Quarterly report pursuant to Section 13 or 15(d)

Real Estate Joint Ventures

v2.4.0.6
Real Estate Joint Ventures
 6 Months Ended
Jun. 30, 2012
Equity Method Investments and Joint Ventures [Abstract]  
Real Estate Joint Ventures
Real Estate Joint Ventures
 
During the six months ended June 30, 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):
Investment Balance at (1)
 
Date
 
 
 
Nature of
 
Maximum Exposure
June 30, 2012
 
December 31, 2011
 
Acquired
 
Ownership
 
Activity
 
to Loss (2)
$
(6,282
)
 
$
(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 June 30, 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):
 
June 30,
2012
 
December 31,
2011
Properties, net
$
58,891

 
$
59,792

Other assets
4,242

 
3,529

Total assets
$
63,133

 
$
63,321

 
 
 
 
Liabilities (primarily debt)
$
68,581

 
$
67,710

Owners’ equity
(5,448
)
 
(4,389
)
Total liabilities and owners’ equity
$
63,133

 
$
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 June 30,
 
For the Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Revenues
$
1,825

 
$
1,890

 
$
3,719

 
$
3,814

Property operating expenses
(724
)
 
(979
)
 
(1,461
)
 
(1,965
)
Interest expense
(1,028
)
 
(988
)
 
(2,153
)
 
(1,999
)
Depreciation and amortization expense
(594
)
 
(567
)
 
(1,164
)
 
(1,175
)
Net loss
$
(521
)
 
$
(644
)
 
$
(1,059
)
 
$
(1,325
)

 
The table below sets forth information pertaining to our investments in consolidated real estate joint ventures at June 30, 2012 (dollars in thousands):
 
 
 
 
Ownership
 
 
 
June 30, 2012
(1)
 
 
Date
 
% at
 
 
 
Total
 
Pledged
 
Total
 
 
Acquired
 
6/30/2012
 
Nature of Activity
 
Assets
 
Assets
 
Liabilities
LW Redstone Company, LLC
 
3/23/2010
 
85%
 
Developing business park (2)
 
$
61,464

 
$
16,141

 
$
11,758

M Square Associates, LLC
 
6/26/2007
 
50%
 
Operating two buildings and developing others (3)
 
60,126

 
48,029

 
43,584

Arundel Preserve #5, LLC
 
7/2/2007
 
50%
 
Operating one building (4)
 
34,694

 
33,582

 
17,716

COPT-FD Indian Head, LLC
 
10/23/2006
 
75%
 
Developing land parcel (5)
 
6,537

 
—

 
—

MOR Forbes 2 LLC
 
12/24/2002
 
50%
 
Operating one building (6)
 
3,787

 
—

 
50

 
 
 
 
 
 
 
 
$
166,608

 
$
97,752

 
$
73,108

(1) Excludes amounts eliminated in consolidation.
(2) This joint venture’s property is in Huntsville, Alabama.
(3) This joint venture’s properties are in College Park, Maryland (in the Suburban Maryland region).
(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.