Investments in Unconsolidated Real Estate Entities

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Real Estate Entities

As of December 31, 2024, our investments in unconsolidated real estate entities had aggregate land, building, and construction in progress costs capitalized of $321,137 and aggregate construction debt of $211,962. We do not guarantee any debt, capital payout or other obligations associated with these entities. We recognize earnings or losses from our investments in unconsolidated real estate entities consisting of our proportionate share of the net earnings or losses of the joint ventures. We recognized (income) losses of $(347), $4,488, and $2,169 from equity method investments during the years ended December 31, 2024, 2023, and 2022, respectively, and the income or losses were recorded in (income) loss from investments in unconsolidated real estate entities in our consolidated statements of operations.

The following table summarizes our investments in unconsolidated real estate entities as of December 31, 2024 and 2023:


					Carrying Value As Of
Investments in Unconsolidated Real Estate Entities	Location	Units (1) (Unaudited)	IRT Ownership Interest		December 31, 2024		December 31, 2023
Metropolis at Innsbrook (2)	Richmond, VA	402	84.8	%	$	21,163	$	18,028
Views of Music City II (3)	Nashville, TN	209	50.0	%	5,905		5,791
The Crockett (4)	Nashville, TN	—	—		—		5,841
Lakeline Station	Austin, TX	378	90.0	%	36,106		32,126
The Mustang (5)	Dallas, TX	275	85.0	%	28,801		27,258
Total		1,264			$	91,975	$	89,044

(1)Represents the total number of units after development is complete and each property is placed in service.

(2)The Metropolis at Innsbrook is an operating property consisting of 402 units (unaudited). We have a call option that gives us the right to buy the property upon the earlier of the date upon which the property achieves 90% occupancy or October 17, 2025. On June 21, 2024, we entered into an agreement with the developer to list the property for sale upon achieving 85% occupancy.

(3)Views of Music City II is an operating property and was listed for sale subsequent to December 31, 2024. We have a right of first refusal on any sale of the Views of Music City II.

(4)The Crockett is an operating property consisting of 199 units (unaudited). On July 16, 2024, we amended the joint venture agreement governing the entity that owns this property and Views of Music City II. The amendment to the joint venture resulted in the return of our invested capital in the amount of $5,541 and preferred return in the amount of $2,964, net, thereon on October 17, 2024, while also providing us with a right of first refusal on any future sale of The Crockett.

(5)The Mustang became an operating property during the fourth quarter of 2024 and consists of 275 units (unaudited). We have a call option that gives us the right to buy the property upon the earlier of the date upon which the property achieves 85% occupancy or August 15, 2025.

Consolidation of Former Unconsolidated Real Estate Entity

An amendment to the Virtuoso joint venture agreement on August 1, 2023 provided us with control over the major decisions that most significantly impact the joint venture and removed our joint venture partner's rights to a promote interest. As a result of the amendment, we reassessed the accounting for Virtuoso, a former unconsolidated real estate entity that consists of 178 units (unaudited) in Huntsville, Alabama. Because we concluded that Virtuoso is a voting interest entity and that we control the major decisions that most significantly impact the joint venture through our 90% voting interest, we began consolidating the assets and liabilities and operating results of Virtuoso effective August 1, 2023.

In accordance with FASB Topic ASC 805, upon consolidation, we recognized the asset and liabilities of Virtuoso at carryover basis, allocating the individual assets and liabilities based upon their relative fair values on our consolidated balance sheet. The following table summarizes the assets and liabilities recognized upon the consolidation of Virtuoso, our former unconsolidated real estate entity, during the year ended December 31, 2023, on the date of consolidation.


	Assets and Liabilities Consolidated During the Year Ended December 31, 2023
Assets:
Investments in real estate	$	49,939
Cash and cash equivalents	816
Restricted cash	1,329
Other assets	396
Intangible assets	398
Total assets	$	52,878
Liabilities:
Indebtedness	$	39,281
Accounts payable and accrued expenses	255
Accrued interest payable	283
Other liabilities	112
Total liabilities	39,931
Noncontrolling interest	256
Derecognition of investments in unconsolidated real estate entities	12,691
Total Liabilities and equity	$	52,878

Subsequent Investment in Unconsolidated Real Estate Entity

On January 30, 2025, we entered into a joint venture for the development of Nexton Pine Hollow, a to-be-built multifamily apartment project comprised of 324 units (unaudited) in Charleston, SC. We have committed to invest an aggregate of $28,582 in this joint venture, and, as of January 30, 2025, had funded $8,408 on account of this commitment.