Unconsolidated Affiliates and Noncontrolling Interests

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Unconsolidated Affiliates and Noncontrolling Interests

Unconsolidated Affiliates

Although the Company had majority ownership of certain joint ventures during 2019 and 2018, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:


•	the pro forma for the development and construction of the project and any material deviations or modifications thereto;


•	the site plan and any material deviations or modifications thereto;


•	the conceptual design of the project and the initial plans and specifications for the project and any material deviations or modifications thereto;


•	any acquisition/construction loans or any permanent financings/refinancings;


•	the annual operating budgets and any material deviations or modifications thereto;


•	the initial leasing plan and leasing parameters and any material deviations or modifications thereto; and


•	any material acquisitions or dispositions with respect to the project.

As a result of the joint control over these joint ventures, the Company accounts for these investments using the equity method of accounting.

At September 30, 2019, the Company had investments in 24 entities, which are accounted for using the equity method of accounting. The Company's ownership interest in these unconsolidated affiliates ranges from 20.0% to 65.0%. Of these entities, 16 are owned in 50/50 joint ventures.

2019 Activity - Unconsolidated Affiliates

Bullseye, LLC

In September 2018, the Company entered into a joint venture, Bullseye, LLC, to develop a vacant land parcel adjacent to Hamilton Corner in Chattanooga, TN. During January 2019, the joint venture closed on the purchase of the land parcel for a gross purchase price of $3,310. The Company has a 20% membership interest in the joint venture. Additionally, the Company made no initial investment and has no future funding obligations. The unconsolidated affiliate is a variable interest entity ("VIE").

El Paso Outlet Center Holding, LLC, and El Paso Outlet Outparcels, LLC

In August 2019, the Company sold 25% of its interest in The Outlet Shoppes at El Paso, in El Paso, TX, to its existing joint venture partner for total consideration of $27,750. The sales price included $18,525 in related debt. Following the sale, the Company and its joint venture partner both own a 50% interest in The Outlet Shoppes at El Paso. This resulted in the Company deconsolidating this property and recognizing a gain on investment/deconsolidation of $11,174, which was made up of a $3,884 gain on the sale of the Company's 25% interest and a $7,290 gain related to adjusting the Company's remaining 50% share to fair value.

G&I VIII CBL Triangle LLC

In July 2019, the lender foreclosed on the loan secured by Triangle Town Center. In September 2018, the Company wrote down its investment in the unconsolidated 90/10 joint venture to zero.

Hamilton Place Self Storage, LLC

In September 2019, the Company entered into a joint venture, Hamilton Place Self Storage, LLC, to develop a self-storage facility adjacent to Hamilton Place Mall. The Company has a 54% share in the joint venture, and recorded a $187 loss on sale of real estate assets related to land that it contributed to the joint venture. The unconsolidated affiliate is a VIE. See additional information in Variable Interest Entities below. In conjunction with the formation of the joint venture, the unconsolidated affiliate closed on a construction loan. See details below under 2019 Financings.

Parkdale Self Storage, LLC

In May 2019, the Company entered into a 50/50 joint venture, Parkdale Self Storage, LLC, to develop a self-storage facility adjacent to Parkdale Mall. The Company recorded a $433 gain on sale of real estate assets related to land that it contributed to the joint venture. The unconsolidated affiliate is a VIE. See additional information in Variable Interest Entities below. In conjunction with the formation of the joint venture, the unconsolidated affiliate closed on a construction loan. See details below under 2019 Financings.

Vision-CBL Hamilton Place, LLC

In November 2018, the Company entered into a 50/50 joint venture, Vision-CBL Hamilton Place, LLC, to acquire, develop and operate a hotel on a parcel adjacent to Hamilton Place Mall. See Note 15 for further details.

Condensed Combined Financial Statements - Unconsolidated Affiliates

Condensed combined financial statement information of the unconsolidated affiliates is as follows:



	September 30, 2019			December 31, 2018
ASSETS
Investment in real estate assets	$	2,135,627		$	2,097,088
Accumulated depreciation	(741,802		)	(674,275		)
	1,393,825			1,422,813
Developments in progress	27,309			12,569
Net investment in real estate assets	1,421,134			1,435,382
Other assets	150,597			188,521
Total assets	$	1,571,731		$	1,623,903
LIABILITIES
Mortgage and other indebtedness, net	$	1,252,003		$	1,319,949
Other liabilities	44,194			39,777
Total liabilities	1,296,197			1,359,726

OWNERS' EQUITY
The Company	173,340			191,050
Other investors	102,194			73,127
Total owners' equity	275,534			264,177
Total liabilities and owners' equity	$	1,571,731		$	1,623,903



	Total for the Three Months Ended September 30,
	2019		2018
Total revenues	$	52,867	$	54,579
Net income (loss) ⁽¹⁾	$	81,300	$	(85,136	)


(1)	The Company's share of net income (loss) is $(1,759) and $1,762 for the three months ended September 30, 2019 and 2018, respectively.



