Investments in Unconsolidated Real Estate Joint Ventures | Investments in Unconsolidated Real Estate Joint Ventures The equity method of accounting is used to account for each of the individual joint ventures. We have an ownership interest in the following unconsolidated real estate joint ventures: As of September 30, 2018 Joint Venture Outlet Center Location Ownership % Square Feet (in 000's) Carrying Value of Investment (in millions) Total Joint Venture Debt, Net (in millions) (1) Investments included in investments in unconsolidated joint ventures: National Harbor National Harbor, MD 50.0 % 341 $ 0.6 $ 86.7 RioCan Canada Various 50.0 % 923 110.7 10.2 $ 111.3 Investments included in other liabilities: Columbus (2) Columbus, OH 50.0 % 355 $ (1.1 ) $ 84.7 Charlotte (2) Charlotte, NC 50.0 % 398 (10.3 ) 99.5 Galveston/Houston (2) Texas City, TX 50.0 % 353 (15.3 ) 79.5 $ (26.7 ) As of December 31, 2017 Joint Venture Outlet Center Location Ownership % Square Feet (in 000's) Carrying Value of Investment (in millions) Total Joint Venture Debt, Net (1) Investments included in investments in unconsolidated joint ventures: Columbus Columbus, OH 50.0 % 355 $ 1.1 $ 84.4 National Harbor National Harbor, MD 50.0 % 341 2.5 86.4 RioCan Canada Various 50.0 % 923 115.8 11.1 $ 119.4 Investments included in other liabilities: Charlotte (2) Charlotte, NC 50.0 % 398 $ (4.1 ) $ 89.8 Galveston/Houston (2) Texas City, TX 50.0 % 353 (13.0 ) 79.4 $ (17.1 ) (1) Net of debt origination costs and including premiums of $1.4 million as of September 30, 2018 and December 31, 2017. (2) The negative carrying value is due to distributions exceeding contributions and increases or decreases from our equity in earnings of the joint venture. Fees we received for various services provided to our unconsolidated joint ventures were recognized in management, leasing and other services as follows (in thousands): Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Fee: Management and marketing $ 571 $ 564 $ 1,704 $ 1,676 Leasing and other fees 12 24 122 100 Total Fees $ 583 $ 588 $ 1,826 $ 1,776 Our investments in real estate joint ventures are reduced by the percentage of the profits earned for leasing and development services associated with our ownership interest in each joint venture. Our carrying value of investments in unconsolidated joint ventures differs from our share of the assets reported in the "Summary Balance Sheets - Unconsolidated Joint Ventures" shown below due to adjustments to the book basis, including intercompany profits on sales of services that are capitalized by the unconsolidated joint ventures. The differences in basis (totaling $4.1 million and $4.2 million as of September 30, 2018 and December 31, 2017 , respectively) are amortized over the various useful lives of the related assets. Charlotte In June 2018, the Charlotte joint venture closed on a $100.0 million mortgage loan with a fixed interest rate of 4.3% and a maturity date of July 2028. The proceeds from the loan were used to pay off the $90.0 million mortgage loan with an interest rate of LIBOR + 1.45% , which had an original maturity date of November 2018. The joint venture distributed the incremental net loan proceeds of $9.3 million equally to the partners. RioCan Canada During the third quarter of 2017, the joint venture determined for its Bromont and Saint Sauveur, Quebec outlet centers that the estimated future undiscounted cash flows of those properties did not exceed the properties' carrying values based on the joint venture's expectations of the future performance of the centers. Therefore, the joint venture recorded an $18.0 million non-cash impairment charge in its statement of operations, which equaled the excess of the properties' carrying values over their fair values. The fair values were determined using a market approach considering the prevailing market income capitalization rates for similar assets. Our share of this impairment charge, $9.0 million , was recorded in equity in earnings of unconsolidated joint ventures in our consolidated statement of operations. Condensed combined summary financial information of unconsolidated joint ventures accounted for using the equity method is as follows (in thousands): Condensed Combined Balance Sheets - Unconsolidated Joint Ventures September 30, 2018 December 31, 2017 Assets Land $ 94,118 $ 95,686 Buildings, improvements and fixtures 503,430 505,618 Construction in progress 3,169 3,005 600,717 604,309 Accumulated depreciation (110,213 ) (93,837 ) Total rental property, net 490,504 510,472 Cash and cash equivalents 13,366 25,061 Deferred lease costs and other intangibles, net 9,387 10,985 Prepaids and other assets 18,142 15,073 Total assets $ 531,399 $ 561,591 Liabilities and Owners' Equity Mortgages payable, net $ 360,600 $ 351,259 Accounts payable and other liabilities 11,114 14,680 Total liabilities 371,714 365,939 Owners' equity 159,685 195,652 Total liabilities and owners' equity $ 531,399 $ 561,591 Three months ended Nine months ended Condensed Combined Statements of Operations September 30, September 30, - Unconsolidated Joint Ventures 2018 2017 2018 2017 Revenues $ 23,538 $ 25,241 $ 70,940 $ 72,588 Expenses: Property operating 9,147 8,987 28,032 27,242 General and administrative 49 72 301 289 Asset impairment — 18,042 — 18,042 Depreciation and amortization 6,860 6,998 19,768 21,453 Total expenses 16,056 34,099 48,101 67,026 Operating income (loss) 7,482 (8,858 ) 22,839 5,562 Interest expense (3,810 ) (2,776 ) (10,275 ) (7,497 ) Other non-operating income 68 20 175 23 Net income (loss) $ 3,740 $ (11,614 ) $ 12,739 $ (1,912 ) The Company and Operating Partnership's share of: Net income (loss) $ 1,833 $ (5,893 ) $ 6,233 $ (1,201 ) Depreciation and amortization and asset impairments (real estate related) $ 3,466 $ 12,604 $ 10,020 $ 19,992 |