Investments In Unconsolidated Joint Ventures
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12 Months Ended |
Dec. 31, 2016 |
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| Investments In Unconsolidated Joint Ventures |
4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
As of December 31, 2016, the Company had an aggregate investment of approximately $320.0 million in its equity method joint ventures. The Company formed these ventures with unaffiliated third parties, or acquired interests in them, to develop or manage primarily office and multi-family rental properties, or to acquire land in anticipation of possible development of office and multi-family rental properties. As of December 31, 2016, the unconsolidated joint ventures owned: 36 office properties aggregating approximately 5.6 million square feet, 10 multi-family properties totaling 3,587 apartments, two retail properties aggregating approximately 81,700 square feet, a 350-room hotel, development projects for up to approximately 822 apartments; and interests and/or rights to developable land parcels able to accommodate up to 4,151 apartments. The Company’s unconsolidated interests range from 7.5 percent to 85 percent subject to specified priority allocations in certain of the joint ventures.
The amounts reflected in the following tables (except for the Company’s share of equity in earnings) are based on the historical financial information of the individual joint ventures. The Company does not record losses of the joint ventures in excess of its investment balances unless the Company is liable for the obligations of the joint venture or is otherwise committed to provide financial support to the joint venture. The outside basis portion of the Company’s investments in joint ventures is amortized over the anticipated useful lives of the underlying ventures’ tangible and intangible assets acquired and liabilities assumed. Unless otherwise noted below, the debt of the Company’s unconsolidated joint ventures generally is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations.
The Company has agreed to guarantee repayment of a portion of the debt of its unconsolidated joint ventures. As of December 31, 2016, such debt had a total facility amount of $192 million of which the Company agreed to guarantee up to $22 million. As of December 31, 2016, the outstanding balance of such debt totaled $155.2 million of which $22 million was guaranteed by the Company. The Company performed management, leasing, development and other services for the properties owned by the unconsolidated joint ventures and recognized $3.7 million and $5.5 million for such services in the years ended December 31, 2016 and 2015, respectively. The Company had $0.7 million and $0.8 million in accounts receivable due from its unconsolidated joint ventures as of December 31, 2016 and 2015.
Included in the Company’s investments in unconsolidated joint ventures as of December 31, 2016 are four unconsolidated development joint ventures, which are VIEs for which the Company is not the primary beneficiary. These joint ventures are primarily established to develop real estate property for long-term investment and were deemed VIEs primarily based on the fact that the equity investment at risk was not sufficient to permit the entities to finance their activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of these VIEs based on the fact that the Company has shared control of these entities along with the entity’s partners and therefore does not have controlling financial interests in these VIEs. The Company’s aggregate investment in these VIEs was approximately $185.4 million as of December 31, 2016. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is estimated to be approximately $207.4 million, which includes the Company’s current investment and estimated future funding commitments/guarantees of approximately $22 million. The Company has not provided financial support to these VIEs that it was not previously contractually required to provide. In general, future costs of development not financed through third parties will be funded with capital contributions from the Company and its outside partners in accordance with their respective ownership percentages.
The following is a summary of the Company's unconsolidated joint ventures as of December 31, 2016 and 2015: (dollars in thousands)
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Property Debt
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Number of
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Company's
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Carrying Value
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As of December 31, 2016
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Apartment Units
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Effective
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December 31,
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December 31,
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Maturity
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Interest
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Entity / Property Name
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or Rentable Square Feet (sf)
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Ownership % (a)
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2016
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2015
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Balance
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Date
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Rate
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Multi-family
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Marbella RoseGarden, L.L.C./ Marbella (b)
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412
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units
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24.27
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%
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$
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15,150
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$
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15,569
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$
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95,000
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05/01/18
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4.99
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%
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RoseGarden Monaco Holdings, L.L.C./ Monaco (b)
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523
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units
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15.00
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%
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-
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937
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165,000
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02/01/21
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4.19
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%
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Rosewood Morristown, L.L.C. / Metropolitan at 40 Park (b) (c)
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130
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units
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12.50
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%
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7,145
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5,723
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43,958
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(d)
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(d)
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Riverwalk G Urban Renewal, L.L.C./ RiverTrace at Port Imperial (e)
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316
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units
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22.50
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%
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(f)
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9,707
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-
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82,000
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11/10/26
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3.21
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%
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(f)
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Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C) (b) (v)
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355
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units
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7.50
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%
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-
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-
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128,100
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03/01/30
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4.00
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%
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Crystal House Apartments Investors LLC / Crystal House (g)
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794
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units
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25.00
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%
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30,565
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28,114
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165,000
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04/01/20
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3.17
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%
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Roseland/Port Imperial Partners, L.P./ Riverwalk C (b) (h)
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363
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units
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20.00
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%
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1,678
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1,678
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-
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-
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-
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RoseGarden Marbella South, L.L.C./ Marbella II
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311
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units
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24.27
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%
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18,050
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16,728
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72,544
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03/30/17
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L+2.25
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%
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(i)
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Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B) (b) (v)
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227
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units
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7.50
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%
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-
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-
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81,900
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03/01/30
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4.00
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%
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Riverpark at Harrison I, L.L.C./ Riverpark at Harrison
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141
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units
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45.00
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%
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2,085
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2,544
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30,000
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08/01/25
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3.70
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%
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Capitol Place Mezz LLC / Station Townhouses
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378
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units
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50.00
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%
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43,073
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46,267
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100,700
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07/01/33
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4.82
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%
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Harborside Unit A Urban Renewal, L.L.C. / URL Harborside
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763
