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Business Segments
 6 Months Ended
Jun. 30, 2025
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 rental communities that are under construction or have not achieved stabilization, as well as land held for development. As of June 30, 2025, our Development and Redevelopment segment consists of 9 properties, including one under construction, two substantially completed and in lease-up, and one that has completed lease-up and is stabilizing operations.

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, 2024 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.

Prior period segment information has been recast based upon our current segment population, and is consistent with how our President and Chief Executive Officer, the chief operating decision maker (“CODM”) evaluates the business.

Our CODM evaluates performance and allocates resources for all of our segments using historical and projected 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 in Note 2.

The following tables present the results of operations of consolidated properties within our segments for the three months ended June 30, 2025 and 2024 (in thousands):

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Three Months Ended June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

6,124

 

 

$

35,394

 

 

$

2,084

 

 

$

2,230

 

 

$

6,926

 

 

$

52,758

 

Controllable operating expenses(3)

 

1,490

 

 

 

5,112

 

 

 

1,768

 

 

 

—

 

 

 

818

 

 

 

9,188

 

Real estate taxes, net of capitalized amounts

 

1,124

 

 

 

4,789

 

 

 

560

 

 

 

—

 

 

 

936

 

 

 

7,409

 

Utilities expense, net of utility reimbursements

 

331

 

 

 

593

 

 

 

63

 

 

 

2,230

 

 

 

338

 

 

 

3,555

 

Property insurance expense, net of capitalized amounts

 

145

 

 

 

672

 

 

 

33

 

 

 

—

 

 

 

398

 

 

 

1,248

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,792

 

 

 

1,792

 

Property operating expenses

 

3,090

 

 

 

11,166

 

 

 

2,424

 

 

 

2,230

 

 

 

4,282

 

 

 

23,192

 

Property net operating income (loss)

 

3,034

 

 

 

24,228

 

 

 

(340

)

 

 

—

 

 

 

2,644

 

 

 

29,566

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(24,161

)

 

 

(24,161

)

Other items included in income before
   income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(16,810

)

 

 

(16,810

)

Income (loss) before income tax

$

3,034

 

 

$

24,228

 

 

$

(340

)

 

$

—

 

 

$

(38,327

)

 

$

(11,405

)

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

1,650

 

 

$

34,719

 

 

$

1,813

 

 

$

1,775

 

 

$

11,191

 

 

$

51,148

 

Controllable operating expenses(3)

 

863

 

 

 

5,071

 

 

 

1,417

 

 

 

—

 

 

 

1,618

 

 

 

8,969

 

Real estate taxes, net of capitalized amounts

 

183

 

 

 

4,377

 

 

 

94

 

 

 

—

 

 

 

2,179

 

 

 

6,833

 

Utilities expense, net of utility reimbursements

 

599

 

 

 

635

 

 

 

64

 

 

 

1,775

 

 

 

320

 

 

 

3,393

 

Property insurance expense, net of capitalized amounts

 

154

 

 

 

664

 

 

 

31

 

 

 

—

 

 

 

520

 

 

 

1,369

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,993

 

 

 

1,993

 

Property operating expenses

 

1,799

 

 

 

10,747

 

 

 

1,606

 

 

 

1,775

 

 

 

6,630

 

 

 

22,557

 

Property net operating income (loss)

 

(149

)

 

 

23,972

 

 

 

207

 

 

 

—

 

 

 

4,561

 

 

 

28,591

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(29,687

)

 

 

(29,687

)

Other items included in income before
   income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(62,195

)

 

 

(62,195

)

Income (loss) before income tax

$

(149

)

 

$

23,972

 

 

$

207

 

 

$

—

 

 

$

(87,321

)

 

$

(63,291

)

 

The following tables present the results of operations of consolidated properties within our segments for the six months ended June 30, 2025 and 2024 (in thousands):

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Six Months Ended June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

11,333

 

 

$

70,967

 

 

$

3,530

 

 

$

4,297

 

 

$

14,983

 

 

$

105,110

 

Controllable operating expenses(3)

 

2,918

 

 

 

9,523

 

 

 

3,484

 

 

 

—

 

 

 

1,548

 

 

 

17,473

 

Real estate taxes, net of capitalized amounts

 

2,224

 

 

 

9,234

 

 

 

829

 

 

 

—

 

 

 

3,001

 

 

 

15,288

 

Utilities expense, net of utility reimbursements

 

930

 

 

 

1,589

 

 

 

135

 

 

 

4,297

 

 

 

595

 

 

 

7,546

 

Property insurance expense, net of capitalized amounts

 

504

 

 

 

1,330

 

 

 

66

 

 

 

—

 

 

 

778

 

 

 

2,678

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,272

 

 

 

3,272

 

