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v3.23.2

Business Segments | 6 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
Business Segments | Note 8 — Business Segments We have three segments: (i) Development and Redevelopment; (ii) Operating; and (iii) Other. Our Development and Redevelopment segment consists of properties that are under construction or have not achieved stabilization, as well as land held for development. As of June 30, 2023, our Development and Redevelopment segment consists of 12 properties: three residential apartment communities with 1,185 apartment homes, of which 276 have been completed and an additional 909 are planned, a single family rental community with 16 planned homes plus eight accessory dwelling units, which we are actively developing or redeveloping; one hotel with 106 rooms and 18,000 square feet of event space completed in April 2023, and land parcels held for development. Our Operating segment includes 21 residential apartment communities with 5,600 apartment homes that have achieved a stabilized level of operations as of January 1, 2022 and maintained it throughout the current year and comparable period. We aggregate all our apartment communities that have reached stabilization into our Operating segment. During the first quarter of 2023, we reclassified one residential apartment community from the Other segment to the Operating segment because it reached stabilization. Prior period segment information has been recast based upon our current segment population, and is consistent with how our chief operating decision maker ("CODM") evaluates the business. The recast conforms with our reportable segment classification as of June 30, 2023. Our Other segment consists of properties currently owned that are not included in our Development and Redevelopment or Operating segments. Our Other segment includes 1001 Brickell Bay Drive, our only office building, and St. George Villas. Our CODM uses cash flow, construction timeline to completion, and actual versus budgeted results to evaluate our properties in our Development and Redevelopment segment. Our CODM uses proportionate property net operating income to assess the operating performance of our Operating segment. Proportionate property net operating income is defined as our share of rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, including utility reimbursements, for the consolidated communities; but • excluding the results of four apartment communities with an aggregate 142 apartment homes that we neither manage nor consolidate, our investment in IQHQ and the Mezzanine Investment; and • excluding property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance. The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the three months ended June 30, 2023 and 2022 (in thousands):
| Development and Redevelopment |  |  | Operating |  |  | Other |  |  | Proportionate and Other Adjustments(1) |  |  | Corporate and Amounts Not Allocated to Segments (2) |  |  | Consolidated |
Three Months Ended June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenues | $ | 3,640 |  |  | $ | 37,011 |  |  | $ | 3,432 |  |  | $ | 1,591 |  |  | $ | — |  |  | $ | 45,674 |
Property operating expenses |  | 2,684 |  |  |  | 11,496 |  |  |  | 1,520 |  |  |  | 1,627 |  |  |  | 1,456 |  |  |  | 18,783 |
Other operating expenses not allocated to segments (3) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 24,921 |  |  |  | 24,921 |
Total operating expenses |  | 2,684 |  |  |  | 11,496 |  |  |  | 1,520 |  |  |  | 1,627 |  |  |  | 26,377 |  |  |  | 43,704 |
Proportionate property net operating income (loss) |  | 956 |  |  |  | 25,515 |  |  |  | 1,912 |  |  |  | (36 | ) |  |  | (26,377 | ) |  |  | 1,970 |
Other items included in income before income tax (4) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,243 | ) |  |  | (2,243 | )
Income (loss) before income tax | $ | 956 |  |  | $ | 25,515 |  |  | $ | 1,912 |  |  | $ | (36 | ) |  | $ | (28,620 | ) |  | $ | (273 | )
| Development and Redevelopment |  |  | Operating |  |  | Other |  |  | Proportionate and Other Adjustments(1) |  |  | Corporate and Amounts Not Allocated to Segments (2) |  |  | Consolidated |
Three Months Ended June 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenues | $ | 33 |  |  | $ | 33,809 |  |  | $ | 3,645 |  |  | $ | 1,461 |  |  | $ | 11,749 |  |  | $ | 50,697 |
Property operating expenses |  | 363 |  |  |  | 10,563 |  |  |  | 1,138 |  |  |  | 1,439 |  |  |  | 6,205 |  |  |  | 19,708 |
Other operating expenses not allocated to segments (3) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 43,824 |  |  |  | 43,824 |
Total operating expenses |  | 363 |  |  |  | 10,563 |  |  |  | 1,138 |  |  |  | 1,439 |  |  |  | 50,029 |  |  |  | 63,532 |
Proportionate property net operating income (loss) |  | (330 | ) |  |  | 23,246 |  |  |  | 2,507 |  |  |  | 22 |  |  |  | (38,280 | ) |  |  | (12,835 | )
Other items included in income before income tax (4) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 312,003 |  |  |  | 312,003 |
Income (loss) before income tax | $ | (330 | ) |  | $ | 23,246 |  |  | $ | 2,507 |  |  | $ | 22 |  |  | $ | 273,723 |  |  | $ | 299,168 |
The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the six months ended June 30, 2023 and 2022 (in thousands):
| Development and Redevelopment |  |  | Operating |  |  | Other |  |  | Proportionate and Other Adjustments(1) |  |  | Corporate and Amounts Not Allocated to Segments (2) |  |  | Consolidated |
