Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

v3.22.2.2
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
 9 Months Ended
Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES INVESTMENTS IN UNCONSOLIDATED JOINT VENTURESAs of September 30, 2022, the Company had an aggregate investment of approximately $129.6 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 properties, or to acquire land in anticipation of possible development of rental properties. As of September 30, 2022, the unconsolidated joint ventures owned: seven multifamily properties totaling 2,146 apartment units, a retail property aggregating approximately 51,000 square feet, a 351-room hotel and interests and/or rights to developable land
parcels able to accommodate up to 771 apartment units. The Company’s unconsolidated interests range from 20 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 September 30, 2022, the outstanding balance of such debt, subject to guarantees, totaled $189.2 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, related parties to the Company, and recognized $0.8 million and $0.9 million for such services in the three months ended September 30, 2022 and 2021, respectively. The Company had $0.2 million and $0.2 million in accounts receivable due from its unconsolidated joint ventures as of September 30, 2022 and December 31, 2021, respectively.
The Company does not have any investments in unconsolidated joint ventures as of September 30, 2022 that are considered VIEs. The Company had three investments in unconsolidated joint ventures which were 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 Company determined that these unconsolidated joint ventures are no longer VIEs since these ventures have completed their development projects and are now in operation.
The following is a summary of the Company's unconsolidated joint ventures as of September 30, 2022 and December 31, 2021 (dollars in thousands):
Entity / Property Name Number of
Apartment Units
or Rentable SF		 Company's
Effective
Ownership % (a)		 Carrying Value  Balance  Property Debt Interest
Rate
As of September 30, 2022
September 30,
2022		 December 31,
2021		 Maturity
Date
Multifamily
Metropolitan and Lofts at
40 Park (b) (c)		 189 units 25.00  % $ 1,980  $ 2,547  $ 60,767  (d) (d)
RiverTrace at Port Imperial 316 units 22.50  % 5,547  6,077  82,000  11/10/26   3.21  %
Capstone at Port Imperial 360 units 40.00  % 24,287  27,401  135,000  12/22/24 SOFR+ 1.2  %
Riverpark at Harrison 141 units 45.00  % —  —  30,192  07/01/35 3.19  %
Station House 378 units 50.00  % 32,479  33,004  91,914  07/01/33 4.82  %
Urby at Harborside (e) 762 units 85.00  % 62,900  66,418  189,201  08/01/29 5.197  %
PI North - Land (b) (f) 771 potential units 20.00  % 1,678  1,678  —  —  —
Liberty Landing (g) 850 potential units 50.00  % 300  300  —  —  —
Other
Hyatt Regency Hotel Jersey City 351 rooms 50.00  % —  —  100,000  10/01/26 3.668  %
Other (h) 404  347  —  —  —
Totals: $ 129,575  $ 137,772  $ 689,074 
(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 25 percent interest in a 50,973 square feet retail building ("Shops at 40 Park") and a 50 percent interest in a 59-unit, five story multifamily rental property ("Lofts at 40 Park").
(d)Property debt balance consists of: (i) an interest only loan, collateralized by the Metropolitan at 40 Park, with a balance of $36,500, bears interest at LIBOR +2.85 percent, matures in October 2023; (ii) an amortizable loan, collateralized by the Shops at 40 Park, with a balance of $6,067, bears interest at LIBOR +1.50 percent and matures in October 2022. The loan was extended on October 11, 2022, for three months and matures in January 2023 with a fixed rate of 5.125%; (iii) an interest only loan, collateralized by the Lofts at 40 Park, with a balance of $18,200, which bears interest at LIBOR +1.50 percent and matures in January 2023.
(e)The Company owns an 85 percent interest with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines. The Company has guaranteed $22 million of the principal outstanding debt.
(f)The Company owns a 20 percent residual interest in undeveloped land parcels: parcels 6, I, and J that can accommodate the development of 771 multifamily units.
(g)Pursuant to a notice letter to its joint venture partner dated January 6, 2022, the Company intends to not proceed with the acquisition and development of Liberty Landing.
(h)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.
The following is a summary of the Company’s equity in earnings (loss) of unconsolidated joint ventures for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):
Three Months Ended
September 30,		 Nine Months Ended
September 30,
Entity / Property Name 2022 2021 2022 2021
Multifamily
Metropolitan and Lofts at 40 Park $ (207) $ (163) $ (440) $ (659)
RiverTrace at Port Imperial 101  (4) 248  (14)
Capstone at Port Imperial (a) (109) 171  (60) (287)
Riverpark at Harrison 94  (1,008) 139  (1,135)
Station House (160) (291) (615) (1,109)
Urby at Harborside (b) (23) (1,026) 2,745  (90)
PI North - Land —  (38) (173) (156)
Liberty Landing —  (3) (10) (3)
Office
12 Vreeland Road (c) —  —  —  2 
Offices at Crystal Lake (d) —  22  —  (113)
Other
Other —  616  13  733 
Company's equity in earnings (loss) of unconsolidated joint ventures (e) $ (304) $ (1,724) $ 1,847  $ (2,831)
(a)The property commenced operations in second quarter 2021.
(b)Includes $2.6 million of the Company’s share of the venture’s income from its sale of an economic urban tax credit certificate from the State of New Jersey to a third party. The venture has an agreement to sell tax credits to a third party over the next five years for $3.0 million per year for a total of $15 million. The sales are subject to the venture obtaining the tax credits from the State of New Jersey each year and transferring the tax credit certificate to the buyer each year.
(c)On April 29, 2021, the Company sold its interest in the joint venture for a gross sale price of approximately $2 million.
(d)On September 1, 2021, the Company sold its interest in this unconsolidated joint venture to its venture partner for $1.9 million.
(e)Amounts are net of amortization of basis differences of $154 and $141 for the three months ended September 30, 2022 and 2021, respectively, and $463 and $427 for the nine months ended September 30, 2022 and 2021, respectively.