FrontView REIT Inc

5. INVESTMENT IN AN UNCONSOLIDATED ENTITY

On October 20, 2023, the Partnership purchased the remaining 50% interest in the Joint Venture from the Joint Venture Partner. The purchase price was equal to the product of: (1) The JV Partner’s aggregate percentage interest, multiplied by (2) (a) $138,250 less (b) the indebtedness of the Joint Venture together with the Joint Venture’s general partner (the Joint Venture and the Joint Venture’s general partner collectively the “Target Entities”), plus (c) retained cash of the Target Entities as of the closing, (d) plus proration items, if the net amount thereof is in the JV Partners’ favor, or minus the proration items if the net amount therefore is in the Partnership’s favor, and (e) minus the asset disposition amount of any properties sold by the Joint Venture following the date of the agreement and prior to closing. The Partnership funded the purchase price of $26,910 through cash, cash equivalents and restricted cash and borrowings under the Revolving Credit Facility. The acquisition was accounted for as an asset acquisition. As such, as of October 20, 2023, the Partnership owned 100% of the Joint Venture and is consolidated.

The 54 properties acquired had a fair value of $138,768, including acquisition costs totaling $518. The Joint Venture was considered a variable interest entity and the acquisition of the entity resulted in a gain of $12,988, which was recorded in gain on acquisition of equity method investment in the year ended December 31, 2023 consolidated statements of operations.

For the nine months ended September 30, 2023, the Partnership had a 50% ownership interest in the Joint Venture. The remaining 50% interest in the Joint Venture was owned by another investment fund (the “JV Partner”) managed by affiliates of the General Partner. The Joint Venture was established to allow the Partnership and its JV Partner to co-invest in properties that meet the investment criteria of both parties to the extent that the Joint Venture has funds available under the ABS Notes (see Note 6 (a)). For thethree and nine months ended September 30, 2023, the Joint Venture generated net loss of $14 and net income of $106, of which the Partnership's share is a net loss of $7 and a net income of $53 respectively. This has been reflected in the condensed consolidated statements of operations under "Equity (loss)/ income from investment in an unconsolidated entity".

The Joint Venture pays fees to an entity affiliated with the General Partner and the Sponsor of the Partnership for property management services. For the three and nine months ended September 30, 2023, such fees amounted to $68 and $204 respectively, in aggregate, of which the Partnership’s share was $34 and $102, respectively. These fees are recorded as part of the property operating expenses.