Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

v3.23.3
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
 9 Months Ended
Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
As of September 30, 2023, the Company had an aggregate investment of approximately $119.8 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 in anticipation of possible development of rental properties. As of September 30, 2023, the unconsolidated joint ventures owned: seven multifamily properties totaling 2,146 apartment units, a retail property aggregating approximately 51,000 square feet and interests and/or rights to developable land parcels able to accommodate up to 829 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.
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, 2023, the outstanding balance of such debt, subject to guarantees, totaled $18.2 million of which $2.0 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 $1.1 million and $0.8 million for such services in the three months ended September 30, 2023 and 2022, respectively. The Company had $0.4 million and $0.2 million in accounts receivable due from its unconsolidated joint ventures as of September 30, 2023 and December 31, 2022, respectively.
As of September 30, 2023, the Company does not have any investments in unconsolidated joint ventures that are considered VIEs.
The following is a summary of the Company's unconsolidated joint ventures as of September 30, 2023 and December 31, 2022 (dollars in thousands):
Property Debt
Entity / Property Name Number of
Apartment Units
or Rentable SF		 Company's
Effective
Ownership % (a)		 Carrying Value As of September 30, 2023 Interest
Rate
September 30,
2023		 December 31,
2022		 Balance Maturity
Date
Multifamily
Metropolitan and Lofts at
40 Park (b) (c)		 189 units 25.00  % $ 682  $ 1,747  $ 60,767  (d) (d)
RiverTrace at Port Imperial 316 units 22.50  % 4,703  5,114  82,000  11/10/26   3.21  %
Capstone at Port Imperial 360 units 40.00  % 21,688  23,234  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  % 32,167  32,372  89,946  07/01/33 4.82  %
Urby at Harborside (e) 762 units 85.00  % 58,493  61,594  186,457  08/01/29 5.197  %
PI North - Land (b) (f) 829 potential units 20.00  % 1,678  1,678  —  —  —
Other (g) 419  419  —  —  —
Totals: $ 119,830  $ 126,158  $ 584,362 
(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 SOFR +2.85 percent that subsequent to September 30, 2023 was extended to mature on October 10, 2024; (ii) an amortizable loan, collateralized by the Shops at 40 Park, with a balance of $6,067, with a fixed rate of 5.125%. On January 10, 2023, the loan was modified bearing interest at SOFR +2.00 percent and matures in January 2025; and (iii) an interest only loan, collateralized by the Lofts at 40 Park, with a balance of $18,200, which bears interest at SOFR +2.00 percent that subsequent to September 30, 2023 was extended to mature on February 1, 2024, requiring a $1 million principal repayment, of which our share was 50 percent.
(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 had guaranteed $22 million of the principal outstanding debt. On February 1, 2023, the lender released the guarantor of all obligations under the Guaranty Agreement.
(f)The Company owns a 20 percent residual interest in undeveloped land parcel 6 and parcel I that can accommodate the development of 829 multifamily units.
(g)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, 2023 and 2022, respectively (dollars in thousands):
Three Months Ended
September 30,		 Nine Months Ended
September 30,
Entity / Property Name 2023 2022 2023 2022
Multifamily
Metropolitan and Lofts at 40 Park $ (357) $ (207) $ (965) $ (440)
RiverTrace at Port Imperial 125  101  407  248 
Capstone at Port Imperial 38  (109) (275) (60)
Riverpark at Harrison 68  94  473  139 
Station House (198) (160) (205) (615)
Urby at Harborside 615  (23) 3,588  2,745 
PI North - Land (80) —  (176) (173)
Liberty Landing (1) —  (4) (10)
Other
Other —  —  —  13 
Company's equity in earnings of unconsolidated joint ventures (a) $ 210  $ (304) $ 2,843  $ 1,847 
(a)Amounts are net of amortization of basis differences of $154 for each of the three months ended September 30, 2023 and 2022 and $463 for each of the nine months ended September 30, 2023 and 2022.
The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of September 30, 2023 and December 31, 2022:
(dollars in thousands) September 30,
2023		 December 31,
2022
Assets:
Rental Property, net $ 731,601  $ 745,210 
Other assets 32,708  39,241 
Total assets $ 764,309  $ 784,451 
Liabilities and partners'/members' capital:
Mortgages and loans payable $ 584,362  $ 587,913 
Other liabilities 9,680  15,545 
Partners'/members' capital 170,267  180,993 
Total liabilities and partners'/members' capital $ 764,309  $ 784,451 
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 three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):

Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Total revenues $ 26,266  $ 34,402  $ 70,967  $ 111,874 
Operating and other expenses (9,107) (19,651) (26,236) (67,467)
Depreciation and amortization (5,591) (6,384) (16,728) (19,325)
Interest expense (7,520) (7,852) (22,995) (21,679)
Net income $ 4,048  $ 515  $ 5,008  $ 3,403