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units
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85.00
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%
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100,188
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96,799
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155,186
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08/01/29
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5.197
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%
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(j)
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RoseGarden Monaco, L.L.C./ San Remo Land
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250
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potential units
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41.67
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%
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1,400
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1,339
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-
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-
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-
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Grand Jersey Waterfront URA, L.L.C./ Liberty Landing
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850
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potential units
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50.00
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%
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337
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337
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-
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-
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-
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Hillsborough 206 Holdings, L.L.C./ Hillsborough 206
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160,000
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sf
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50.00
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%
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1,962
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1,962
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-
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-
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-
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Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations) (u)
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1,225,000
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sf
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50.00
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%
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4,448
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4,055
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-
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-
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-
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Office
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Red Bank Corporate Plaza, L.L.C./ Red Bank
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92,878
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sf
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50.00
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%
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4,339
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4,140
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14,476
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05/17/17
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L+3.00
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%
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12 Vreeland Associates, L.L.C./ 12 Vreeland Road
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139,750
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sf
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50.00
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%
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6,237
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5,890
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11,041
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07/01/23
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2.87
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%
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BNES Associates III / Offices at Crystal Lake
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106,345
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sf
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31.25
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%
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3,124
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2,295
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5,480
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11/01/23
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4.76
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%
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KPG-P 100 IMW JV, LLC / 100 Independence Mall West
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339,615
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sf
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33.33
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%
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(t)
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-
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-
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72,000
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09/08/18
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L+5.95
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%
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(k)
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Keystone-Penn
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1,842,820
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sf
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(l)
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(t)
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-
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-
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235,059
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(m)
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(m)
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Keystone-TriState
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1,266,384
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sf
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(n)
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(t)
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2,285
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3,958
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218,639
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(o)
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(o)
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KPG-MCG Curtis JV, L.L.C./ Curtis Center (p)
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885,000
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sf
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50.00
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%
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65,400
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59,858
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(q)
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(q)
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(q)
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Other
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Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial (b)
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30,745
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sf
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20.00
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%
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1,706
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1,758
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-
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-
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-
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South Pier at Harborside / Hyatt Regency Jersey City on the Hudson
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350
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rooms
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50.00
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%
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163
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(r)
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100,000
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10/01/26
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3.668
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%
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Other (s)
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1,005
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3,506
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-
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-
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-
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Totals:
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$
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320,047
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$
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303,457
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$
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1,776,083
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(a)
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Company's effective ownership % represents the Company's entitlement to residual distributions after payments of priority returns, where applicable.
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(b)
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The Company's ownership interests in this venture are subordinate to its partner's preferred capital balance and the Company is not expected to meaningfully participate in the venture's cash flows in the near term.
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(c)
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Through the joint venture, the Company also owns a 12.5 percent interest in a 50,973 square feet retail building ("Shops at 40 Park") and a 25 percent interest in a to-be-built 59-unit, five story multi-family rental development property ("Lofts at 40 Park").
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(d)
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Property debt balance consists of: (i) an amortizable loan, collateralized by the Metropolitan at 40 Park, with a balance of $37,640, bears interest at 3.25 percent, matures in September 2020; (ii) an amortizable loan, collateralized by the Shops at 40 Park, with a balance of $6,318, bears interest at 3.63 percent, matures in August 2018. On February 3, 2017, the venture obtained a construction loan for the Lofts at 40 Park with a maximum borrowing amount of $13,950, which bears interest at LIBOR plus 250 basis points and matures in February 2020.
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(e)
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During the second quarter 2016, the Company acquired the equity interests of its joint venture partner in Portside Apartment Holdings, L.L.C and PruRose Riverwalk G, L.L.C. for $39.6 million and $11.3 million, respectively, which increased its ownership to 100 percent in Portside Apartment Holdings, LLC and 50 percent in Riverwalk G Urban Renewal, L.L.C. (See Note 3: Recent Transactions – Acquisitions).
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(f)
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The loan was refinanced in October 2016. The new $82 million loan matures in November 2026 and has an interest rate of 3.21 percent. Concurrent with the refinancing in October 2016, the Company executed an agreement with the remaining partner which converted its 50 percent subordinated interest to 22.5 percent pari passu interest.
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(g)
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The Company also owns a 50 percent interest in a vacant land to accommodate the development of approximately 295 additional units of which 252 are currently approved.
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(h)
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The Company also owns a 20 percent residual interest in undeveloped land parcels: parcels 6, I, and J that can accommodate the development of 836 apartment units.
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(i)
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The construction loan has a maximum borrowing amount of $77,400 and provides, subject to certain conditions, two one-year extension options with a fee of 25 basis points for each year.
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(j)
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The construction/permanent loan has a maximum borrowing amount of $192,000. The Company owns an 85 percent interest with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines.
