Quarterly report pursuant to Section 13 or 15(d)

Real Estate Joint Ventures

v2.4.0.6
Real Estate Joint Ventures
3 Months Ended
Mar. 31, 2012
Real Estate Joint Ventures  
Real Estate Joint Ventures

5.                                      Real Estate Joint Ventures

 

During the three months ended March 31, 2012, 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):

 

 

 

 

 

 

 

 

 

 

 

Maximum

 

Investment Balance at (1)

 

Date

 

 

 

Nature of

 

Exposure

 

March 31, 2012

 

December 31, 2011

 

Acquired

 

Ownership

 

Activity

 

to Loss (2)

 

$

 (6,178

)

$

(6,071

)

9/29/2005

 

20

%

Operates 16 Buildings

 

$

 

 

(1)         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 March 31, 2012 and December 31, 2011 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.

 

(2)         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 15).

 

The following table sets forth condensed balance sheets for this unconsolidated real estate joint venture (in thousands):

 

 

 

March 31,

 

December 31,

 

 

 

2012

 

2011

 

Properties, net

 

$

59,333

 

$

59,792

 

Other assets

 

4,403

 

3,529

 

Total assets

 

$

63,736

 

$

63,321

 

 

 

 

 

 

 

Liabilities (primarily debt)

 

$

68,663

 

$

67,710

 

Owners’ equity

 

(4,927

)

(4,389

)

Total liabilities and owners’ equity

 

$

63,736

 

$

63,321

 

 

The following table sets forth condensed statements of operations for this unconsolidated real estate joint venture (in thousands):

 

 

 

For the Three Months

 

 

 

Ended March 31,

 

 

 

2012

 

2011

 

Revenues

 

$

1,894

 

$

1,924

 

Property operating expenses

 

(737

)

(986

)

Interest expense

 

(1,125

)

(1,011

)

Depreciation and amortization expense

 

(570

)

(608

)

Net loss

 

$

(538

)

$

(681

)

 

The table below sets forth information pertaining to our investments in consolidated real estate joint ventures at March 31, 2012 (dollars in thousands):

 

 

 

 

 

Ownership

 

 

 

March 31, 2012 (1)

 

 

 

Date

 

% at

 

Nature of

 

Total

 

Pledged

 

Total

 

 

 

Acquired

 

3/31/2012

 

Activity

 

Assets

 

Assets

 

Liabilities

 

M Square Associates, LLC

 

6/26/2007

 

50

%

Operating two buildings and developing others (2)

 

$

60,260

 

$

47,845

 

$

44,117

 

LW Redstone Company, LLC

 

3/23/2010

 

85

%

Developing business park (3)

 

55,255

 

15,858

 

11,373

 

Arundel Preserve #5, LLC

 

7/2/2007

 

50

%

Operating one building (4)

 

32,477

 

31,619

 

18,079

 

COPT-FD Indian Head, LLC

 

10/23/2006

 

75

%

Developing land parcel (5)

 

6,544

 

 

 

MOR Forbes 2 LLC

 

12/24/2002

 

50

%

Operating one building (6)

 

3,836

 

 

40

 

 

 

 

 

 

 

 

 

$

158,372

 

$

95,322

 

$

73,609

 

 

(1) Excludes amounts eliminated in consolidation.

(2) This joint venture’s properties are in College Park, Maryland (in the Suburban Maryland region).

(3) This joint venture’s property is in Huntsville, Alabama.

(4) This joint venture’s property is in Hanover, Maryland (in the Baltimore/Washington Corridor).

(5) This joint venture’s property is in Charles County, Maryland.

(6) This joint venture’s 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 15.