Investments in Partially Owned Entities

12 Months Ended

Dec. 31, 2010

Investments in Partially Owned Entities [Abstract]

Investments in Partially Owned Entities

6. Investments in Partially Owned Entities

The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following tables and information summarize the Company’s investments in partially owned entities as of December 31, 2010 (amounts in thousands except for project and apartment unit amounts):

	Consolidated
	Development Projects (VIEs)
	Held for and/or Under Development		Completed, Not Stabilized (4)			Completed and Stabilized			Other			Total
Total projects (1)		—		1			4			19			24
Total apartment units (1)		—		490			1,302			3,440			5,232
Balance sheet information at 12/31/10 (at 100%):
ASSETS
Investment in real estate	$	44,006	$	257,747		$	390,465		$	438,329		$	1,130,547
Accumulated depreciation		—		—			(18,471	)		(124,347	)		(142,818	)
Investment in real estate, net		44,006		257,747			371,994			313,982			987,729
Cash and cash equivalents		877		1,288			7,384			11,581			21,130
Deposits – restricted		1,115		922			3,205			8			5,250
Escrow deposits – mortgage		—		—			222			2,321			2,543
Deferred financing costs, net		—		2,800			412			505			3,717
Other assets		339		268			308			143			1,058
Total assets	$	46,337	$	263,025		$	383,525		$	328,540		$	1,021,427
LIABILITIES AND EQUITY
Mortgage notes payable	$	18,342	$	141,741		$	275,348		$	314,535		$	749,966
Accounts payable & accrued expenses		346		2,215			1,070			1,259			4,890
Accrued interest payable		1,294		521			605			1,531			3,951
Other liabilities		1,617		1,568			910			1,001			5,096
Security deposits		—		1,021			955			1,392			3,368
Total liabilities		21,599		147,066			278,888			319,718			767,271
Noncontrolling Interests – Partially Owned Properties		3,418		5,025			4,278			(4,730	)		7,991
Accumulated other comprehensive (loss)		—		(1,322	)		—			—			(1,322	)
EQR equity		21,320		112,256			100,359			13,552			247,487
Total equity		24,738		115,959			104,637			8,822			254,156
Total liabilities and equity	$	46,337	$	263,025		$	383,525		$	328,540		$	1,021,427
Debt – Secured (2):
EQR Ownership (3)	$	18,342	$	141,741		$	275,348		$	252,857		$	688,288
Noncontrolling Ownership		—		—			—			61,678			61,678
Total (at 100%)	$	18,342	$	141,741		$	275,348		$	314,535		$	749,966

	Consolidated
	Development Projects (VIEs)									Other			Total
	Held for and/or Under Development			Completed, Not Stabilized (4)			Completed and Stabilized
Operating information for the year ended 12/31/10 (at 100%):
Operating revenue	$	4		$	6,344		$	25,607		$	55,928		$	87,883
Operating expenses		758			3,458			9,370			19,906			33,492
Net operating (loss) income		(754	)		2,886			16,237			36,022			54,391
Depreciation		—			—			12,239			14,882			27,121
General and administrative/other		51			—			127			92			270
Impairment		8,959			—			—			—			8,959
Operating (loss) income		(9,764	)		2,886			3,871			21,048			18,041
Interest and other income		23			—			10			30			63
Other expenses		(493	)		—			—			(548	)		(1,041	)
Interest:
Expense incurred, net		(925	)		(2,872	)		(6,596	)		(20,576	)		(30,969	)
Amortization of deferred financing costs		—			—			(753	)		(238	)		(991	)
(Loss) income before income and other taxes and discontinued operations		(11,159	)		14			(3,468	)		(284	)		(14,897	)
Income and other tax (expense) benefit		(31	)		—			—			(5	)		(36	)
Net loss on sales of land parcels		(234	)		—			—			—			(234	)
Net gain on sales of discontinued operations		711			—			—			34,842			35,553
Net (loss) income	$	(10,713	)	$	14		$	(3,468	)	$	34,553		$	20,386

(1) Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed.

(2) All debt is non-recourse to the Company with the exception of $14.0 million in mortgage debt on one development project.

(3) Represents the Company’s current economic ownership interest.

(4) Projects included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing.

During the year ended December 31, 2010, the Company acquired the 75% equity interest it did not own in seven previously unconsolidated properties containing 1,811 apartment units in exchange for an approximate $30.0 million payment to its partner. In addition, the Company repaid the net $70.0 million mortgage loan, which was to mature on May 1, 2010, concurrent with closing using proceeds drawn from the Company’s line of credit. The Company also sold its 25% equity interest in the remaining 24 unconsolidated properties containing 5,635 apartment units in exchange for an approximate $25.4 million payment from its partner and the related $264.8 million in non-recourse mortgage debt was extinguished by the partner at closing.

On December 29, 2010, the Company admitted an 80% institutional partner to an entity owning a developable land parcel in Florida in exchange for $11.7 million in cash and retained a 20% equity interest. This land parcel is now unconsolidated. Total project cost is approximately $76.1 million and construction is expected to start in the first quarter of 2011. The Company is responsible for constructing the project and has given certain construction cost overrun guarantees.

The Company is the controlling partner in various consolidated partnership properties and development properties having a noncontrolling interest book value of $8.0 million at December 31, 2010. The Company has identified its development partnerships as VIEs as the Company provides substantially all of the capital for these ventures (other than third party mortgage debt, if any) despite the fact that each partner legally owns 50% of each venture. The Company is the primary beneficiary as it exerts the most significant power over the ventures, absorbs the majority of the expected losses and has the right to receive a majority of the expected residual returns. The assets net of liabilities of the Company’s VIEs are restricted in their use to the specific VIE to which they relate and are not available for general corporate use. The Company does not have any unconsolidated VIEs.