INVESTMENT 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 December 31, 2013 was $62,604,000. The equity in the income of the unconsolidated joint ventures was $4,006,000 for the twelve months ended December 31, 2013. The unconsolidated joint ventures have not been consolidated as of December 31, 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 and has significant decision making authority regarding key business components such as fuel inventory and pricing at the facility. At December 31, 2013, the Company had an equity investment balance of $11,513,000 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 Pacific LLC 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 December 31, 2013, the Company’s equity investment balance in this joint venture was $43,873,000.

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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 Five-West Parcel joint venture currently has an outstanding loan with a balance of $11,000,000. The note is due in 2015 and is fully secured by the building as well as guarantees from each partner. We do not believe the bank will call on the guarantees provided. 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 a 326,000 square foot outlet center on land at TRCC-East. This outlet center is estimated to cost approximately $86 million to construct and will be funded through a construction loan for up to 60% of the costs and equity from the members. This joint venture is separate from the above agreement to develop up to 500 acres of land in TRCC. During the second quarter of 2013, we contributed land and other assets at an agreed value of $10,558,000 for our capital contribution ($2,159,000 at cost) and Rockefeller matched our capital contribution with cash. Rockefeller also reimbursed the Company for $335,000 in outlet center marketing costs, which were offset against the Company's equity in losses for the TRCC/Rock Outlet Center LLC joint venture. During the fourth quarter of 2013, the TRCC/Rock Outlet Center LLC joint venture entered into a construction line of credit agreement with a financial institution for $52,000,000 that, as of December 31, 2013, had no outstanding balance.

At December 31, 2013, the Company’s combined equity investment balance in these three joint ventures was $7,218,000.

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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 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 VIE, 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 December 31, 2013 the Company had a 72.83% ownership position in Centennial Founders, LLC.

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

Statement of Operations for the twelve months ending December 31, 2013



	UNCONSOLIDATED														CONSOLIDATED
($ in thousands)	Petro Travel Plaza Holdings		Five West Parcel		18-19 West LLC		TRCC/Rock Outlet Center			Tejon Mountain Village			Total		Centennial-VIE
Revenues	$	125,084	$	3,368	$	61	$	—		$	—		$	128,513	$	935
Net income (loss)	$	6,154	$	26	$	55	$	(470	)	$	(119	)	$	5,646	$	(223	)
Partner’s share of net income (loss)	$	2,462	$	13	$	28	$	(235	)	$	(60	)	$	2,208	$	(62	)
Equity in earnings (losses)	$	3,925	$	13	$	27	$	100		$	(59	)	$	4,006	$	—

Balance Sheet Information as of December 31, 2013



	UNCONSOLIDATED																	CONSOLIDATED
($ in thousands)	Petro Travel Plaza Holdings			Five West Parcel			18-19 West LLC		TRCC/Rock Outlet Center			Tejon Mountain Village			Total			Centennial-VIE
Current assets	$	14,886		$	813		$	10	$	2,428		$	99,690		$	117,827		$	86
Property and equipment, net	43,897			16,980			4,514		24,633			—			90,024			74,968
Other assets	208			438			—		2,161			—			2,807			—
Long-term debt	(16,602		)	(11,000		)	—		—			—			(27,602		)	—
Other liabilities	(2,687		)	(343		)	—		(8,577		)	(168		)	(11,775		)	(204		)
Net assets	$	39,702		$	6,888		$	4,524	$	20,645		$	99,522		$	171,281		$	74,850

Statement of Operations for the twelve months ending December 31, 2012



	UNCONSOLIDATED												CONSOLIDATED
($ in thousands)	Petro Travel Plaza Holdings		Five West Parcel			18-19 West		Tejon Mountain Village			Total		Centennial
Revenues	$	133,962	$	2,710		$	80	$	—		$	136,752	$	582
Net income (loss)	$	4,857	$	(241	)	$	72	$	(84	)	$	4,604	$	(530	)
Partner’s share of net income (loss)	$	1,943	$	(121	)	$	36	$	(42	)	$	1,816	$	(158	)
Equity in earnings (losses)	$	2,661	$	(120	)	$	36	$	(42	)	$	2,535	$	—

Balance Sheet Information as of December 31, 2012



	UNCONSOLIDATED															CONSOLIDATED
($ in thousands)	Petro Travel Plaza Holdings			Five West Parcel			18-19 West			Tejon Mountain Village			Total			Centennial
Current assets	$	9,577		$	194		$	42		$	218		$	10,031		$	491
Property and equipment, net	44,196			19,025			4,412			92,846			160,479			72,356
Other assets	246			683			—			—			929			—
Long-term debt	(17,358		)	(11,000		)	—			—			(28,358		)	—
Other liabilities	(3,350		)	(39		)	(1		)	(224		)	(3,614		)	(1,099		)
Net assets	$	33,311		$	8,863		$	4,453		$	92,840		$	139,467		$	71,748

The Company’s investment balance in its unconsolidated joint ventures differs from its respective 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.