Quarterly report pursuant to Section 13 or 15(d)

Investment in and Advances to Unconsolidated Joint Ventures

v3.21.2
Investment in and Advances to Unconsolidated Joint Ventures
 9 Months Ended
Sep. 30, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Investment in and Advances to Unconsolidated Joint Ventures Investment in and Advances to Unconsolidated Joint Ventures
As of September 30, 2021 and December 31, 2020, the Company had two unconsolidated joint ventures with ownership interests of 51% and 25% in LS-NJ Port Imperial JV LLC and LS-Boston Point LLC, respectively, and concluded that these joint ventures were variable interest entities. The Company concluded that it was not the primary beneficiary of the variable interest entities and, accordingly, accounted for these entities under the equity method of accounting. The Company's maximum exposure to loss is limited to the investment in the unconsolidated joint venture amounts included on the consolidated balance sheets.
The condensed combined balance sheets for the Company’s unconsolidated joint ventures accounted for under the equity method are as follows:
September 30, 2021 December 31, 2020
(dollars in thousands)
Cash and cash equivalents $ 2,592  $ 2,740 
Restricted cash —  4,870 
Real estate inventories 10,903  41,214 
Other assets 122  123 
Total assets $ 13,617  $ 48,947 
 
Accounts payable $ 26  $ 188 
Accrued expenses and other liabilities 5,045  3,928 
Due to affiliates 809  5,735 
Total liabilities 5,880  9,851 
Members' capital 7,737  39,096 
Total liabilities and members' capital $ 13,617  $ 48,947 
The condensed combined statements of operations for the Company’s unconsolidated joint ventures accounted for under the equity method are as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(dollars in thousands) (dollars in thousands)
Revenues $ 10,981  $ 9,937  $ 40,944  $ 28,409 
Cost of sales and expenses (10,106) (10,601) (37,293) (31,353)
Impairment of real estate inventories —  —  —  (27,094)
Net income (loss) of unconsolidated joint ventures $ 875  $ (664) $ 3,651  $ (30,038)
Equity in net income (loss) of unconsolidated joint ventures (1)
$ 168  $ (616) $ 814  $ (16,229)
(1)     The equity in net income (loss) of unconsolidated joint ventures consists of two pieces. The allocation of the Company's proportionate share of income or loss from the unconsolidated joint ventures of $0.5 million income and $0.3 million loss for the three months ended September 30, 2021 and 2020, respectively, and $1.9 million income and $15.3 million loss for the nine months ended September 30, 2021 and 2020, respectively. In addition, expenses related to capitalized interest and other costs were $0.3 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $1.1 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively.

For the three and nine months ended September 30, 2021, no impairment charges were recorded related to either of the unconsolidated joint ventures. For the nine months ended September 30, 2020, one of the Company's unconsolidated joint ventures recorded an impairment charge of $27.1 million, related to slowing absorption and weaker pricing than expected. The impairment charge, based on the Company's ownership percentage of 51%, was $13.8 million and is reflected in the equity in net income (loss) of unconsolidated joint ventures line in the consolidated statements of operations. No impairment charge was recorded for the three months ended September 30, 2020.