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Investment in Unconsolidated Entities (Tables) | 9 Months Ended
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Sep. 30, 2024
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments | A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):
|  | September 30, 2024 |  | December 31, 2023
GBTM Sendera, LLC |  | $ | 21,985 |  |  | $ | 19,866 |
EJB River Holdings, LLC |  | 12,812 |  |  | 10,867 |
Rainwater Crossing Single-Family, LLC |  | 12,714 |  |  | — |
TMGB Magnolia Ridge, LLC |  | 11,005 |  |  | — |
BHome Mortgage, LLC |  | 840 |  |  | 1,255 |
GB Challenger, LLC(1) |  | — |  |  | 52,666 |
Total investment in unconsolidated entities |  | $ | 59,356 |  |  | $ | 84,654 |
(1)Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC for approximately $64.0 million in cash.
Investment in Unconsolidated Entities | A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):
|  | September 30, 2024 |  | December 31, 2023
GBTM Sendera, LLC |  | $ | 21,985 |  |  | $ | 19,866 |
EJB River Holdings, LLC |  | 12,812 |  |  | 10,867 |
Rainwater Crossing Single-Family, LLC |  | 12,714 |  |  | — |
TMGB Magnolia Ridge, LLC |  | 11,005 |  |  | — |
BHome Mortgage, LLC |  | 840 |  |  | 1,255 |
GB Challenger, LLC(1) |  | — |  |  | 52,666 |
Total investment in unconsolidated entities |  | $ | 59,356 |  |  | $ | 84,654 |
(1)Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC for approximately $64.0 million in cash. Sale of GB Challenger Ownership Interest Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC (“Challenger”) to the entity that already held the controlling interest in Challenger for approximately $64.0 million in cash. A gain on this sale of $10.7 million is included in other income, net in the condensed consolidated statements of income. Rainwater Crossing Single-Family, LLC Joint Venture In February 2024, GRBK Edgewood, LLC (“GRBK Edgewood”) established a joint venture (“JV”), Rainwater Crossing Single-Family, LLC (“Rainwater Crossing”), with Rainwater Single Family S-CORP to develop a tract of land in Celina, Texas. Both parties hold a 50% ownership interest in Rainwater Crossing. The Company evaluated the JV agreements and determined that Rainwater Crossing is a VIE and the Company has a variable interest in this entity, but the Company is not its primary beneficiary. Specifically, the Company determined that it does not direct the activities that most significantly impact the entity’s economic performance as key decisions are subject to the approval of a management committee where both members are equally represented. Therefore, the Company’s investment in Rainwater Crossing is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s condensed consolidated balance sheets. As of September 30, 2024, the Company’s maximum exposure to loss as a result from its involvement with Rainwater Crossing was approximately $24.9 million, representing its $12.7 million investment and the Company’s remaining commitment to contribute to the joint venture $12.2 million in quarterly payments through March 31, 2029. The Company is also required to fund the remaining development costs related to this project. TMGB Magnolia Ridge, LLC Joint Venture In September 2024, TMGB Magnolia Ridge, LLC (“Magnolia Ridge”) was formed by GRBK Edgewood and TM Magnolia Ridge, LLC (“TM Magnolia Ridge”) with the purpose to acquire and develop a tract of land in Denton County, Texas. Both parties hold a 50% ownership interest in Magnolia Ridge. During the three months ended September 30, 2024, Magnolia Ridge received two initial contributions of $11.0 million from its two members, GBRK Edgewood and TM Magnolia Ridge. Per the Magnolia Ridge company agreement, GRBK Edgewood and TM Magnolia Ridge share equally in the profits and losses of Magnolia Ridge, with the exception of certain customary fees. Following the analysis of the above facts and provisions of the Magnolia Ridge company agreement, the Company has determined that Magnolia Ridge is a JV to be evaluated under the voting interest model. Therefore, the Company’s investment in Magnolia Ridge is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s condensed consolidated balance sheets. As of September 30, 2024, the Company’s maximum exposure to loss as a result of its involvement with Magnolia Ridge, was $33.5 million representing the Company’s investment in Magnolia Ridge of $11.0 million and up to a $22.5 million completion guarantee on the JV’s revolving loan to fund its development activities. A summary of the unaudited condensed financial information of the unconsolidated entities as of September 30, 2024 and December 31, 2023 that are accounted for by the equity method is as follows (in thousands):
| September 30, 2024 |  | December 31, 2023
Assets: |  |  |
Cash | $ | 9,309 |  |  | $ | 23,549 |
Accounts receivable | 707 |  |  | 4,207 |
Bonds and notes receivable | 12,211 |  |  | 2,838 |
Loans held for sale, at fair value | 2,901 |  |  | 7,452 |
Inventory | 101,678 |  |  | 182,550 |
Other assets | 2,043 |  |  | 6,425 |
Total assets | $ | 128,849 |  |  | $ | 227,021 |
Liabilities: |  |  |
Accounts payable | $ | 4,453 |  |  | $ | 7,151 |
Accrued expenses and other liabilities | 1,976 |  |  | 10,265 |
Notes payable | 16,071 |  |  | 49,701 |
Total liabilities | 22,500 |  |  | 67,117 |
Owners’ equity: |  |  |
Green Brick | 57,262 |  |  | 80,968 |
Others | 49,087 |  |  | 78,936 |
Total owners’ equity | 106,349 |  |  | 159,904 |
Total liabilities and owners’ equity | $ | 128,849 |  |  | $ | 227,021 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenues | $ | 6,498 |  |  | $ | 66,782 |  |  | $ | 44,315 |  |  | $ | 199,852 |
Costs and expenses | 4,499 |  |  | 66,844 |  |  | 34,686 |  |  | 179,990 |
Net earnings (loss) of unconsolidated entities | $ | 1,999 |  |  | $ | (62) |  |  | $ | 9,629 |  |  | $ | 19,862 |
Company’s share in net earnings of unconsolidated entities | $ | 992 |  |  | $ | 1,345 |  |  | $ | 4,770 |  |  | $ | 11,265 |
A summary of the Company’s share in net earnings by unconsolidated entity is as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
EJB River Holdings, LLC | 655 |  |  | 770 |  |  | 1,945 |  |  | 1,844 |
BHome Mortgage, LLC | 337 |  |  | 646 |  |  | 1,896 |  |  | 1,980 |
GB Challenger, LLC(1) | $ | — |  |  | $ | (71) |  |  | $ | 929 |  |  | $ | 7,441 |
Total net earnings (loss) from unconsolidated entities | $ | 992 |  |  | $ | 1,345 |  |  | $ | 4,770 |  |  | $ | 11,265 |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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- Definition Tabular disclosure of equity method investments including, but not limited to, name of each investee or group of investments, percentage ownership, difference between recorded amount of an investment and the value of the underlying equity in the net assets, and summarized financial information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 + Details
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