INVESTMENTS IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES

The Company maintains investments in joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting unless the venture is a variable interest entity, or VIE, and meets the requirements for consolidation. The Company’s investment in its unconsolidated joint ventures at June 30, 2013 was $59,235,000. The equity in the income of the unconsolidated joint ventures was $1,679,000 for the six months ended June 30, 2013. The unconsolidated joint ventures have not been consolidated as of June 30, 2013, because the Company does not control the investments. The Company’s current joint ventures are as follows:

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Petro Travel Plaza Holdings LLC – TA/Petro is an unconsolidated joint venture with TravelCenters of America, LLC for the development and management of travel plazas and convenience stores. This is a 60%-owned joint venture which owns and operates travel plazas/commercial highway operations in TRCC. It houses multiple commercial eating establishments as well as diesel and gasoline operations. The Company does not control the investment due to its having only 50% voting rights, and because our partner in the joint venture is the managing partner and performs all of the day-to-day operations at the facility. At June 30, 2013, the Company had an equity investment balance of $9,027,000 in this joint venture.

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Tejon Mountain Village LLC – Tejon Mountain Village LLC, or TMV LLC, is an unconsolidated joint venture between the Company and DMB TMV LLC (a wholly owned subsidiary of DMB Associates, Inc.) formed to obtain all necessary government entitlement approvals and to develop the Tejon Mountain Village project. The Company owns a 50% interest in this venture. At June 30, 2013, the Company’s equity investment balance in this joint venture was $41,862,000.

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Rockefeller Joint Ventures – The Company has multiple joint ventures with Rockefeller Group Development Corporation or Rockefeller. Two joint ventures are for the development of buildings on approximately 91 acres and are part of an agreement for the potential development of up to 500 acres of land in TRCC including pursuing Foreign Trade Zone, or FTZ, designation and development of the property within the FTZ for warehouse distribution and light manufacturing. The Company owns a 50% interest in each of the joint ventures. Currently the Five West Parcel LLC joint venture owns and leases a 606,000 square foot building. The second of these joint ventures, 18-19 West LLC, was formed in August 2009 through the contribution of 61.5 acres of land by the Company, which is being held for future development.

During the second quarter of 2013, we entered into a new joint venture with Rockefeller, the TRCC/Rock Outlet Center LLC joint venture, to develop, own, and manage an outlet center on land at TRCC-East. This joint venture is separate from the above agreement to develop up to 500 acres. During the second quarter of 2013, we contributed land and other assets at an agreed value of $10,558,000 for our capital contribution and Rockefeller matched our capital contribution with cash.

At June 30, 2013, the Company’s combined book value equity investment balance in these three joint ventures was $8,346,000.

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Centennial Founders, LLC – Centennial Founders, LLC is a joint venture with Pardee Homes, Lewis Investment Company, and Standard Pacific Corp. that was organized to pursue the entitlement and development of land that the Company owns in Los Angeles County. Based on the Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC and the change in control and funding that resulted from the amended agreement, Centennial Founders, LLC qualified as a variable interest entity, beginning in the third quarter of 2009 and the Company was determined to be the primary beneficiary. As a result, Centennial Founders, LLC has been consolidated into our financial statements beginning in that quarter. Our partners retained a noncontrolling interest in the joint venture. At June 30, 2013 the Company had a 72.01% ownership position in Centennial Founders, LLC.

The Company’s investment balance in its unconsolidated joint ventures differs from its capital accounts in the respective joint ventures. The differential represents the difference between the cost basis of assets contributed by the Company and the agreed-upon contribution value of the assets contributed.

Unaudited condensed balance sheet information of the Company’s unconsolidated and consolidated joint ventures as of June 30, 2013 and December 31, 2012 and condensed statements of operations for the six months ended June 30, 2013 and June 30, 2012 are as follows:



($ in thousands)	UNCONSOLIDATED																	CONSOLIDATED
Statement of Operations for the six months ended June 30, 2013	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West		TRCC/Rock Outlet Center			Total			Centennial-VIE
Gross revenues	$	55,364		$	1,673		$	—		$	31	$	—		$	57,068		$	314
Net income (loss)	$	2,394		$	47		$	(83	)	$	25	$	(176	)	$	2,207		$	(232	)
Partner’s share of net income (loss)	$	958		$	23		$	(42	)	$	12	$	(88	)	$	863		$	(66	)
Equity in income (losses)	$	1,436		$	24		$	(41	)	$	13	$	247		$	1,679		$	—
Balance Sheet Information as of June 30, 2013
Current assets	$	11,256		$	1,214		$	255		$	30	$	9,381		$	22,136		$	142
Property and equipment, net	43,907			18,111			95,772			4,449		12,858			175,097			74,074
Other assets	227			651			—			—		—			878			—
Long-term debt	(16,988		)	(11,000		)	—			—		—			(27,988		)	—
Other liabilities	(2,309		)	(67		)	(520		)	—		(1,300		)	(4,196		)	(1,024		)
Net assets	$	36,093		$	8,909		$	95,507		$	4,479	$	20,939		$	165,927		$	73,192



($ in thousands)	UNCONSOLIDATED															CONSOLIDATED
Statement of Operations for the six months ended June 30, 2012	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West			Total			Centennial-VIE
Gross revenues	$	59,001		$	975		$	—		$	53		$	60,029		$	135
Net income (loss)	$	1,540		$	(282	)	$	(47	)	$	46		$	1,257		$	(160	)
Partner’s share of net income (loss)	$	616		$	(141	)	$	(24	)	$	23		$	474		$	(50	)
Equity in income (losses)	$	675		$	(141	)	$	(23	)	$	23		$	534		$	(110	)
Balance Sheet Information as of December 31, 2012
Current assets	$	9,577		$	194		$	218		$	42		$	10,031		$	491
Property and equipment, net	44,196			19,025			92,846			4,412			160,479			72,356
Other assets	246			683			—			—			929			—
Long-term debt	(17,358		)	(11,000		)	—			—			(28,358		)	—
Other liabilities	(3,350		)	(39		)	(224		)	(1		)	(3,614		)	(1,099		)
Net assets	$	33,311		$	8,863		$	92,840		$	4,453		$	139,467		$	71,748