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Business Segments
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Business Segments

Note 14 — 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 December 31, 2024, our Development and Redevelopment segment consists of 9 properties, including one under construction and three substantially completed and in lease-up.

Our Operating segment includes 20 residential apartment communities with 5,243 apartment homes that have achieved a stabilized level of operations as of January 1, 2023 and maintained it throughout the current year and comparable period. We aggregate all our apartment communities that have reached stabilization into our Operating segment.

Our Other segment consists of properties currently owned that are not included in our Development and Redevelopment or Operating segments. Our Other segment includes The Benson Hotel, our only hotel.

During the first quarter of 2024, we revised the information regularly reviewed by our President and Chief Executive Officer, the chief operating decision maker ("CODM"), to assess our operating performance. As a result, we reclassified The Benson Hotel from the Development and Redevelopment segment to the Other segment. In addition, during the year ended December 31, 2024, we disposed of a majority of our partnership interest in St. George Villas, which was previously reported within the Other segment, and The Hamilton, which was previously reported within the Development and Redevelopment segment. We also reclassified as held for sale 1001 Brickell Bay Drive, which was previously reported within the Other segment, and Yacht Club Apartments, which was previously reported in our Operating segment. Prior period segment information has been recast based upon our current segment population, and is consistent with how our CODM evaluates the business.

Our CODM evaluates performance and allocates resources for all of our segments using property net operating income ("PNOI"), which is our measure of segment profit or loss. PNOI is defined as 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, the Mezzanine Investment, and investments in real estate technology funds; and
•
property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance.

 

Our CODM uses historical and projected PNOI to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget process. PNOI is used to review operating trends, perform analytical comparisons between periods, and to monitor budget-to-actual variances on at least a quarterly basis in order to assess performance and allocate resources. The corporate goals, which impact short term incentive compensation for employees, also include consideration of PNOI.

The accounting policies of segments are the same as those described in the summary of significant accounting policies described in Note 2.

The following tables present the results of operations of consolidated properties with our segments for the years ended December 31, 2024, 2023, and 2022 (in thousands):

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments (2)

 

 

Consolidated

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

9,852

 

 

$

140,099

 

 

$

6,690

 

 

$

7,977

 

 

$

44,061

 

 

$

208,679

 

Controllable operating expenses(3)

 

4,527

 

 

 

18,567

 

 

 

6,746

 

 

 

—

 

 

 

6,239

 

 

 

36,079

 

Real estate taxes, net of capitalized amounts

 

1,963

 

 

 

16,653

 

 

 

593

 

 

 

—

 

 

 

7,312

 

 

 

26,521

 

Utilities expense, net of utility reimbursements

 

1,959

 

 

 

3,096

 

 

 

255

 

 

 

7,977

 

 

 

1,410

 

 

 

14,697

 

Property insurance expense, net of capitalized amounts

 

1,019

 

 

 

2,773

 

 

 

118

 

 

 

—

 

 

 

2,059

 

 

 

5,969

 

Other property operating expenses (4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,718

 

 

 

7,718

 

Property operating expenses

 

9,468

 

 

 

41,089

 

 

 

7,712

 

 

 

7,977

 

 

 

24,738

 

 

 

90,984

 

Property net operating income (loss)

 

384

 

 

 

99,010

 

 

 

(1,022

)

 

 

—

 

 

 

19,323

 

 

 

117,695

 

Other operating expenses not allocated to segments (5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(119,196

)

 

 

(119,196

)

Other items included in income before
   income tax (6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(105,570

)

 

 

(105,570

)

Income (loss) before income tax

$

384

 

 

$

99,010

 

 

$

(1,022

)

 

$

—

 

 

$

(205,443

)

 

$

(107,071

)

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments (2)

 

 

Consolidated

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

109

 

 

$

134,078

 

 

$

2,691

 

 

$

6,800

 

 

$

43,317

 

 

$

186,995

 

Controllable operating expenses(3)

 

670

 

 

 

18,094

 

 

 

4,029

 

 

 

—

 

 

 

6,096

 

 

 

28,889

 

Real estate taxes, net of capitalized amounts

 

84

 

 

 

15,513

 

 

 

475

 

 

 

—

 

 

 

5,634

 

 

 

21,706

 

Utilities expense, net of utility reimbursements

 

114

 

 

 

3,144

 

 

 

179

 

 

 

6,800

 

 

 

1,432

 

 

 

11,669

 

Property insurance expense, net of capitalized amounts

 

59

 

 

 

2,605

 

 

 

27

 

 

 

—

 

 

 

2,111

 

 

 

4,802

 

Other property operating expenses (4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,646

 

 

 

6,646

 

Property operating expenses

 

927

 

 

 

39,356

 

 

 

4,710

 

 

 

6,800

 

 

 

21,919

 

 

 

73,712

 

Property net operating income (loss)

 

(818

)

 

 

94,722

 

 

 

(2,019

)

 

 

—

 

 

 

21,398

 

 

 

113,283

 

Other operating expenses not allocated to segments (5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(101,699

)

 

 

(101,699

)

Other items included in income before
   income tax (6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(181,655

)

 

 

(181,655

)

Income (loss) before income tax

$

(818

)

 

$

94,722

 

 

$

(2,019

)

 

$

—

 

 

$

(261,956

)

 

$

(170,071

)

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments (2)

 

 

Consolidated

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

24

 

 

$

124,443

 

 

$

—

 

 

$

7,306

 

 

$

58,571

 

 

