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SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2025

SIGNIFICANT ACCOUNTING POLICIES

Summary of notes receivable, net

The following table summarizes our Notes receivable, net as of September 30, 2025 and December 31, 2024 (dollars in thousands):


		Interest rate at		Balance Outstanding (a)
		September 30,		September 30,			December 31,
		2025		2025			2024
Note due March 2025 (b)		—	%	$	—		$	42,807
Notes due October 2025 and May 2026 (c)		—	%		—			106,271
Note due December 2026 (d)		11.00	%		77,781			71,873
Note due December 2026 (e)		11.00	%		31,177			29,090
Notes due June 2027 (f)		18.00	%		5,108			4,470
Note due September 2027 (g)		7.34	%		33,274			31,771
Notes receivable					147,340			286,282
Allowance for credit losses					(591)			(38,433)
Total notes receivable, net				$	146,749		$	247,849

(a)	Outstanding note amounts include any accrued and unpaid interest, as applicable.

(b)

The Company had a secured note with an unaffiliated third party with an aggregate commitment of $32.5 million, all of which was funded. In April 2025, the borrower’s assets were acquired by an unaffiliated third party real estate technology company. In connection with the sale, the Company’s note and accrued interest were settled in full through the receipt of an equity interest in the real estate technology company. As the Company does not have significant influence in the real estate technology company, we adopted the measurement alternative accounting method for the investment. The measurement alternative measures the equity investment at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company recorded its investment in the real estate technology company in Other Assets on the Consolidated Balance Sheets.

(c)

The Company had three loans (the “Notes”) with a joint venture that owned a 478 apartment home operating community located in Philadelphia, Pennsylvania with an aggregate commitment of $205.5 million (exclusive of accrued and unpaid interest and a $37.6 million loan reserve), all of which was funded. The Notes were senior to the equity in the borrower and were on non-accrual status. In May 2025, the Company acquired the developer’s equity interest in the joint venture. In connection with the acquisition, the developer paid the Company $6.7 million, which consisted primarily of unpaid interest on the Notes and reimbursement for certain costs previously advanced by the Company. As a result, the joint venture became wholly owned, and the Company began consolidating the community. The consolidation of the community resulted in the Company recording $3.9 million in previously unaccrued interest and a $0.3 million gain on consolidation both of which are recorded in Interest income and other income/(expense), net on the Consolidated Statements of Operations (See Note 3, Real Estate Owned for more information).

(d)

The Company has a secured mezzanine loan with a third party developer of a 482 apartment home community located in Riverside, California, which is expected to be completed in late 2025 or early 2026, with an aggregate commitment of $59.7 million (exclusive of accrued and unpaid interest), all of which has been funded. Interest payments accrue and are due at maturity of the loan. The secured mezzanine loan has a scheduled maturity date in December 2026, with two one-year extension options.

(e)

The Company has a secured mezzanine loan with a third party developer of a 237 apartment home community located in Menifee, California, which was completed in 2025, with an aggregate commitment of $24.4 million (exclusive of accrued and unpaid interest), all of which has been funded. Interest payments accrue and are due at maturity of the loan. The secured mezzanine loan has a scheduled maturity date in December 2026, with two one-year extension options.

(f)

The Company and a syndicate of lenders previously entered into a $16.0 million secured credit facility with an unaffiliated third party. In 2023, the secured credit facility was amended to provide a new term loan in the amount of $19.0 million, and the Company’s commitment was increased from $1.5 million to $3.0 million (exclusive of accrued interest), all of which has been funded. Interest payments accrue and are due at maturity of the facility. The facility is secured by substantially all of the borrower’s assets and matures at the earliest of the following: (a) acceleration in the event of default; or (b) June 2027.

(g)

In September 2024, the Company entered into a $31.1 million secured mortgage loan with one of its joint ventures that owns a 66 apartment home operating community located in Santa Monica, California, in which the Company also holds a preferred investment. The contractual interest rate on the note receivable is SOFR plus a spread of 300 basis points. Interest payments are due monthly from net cash flow from the operating community. If net cash flow is insufficient to cover the interest payment on the payment date, the unpaid amount is added to the outstanding principal balance. The mortgage loan has a scheduled maturity date in September 2027. (See Note 5, Joint Ventures and Partnerships for further discussion).

Schedule of allowance for credit losses


Allowance for credit losses as of December 31, 2024	$	(38,433)
(Provision)/recovery for credit losses		213
Write-offs charged against allowance (1)		37,629
Allowance for credit losses as of September 30, 2025	$	(591)

(1)

See footnote (c) above for further information.