Investments in and Advances to Joint Ventures

12 Months Ended

Dec. 31, 2023

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, 2023, 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	2
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,
	2023			2022
Condensed Combined Balance Sheets
Land	$	180,588		$	212,326
Buildings		558,585			643,334
Fixtures and tenant improvements		58,626			70,636
		797,799			926,296
Less: Accumulated depreciation		(187,557	)		(220,642	)
		610,242			705,654
Construction in progress and land		1,616			1,965
Real estate, net		611,858			707,619
Cash and restricted cash		41,250			44,809
Receivables, net		9,847			11,671
Other assets, net		25,498			36,272
	$	688,453		$	800,371

Mortgage debt	$	464,255		$	535,093
Notes and accrued interest payable to the Company		2,627			2,972
Other liabilities		36,279			41,588
		503,161			579,653
Accumulated equity		185,292			220,718
	$	688,453		$	800,371

Company's share of accumulated equity	$	35,782		$	42,644
Basis differentials		1,099			(707	)
Deferred development fees, net of portion related to the Company's interest		(136	)		(301	)
Amounts payable to the Company		2,627			2,972
Investments in and Advances to Joint Ventures, net	$	39,372		$	44,608


	For the Year Ended December 31,
	2023			2022			2021
Condensed Combined Statements of Operations
Revenues from operations	$	92,479		$	132,494		$	195,559
Expenses from operations:
Operating expenses		23,903			35,319			53,391
Impairment charges		—			17,550			—
Depreciation and amortization		32,578			46,518			66,618
Interest expense		25,601			34,055			43,379
Other (income) expense, net		10,467			12,303			12,074
		92,549			145,745			175,462
(Loss) income before gain on disposition of real estate		(70	)		(13,251	)		20,097
Gain on disposition of real estate, net		21,316			120,097			89,935
Net income attributable to unconsolidated joint ventures	$	21,246		$	106,846		$	110,032
Company's share of equity in net income of joint ventures	$	4,581		$	22,262		$	49,417
Basis differential adjustments(A)		1,996			5,630			(2,120	)
Equity in net income of joint ventures	$	6,577		$	27,892		$	47,297

(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 and differences in gain (loss) on sale of certain assets recognized due to the basis differentials.

The impact of the COVID-19 pandemic on revenues in 2021 for the Company’s joint ventures is more fully described in Note 1.

Revenues earned by the Company related to all of the Company’s unconsolidated joint ventures are as follows (in millions):


	For the Year Ended December 31,
	2023		2022		2021
Revenue from contracts:
Asset and property management fees	$	5.7	$	7.7	$	10.6
Leasing commissions and development fees		0.4		1.9		2.2
		6.1		9.6		12.8
Other		0.7		1.0		1.7
	$	6.8	$	10.6	$	14.5

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 Assets

In addition to the transactions below, the Company’s joint ventures sold five, 16 and six shopping centers and land parcels for an aggregate sales price of $112.2 million, $439.2 million and $135.5 million, respectively, of which the Company’s share of the gain on sale was $6.7 million, $27.0 million and $36.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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 Change in Control of Interests of $3.3 million (Note 2).

In 2022, the Company sold its 20% interest in the SAU Joint Venture to its partner 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. In 2023, the income tax contingencies were resolved and the Company recorded a Gain on Sale

and Change in Control of Interests of $3.7 million. 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. 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.

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