Investment in Affiliates (Tables)

6 Months Ended

Jun. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

mortgage debt of joint ventures [Table Text Block]

The following table provides a summary of the mortgage debt held by our unconsolidated joint ventures (dollars in thousands):



	FPO Ownership	Effective Interest Rate	Maturity Date	Principal Balance at June 30, 2017⁽¹⁾		Principal Balance at December 31, 2016⁽¹⁾
Rivers Park I and II ⁽²⁾	25%	LIBOR + 1.90%⁽³⁾	September 2017	$	—	$	28,000
1750 H Street, NW⁽⁴⁾	50%	3.92%	August 2024	32,000		32,000
Prosperity Metro Plaza⁽⁵⁾	51%	3.91%	December 2029	50,000		50,000
Weighted Average / Total		3.91%		$	82,000	$	110,000


⁽¹⁾	Reflects the entire balance of the debt secured by the properties, not our portion of the debt.


⁽²⁾	The unconsolidated joint ventures that owned Rivers Park I and II sold these properties on March 7, 2017. The unconsolidated joint venture partners used net proceeds from the sale to repay the mortgage debt encumbering the properties. At December 31, 2016, $2.8 million of the outstanding mortgage balance was recourse to us.


⁽³⁾	At June 30, 2017, LIBOR was 1.22%. All references to LIBOR in the condensed consolidated financial statements refer to one-month LIBOR.


⁽⁴⁾	The loan requires interest-only payments with a constant interest rate over the life of the loan. The loan is repayable in full, without penalty, on or after August 1, 2021.


⁽⁵⁾	The loan requires interest-only payments through December 2024, at which time the loan requires principal and interest payments through its maturity date. The loan is repayable in full, without penalty, on or after June 1, 2029.

Schedule of Equity Method Investments [Line Items]

Components of Investments in Affiliates

Our investment in affiliates consisted of the following (dollars in thousands):



	Reporting Segment	Ownership Interest	Investment at June 30, 2017		Investment at December 31, 2016
Prosperity Metro Plaza	Northern Virginia	51%	$	27,165	$	26,414
1750 H Street, NW	Washington, D.C.	50%	14,198		14,624
Aviation Business Park⁽¹⁾	Maryland	50%	—		5,941
Rivers Park I and II⁽¹⁾⁽²⁾	Maryland	25%	—		2,413
			$	41,363	$	49,392

⁽¹⁾ The unconsolidated joint ventures that owned Aviation Business Park and Rivers Park I and II sold these properties on March 7, 2017. During the three months ended June 30, 2017, we recognized a nominal loss from these properties, which was primarily due to a true-up of accrued liabilities subsequent to the sale of the properties. We anticipate a final true-up of all existing liabilities and a final distribution of any remaining cash to occur in the third quarter of 2017.


⁽²⁾	Rivers Park I and Rivers Park II were owned through two separate unconsolidated joint ventures.

Net Assets of Company's Unconsolidated Joint Ventures

The net assets of our unconsolidated joint ventures consisted of the following (dollars in thousands):



	June 30, 2017		December 31, 2016
Assets:
Rental property, net	$	143,184	$	189,245
Cash and cash equivalents	9,786		9,887
Other assets	16,509		20,726
Total assets	169,479		219,858
Liabilities:
Mortgage loans, net⁽¹⁾⁽²⁾	81,431		109,372
Other liabilities	7,608		8,674
Total liabilities	89,040		118,046
Net assets	$	80,439	$	101,812


⁽¹⁾	Of the total mortgage debt that encumbers our unconsolidated properties, none was recourse to us at June 30, 2017 and $2.8 million was recourse to us at December 31, 2016.


⁽²⁾	Mortgage loans, net at both June 30, 2017 and December 31, 2016 included $0.6 million of unamortized deferred financing costs

Results of Operations of Company's Unconsolidated Joint Ventures

The following table summarizes the results of operations of our unconsolidated joint ventures for the periods presented, of which, our proportionate share is reflected in “Equity in earnings of affiliates” in our consolidated statements of operations based on our varying ownership interests in the unconsolidated joint ventures (dollars in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Total revenues	$	4,679		$	6,240		$	10,357		$	12,529
Total operating expenses	(1,562		)	(1,814		)	(3,499		)	(3,980		)
Net operating income	3,117			4,426			6,858			8,549
Depreciation and amortization	(1,382		)	(2,006		)	(3,245		)	(3,972		)
Interest expense, net	(817		)	(997		)	(1,778		)	(1,989		)
Gain on sale of rental property	—			—			10,324			—
Net income	$	918		$	1,423		$	12,159		$	2,588

FIRST POTOMAC REALTY TRUST 10-Q