Quarterly report pursuant to Section 13 or 15(d)

Noncontrolling Interests

v3.19.3
Noncontrolling Interests
9 Months Ended
Sep. 30, 2019
Noncontrolling Interests [Abstract]  
Noncontrolling Interests 6. Noncontrolling interests

Noncontrolling interests represent (i) PS’s noncontrolling interest in the OP through its ownership of 7,305,355 common partnership units, totaling $213.0 million and $215.1 million at September 30, 2019 and December 31, 2018, respectively, and (ii) the JV Partner’s 5.0% interest in a joint venture owning a 395-unit multifamily apartment complex, totaling $3.0 million at September 30, 2019 and December 31, 2018, respectively.

PS OP Interests

Each common partnership unit receives a cash distribution equal to the dividend paid on our common shares and is redeemable at PS’s option.

If PS exercises its right of redemption, at PSB’s option (a) PS will receive one common share from us for each common partnership unit redeemed, or (b) PS will receive cash from us for each common partnership unit redeemed generally equal to the market value of a common share (as defined in the Operating Partnership Agreement). We can prevent redemptions that we believe would violate either our articles of incorporation or securities laws, cause PSB to no longer qualify as a REIT, or could result in the OP no longer being treated as a partnership for federal tax purposes.

In allocating net income and presenting equity, we treat the common partnership units as if converted to common shares. Accordingly, they receive the same net income allocation per unit as a common share and are adjusted each period to have the same equity per unit as a common share, totaling $7.0 million and $6.7 million for the three months ended September 30, 2019 and 2018, respectively, and $21.6 million and $37.8 million for the nine months ended September 30, 2019 and 2018, respectively.

JV Partner

In conjunction with consolidating the joint venture on January 1, 2018, we recorded noncontrolling interest of $4.0 million related to the JV Partner’s 5.0% interest in a joint venture owning a 395-unit multifamily apartment complex. A total of $14,000 in income and $189,000 in loss was allocated to the JV Partner during the three months ended September 30, 2019 and 2018, respectively, and $27,000 in income and $1.0 million in loss for the nine months ended September 30, 2019 and 2018, respectively. Distributions of $33,000 and $78,000 were paid to the JV Partner during the three and nine months ended September 30, 2019 and none were paid during 2018.