COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Real Estate Joint Ventures

Real Estate Joint Ventures

9 Months Ended

Sep. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

Consolidated Real Estate Joint Ventures

The table below sets forth information as of September 30, 2024 pertaining to our investments in consolidated real estate joint ventures, which are each variable interest entities (dollars in thousands):


		Nominal Ownership %		September 30, 2024
	Date Formed			Total Assets		Encumbered Assets		Total Liabilities		Mortgage Debt
Entity			Location
LW Redstone Company, LLC (1)	3/23/2010	85%	Huntsville, Alabama	$	740,718	$	35,023	$	74,670	$	22,227
Stevens Investors, LLC	8/11/2015	95%	Washington, D.C.	130,342		—		2,599		—
M Square Associates, LLC	6/26/2007	50%	College Park, Maryland	97,273		56,446		49,272		47,741
				$	968,333	$	91,469	$	126,541	$	69,968

(1)We fund all capital requirements. Our partner receives distributions of $1.2 million of annual operating cash flows and we receive the remainder.

Unconsolidated Real Estate Joint Ventures

The table below sets forth information pertaining to our investments in unconsolidated real estate joint ventures accounted for using the equity method of accounting (dollars in thousands):


	Date Formed	Nominal Ownership %	Number of Properties	Carrying Value of Investment (1)
Entity				September 30, 2024		December 31, 2023
Redshift JV LLC	1/10/2023	10%	3	$	20,955	$	21,053
BREIT COPT DC JV LLC	6/20/2019	10%	9	9,781		10,629
Quark JV LLC	12/14/2022	10%	2	6,711		6,727
B RE COPT DC JV III LLC	6/2/2021	10%	2	2,273		2,643
B RE COPT DC JV II LLC (2)	10/30/2020	10%	8	(3,370)		(2,777)
			24	$	36,350	$	38,275

(1)Included $39.7 million and $41.1 million reported in “investment in unconsolidated real estate joint ventures” and $3.4 million and $2.8 million for investments with deficit balances reported in “other liabilities” on our consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively.

(2)Our investment in B RE COPT DC JV II LLC was lower than our share of the joint venture’s equity by $6.7 million as of September 30, 2024 and $6.8 million as of December 31, 2023 due to a difference between our cost basis and our share of the joint venture’s underlying equity in its net assets. We recognize adjustments to our share of the joint venture’s earnings and losses resulting from this basis difference in the underlying assets of the joint venture.