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(k)
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The mortgage loan has three one-year extension options, subject to certain conditions.
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(l)
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The Company’s equity interests in the joint ventures will be subordinated to Keystone Entities receiving a 15 percent internal rate of return (“IRR”) after which the Company will receive a 10 percent IRR on its subordinate equity and then all profit will be split equally.
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(m)
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Principal balance of $127,103 bears interest at 5.114 percent and matures on August 27, 2023; principal balance of $45,500 bears interest at 5.01 percent and matures on September 6, 2025; principal balance of $18,281 bears interest at LIBOR+5.5 percent and matures on December 21, 2020; principal balance of $22,500 bears interest at LIBOR+5.2 percent and matures on August 31, 2019; principal balance of $11,250 bears interest at LIBOR+5.5 percent and matures on January 9, 2019; principal balance of $10,425 bears interest at LIBOR+6.0 percent matures on August 27, 2017.
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(n)
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Includes the Company’s pari passu interests of $2.3 million in five properties and Company’s subordinated equity interests to Keystone Entities receiving a 15 percent internal rate of return (“IRR”) after which the Company will receive a 10 percent IRR on its subordinate equity and then all profit will be split equally.
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(o)
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Principal balance of $47,500 bears interest at 5.57 percent and matures on July 1, 2017; principal balance of $78,439 bears interest at rates ranging from 5.65 percent to 6.75 percent and matures on September 9, 2017; principal balance of $14,250 bears interest at 4.88 percent and matures on July 6, 2024; principal balance of $63,400 bears interest at 4.93 percent and matures on July 6, 2044; principal balance of $15,050 bears interest at 4.71 percent and matures on August 6, 2024.
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(p)
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Includes undivided interests in the same manner as investments in noncontrolling partnership, pursuant to ASC 970-323-25-12.
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(q)
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See Note 9: Mortgages, Loans Payable and Other Obligations for debt secured by interests in these assets.
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(r)
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The negative carrying value for this venture of $3,317 as of December 31, 2015, was included in accounts payable, accrued expenses and other liabilities.
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(s)
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The Company owns other interests in various unconsolidated joint ventures, including interests in assets previously owned and interest in ventures whose businesses are related to its core operations. These ventures are not expected to significantly impact the Company's operations in the near term.
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(t)
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On January 31, 2017, the Company sold its equity interest in the joint venture. See Note 3: Recent Transactions - Unconsolidated Joint Venture Activity.
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(u)
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On February 3, 2017, the Company acquired the equity interest of its partner. See Note 3: Recent Transactions - Unconsolidated Joint Venture Activity.
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(v)
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On February 15, 2017, the Company sold its 7.5 percent interest in Elmajo Urban Renewal Associates, LLC and Estuary Urban Renewal Unit B, LLC joint ventures that own operating multi-family properties, located in Weehawken, New Jersey for a combined sales price of $5.1 million.
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The following is a summary of the Company’s equity in earnings (loss) of unconsolidated joint ventures for the years ended December 31, 2016 and 2015: (dollars in thousands)
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Year Ended December 31,
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Entity / Property Name
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2016
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2015
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2014
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Multi-family
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Marbella RoseGarden, L.L.C./ Marbella
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$
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231
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$
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231
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$
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(19)
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RoseGarden Monaco Holdings, L.L.C./ Monaco
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(937)
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(1,224)
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(1,040)
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Rosewood Morristown, L.L.C. / Metropolitan at 40 Park
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(317)
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(364)
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(345)
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Riverwalk G Urban Renewal, L.L.C./ RiverTrace at Port Imperial
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(1,146)
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(955)
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(2,139)
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Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C)
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-
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-
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(203)
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Crystal House Apartments Investors LLC / Crystal House
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(870)
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(123)
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(139)
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Roseland/Port Imperial Partners, L.P./ Riverwalk C
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(120)
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(474)
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(646)
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RoseGarden Marbella South, L.L.C./ Marbella II
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(202)
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-
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-
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Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B)
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-
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1
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(15)
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Riverpark at Harrison I, L.L.C./ Riverpark at Harrison
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(190)
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(363)
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(150)
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Capitol Place Mezz LLC / Station Townhouses
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(2,440)
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(3,687)
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(75)
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Harborside Unit A Urban Renewal, L.L.C. / URL Harborside
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(219)
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-
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(218)
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RoseGarden Monaco, L.L.C./ San Remo Land
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-
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-
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-
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Grand Jersey Waterfront URA, L.L.C./ Liberty Landing
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(80)
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(32)
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(54)
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Hillsborough 206 Holdings, L.L.C./ Hillsborough 206
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|
(53)
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|
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(5)
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|
|
(10)
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Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)
|
|
393
|
|
|
344
|
|
|
320
|
|
Office
|
|
|
|
|
|
|
|
|
|
Red Bank Corporate Plaza, L.L.C./ Red Bank
|
|
448
|
|
|
392
|
|
|
380
|
|
12 Vreeland Associates, L.L.C./ 12 Vreeland Road
|
|
347
|
|
|
270
|
|
|
106
|
|
BNES Associates III / Offices at Crystal Lake
|
|
(15)
|
|
|
115
|
|
|
240
|
|
KPG-P 100 IMW JV, LLC / 100 Independence Mall West
|
|
-
|
|
|
(800)
|
|
|
(1,887)
|
|
Keystone-Penn
|
|
600
|
|
|
3,812
|
|
|
-
|
|
Keystone-TriState
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|
(1,672)
|
|
|
(2,182)
|
|
|
(318)
|
|
KPG-MCG Curtis JV, L.L.C./ Curtis Center
|
|
(92)
|
|
|
475
|
|
|
624
|
|
Other
|
|
|
|
|
|
|
|
|
|
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial
|
|
(52)
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|
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(70)
|
|
|
(102)
|
|
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson (a)
|
|
24,180
|
|
|
3,036
|
|
|
2,602
|
|
Other
|
|
994
|
|
|
(1,569)
|
|
|
665
|
|
Company's equity in earnings (loss) of unconsolidated joint ventures
|
$
|
18,788
|
|
$
|
(3,172)
|
|
$
|
(2,423)
|
(a)Equity in earnings in 2016 includes the effect of distributions received from the joint venture’s refinancing. See Recent Joint Venture Transactions following in this footnote.