Property operating expenses

 

6,576

 

 

 

21,676

 

 

 

4,514

 

 

 

4,297

 

 

 

9,194

 

 

 

46,257

 

Property net operating income (loss)

 

4,757

 

 

 

49,291

 

 

 

(984

)

 

 

—

 

 

 

5,789

 

 

 

58,853

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(48,762

)

 

 

(48,762

)

Other items included in income before
   income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(33,293

)

 

 

(33,293

)

Income (loss) before income tax

$

4,757

 

 

$

49,291

 

 

$

(984

)

 

$

—

 

 

$

(76,266

)

 

$

(23,202

)

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

2,432

 

 

$

69,355

 

 

$

2,999

 

 

$

3,797

 

 

$

22,767

 

 

$

101,350

 

Controllable operating expenses(3)

 

1,395

 

 

 

9,363

 

 

 

2,942

 

 

 

—

 

 

 

2,939

 

 

 

16,639

 

Real estate taxes, net of capitalized amounts

 

451

 

 

 

8,634

 

 

 

240

 

 

 

—

 

 

 

3,901

 

 

 

13,226

 

Utilities expense, net of utility reimbursements

 

953

 

 

 

1,619

 

 

 

128

 

 

 

3,797

 

 

 

651

 

 

 

7,148

 

Property insurance expense, net of capitalized amounts

 

405

 

 

 

1,368

 

 

 

54

 

 

 

—

 

 

 

998

 

 

 

2,825

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,918

 

 

 

3,918

 

Property operating expenses

 

3,204

 

 

 

20,984

 

 

 

3,364

 

 

 

3,797

 

 

 

12,407

 

 

 

43,756

 

Property net operating income (loss)

 

(772

)

 

 

48,371

 

 

 

(365

)

 

 

—

 

 

 

10,360

 

 

 

57,594

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(57,704

)

 

 

(57,704

)

Other items included in income before
   income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(73,106

)

 

 

(73,106

)

Income (loss) before income tax

$

(772

)

 

$

48,371

 

 

$

(365

)

 

$

—

 

 

$

(120,450

)

 

$

(73,216

)
(1)
Represents 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 period 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 consist of property personnel costs, marketing, repairs and maintenance, turnover, and contract services.
(4)
Other property operating expenses include property management costs and casualty gains or losses, which are included in consolidated property operating expenses and are not part of our segment performance measure.
(5)
Other operating expenses not allocated to segments consist of depreciation and amortization and general and administrative expenses.
(6)
Other items included in Income before income tax benefit (expense) consist primarily of interest income, interest expense, realized and unrealized gains (losses) on interest rate contracts, realized and unrealized gains (losses) on equity investments, other income (expense), and gain on dispositions of real estate, if any.

Net real estate and non-recourse property debt and construction loans, net, of our segments as of June 30, 2025 and December 31, 2024, were as follows (in thousands):

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Total

 

As of June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

Buildings and improvements

$

662,807

 

 

$

641,156

 

 

$

75,902

 

 

$

1,379,865

 

Land

 

165,217

 

 

 

231,047

 

 

 

1,503

 

 

 

397,767

 

Total real estate

 

828,024

 

 

 

872,203

 

 

 

77,405

 

 

 

1,777,632

 

Accumulated depreciation

 

(34,772

)

 

 

(459,857

)

 

 

(13,445

)

 

 

(508,074

)

Net real estate

$

793,252

 

 

$

412,346

 

 

$

63,960

 

 

$

1,269,558

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse property debt and construction loans, net

$

370,601

 

 

$

685,031

 

 

$

—

 

 

$

1,055,632

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

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

 

 

Capital additions within our segments for the three and six months ended June 30, 2025 and 2024, were as follows (in thousands):

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Development and Redevelopment

$

22,134

 

 

$

29,995

 

 

$

42,393

 

 

$

72,466

 

Operating

 

5,455

 

 

 

3,855

 

 

 

8,151

 

 

 

6,099

 

Other

 

—

 

 

 

—

 

 

 

160

 

 

 

—

 

Corporate and Amounts Not Allocated to Segments (1)

 

105

 

 

 

567

 

 

 

211

 

 

 

1,486

 

Total capital additions

$

27,694

 

 

$

34,417

 

 

$

50,915

 

 

$

80,051

 
(1)
During the three and six months ended June 30, 2025 and 2024, 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 period ends. We added a row to the table above for presentation purposes to display these capital additions for the three and six months ended June 30, 2025 and 2024.

In addition to the amounts disclosed in the tables above, as of June 30, 2025 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $107.1 million and $123.7 million, respectively, and as of December 31, 2024, aggregated to $107.7 million and $121.8 million, respectively. As of June 30, 2025, right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.