$

190,344

 

Controllable operating expenses(3)

 

126

 

 

 

17,226

 

 

 

383

 

 

 

—

 

 

 

9,389

 

 

 

27,124

 

Real estate taxes, net of capitalized amounts

 

64

 

 

 

15,674

 

 

 

74

 

 

 

—

 

 

 

6,955

 

 

 

22,767

 

Utilities expense, net of utility reimbursements

 

1

 

 

 

3,082

 

 

 

—

 

 

 

7,306

 

 

 

1,397

 

 

 

11,786

 

Property insurance expense, net of capitalized amounts

 

—

 

 

 

1,821

 

 

 

—

 

 

 

—

 

 

 

1,328

 

 

 

3,149

 

Other property operating expenses (4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,966

 

 

 

6,966

 

Property operating expenses

 

191

 

 

 

37,803

 

 

 

457

 

 

 

7,306

 

 

 

26,035

 

 

 

71,792

 

Property net operating income (loss)

 

(167

)

 

 

86,640

 

 

 

(457

)

 

 

—

 

 

 

32,536

 

 

 

118,552

 

Other operating expenses not allocated to segments (5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(198,640

)

 

 

(198,640

)

Other items included in income before
   income tax (6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

189,510

 

 

 

189,510

 

Income (loss) before income tax

$

(167

)

 

$

86,640

 

 

$

(457

)

 

$

—

 

 

$

23,406

 

 

$

109,422

 
(1)
Represents the reclassification of utility reimbursements, which are included in Rental and other property revenues in our 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)
Controllable operating expenses primarily consists of property personnel costs, marketing, repairs and maintenance, turnover, and contract services expense.
(4)
Other property operating expenses include property management costs and casualty gains or losses.
(5)
Other operating expenses not allocated to segments consists of depreciation and amortization and general and administrative expense.
(6)
Other items included in Income before income tax benefit (expense) consists primarily of lease modification income, gain on disposition of real estate, interest income, interest expense, mezzanine investment income (loss), net, realized and unrealized gains (losses) on interest rate contracts, and realized and unrealized gains (losses) on equity investments.

Net real estate and non-recourse property debt, net, of our segments as of December 31, 2024 and 2023, were as follows (in thousands):

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Corporate (1)

 

 

Total

 

As of December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buildings and improvements

$

620,000

 

 

$

653,184

 

 

$

75,741

 

 

$

—

 

 

$

1,348,925

 

Land

 

165,633

 

 

 

231,046

 

 

 

1,503

 

 

 

—

 

 

 

398,182

 

Total real estate

 

785,633

 

 

 

884,230

 

 

 

77,244

 

 

 

—

 

 

 

1,747,107

 

Accumulated depreciation

 

(20,872

)

 

 

(468,040

)

 

 

(10,362

)

 

 

—

 

 

 

(499,274

)

Net real estate

$

764,761

 

 

$

416,190

 

 

$

66,882

 

 

$

—

 

 

$

1,247,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse property debt and construction loans, net

$

385,240

 

 

$

685,420

 

 

$

—

 

 

$

—

 

 

$

1,070,660

 

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Corporate (1)

 

 

Total

 

As of December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buildings and improvements

$

492,993

 

 

$

655,059

 

 

$

75,725

 

 

$

370,025

 

 

$

1,593,802

 

Land

 

163,513

 

 

 

231,047

 

 

 

1,503

 

 

 

224,758

 

 

 

620,821

 

Total real estate

 

656,506

 

 

 

886,106

 

 

 

77,228

 

 

 

594,783

 

 

 

2,214,623

 

Accumulated depreciation

 

(952

)

 

 

(456,360

)

 

 

(4,204

)

 

 

(119,286

)

 

 

(580,802

)

Net real estate

$

655,554

 

 

$

429,746

 

 

$

73,024

 

 

$

475,497

 

 

$

1,633,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse property debt and construction loans, net

$

201,103

 

 

$

686,147

 

 

$

—

 

 

$

260,491

 

 

$

1,147,741

 

 

(1)
During the years ended December 31, 2024 and 2023 certain properties were sold or reclassified as held for sale, and therefore are not included in our segment balance sheets at year end. We added a Corporate column to the tables above for presentation purposes to display these assets and the associated debt as of December 31, 2023.

Capital additions within our segments for the years ended December 31, 2024, 2023 and 2022, were as follows (in thousands):

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Development and Redevelopment

$

126,125

 

 

$

258,888

 

 

$

159,419

 

Operating

 

12,772

 

 

 

11,788

 

 

 

23,997

 

Other

 

26

 

 

 

8,782

 

 

 

33,201

 

Corporate amounts not allocated to segments (1)

 

2,749

 

 

 

13,463

 

 

 

56,763

 

Total capital additions

$

141,672

 

 

$

292,921

 

 

$

273,380

 

 

(1)
During the years ended December 31, 2024, 2023 and 2022, certain capital additions pertained to properties that were sold or reclassified as held for sale, and therefore are not included in our segments as capital additions at those respective year ends. We added a Corporate row to the table above for presentation purposes to display these capital additions as of December 31, 2024, 2023 and 2022, respectively.

 

In addition to the amounts disclosed in the tables above, as of December 31, 2024, the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $107.7 million and $121.8 million, respectively, and as of December 31, 2023, aggregated to $109.0 million and $118.7 million, respectively. As of December 31, 2024, right-of-use lease assets and lease liabilities primarily related to our investments in Upton Place, Strathmore Square and Oak Shore.