The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of December 31, 2016 and 2015: (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Assets:
|
|
|
|
|
|
|
|
Rental property, net
|
|
$
|
1,746,233
|
|
$
|
1,781,621
|
|
Other assets
|
|
|
278,289
|
|
|
307,000
|
|
Total assets
|
|
$
|
2,024,522
|
|
$
|
2,088,621
|
|
Liabilities and partners'/
|
|
|
|
|
|
|
|
members' capital:
|
|
|
|
|
|
|
|
Mortgages and loans payable
|
|
$
|
1,350,973
|
|
$
|
1,298,293
|
|
Other liabilities
|
|
|
247,212
|
|
|
215,951
|
|
Partners'/members' capital
|
|
|
426,337
|
|
|
574,377
|
|
Total liabilities and
|
|
|
|
|
|
|
|
partners'/members' capital
|
|
$
|
2,024,522
|
|
$
|
2,088,621
|
The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the years ended December 31, 2016, 2015 and 2014: (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Total revenues
|
$
|
377,711
|
|
$
|
318,980
|
|
$
|
305,034
|
|
Operating and other expenses
|
|
(262,703)
|
|
|
(220,982)
|
|
|
(233,320)
|
|
Depreciation and amortization
|
|
(75,512)
|
|
|
(71,711)
|
|
|
(42,985)
|
|
Interest expense
|
|
(58,390)
|
|
|
(52,972)
|
|
|
(32,862)
|
|
Net loss
|
$
|
(18,894)
|
|
$
|
(26,685)
|
|
$
|
(4,133)
|
Recent Joint Venture Transactions
The South Pier at Harborside venture had a $59.1 million mortgage loan collateralized by the hotel property, which bore interest at a rate of 6.15 percent and was scheduled to mature in November 2016. The venture also had a $3.0 million loan with the City of Jersey City, provided by the U.S. Department of Housing and Urban Development (“HUD loan”), which was guaranteed by the Company, half of which was indemnified by the venture partner. On September 14, 2016, the venture refinanced the mortgage loan and repaid in full the HUD loan, eliminating the previous guarantee which had caused the Company to carry this investment at a negative balance. The Company recorded this reversal through equity in earnings for the year ended December 31, 2016.
The new loan, with a balance of $100.0 million at December 31, 2016, bears interest at a rate of 3.668 percent and matures in October 2026. In connection with the refinancing, the venture distributed $35.7 million of the loan proceeds, of which the Company’s share was $17.8 million. Prior to this distribution, the Company had already received cumulative distributions in excess of cumulative earnings and contributions resulting in a carrying value of zero and as such, $17.8 million was recognized as equity in earnings for the year ended December 31, 2016. The Company has no obligations to fund future venture losses nor has any guarantees on the joint venture’s current debt.
|
| Mack-Cali Realty LP [Member] |
|
| Investments In Unconsolidated Joint Ventures |
4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
As of December 31, 2016, the Company had an aggregate investment of approximately $320.0 million in its equity method joint ventures. The Company formed these ventures with unaffiliated third parties, or acquired interests in them, to develop or manage primarily office and multi-family rental properties, or to acquire land in anticipation of possible development of office and multi-family rental properties. As of December 31, 2016, the unconsolidated joint ventures owned: 36 office properties aggregating approximately 5.6 million square feet, 10 multi-family properties totaling 3,587 apartments, two retail properties aggregating approximately 81,700 square feet, a 350-room hotel, development projects for up to approximately 822 apartments; and interests and/or rights to developable land parcels able to accommodate up to 4,151 apartments. The Company’s unconsolidated interests range from 7.5 percent to 85 percent subject to specified priority allocations in certain of the joint ventures.
