| Investments in Unconsolidated Real Estate Ventures |
4.Investments in Unconsolidated Real Estate Ventures The following is a summary of the composition of our investments in unconsolidated real estate ventures: | | | | | | | | | | | | | | | | | | | | Effective | | | | | | | | | Ownership | | | Real Estate Venture | | Interest (1) | | June 30, 2025 | | December 31, 2024 | | | | | | (In thousands) | J.P. Morgan Global Alternatives ("J.P. Morgan") (2) | | 50.0% | | $ | 74,447 | | $ | 74,188 | 4747 Bethesda Venture | | 20.0% | | | 9,621 | | | 10,813 | Brandywine Realty Trust | | 30.0% | | | 6,962 | | | 6,954 | Other | | | | | 2,829 | | | 1,699 | Total investments in unconsolidated real estate ventures (3) (4) | | | | $ | 93,859 | | $ | 93,654 |
| (1) | Reflects our effective ownership interests as of June 30, 2025. We have multiple investments with certain venture partners in the underlying real estate. |
| (2) | J.P. Morgan is the advisor for an institutional investor. |
| (3) | Excludes our 10.0% subordinated interest in one commercial building and the Fortress Assets. See Note 1 for more information. Also, excludes our interest in an investment in the real estate venture that owns 1101 17th Street for which we have discontinued applying the equity method of accounting since June 30, 2018 because we received distributions in excess of our contributions and share of earnings, which reduced our investment to zero; further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support. |
| (4) | As of June 30, 2025 and December 31, 2024, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $11.1 million and $10.6 million, resulting principally from our zero-investment balance in certain real estate ventures and capitalized interest. |
We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of $2.7 million and $5.6 million for the three and six months ended June 30, 2025, and $4.1 million and $8.7 million for the three and six months ended June 30, 2024. The following is a summary of the debt of our unconsolidated real estate ventures: | | | | | | | | | | | Weighted | | | | | | | | | Average Effective | | | | | Interest Rate (1) | | June 30, 2025 | | December 31, 2024 | | | | | | (In thousands) | Variable rate (2) | | 5.66% | | $ | 235,000 | | $ | 175,000 | Fixed rate (3) | | — | | | — | | | 60,000 | Mortgage loans | | | | | 235,000 | | | 235,000 | Unamortized deferred financing costs and premium / discount, net | | | | | (4,431) | | | (5,795) | Mortgage loans, net (4) | | | | $ | 230,569 | | $ | 229,205 |
| (1) | Weighted average effective interest rate as of June 30, 2025. |
| (2) | Includes variable rate mortgage loans with interest rate cap agreements. The $60.0 million mortgage loan collateralized by 1101 17th Street matured on June 13, 2025, and is under a forbearance agreement through August 14, 2025. |
| (3) | Includes variable rate mortgage loans with interest rates fixed by interest rate swap agreements. |
| (4) | See Note 17 for additional information on guarantees of the debt of certain of our unconsolidated real estate ventures. |
The following is a summary of financial information for our unconsolidated real estate ventures: | | | | | | | | | June 30, 2025 | | December 31, 2024 | | | | (In thousands) | Combined balance sheet information: (1) | | | | | | | Real estate, net | | $ | 421,136 | | $ | 424,170 | Other assets, net | | | 62,221 | | | 64,478 | Total assets | | $ | 483,357 | | $ | 488,648 | | | | | | | | Mortgage loans, net | | $ | 230,569 | | $ | 229,205 | Other liabilities, net | | | 23,777 | | | 27,019 | Total liabilities | | | 254,346 | | | 256,224 | Total equity | | | 229,011 | | | 232,424 | Total liabilities and equity | | $ | 483,357 | | $ | 488,648 |
| | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2025 | | 2024 | | 2025 | | 2024 | | | | | (In thousands) | Combined income statement information: (1) (2) | | | | | | | | | | | | | Total revenue | | $ | 8,266 | | $ | 7,912 | | $ | 16,578 | | $ | 21,194 | Operating income (3) | | | 5,285 | | | 1,414 | | | 6,648 | | | 5,938 | Net income (loss) (3) | | | 1,340 | | | (2,511) | | | (1,087) | | | (1,867) |
| (1) | Excludes amounts related to the Fortress Assets and one commercial building in which we have a 10.0% subordinated interest. |
| (2) | Excludes amounts related to The Foundry and the L'Enfant Plaza assets as we discontinued applying the equity method of accounting after September 30, 2023 and September 30, 2022. In April 2024, the lender foreclosed on the mortgage loan secured by The Foundry and took possession of the property. In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza assets and took possession of the properties. |
| (3) | Includes a $3.0 million gain for the three and six months ended June 30, 2025 related to a prior year disposition. Includes the gain on the sale of Central Place Tower of $894,000 for the six months ended June 30, 2024. |
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