Six Months Ended June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenues | $ | 5,842 |  |  | $ | 73,683 |  |  | $ | 7,129 |  |  | $ | 3,288 |  |  | $ | — |  |  | $ | 89,942 |
Property operating expenses |  | 4,708 |  |  |  | 22,683 |  |  |  | 2,712 |  |  |  | 3,304 |  |  |  | 2,880 |  |  |  | 36,287 |
Other operating expenses not allocated to segments (3) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 49,595 |  |  |  | 49,595 |
Total operating expenses |  | 4,708 |  |  |  | 22,683 |  |  |  | 2,712 |  |  |  | 3,304 |  |  |  | 52,475 |  |  |  | 85,882 |
Proportionate property net operating income (loss) |  | 1,134 |  |  |  | 51,000 |  |  |  | 4,417 |  |  |  | (16 | ) |  |  | (52,475 | ) |  |  | 4,060 |
Other items included in income before income tax (4) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (14,282 | ) |  |  | (14,282 | )
Income (loss) before income tax | $ | 1,134 |  |  | $ | 51,000 |  |  | $ | 4,417 |  |  | $ | (16 | ) |  | $ | (66,757 | ) |  | $ | (10,222 | )
| Development and Redevelopment |  |  | Operating |  |  | Other |  |  | Proportionate and Other Adjustments(1) |  |  | Corporate and Amounts Not Allocated to Segments (2) |  |  | Consolidated |
Six Months Ended June 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental and other property revenues | $ | 81 |  |  | $ | 66,739 |  |  | $ | 8,000 |  |  | $ | 3,122 |  |  | $ | 22,749 |  |  | $ | 100,691 |
Property operating expenses |  | 572 |  |  |  | 20,960 |  |  |  | 2,577 |  |  |  | 3,076 |  |  |  | 11,744 |  |  |  | 38,929 |
Other operating expenses not allocated to segments (3) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 76,414 |  |  |  | 76,414 |
Total operating expenses |  | 572 |  |  |  | 20,960 |  |  |  | 2,577 |  |  |  | 3,076 |  |  |  | 88,158 |  |  |  | 115,343 |
Proportionate property net operating income (loss) |  | (491 | ) |  |  | 45,779 |  |  |  | 5,423 |  |  |  | 46 |  |  |  | (65,409 | ) |  |  | (14,652 | )
Other items included in income before income tax (4) |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 319,876 |  |  |  | 319,876 |
Income (loss) before income tax | $ | (491 | ) |  | $ | 45,779 |  |  | $ | 5,423 |  |  | $ | 46 |  |  | $ | 254,467 |  |  | $ | 305,224 |
(1) Represents adjustments for noncontrolling interests in consolidated real estate partnerships' share of the results of consolidated communities in our segments, which are included in the related consolidated amounts, but excluded from proportionate property net operating income for our segment evaluation. Also includes the reclassification of utility reimbursements, which are included in Rental and other property revenues in our Condensed Consolidated Statements of Operations, in accordance with GAAP, from revenues to property operating expenses for the purpose of evaluating segment results. (2) Includes the operating results of apartment communities sold during the periods shown or held for sale at the end of the period, if any. Also includes property management expenses and casualty gains and losses, which are included in consolidated property operating expenses and are not part of our segment performance measure. (3) Other operating expenses not allocated to segments consist of depreciation and amortization and general and administrative expense. (4) Other items included in Income before income tax benefit consist primarily of lease modification income, gain on dispositions of real estate, interest expense, mezzanine investment income (loss), net realized and unrealized gains (losses) on interest rate options, and realized and unrealized gains (losses) on equity investments. Net real estate and non-recourse property debt, net, of our segments as of June 30, 2023 and December 31, 2022, were as follows (in thousands):
| Development and Redevelopment |  |  | Operating |  |  | Other |  |  | Total |
As of June 30, 2023: |  |  |  |  |  |  |  |  |  |  |
Buildings and improvements | $ | 599,807 |  |  | $ | 702,884 |  |  | $ | 165,041 |  |  | $ | 1,467,732 |
Land |  | 226,161 |  |  |  | 262,409 |  |  |  | 150,090 |  |  |  | 638,660 |
Total real estate |  | 825,968 |  |  |  | 965,293 |  |  |  | 315,131 |  |  |  | 2,106,392 |
Accumulated depreciation |  | (7,385 | ) |  |  | (472,573 | ) |  |  | (68,358 | ) |  |  | (548,316 | )
Net real estate | $ | 818,583 |  |  | $ | 492,720 |  |  | $ | 246,773 |  |  | $ | 1,558,076 |
Non-recourse property debt and construction loans, net | $ | 218,468 |  |  | $ | 766,453 |  |  | $ | 80,741 |  |  | $ | 1,065,662 |
| Development and Redevelopment |  |  | Operating |  |  | Other |  |  | Total |
As of December 31, 2022: |  |  |  |  |  |  |  |  |  |  |
Buildings and improvements | $ | 449,316 |  |  | $ | 708,665 |  |  | $ | 164,400 |  |  | $ | 1,322,381 |
Land |  | 228,568 |  |  |  | 262,409 |  |  |  | 150,125 |  |  | $ | 641,102 |
Total real estate |  | 677,884 |  |  |  | 971,074 |  |  |  | 314,525 |  |  |  | 1,963,483 |
Accumulated depreciation |  | (2,378 | ) |  |  | (468,428 | ) |  |  | (59,916 | ) |  | $ | (530,722 | )
Net real estate | $ | 675,506 |  |  | $ | 502,646 |  |  | $ | 254,609 |  |  | $ | 1,432,761 |
Non-recourse property debt and construction loans, net | $ | 200,135 |  |  | $ | 767,513 |  |  | $ | 80,551 |  |  | $ | 1,048,199 |
In addition to the amounts disclosed in the tables above, as of June 30, 2023 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $109.6 million and $116.6 million, respectively, and as of December 31, 2022, aggregated to $110.3 million and $114.6 million, respectively. As of June 30, 2023 and December 31, 2022, right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.

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