The amounts reflected in the following tables (except for the Company’s share of equity in earnings) are based on the historical financial information of the individual joint ventures. The Company does not record losses of the joint ventures in excess of its investment balances unless the Company is liable for the obligations of the joint venture or is otherwise committed to provide financial support to the joint venture. The outside basis portion of the Company’s investments in joint ventures is amortized over the anticipated useful lives of the underlying ventures’ tangible and intangible assets acquired and liabilities assumed. Unless otherwise noted below, the debt of the Company’s unconsolidated joint ventures generally is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations.
The Company has agreed to guarantee repayment of a portion of the debt of its unconsolidated joint ventures. As of December 31, 2016, such debt had a total facility amount of $192 million of which the Company agreed to guarantee up to $22 million. As of December 31, 2016, the outstanding balance of such debt totaled $155.2 million of which $22 million was guaranteed by the Company. The Company performed management, leasing, development and other services for the properties owned by the unconsolidated joint ventures and recognized $3.7 million and $5.5 million for such services in the years ended December 31, 2016 and 2015, respectively. The Company had $0.7 million and $0.8 million in accounts receivable due from its unconsolidated joint ventures as of December 31, 2016 and 2015.
Included in the Company’s investments in unconsolidated joint ventures as of December 31, 2016 are four unconsolidated development joint ventures, which are VIEs for which the Company is not the primary beneficiary. These joint ventures are primarily established to develop real estate property for long-term investment and were deemed VIEs primarily based on the fact that the equity investment at risk was not sufficient to permit the entities to finance their activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of these VIEs based on the fact that the Company has shared control of these entities along with the entity’s partners and therefore does not have controlling financial interests in these VIEs. The Company’s aggregate investment in these VIEs was approximately $185.4 million as of December 31, 2016. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is estimated to be approximately $207.4 million, which includes the Company’s current investment and estimated future funding commitments/guarantees of approximately $22 million. The Company has not provided financial support to these VIEs that it was not previously contractually required to provide. In general, future costs of development not financed through third parties will be funded with capital contributions from the Company and its outside partners in accordance with their respective ownership percentages.
The following is a summary of the Company's unconsolidated joint ventures as of December 31, 2016 and 2015: (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Debt
|
|
|
|
Number of
|
Company's
|
|
|
Carrying Value
|
|
|
As of December 31, 2016
|
|
|
|
Apartment Units
|
Effective
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
Maturity
|
Interest
|
|
|
Entity / Property Name
|
or Rentable Square Feet (sf)
|
Ownership % (a)
|
|
|
2016
|
|
|
2015
|
|
|
Balance
|
Date
|
Rate
|
|
|
Multi-family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marbella RoseGarden, L.L.C./ Marbella (b)
|
412
|
units
|
24.27
|
%
|
|
$
|
15,150
|
|
$
|
15,569
|
|
$
|
95,000
|
05/01/18
|
4.99
|
%
|
|
|
RoseGarden Monaco Holdings, L.L.C./ Monaco (b)
|
523
|
units
|
15.00
|
%
|
|
|
-
|
|
|
937
|
|
|
165,000
|
02/01/21
|
4.19
|
%
|
|
|
Rosewood Morristown, L.L.C. / Metropolitan at 40 Park (b) (c)
|
130
|
units
|
12.50
|
%
|
|
|
7,145
|
|
|
5,723
|
|
|
43,958
|
(d)
|
(d)
|
|
|
|
Riverwalk G Urban Renewal, L.L.C./ RiverTrace at Port Imperial (e)
|
316
|
units
|
22.50
|
%
|
(f)
|
|
9,707
|
|
|
-
|
|
|
82,000
|
11/10/26
|
3.21
|
%
|
(f)
|
|
Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C) (b) (v)
|
355
|
units
|
7.50
|
%
|
|
|
-
|
|
|
-
|
|
|
128,100
|
03/01/30
|
4.00
|
%
|
|
|
Crystal House Apartments Investors LLC / Crystal House (g)
|
794
|
units
|
25.00
|
%
|
|
|
30,565
|
|
|
28,114
|
|
|
165,000
|
04/01/20
|
3.17
|
%
|
|
|
Roseland/Port Imperial Partners, L.P./ Riverwalk C (b) (h)
|
363
|
units
|
20.00
|
%
|
|
|
1,678
|
|
|
1,678
|
|
|
-
|
-
|
-
|
|
|
|
RoseGarden Marbella South, L.L.C./ Marbella II
