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5. Real Estate Joint Ventures
During the nine months ended September 30, 2011, we had an investment in one unconsolidated real estate joint venture accounted for using the equity method of accounting. Information pertaining to this joint venture investment is set forth below (dollars in thousands):
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Maximum
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Investment Balance at (1)
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Date
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Nature of
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Exposure
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September 30, 2011
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December 31, 2010
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Acquired
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Ownership
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Activity
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to Loss (2)
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$
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(5,953
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)
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$
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(5,545
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)
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9/29/2005
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20
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%
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Operates 16 buildings
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$
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(1)
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The carrying amount of our investment in this joint venture was lower than our share of the equity in the joint venture by $5.2 million at September 30, 2011 and December 31, 2010 due to our deferral of gain on the contribution by us of real estate into the joint venture upon its formation. A difference will continue to exist to the extent the nature of our continuing involvement in the joint venture remains the same.
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(2)
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Derived from the sum of our investment balance and maximum additional unilateral capital contributions or loans required from us. Not reported above are additional amounts that we and our partner are required to fund when needed by this joint venture; these funding requirements are proportional to our respective ownership percentages. Also not reported above are additional unilateral contributions or loans from us, the amounts of which are uncertain, that we would be required to make if certain contingent events occur (see Note 16).
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The following table sets forth condensed balance sheets for this unconsolidated real estate joint venture (in thousands):
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September 30,
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December 31,
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2011
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2010
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Properties, net
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$
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60,332
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$
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61,521
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Other assets
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3,645
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4,174
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Total assets
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$
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63,977
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$
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65,695
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Liabilities (primarily debt)
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$
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67,780
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$
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67,454
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Owners equity
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(3,803
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)
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(1,759
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)
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Total liabilities and owners equity
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$
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63,977
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$
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65,695
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The following table sets forth condensed statements of operations for this unconsolidated real estate joint venture (in thousands):
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For the Three Months
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For the Nine Months
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Ended September 30,
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Ended September 30,
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2011
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2010
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2011
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2010
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Revenues
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$
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1,905
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$
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2,094
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$
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5,719
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$
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6,283
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Property operating expenses
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(904
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)
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(902
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)
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(2,869
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)
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(2,728
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)
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Interest expense
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(984
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)
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(899
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)
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(2,983
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)
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(2,846
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)
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Depreciation and amortization expense
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(578
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)
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(826
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)
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(1,753
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)
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(2,561
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)
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Net loss
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$
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(561
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)
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$
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(533
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)
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$
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(1,886
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)
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$
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(1,852
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)
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The table below sets forth information pertaining to our investments in consolidated real estate joint ventures at September 30, 2011 (dollars in thousands):
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Ownership
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September 30, 2011 (1)
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Date
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% at
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Nature of
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Total
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Pledged
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Total
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Acquired
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9/30/2011
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Activity
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Assets
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Assets
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Liabilities
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M Square Associates, LLC
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6/26/2007
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50
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%
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Operating two buildings and developing others (2)
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$
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60,190
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$
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48,435
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$
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44,735
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LW Redstone Company, LLC
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3/23/2010
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85
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%
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Developing business park (3)
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38,854
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2,453
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Arundel Preserve #5, LLC
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7/2/2007
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50
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%
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Operating one building (4)
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29,552
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28,590
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16,908
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COPT-FD Indian Head, LLC
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10/23/2006
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75
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%
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Developing land parcel (5)
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6,524
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MOR Forbes 2 LLC
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12/24/2002
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50
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%
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Operating one building (6)
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3,988
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44
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$
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139,108
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$
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77,025
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$
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64,140
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(1) Excludes amounts eliminated in consolidation.
(2) This joint ventures properties are in College Park, Maryland (in the Suburban Maryland region).
(3) This joint ventures property is in Huntsville, Alabama.
(4) This joint ventures property is in Hanover, Maryland (in the Baltimore/Washington Corridor).
(5) This joint ventures property is in Charles County, Maryland.
(6) This joint ventures property is in Lanham, Maryland (in the Suburban Maryland region).
Our commitments and contingencies pertaining to our real estate joint ventures are disclosed in Note 16.
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