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INVESTMENT IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES
 3 Months Ended
Mar. 31, 2024
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENT IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES 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 as of March 31, 2024 was $30,075,000. The equity in the income of unconsolidated joint ventures was $1,513,000 for the three months ended March 31, 2024. The unconsolidated joint ventures have not been consolidated as of March 31, 2024, because the Company does not control the investments. The Company’s current joint ventures are as follows:
•Petro Travel Plaza Holdings LLC – TA/Petro is an unconsolidated joint venture with TravelCenters of America Inc. for the development and management of travel plazas and convenience stores. The Company has 50% voting rights and shares 60% of profit and losses in this joint venture. It houses multiple commercial eating establishments, as well as diesel and gasoline operations in TRCC. The Company does not control the investment due to it having only 50% voting rights, and because the 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. The Company's investment in this joint venture was $20,214,000 as of March 31, 2024.
•Majestic Realty Co. – Majestic Realty Co., or Majestic, is a privately-held developer and owner of industrial and commercial properties throughout the United States. The Company partnered with Majestic to form five active 50/50 joint ventures to acquire, develop, manage, and operate industrial real estate at TRCC. The partners have equal voting rights and equally share in the profit and loss of the joint venture. The Company and Majestic guarantee the performance of all outstanding debt.
•On March 29, 2022, TRC-MRC 5 LLC was formed to pursue the development, construction, lease-up, and management of an approximately 446,400 square foot industrial building located within TRCC-East. The construction of the building was completed in the fourth quarter of 2023, and the joint venture has leased 100% of the rentable spaces. The joint venture refinanced the construction loan in February 2024 with a promissory note. The note matures on February 3, 2035, and had an outstanding balance of $53,354,000 as of March 31, 2024. In December 2022, the Company contributed land with a fair value of $8,501,000 to TRC-MRC5, LLC. The total cost of the land was $2,477,000. The Company recognized profit of $3,012,000 and deferred profit of $3,012,000. Since its inception, the Company has received excess distributions resulting in a deficit balance in its investment of $1,234,000. In accordance with the applicable accounting guidance, the Company reclassified excess distributions to Other Liabilities within the Consolidated Balance Sheets. The Company expects to continue to record equity in earnings as a debit to the investment account and if it were to become positive, the Company would reclassify the liability to an asset. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), the Company will immediately recognize the liability as income.
•On March 25, 2021, TRC-MRC 4 LLC was formed to pursue the development, construction, lease-up, and management of a 629,274 square foot industrial building located within TRCC-East. The construction of the building was completed in the fourth quarter of 2022, and the joint venture has leased 100% of the rentable space. The joint venture refinanced its construction loan in March 2023 with a promissory note. The note matures on March 1, 2033, and had an outstanding balance of $61,556,000 as of March 31, 2024. In June 2021, the Company contributed land with a fair value of $8,464,000 to TRC-MRC 4, LLC. The total cost of the land was $2,895,000. The Company recognized profit of $2,785,000 and deferred profit of $2,785,000. Since its inception, the Company has received excess distributions resulting in a deficit balance in its investment of $6,038,000. In accordance with the applicable accounting guidance, the Company reclassified excess distributions to Other Liabilities within the Consolidated Balance Sheets. The Company expects to continue to record equity in earnings as a debit to the investment account and if it were to become positive, the Company would reclassify the liability to an asset. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), the Company will immediately recognize the liability as income.
•In November 2018, TRC-MRC 3, LLC was formed to pursue the development, construction, leasing, and management of a 579,040 square foot industrial building on the Company's property at TRCC-East. TRC-MRC 3, LLC qualified as a VIE from inception, but the Company is not the primary beneficiary therefore it does not consolidate TRC-MRC 3, LLC in its financial statements. The construction of the building was completed in 2019, and the joint venture has leased 100% of the rentable space to two tenants. In March 2019, the joint venture entered into a promissory note with a financial institution to finance the construction of the building. The note matures on May 1, 2030 and had an outstanding principal balance of $33,404,000 as of March 31, 2024. On April 1, 2019, the Company contributed land with a fair value of $5,854,000 to TRC-MRC 3, LLC in accordance with the limited liability agreement. The Company's investment in this joint venture was $214,000 as of March 31, 2024.
•In August 2016, the Company partnered with Majestic to form TRC-MRC 2, LLC to acquire, lease, and maintain a fully occupied warehouse at TRCC-West. The partnership acquired the 651,909 square foot building for $24,773,000, and was largely financed through a promissory note. The promissory note was refinanced on June 1, 2018 with a $25,240,000 promissory note. The note matures on July 3, 2028 and had an outstanding principal balance of $21,766,000 as of March 31, 2024. The building was 100% leased as of March 31, 2024. Since its inception, the Company has received excess distributions resulting in a deficit balance in its investment of $1,161,000. In accordance with the applicable accounting guidance, the Company reclassified excess distributions to Other Liabilities within the Consolidated Balance Sheets. The Company will continue to record its equity in the net income as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on the consolidated balance sheet. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), the Company will recognize any balance classified as a liability as income.