|
311
|
units
|
24.27
|
%
|
|
|
18,050
|
|
|
16,728
|
|
|
72,544
|
03/30/17
|
L+2.25
|
%
|
(i)
|
|
Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B) (b) (v)
|
227
|
units
|
7.50
|
%
|
|
|
-
|
|
|
-
|
|
|
81,900
|
03/01/30
|
4.00
|
%
|
|
|
Riverpark at Harrison I, L.L.C./ Riverpark at Harrison
|
141
|
units
|
45.00
|
%
|
|
|
2,085
|
|
|
2,544
|
|
|
30,000
|
08/01/25
|
3.70
|
%
|
|
|
Capitol Place Mezz LLC / Station Townhouses
|
378
|
units
|
50.00
|
%
|
|
|
43,073
|
|
|
46,267
|
|
|
100,700
|
07/01/33
|
4.82
|
%
|
|
|
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside
|
763
|
units
|
85.00
|
%
|
|
|
100,188
|
|
|
96,799
|
|
|
155,186
|
08/01/29
|
5.197
|
%
|
(j)
|
|
RoseGarden Monaco, L.L.C./ San Remo Land
|
250
|
potential units
|
41.67
|
%
|
|
|
1,400
|
|
|
1,339
|
|
|
-
|
-
|
-
|
|
|
|
Grand Jersey Waterfront URA, L.L.C./ Liberty Landing
|
850
|
potential units
|
50.00
|
%
|
|
|
337
|
|
|
337
|
|
|
-
|
-
|
-
|
|
|
|
Hillsborough 206 Holdings, L.L.C./ Hillsborough 206
|
160,000
|
sf
|
50.00
|
%
|
|
|
1,962
|
|
|
1,962
|
|
|
-
|
-
|
-
|
|
|
|
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations) (u)
|
1,225,000
|
sf
|
50.00
|
%
|
|
|
4,448
|
|
|
4,055
|
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Red Bank Corporate Plaza, L.L.C./ Red Bank
|
92,878
|
sf
|
50.00
|
%
|
|
|
4,339
|
|
|
4,140
|
|
|
14,476
|
05/17/17
|
L+3.00
|
%
|
|
|
12 Vreeland Associates, L.L.C./ 12 Vreeland Road
|
139,750
|
sf
|
50.00
|
%
|
|
|
6,237
|
|
|
5,890
|
|
|
11,041
|
07/01/23
|
2.87
|
%
|
|
|
BNES Associates III / Offices at Crystal Lake
|
106,345
|
sf
|
31.25
|
%
|
|
|
3,124
|
|
|
2,295
|
|
|
5,480
|
11/01/23
|
4.76
|
%
|
|
|
KPG-P 100 IMW JV, LLC / 100 Independence Mall West
|
339,615
|
sf
|
33.33
|
%
|
(t)
|
|
-
|
|
|
-
|
|
|
72,000
|
09/08/18
|
L+5.95
|
%
|
(k)
|
|
Keystone-Penn
|
1,842,820
|
sf
|
(l)
|
|
(t)
|
|
-
|
|
|
-
|
|
|
235,059
|
(m)
|
(m)
|
|
|
|
Keystone-TriState
|
1,266,384
|
sf
|
(n)
|
|
(t)
|
|
2,285
|
|
|
3,958
|
|
|
218,639
|
(o)
|
(o)
|
|
|
|
KPG-MCG Curtis JV, L.L.C./ Curtis Center (p)
|
885,000
|
sf
|
50.00
|
%
|
|
|
65,400
|
|
|
59,858
|
|
|
(q)
|
(q)
|
(q)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial (b)
|
30,745
|
sf
|
20.00
|
%
|
|
|
1,706
|
|
|
1,758
|
|
|
-
|
-
|
-
|
|
|
|
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson
|
350
|
rooms
|
50.00
|
%
|
|
|
163
|
|
|
(r)
|
|
|
100,000
|
10/01/26
|
3.668
|
%
|
|
|
Other (s)
|
|
|
|
|
|
|
1,005
|
|
|
3,506
|
|
|
-
|
-
|
-
|
|
|
|
Totals:
|
|
|
|
|
|
$
|
320,047
|
|
$
|
303,457
|
|
$
|
1,776,083
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Company's effective ownership % represents the Company's entitlement to residual distributions after payments of priority returns, where applicable.
|
|
(b)
|
The Company's ownership interests in this venture are subordinate to its partner's preferred capital balance and the Company is not expected to meaningfully participate in the venture's cash flows in the near term.
|
|
(c)
|
Through the joint venture, the Company also owns a 12.5 percent interest in a 50,973 square feet retail building ("Shops at 40 Park") and a 25 percent interest in a to-be-built 59-unit, five story multi-family rental development property ("Lofts at 40 Park").
|
|
(d)
|
Property debt balance consists of: (i) an amortizable loan, collateralized by the Metropolitan at 40 Park, with a balance of $37,640, bears interest at 3.25 percent, matures in September 2020; (ii) an amortizable loan, collateralized by the Shops at 40 Park, with a balance of $6,318, bears interest at 3.63 percent, matures in August 2018. On February 3, 2017, the venture obtained a construction loan for the Lofts at 40 Park with a maximum borrowing amount of $13,950, which bears interest at LIBOR plus 250 basis points and matures in February 2020.
|
|
(e)
|
During the second quarter 2016, the Company acquired the equity interests of its joint venture partner in Portside Apartment Holdings, L.L.C and PruRose Riverwalk G, L.L.C. for $39.6 million and $11.3 million, respectively, which increased its ownership to 100 percent in Portside Apartment Holdings, LLC and 50 percent in Riverwalk G Urban Renewal, L.L.C. (See Note 3: Recent Transactions – Acquisitions).
|
|
(f)
|
The loan was refinanced in October 2016. The new $82 million loan matures in November 2026 and has an interest rate of 3.21 percent. Concurrent with the refinancing in October 2016, the Company executed an agreement with the remaining partner which converted its 50 percent subordinated interest to 22.5 percent pari passu interest.
