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Investment in Joint Ventures
 9 Months Ended
Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Investment in Joint Ventures Investment in Joint Ventures
Joint Venture Transactions
In the third quarter of 2023, we formed the Core JV by contributing 10 properties included in our Same Store reporting segment located in Philadelphia, Washington, D.C. area, Denver area, Oceanside, and Kendall. The Core JV, in which we retain a 53% interest, closed with respect to (i) eight of the properties in July 2023, (ii) one property in August 2023, and (iii) one property in September 2023. The 10 properties, with a total fair value of $1.1 billion and a carrying value of $373.3 million, were contributed to the Core JV subject to $644.4 million of non-recourse property debt, which represents a non-cash financing activity during the period. In advance of the joint venture closing, AIR placed $611.4 million in new non-recourse property debt, which was subsequently contributed to the joint venture. As a result of the transaction, AIR received $201.9 million in cash and recognized a gain of $698.8 million, including the measurement of the fair value of our interest in the Core JV during the three months ended September 30, 2023. AIR will earn various fees for providing property management, construction, and corporate services to the joint venture.
Additionally, during the third quarter of 2023, AIR and our joint venture partner increased the investment in the Core JV to fund the joint venture's acquisition of an eleventh property, a 456-unit property located in Bethesda, Maryland. The Core JV funded the acquisition with $155.0 million in new debt, and capital contributions to the joint venture of $95.0 million, for a purchase price of $250.0 million.
In addition, during the second quarter of 2023, we formed the Value-Add JV by contributing the Huntington Gateway property, a 443-unit property located in Virginia. AIR is the general partner and retains legal ownership of 30%, and AIR will receive 50% of the net cash flows from operations, and various fees for providing property management, construction, and corporate services to the joint venture. We recognized a gain of $0.5 million during the nine months ended September 30, 2023 in connection with this transaction.
Unconsolidated Joint Ventures
As of September 30, 2023, AIR has equity investments in three significant unconsolidated joint ventures: the Core JV, the Value-Add JV, and the Virginia JV (collectively, the "Joint Venture Entities"). We account for these joint ventures utilizing the equity method of accounting and our ownership interests meet the definition of a VIE. However, we are not the primary beneficiary and do not consolidate these entities.
Virginia JVValue-Add JV (1)Core JV
Initial formation dateOctober 2021June 2023July 2023
AIR Ownership20%30%53%
Outside Entities Ownership80%70%47%
Number of Apartment Communities3111
Apartment Units1,7484433,549
(1)A global asset manager acquired a 70% legal ownership in the Huntington Gateway property, but AIR will receive 50% of the net cash flows from operations, and various fees for providing property management, construction, and corporate services to the joint venture.
The carrying value of AIR's investment in each joint venture is included in investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets. AIR's exposure to the obligations of the VIEs is limited to the carrying value of the limited partnership interests and AIR's interest of the joint ventures' guarantor non-recourse liabilities. The following table summarizes certain relevant information with respect to our investments in unconsolidated joint ventures (in thousands):
September 30, 2023
Virginia JVValue-Add JVCore JV
Total Third-Party Debt$395,000 $94,105 $799,164 
AIR's Investment In Balance (1)$18,198 $29,341 $272,957 
(1)AIR's investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets includes $31.6 million related to two immaterial unconsolidated investments and certain basis differences.
December 31, 2022
Virginia JVValue-Add JVCore JV
Total Third-Party Debt$395,000 — — 
AIR's Investment In Balance (1)$20,660 — — 
(1)AIR's investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets includes $21.2 million related to two immaterial unconsolidated investments.
The Company recognizes earnings or losses from our investments in unconsolidated joint ventures consisting of our proportionate share of the net earnings or losses of the joint ventures. In addition, we earn various fees for providing property management, construction, and corporate services to the Joint Venture Entities. The table below presents earnings or losses attributable to our investments in unconsolidated joint ventures, which is included in loss from unconsolidated real estate partnerships in our combined condensed consolidated statements of operations (in thousands):
Three Months EndedNine Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Virginia JV$(1,113)$(87)$(3,004)$(2,974)
Core JV(7,930)— (7,930)— 
Value-Add JV(1,347)— (1,333)— 
Total$(10,390)$(87)$(12,267)$(2,974)