	Total for the Nine Months Ended September 30,
	2019		2018
Total revenues	$	162,964	$	166,843
Net income (loss) ⁽¹⁾	$	90,303	$	(72,585	)


(1)	The Company's share of net income is $3,421 and $9,869 for the nine months ended September 30, 2019 and 2018, respectively.

Financings - Unconsolidated Affiliates

All of the debt on the properties owned by the unconsolidated affiliates is non-recourse, except for debt secured by Ambassador Infrastructure, Hammock Landing, The Pavilion at Port Orange, The Shoppes at Eagle Point and the self-storage developments adjacent to EastGate Mall, Mid Rivers Mall, Parkdale Mall and Hamilton Place Mall. See Note 12 for a description of guarantees the Operating Partnership has issued related to these unconsolidated affiliates.

2019 Financings

The Company's unconsolidated affiliates had the following loan activity in 2019:

Date

Property

Stated
Interest Rate

Maturity Date

Amount

Financed or

Extended

May

Parkdale Self Storage ⁽¹⁾

5.25%

⁽²⁾

July 2024

6,500

September

Hamilton Place Self Storage ⁽³⁾

LIBOR + 2.75

September 2024

7,002

(1)

Parkdale Self Storage, LLC, a 50/50 joint venture, closed on a construction loan with a total borrowing capacity of up to $6,500 for the development of a climate controlled self-storage facility adjacent to Parkdale Mall in Beaumont, TX. The Company's share of the outstanding balance of the construction loan was $189 at September 30, 2019. The Operating Partnership has a joint and several guaranty with its 50/50 partner. Therefore, the maximum guarantee is 100% of the loan. See Note 12 for more information.


(2)	The interest rate is variable and is the greater of 5.25% or LIBOR + 2.80%.

(3)

Hamilton Place Self Storage, LLC, a 54/46 joint venture, closed on a construction loan with a total borrowing capacity of up to $7,002 for the development of a climate controlled self-storage facility adjacent to Hamilton Place Mall in Chattanooga, TN. There were no draws on the construction loan at September 30, 2019. The Operating Partnership has guaranteed 100% of the construction loan, but it has a back-up guaranty with its joint venture partner for 50% of the construction loan. See Note 12 for more information.

Noncontrolling Interests

Noncontrolling interests consist of the following:



	As of
	September 30, 2019		December 31, 2018
Noncontrolling interests:
Operating Partnership	$	28,279	$	55,917
Other consolidated subsidiaries	8,134		12,111
	$	36,413	$	68,028

Variable Interest Entities

In accordance with the guidance in ASU 2015-02, Amendments to the Consolidation Analysis, and ASU 2016-17, Interests Held Through Related Parties That Are under Common Control, the Operating Partnership and certain of its subsidiaries are deemed to have the characteristics of a VIE primarily because the limited partners of these entities do not collectively possess substantive kick-out or participating rights.

The Company consolidates the Operating Partnership, which is a VIE, for which the Company is the primary beneficiary. The Company, through the Operating Partnership, consolidates all VIEs for which it is the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership is considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether the Company is the primary beneficiary of a VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Company's investment; the obligation or likelihood for the Company or other investors to provide financial support; and the similarity with and significance to the Company's business activities and the business activities of the other investors.

Consolidated VIEs

As of September 30, 2019, the Company had investments in 14 consolidated VIEs with ownership interests ranging from 50% to 92%.

Unconsolidated VIEs

The table below lists the Company's unconsolidated VIEs as of September 30, 2019:



	Investment in Real Estate Joint Ventures and Partnerships		Maximum Risk of Loss
Ambassador Infrastructure, LLC ⁽¹⁾	$	—	$	10,050
Bullseye, LLC	5		5
Continental 425 Fund LLC	7,243		7,243
EastGate Storage, LLC ⁽¹⁾	885		3,250
Hamilton Place Self Storage, LLC ⁽¹⁾	1,463		7,002
Parkdale Self Storage, LLC ⁽¹⁾	1,190		6,500
Self-Storage at Mid Rivers, LLC ⁽¹⁾	844		2,994
Shoppes at Eagle Point, LLC⁽¹⁾	16,268		16,268

(1)

The Operating Partnership has guaranteed all or a portion of the debt of each of the VIEs listed above. See Note 12 for more information.