|
|
(g)
|
The Company also owns a 50 percent interest in a vacant land to accommodate the development of approximately 295 additional units of which 252 are currently approved.
|
|
(h)
|
The Company also owns a 20 percent residual interest in undeveloped land parcels: parcels 6, I, and J that can accommodate the development of 836 apartment units.
|
|
(i)
|
The construction loan has a maximum borrowing amount of $77,400 and provides, subject to certain conditions, two one-year extension options with a fee of 25 basis points for each year.
|
|
(j)
|
The construction/permanent loan has a maximum borrowing amount of $192,000. The Company owns an 85 percent interest with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines.
|
|
(k)
|
The mortgage loan has three one-year extension options, subject to certain conditions.
|
|
(l)
|
The Company’s equity interests in the joint ventures will be subordinated to Keystone Entities receiving a 15 percent internal rate of return (“IRR”) after which the Company will receive a 10 percent IRR on its subordinate equity and then all profit will be split equally.
|
|
(m)
|
Principal balance of $127,103 bears interest at 5.114 percent and matures on August 27, 2023; principal balance of $45,500 bears interest at 5.01 percent and matures on September 6, 2025; principal balance of $18,281 bears interest at LIBOR+5.5 percent and matures on December 21, 2020; principal balance of $22,500 bears interest at LIBOR+5.2 percent and matures on August 31, 2019; principal balance of $11,250 bears interest at LIBOR+5.5 percent and matures on January 9, 2019; principal balance of $10,425 bears interest at LIBOR+6.0 percent matures on August 27, 2017.
|
|
(n)
|
Includes the Company’s pari passu interests of $2.3 million in five properties and Company’s subordinated equity interests to Keystone Entities receiving a 15 percent internal rate of return (“IRR”) after which the Company will receive a 10 percent IRR on its subordinate equity and then all profit will be split equally.
|
|
(o)
|
Principal balance of $47,500 bears interest at 5.57 percent and matures on July 1, 2017; principal balance of $78,439 bears interest at rates ranging from 5.65 percent to 6.75 percent and matures on September 9, 2017; principal balance of $14,250 bears interest at 4.88 percent and matures on July 6, 2024; principal balance of $63,400 bears interest at 4.93 percent and matures on July 6, 2044; principal balance of $15,050 bears interest at 4.71 percent and matures on August 6, 2024.
|
|
(p)
|
Includes undivided interests in the same manner as investments in noncontrolling partnership, pursuant to ASC 970-323-25-12.
|
|
(q)
|
See Note 9: Mortgages, Loans Payable and Other Obligations for debt secured by interests in these assets.
|
|
(r)
|
The negative carrying value for this venture of $3,317 as of December 31, 2015, was included in accounts payable, accrued expenses and other liabilities.
|
|
(s)
|
The Company owns other interests in various unconsolidated joint ventures, including interests in assets previously owned and interest in ventures whose businesses are related to its core operations. These ventures are not expected to significantly impact the Company's operations in the near term.
|
|
(t)
|
On January 31, 2017, the Company sold its equity interest in the joint venture. See Note 3: Recent Transactions - Unconsolidated Joint Venture Activity.
|
|
(u)
|
On February 3, 2017, the Company acquired the equity interest of its partner. See Note 3: Recent Transactions - Unconsolidated Joint Venture Activity.
|
|
(v)
|
On February 15, 2017, the Company sold its 7.5 percent interest in Elmajo Urban Renewal Associates, LLC and Estuary Urban Renewal Unit B, LLC joint ventures that own operating multi-family properties, located in Weehawken, New Jersey for a combined sales price of $5.1 million.
|
The following is a summary of the Company’s equity in earnings (loss) of unconsolidated joint ventures for the years ended December 31, 2016 and 2015: (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Entity / Property Name
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Multi-family
|
|
|
|
|
|
|
|
|
|
Marbella RoseGarden, L.L.C./ Marbella
|
$
|
231
|
|
$
|
231
|
|
$
|
(19)
|
|
RoseGarden Monaco Holdings, L.L.C./ Monaco
|
|
(937)
|
|
|
(1,224)
|
|
|
(1,040)
|
|
Rosewood Morristown, L.L.C. / Metropolitan at 40 Park
|
|
(317)
|
|
|
(364)
|
|
|
(345)
|
|
Riverwalk G Urban Renewal, L.L.C./ RiverTrace at Port Imperial
|
|
(1,146)
|
|
|
(955)
|
|
|
(2,139)
|
|
Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C)
|
|
-
|
|
|
-
|
|
|
(203)
|
|
Crystal House Apartments Investors LLC / Crystal House
