Equity Investments in Unconsolidated Joint Ventures | Equity Investments in Unconsolidated Joint Ventures As of September 30, 2022 and December 31, 2021, we had three joint venture agreements: 1) R2G Venture LLC (“R2G”), 2) RGMZ, and 3) Ramco HHF NP LLC whereby we own 51.5%, 6.4%, and 7.0%, respectively, of the equity in each joint venture. As of September 30, 2022, R2G owned 11 income producing shopping centers, RGMZ owned 48 net lease retail properties, and Ramco HHF NP LLC did not own any income producing properties. We and the joint venture partners have joint approval rights for major decisions, including those regarding property operations. We cannot make significant decisions without our partner’s approval. Accordingly, we account for our interest in the joint ventures using the equity method of accounting. The combined condensed financial information for our unconsolidated joint ventures is summarized as follows: Balance Sheets September 30, 2022 December 31, 2021 (In thousands) ASSETS R2G RGMZ Total R2G RGMZ Total Investment in real estate, net $ 676,327 $ 215,670 $ 891,997 $ 489,557 $ 152,992 $ 642,549 Other assets 85,551 83,989 169,540 71,543 74,295 145,838 Total Assets $ 761,878 $ 299,659 $ 1,061,537 $ 561,100 $ 227,287 $ 788,387 LIABILITIES AND OWNERS' EQUITY Notes payable $ 80,021 $ 185,269 $ 265,290 $ 28,516 $ 130,519 $ 159,035 Other liabilities 41,354 6,420 47,774 32,914 3,168 36,082 Owners' equity 640,503 107,970 748,473 499,670 93,600 593,270 Total Liabilities and Owners' Equity $ 761,878 $ 299,659 $ 1,061,537 $ 561,100 $ 227,287 $ 788,387 RPT's equity investments in unconsolidated joint ventures $ 333,467 $ 6,871 $ 340,338 $ 261,229 $ 5,954 $ 267,183 Three Months Ended September 30, Statements of Operations 2022 2021 (In thousands) R2G RGMZ Total R2G RGMZ Other Total Total revenue $ 17,270 $ 5,512 $ 22,782 $ 9,259 $ 1,894 $ — $ 11,153 Total expenses 13,006 3,684 16,690 7,163 1,038 (1) 8,200 Operating income 4,264 1,828 6,092 2,096 856 1 2,953 Interest expense 620 2,669 3,289 — 720 — 720 Loss on extinguishment of debt — 318 318 — — — — Income tax expense — 29 29 — — — — Net income (loss) $ 3,644 $ (1,188) $ 2,774 $ 2,096 $ 136 $ 1 $ 2,233 Preferred member dividends 41 11 52 30 (4) — 26 Net income (loss) available to common members $ 3,603 $ (1,199) $ 2,722 $ 2,066 $ 140 $ 1 $ 2,207 RPT's share of earnings (loss) from unconsolidated joint ventures $ 1,856 $ (77) $ 1,779 $ 1,065 $ 9 $ — $ 1,074 Nine Months Ended September 30, Statements of Operations 2022 2021 (In thousands) R2G RGMZ Total R2G RGMZ Other Total Total revenue $ 45,726 $ 14,515 $ 60,241 $ 21,462 $ 3,298 $ — $ 24,760 Total expenses 42,844 9,683 52,527 15,709 1,781 7 17,497 Operating income (loss) 2,882 4,832 7,714 5,753 1,517 (7) 7,263 Interest expense 1,678 5,915 7,593 — 1,210 — 1,210 Loss on extinguishment of debt — 318 318 — — — — Income tax expense — 35 35 — — — — Net income (loss) $ 1,204 $ (1,436) $ (232) $ 5,753 $ 307 $ (7) $ 6,053 Preferred member dividends 115 34 149 66 12 — 78 Net income (loss) available to common members $ 1,089 $ (1,470) $ (381) $ 5,687 $ 295 $ (7) $ 5,975 RPT's share of earnings (loss) from unconsolidated joint ventures $ 561 $ (94) $ 467 $ 2,928 $ 19 $ — $ 2,947 Acquisitions The following table provides a summary of R2G's acquisitions during the nine months ended September 30, 2022: Gross Property Name Location GLA Date Acquired Contract Price (1) Purchase Price Debt Issued or Assumed (in thousands) (In thousands) Mary Brickell Village Miami, FL 199 7/07/22 $ 216,000 $ 212,421 $ — Total R2G acquisitions 199 $ 216,000 $ 212,421 $ — (1) Contract price does not include purchase price adjustments made at closing and capitalized closing costs. The total aggregate fair value of the R2G acquisitions was allocated and is reflected in the following table in accordance with accounting guidance for asset acquisitions. At the time of acquisition, these assets and liabilities were considered Level 3 fair value measurements: As of Acquisition Date (In thousands) Land $ 135,637 Buildings and improvements 64,739 Above market leases 937 Lease origination costs 16,160 Below market leases (5,052) Net assets acquired $ 212,421 The following table provides a summary of RGMZ's acquisitions during the nine months ended September 30, 2022: Gross Property Name Location GLA Date Acquired Contract Price (1) Purchase Price Debt Issued or Assumed (in thousands) (In thousands) RPT Realty - 2 Income Producing Properties Various (2) 132 3/22/22 $ 11,576 $ 11,679 $ (6,946) Single-Tenant Property Ridgeland, MS 2 4/01/22 2,200 2,315 (1,320) Ansonia Landing Ansonia, CT 91 5/03/22 14,000 14,238 (8,400) Walgreens Portfolio Various (3) 71 5/25/22 33,800 34,261 (20,897) RPT Realty - 1 Income Producing Property Northborough, MA 55 9/08/22 10,229 9,290 (6,649) Total RGMZ acquisitions 351 $ 71,805 $ 71,783 $ (44,212) (1) Contract price does not include purchase price adjustments made at closing and capitalized