and Advances to Joint Ventures in the Company’s consolidated balance sheet at December 31, 2022, are as follows:


Unconsolidated Real Estate Ventures	Partner	Effective Ownership Percentage	Operating Properties
Dividend Trust Portfolio JV LP	Chinese Institutional Investors	20.0%	10
DDRM Joint Venture	Madison International Realty	20.0	7
RVIP IIIB, Deer Park, IL	Prudential	25.75	1

Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):


	December 31,
	2022			2021
Condensed Combined Balance Sheets
Land	$	212,326		$	378,442
Buildings		643,334			1,092,245
Fixtures and tenant improvements		70,636			123,313
		926,296			1,594,000
Less: Accumulated depreciation		(220,642	)		(441,215	)
		705,654			1,152,785
Construction in progress and land		1,965			5,778
Real estate, net		707,619			1,158,563
Cash and restricted cash		44,809			37,535
Receivables, net		11,671			16,854
Other assets, net		36,272			49,029
	$	800,371		$	1,261,981

Mortgage debt	$	535,093		$	873,336
Notes and accrued interest payable to the Company		2,972			3,331
Other liabilities		41,588			51,473
		579,653			928,140
Accumulated equity		220,718			333,841
	$	800,371		$	1,261,981

Company's share of accumulated equity	$	42,644		$	59,286
Basis differentials		(707	)		2,946
Deferred development fees, net of portion related to the Company's interest		(301	)		(937	)
Amounts payable to the Company		2,972			3,331
Investments in and Advances to Joint Ventures, net	$	44,608		$	64,626


	For the Year Ended December 31,
	2022			2021			2020
Condensed Combined Statements of Operations
Revenues from operations	$	132,494		$	195,559		$	252,946
Expenses from operations:
Operating expenses		35,319			53,391			77,040
Impairment charges		17,550			—			33,240
Depreciation and amortization		46,518			66,618			99,779
Interest expense		34,055			43,379			60,010
Preferred share expense		—			—			15,708
Other income (expense), net		12,303			12,074			13,796
		145,745			175,462			299,573
(Loss) income before gain on disposition of real estate		(13,251	)		20,097			(46,627	)
Gain on disposition of real estate, net		120,097			89,935			9,257
Net income (loss) attributable to unconsolidated joint ventures	$	106,846		$	110,032		$	(37,370	)
Company's share of equity in net income of joint ventures	$	22,262		$	49,417		$	1,109
Basis differential adjustments(A)		5,630			(2,120	)		407
Equity in net income of joint ventures	$	27,892		$	47,297		$	1,516

(a)

The difference between the Company’s share of net income, as reported above, and the amounts included in the Company’s consolidated statements of operations is attributable to the amortization of basis differentials, the recognition of deferred gains, differences in gain (loss) on sale of certain assets recognized due to the basis differentials and other than temporary impairment charges.

The impact of the COVID-19 pandemic on revenues for the Company’s joint ventures is more fully described in Note 2.

Revenues earned by the Company related to all of the Company’s unconsolidated joint ventures and interest income on its preferred interests are as follows (in millions):


	For the Year Ended December 31,
	2022		2021		2020
Revenue from contracts:
Asset and property management fees	$	7.7	$	10.6	$	12.8
Leasing commissions and development fees		1.9		2.2		4.2
		9.6		12.8		17.0
Other:
Interest income(A)		—		—		12.0
Other		1.0		1.7		2.1
		1.0		1.7		14.1
	$	10.6	$	14.5	$	31.1

(A)

Interest income recorded in 2020 related to preferred equity interests in the BRE DDR Joint Ventures, which were transferred or redeemed in the fourth quarter of 2020.

The Company’s joint venture agreements generally include provisions whereby each partner has the right to trigger a purchase or sale of its interest in the joint venture or to initiate a purchase or sale of the properties after a certain number of years or if either party is in default of the joint venture agreements. The Company is not obligated to purchase the interests of its outside joint venture partners under these provisions.

Disposition of Joint Venture Interests

In 2022, the Company acquired its joint venture partner's 80% equity interest in one asset owned by the DDRM Joint Venture (Casselberry Commons, Casselberry, Florida) for $35.6 million and stepped up the previous 20% interest due to change in control. The transaction resulted in Gain on Sale and Change in Control of Interests of $3.3 million (Note 5).

In 2022, the Company sold its 20% interest in the SAU Joint Venture to its partner, the State of Utah, based on a gross asset value of $155.7 million (at 100%). In addition, the Company sold its 50% interest in Lennox Town Center to its partner based on a gross asset value of $77.0 million (at 100%). These transactions resulted in Gain on Sale of Interests of $42.2 million.

In 2021, one of the Company’s unconsolidated joint ventures sold its sole asset, which was a parcel of undeveloped land in Richmond Hill, Ontario. The Company’s share of net proceeds totaled $22.1 million, after accounting for customary closing costs and foreign currency translation but before income tax. The Company recorded an aggregate gain on the transaction of $14.9 million, which included its $2.8 million share of the gain reported by the joint venture, as well as $12.1 million related to the Company’s promoted interest on the disposition of the investment net of the write-off of the accumulated foreign currency translation and contingent estimated income taxes. Subsequent to the transaction, the Company has no other investments outside the United States.

In 2021, the Company acquired the 80% equity interest in six assets owned by the DDRM Joint Venture for $107.2 million and stepped up the previous 20% interest due to change in control, with $73.9 million of mortgage debt related to the properties repaid at closing. The transaction resulted in a Gain on Sale and Change in Control of Interests of $7.2 million (Note 5). In connection with estimating the fair value of the net assets acquired from the DDRM Joint Venture, the fair value of each property was estimated, and the aggregate gross fair value of the properties acquired was estimated to be $134.0 million (at 100%) based on the consideration paid for the partner's interest. The valuation technique used to value the properties was a discounted cash flow analysis for each property. The discounted cash flow analyses used to estimate the fair value of properties acquired involves significant estimates and assumptions, including discount rates, exit capitalization rates and certain market leasing assumptions.

In 2020, the Company sold its 15% interest in the DDRTC Joint Venture to its partner, an affiliate of TIAA-CREF and recorded a Gain on Sale of Joint Venture Interests of $45.6 million in connection with this sale. In addition, in the fourth quarter of 2020, the Company transferred and redeemed its common and preferred equity interests in the BRE DDR Joint Ventures in exchange for the acquisition of certain of the underlying assets resulting in a Loss on Sale of Joint Venture Interests of $0.2 million.

Disposition of Joint Venture Assets

In addition to the transactions above, the Company’s joint ventures sold 16, six and two shopping centers and land parcels for an aggregate sales price of $439.2 million, $135.5 million and $27.7 million, respectively, of which the Company’s share of the gain on sale was $27.0 million, $36.6 million and $1.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.

All transactions with the Company’s equity affiliates are described above.