|
|
(870)
|
|
|
(123)
|
|
|
(139)
|
|
Roseland/Port Imperial Partners, L.P./ Riverwalk C
|
|
(120)
|
|
|
(474)
|
|
|
(646)
|
|
RoseGarden Marbella South, L.L.C./ Marbella II
|
|
(202)
|
|
|
-
|
|
|
-
|
|
Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B)
|
|
-
|
|
|
1
|
|
|
(15)
|
|
Riverpark at Harrison I, L.L.C./ Riverpark at Harrison
|
|
(190)
|
|
|
(363)
|
|
|
(150)
|
|
Capitol Place Mezz LLC / Station Townhouses
|
|
(2,440)
|
|
|
(3,687)
|
|
|
(75)
|
|
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside
|
|
(219)
|
|
|
-
|
|
|
(218)
|
|
RoseGarden Monaco, L.L.C./ San Remo Land
|
|
-
|
|
|
-
|
|
|
-
|
|
Grand Jersey Waterfront URA, L.L.C./ Liberty Landing
|
|
(80)
|
|
|
(32)
|
|
|
(54)
|
|
Hillsborough 206 Holdings, L.L.C./ Hillsborough 206
|
|
(53)
|
|
|
(5)
|
|
|
(10)
|
|
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)
|
|
393
|
|
|
344
|
|
|
320
|
|
Office
|
|
|
|
|
|
|
|
|
|
Red Bank Corporate Plaza, L.L.C./ Red Bank
|
|
448
|
|
|
392
|
|
|
380
|
|
12 Vreeland Associates, L.L.C./ 12 Vreeland Road
|
|
347
|
|
|
270
|
|
|
106
|
|
BNES Associates III / Offices at Crystal Lake
|
|
(15)
|
|
|
115
|
|
|
240
|
|
KPG-P 100 IMW JV, LLC / 100 Independence Mall West
|
|
-
|
|
|
(800)
|
|
|
(1,887)
|
|
Keystone-Penn
|
|
600
|
|
|
3,812
|
|
|
-
|
|
Keystone-TriState
|
|
(1,672)
|
|
|
(2,182)
|
|
|
(318)
|
|
KPG-MCG Curtis JV, L.L.C./ Curtis Center
|
|
(92)
|
|
|
475
|
|
|
624
|
|
Other
|
|
|
|
|
|
|
|
|
|
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial
|
|
(52)
|
|
|
(70)
|
|
|
(102)
|
|
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson (a)
|
|
24,180
|
|
|
3,036
|
|
|
2,602
|
|
Other
|
|
994
|
|
|
(1,569)
|
|
|
665
|
|
Company's equity in earnings (loss) of unconsolidated joint ventures
|
$
|
18,788
|
|
$
|
(3,172)
|
|
$
|
(2,423)
|
(a)Equity in earnings in 2016 includes the effect of distributions received from the joint venture’s refinancing. See Recent Joint Venture Transactions following in this footnote.
The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of December 31, 2016 and 2015: (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Assets:
|
|
|
|
|
|
|
|
Rental property, net
|
|
$
|
1,746,233
|
|
$
|
1,781,621
|
|
Other assets
|
|
|
278,289
|
|
|
307,000
|
|
Total assets
|
|
$
|
2,024,522
|
|
$
|
2,088,621
|
|
Liabilities and partners'/
|
|
|
|
|
|
|
|
members' capital:
|
|
|
|
|
|
|
|
Mortgages and loans payable
|
|
$
|
1,350,973
|
|
$
|
1,298,293
|
|
Other liabilities
|
|
|
247,212
|
|
|
215,951
|
|
Partners'/members' capital
|
|
|
426,337
|
|
|
574,377
|
|
Total liabilities and
|
|
|
|
|
|
|
|
partners'/members' capital
|
|
$
|
2,024,522
|
|
$
|
2,088,621
|
The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the years ended December 31, 2016, 2015 and 2014: (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Total revenues
|
$
|
377,711
|
|
$
|
318,980
|
|
$
|
305,034
|
|
Operating and other expenses
|
|
(262,703)
|
|
|
(220,982)
|
|
|
(233,320)
|
|
Depreciation and amortization
|
|
(75,512)
|
|
|
(71,711)
|
|
|
(42,985)
|
|
Interest expense
|
|
(58,390)
|
|
|
(52,972)
|
|
|
(32,862)
|
|
Net loss
|
$
|
(18,894)
|
|
$
|
(26,685)
|
|
$
|
(4,133)
|
Recent Joint Venture Transactions
The South Pier at Harborside venture had a $59.1 million mortgage loan collateralized by the hotel property, which bore interest at a rate of 6.15 percent and was scheduled to mature in November 2016. The venture also had a $3.0 million loan with the City of Jersey City, provided by the U.S. Department of Housing and Urban Development (“HUD loan”), which was guaranteed by the Company, half of which was indemnified by the venture partner. On September 14, 2016, the venture refinanced the mortgage loan and repaid in full the HUD loan, eliminating the previous guarantee which had caused the Company to carry this investment at a negative balance. The Company recorded this reversal through equity in earnings for the year ended December 31, 2016.
The new loan, with a balance of $100.0 million at December 31, 2016, bears interest at a rate of 3.668 percent and matures in October 2026. In connection with the refinancing, the venture distributed $35.7 million of the loan proceeds, of which the Company’s share was $17.8 million. Prior to this distribution, the Company had already received cumulative distributions in excess of cumulative earnings and contributions resulting in a carrying value of zero and as such, $17.8 million was recognized as equity in earnings for the year ended December 31, 2016. The Company has no obligations to fund future venture losses nor has any guarantees on the joint venture’s current debt.
|