closing costs. (2) Net lease retail properties acquired are located in Colorado and Georgia. (3) Net lease retail properties acquired are located in Louisiana and Michigan. The total aggregate fair value of the RGMZ acquisitions was allocated and is reflected in the following table in accordance with accounting guidance for asset acquisitions. At the time of acquisition, these assets and liabilities were considered Level 3 fair value measurements: As of Acquisition Date (In thousands) Land $ 20,592 Buildings and improvements 44,308 Above market leases 285 Lease origination costs 6,934 72,119 Mortgage debt assumed at fair value (19,187) Below market leases (2,046) Net assets acquired $ 50,886 Dispositions There was no disposition activity in the nine months ended September 30, 2022 by any of our unconsolidated joint ventures. Debt During the nine months ended September 30, 2022, our R2G joint venture closed on a fixed mortgage secured by Village Shoppes at Canton for an aggregate principal amount of $22.1 million. The mortgage has an annual rate of 2.81% and matures on March 1, 2029. During the nine months ended September 30, 2022, our R2G joint venture closed on a fixed mortgage secured by Bedford Marketplace for an aggregate principal amount of $30.0 million. The mortgage has an annual rate of 2.93% and matures on March 1, 2032. The following table summarizes the R2G's fixed rate mortgages: September 30, 2022 December 31, 2021 Mortgage Debt Maturity Date Principal Balance Interest Rate/Weighted Average Interest Rate Principal Balance Interest Rate/Weighted Average Interest Rate (in thousands) (in thousands) Village Shoppes of Canton 3/1/2029 $ 22,050 2.81 % $ — — % East Lake Woodlands 12/1/2031 12,750 2.94 % 12,750 2.94 % South Pasadena 12/1/2031 16,330 2.94 % 16,330 2.94 % Bedford Marketplace 3/1/2032 29,975 2.93 % — — % $ 81,105 2.90 % $ 29,080 2.94 % Unamortized deferred financing costs (1,084) (564) Total $ 80,021 $ 28,516 In July 2022, RGMZ entered into an amendment to increase its secured credit facility from $240.0 million to $300.0 million which also includes an accordion feature allowing it to increase future potential commitments up to a total capacity of $600.0 million. The amendment also changed the indexed interest rate from LIBOR to the SOFR.. As of September 30, 2022, RGMZ had $166.1 million outstanding under its secured credit facility, an increase of $35.6 million from December 31, 2021, as result of borrowings in 2022. The interest rate at September 30, 2022 was 5.33%. In addition, RGMZ has a fixed rate mortgage secured by certain single-tenant properties for an aggregate principal amount of $20.8 million. The mortgage has an annual rate of 3.56% and matures on December 1, 2030. Joint Venture Management and Other Fee Income We receive a property management fee which is based upon 4.0% of gross revenues received for providing services to R2G and recognize these fees as the services are rendered. We also receive leasing fees from R2G for new leases and renewal leases of 6.0% and 2.5%, respectively, of total expected rent over the length of the lease, capped at 10 years. We receive an asset management fee for services provided to RGMZ, which is based upon 0.25% of the gross asset value of net lease retail assets in RGMZ. We also receive leasing fees from RGMZ for new leases and renewal leases of 5.0% and 2.5%, respectively, of total expected rent over the length of the lease, capped at 10 years. The Company will be paid an additional annual incentive management fee equal to 0.15% based upon the appraised gross asset value of the net lease retail assets in RGMZ. However, the Company will not earn this fee until meeting certain financial hurdles measured at sale or initial public offering of the RGMZ joint venture. Notwithstanding the forgoing for both joint ventures, for tenants with space in excess of 17,000 rentable square feet, the fees are as follows: (i) $1 per rentable square foot for each renewal lease, (ii) (a) $5 per rentable square foot for each new lease for grocer and (b) $4 per rentable square foot for each new lease for non-grocer. We also can receive fees from both joint ventures for construction management and development management. We are responsible for paying any third-party leasing fees. The following table provides information for our fees earned which are reported in our condensed consolidated statements of operations and comprehensive income: Three Months Ended September 30, 2022 2021 (In thousands) R2G RGMZ Total R2G RGMZ Total Management fees $ 644 $ 183 $ 827 $ 348 $ 58 $ 406 Leasing fees 128 145 273 15 — 15 Construction fees 131 — 131 5 — 5 Total $ 903 $ 328 $ 1,231 $ 368 $ 58 $ 426 Nine Months Ended September 30, 2022 2021 (In thousands) R2G RGMZ Total R2G RGMZ Total Management fees $ 1,643 $ 493 $ 2,136 $ 822 $ 99 $ 921 Leasing fees 425 156 581 346 — 346 Construction fees 131 — 131 5 — 5 Total $ 2,199 $ 649 $ 2,848 $ 1,173 $ 99 $ 1,272 |