Notes And Other Receivables

6 Months Ended

Jun. 30, 2024

Notes and Loans Payable, by Type, Current and Noncurrent [Abstract]

4. Notes and Other Receivables

The following table sets forth certain information regarding notes and other receivables (in millions):


	June 30, 2024		December 31, 2023
Installment notes receivable on manufactured homes, net	$	54.5	$	19.6
Notes receivable from real estate developers and operators	131.3		134.5
Other receivables, net	231.6		267.5
Total Notes and Other Receivables, net	$	417.4	$	421.6

Installment Notes Receivable on Manufactured Homes

Installment notes receivable are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820, "Fair Value Measurements and Disclosures." During the three months ended December 31, 2023, we transferred a group of installment notes receivable to an unrelated party. Refer to Note 5, "Collateralized Receivables and Transfers of Financial Assets," for additional details. The balances of installment notes receivable of $54.5 million (gross installment notes receivable of $55.7 million less fair value adjustment of $1.2 million) and $19.6 million (gross installment notes receivable of $20.4 million less fair value adjustment of $0.8 million) as of June 30, 2024 and December 31, 2023, respectively, are secured by manufactured homes. The notes represent financing to purchasers of manufactured homes located in our communities and require monthly principal and interest payments. The notes had a net weighted average interest rate (net of servicing costs) and maturity of 6.5% and 18.5 years as of June 30, 2024, and 6.9% and 17.2 years as of December 31, 2023, respectively. Refer to Note 16, "Fair Value Measurements," for additional details.

Notes Receivable from Real Estate Developers and Operators

Notes receivable from real estate developers and operators are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820, "Fair Value Measurements and Disclosures." Refer to Note 16, "Fair Value Measurements," for additional information.

Note Receivable from a Real Estate Operator

The note receivable from a real estate operator was comprised of a fully drawn loan provided to Royale Holdings Group HoldCo Limited, a real estate development owner and operator in the United Kingdom, and certain other parties, to fund investing and financing activities (the "Note"). The Note was collateralized by a first-priority security interest in three real estate assets and three MH manufacturers in the United Kingdom. As of June 30, 2024, there was no remaining balance due on the note receivable.

After the maturity date of July 31, 2023, the Note became past due. On September 29, 2023, we appointed receivers over the real estate assets. The receivers marketed the real estate assets for sale during the fourth quarter of 2023. Upon completion of the marketing process, on December 28, 2023, we appointed administrators over the real estate assets and acquired such assets through a credit bid. During the fourth quarter, we engaged third party valuation specialists to appraise the real estate assets in accordance with ASC 820. The appraisals were completed using the discounted cash flow method (income approach), with the significant assumptions being development density, estimated absorption rate, home sale price and discount rate. The real estate assets appraised at fair value totaling $263.8 million. The Note balance was reduced by this amount, with an offsetting adjustment to Investment property, net on our Consolidated Balance Sheets as of December 31, 2023.

As of December 31, 2023, the balance remaining on the Note, which was in nonaccrual status, collateralized by a first-priority security interest in three MH manufacturers in the United Kingdom, was adjusted to fair value totaling $10.8 million (gross notes receivable of $114.3 million, inclusive of accrued interest of $10.4 million, less a fair value adjustment of $103.5 million). The note had a weighted average interest rate of 12.5% as of December 31, 2023.

During the three months ended March 31, 2024, we completed a receivership process related to the three MH manufacturers in the United Kingdom. The receivers sold such assets for a total consideration of $10.7 million, resulting in cash proceeds to the Company of $7.0 million, net of non-cash consideration and fees. The sale of these assets resulted in an incremental fair value remeasurement adjustment of $0.8 million that was recorded in Loss on remeasurement of notes receivable on the Consolidated Statements of Operations.

Notes Receivable from Real Estate Developers

Other acquisition and construction loans provided to real estate developers total $131.3 million with a net weighted average interest rate and maturity of 9.3% and 2.4 years as of June 30, 2024, and total $123.7 million with a net weighted average interest rate and maturity of 9.2% and 2.6 years as of December 31, 2023. As of June 30, 2024, the additional acquisition and construction loans provided to real estate developers have $37.1 million of undrawn funds. There were no adjustments to the fair value of notes receivable from real estate developers during the six months ended June 30, 2024 and the year ended December 31, 2023.

Other Receivables, net

Other receivables, net were comprised of amounts due from the following categories (in millions):


	June 30, 2024		December 31, 2023
Insurance receivables	$	72.7	$	77.8
Home sale proceeds	65.1		28.2
Marina customers for storage, service and lease payments, net(1)	49.9		46.8
MH and annual RV residents for rent, utility charges, fees and other pass-through charges, net(2)	12.0		65.9
Other receivables	31.9		48.8
Total Other Receivables, net	$	231.6	$	267.5

(1)Net of allowance of $3.1 million and $2.9 million as of June 30, 2024 and December 31, 2023, respectively.

(2)Net of allowance of $4.8 million as of June 30, 2024 and December 31, 2023, respectively.