•In September 2016, TRC-MRC 1, LLC was formed to develop and operate an approximately 480,480 square foot industrial building at TRCC-East. The joint venture completed construction in 2017. Since inception of the joint venture, the Company has received excess distributions resulting in a deficit balance in its investment of $1,374,000. In accordance with the applicable accounting guidance, the Company reclassified excess distributions to Other Liabilities within the Consolidated Balance Sheets. The Company will continue to record its equity in the net income as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on the consolidated balance sheet. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), the Company will recognize any balance classified as a liability as income. The joint venture refinanced its construction loan in December 2018 with a mortgage loan. The original balance of the mortgage loan was $25,030,000, of which $21,979,000 was outstanding as of March 31, 2024.
•TRCC/Rock Outlet Center LLC – This joint venture was formed in 2013 with Rockefeller Group Development Corporation, or Rockefeller. to develop, own, and manage a net leasable 326,000 square foot outlet center on land at TRCC-East. At March 31, 2024, the Company’s equity investment balance in this joint venture was $9,647,000. The Company controls 50% of the voting interests of TRCC/Rock Outlet Center LLC; thus, it does not control the joint venture by voting interest alone. The Company is the named managing member. The managing member’s responsibilities relate to the routine day-to-day activities of TRCC/Rock Outlet Center LLC. However, all operating decisions during the development period and ongoing operations, including the setting and monitoring of the budget, leasing, marketing, financing, and selection of the contractor for any construction, are jointly made by both members of the joint venture. Therefore, the Company concluded that both members have significant participating rights that are sufficient to overcome the presumption of the Company controlling the joint venture through it being named the managing member. Therefore, the investment in TRCC/Rock Outlet Center LLC is being accounted for under the equity method. On August 16, 2023, the TRCC/Rock Outlet Center LLC joint venture successfully extended the maturity date of its term note with a financial institution from May 31, 2024 to June 30, 2025. In connection with the loan extension, the joint venture also reduced the outstanding amount by $6,000,000. As of March 31, 2024, the outstanding balance of the term note was $20,776,000. The Company and Rockefeller guarantee the performance of the debt.
•Centennial Founders, LLC – CFL is a joint venture with TRI Pointe Homes to pursue the entitlement and development of land that the Company owns in Los Angeles County. As of March 31, 2024, the Company owned 93.51% of CFL.
The Company’s investment balance in each of its unconsolidated joint ventures differs from its capital accounts in the respective joint ventures. The variance represents the difference between the cost basis of assets contributed by the Company and the agreed upon fair value of those assets.
Unaudited condensed statements of operations for the three months ended March 31, 2024 and 2023 and condensed balance sheet information of the Company’s unconsolidated joint ventures as of March 31, 2024 and December 31, 2023 are as follows:
Three Months Ended March 31,
202420232024202320242023
Joint VentureTRC
($ in thousands)RevenuesEarnings (Loss)Equity in Earnings (Loss)
Petro Travel Plaza Holdings, LLC$34,499 $34,812 $1,406 $2,270 $843 $1,362 
TRCC/Rock Outlet Center, LLC1
1,832 1,431 (592)(887)(296)(443)
TRC-MRC 1, LLC865 961 184 96 92 48 
TRC-MRC 2, LLC1,482 1,390 1,110 667 555 334 
TRC-MRC 3, LLC1,108 1,051 217 196 109 98 
TRC-MRC 4, LLC1,773 1,776 278 251 139 125 
TRC-MRC 5, LLC1,572 — 142 (14)71 (7)
Total$43,131 $41,421 $2,745 $2,579 $1,513 $1,517 
Centennial Founders, LLC$56 $175 $5 $109 Consolidated
(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $0.4 million and $0.3 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

March 31, 2024December 31, 2023
Joint VentureTRCJoint VentureTRC
($ in thousands)AssetsDebtEquity (Deficit)EquityAssetsDebtEquity (Deficit)Equity
Petro Travel Plaza Holdings, LLC$73,382 $(12,365)$54,356 $20,214 $72,633 $(12,556)$52,950 $19,370 
TRCC/Rock Outlet Center, LLC57,022 (20,776)34,943 9,647 58,040 (20,850)35,535 9,943 
TRC-MRC 1, LLC25,292 (21,979)1,798 — 25,224 (22,144)1,684 — 
TRC-MRC 2, LLC20,150 (21,766)(1,384)— 18,882 (21,939)(2,597)— 
TRC-MRC 3, LLC35,806 (33,404)2,926 214 35,467 (33,627)2,087 141 
TRC-MRC 4, LLC50,757 (61,556)(10,546)— 49,964 (61,776)(12,192)— 
TRC-MRC 5, LLC52,869 (53,354)70 — 49,687 (35,138)8,390 4,194 
Total$315,278 $(225,200)$82,163 $30,075 $309,897 $(208,030)$85,857 $33,648 
Centennial Founders, LLC$105,661 $— $105,258 ***$104,979 $— $104,753 ***
*** Centennial Founders, LLC is consolidated within the Company's financial statements.