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Business Segments
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
Business Segments

Note 9 — 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 September 30, 2025, our Development and Redevelopment segment consists of 9 properties, including one under construction, two completed and in lease-up, and one that has completed lease-up and is stabilizing operations.

Our Operating segment includes 15 residential apartment communities with 2,524 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. During the three months ended September 30, 2025, we reclassified as discontinued operations the five properties within our Boston portfolio, which was previously reported within the Operating segment. Refer to Note 8 for the operating results of our Boston portfolio.

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 September 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 September 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

7,606

 

 

$

18,176

 

 

$

1,989

 

 

$

1,598

 

 

$

5,763

 

 

$

35,132

 

Controllable operating expenses(3)

 

1,628

 

 

 

3,183

 

 

 

1,839

 

 

 

—

 

 

 

788

 

 

 

7,438

 

Real estate taxes, net of capitalized amounts

 

1,125

 

 

 

2,731

 

 

 

(149

)

 

 

—

 

 

 

1,190

 

 

 

4,897

 

Utilities expense, net of utility reimbursements

 

456

 

 

 

214

 

 

 

70

 

 

 

1,598

 

 

 

342

 

 

 

2,680

 

Property insurance expense, net of capitalized amounts

 

139

 

 

 

423

 

 

 

34

 

 

 

—

 

 

 

396

 

 

 

992

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

886

 

 

 

886

 

Property operating expenses

 

3,348

 

 

 

6,551

 

 

 

1,794

 

 

 

1,598

 

 

 

3,602

 

 

 

16,893

 

Property net operating income (loss)

 

4,258

 

 

 

11,625

 

 

 

195

 

 

 

—

 

 

 

2,161

 

 

 

18,239

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(81,118

)

 

 

(81,118

)

Other items included in income (loss) from continuing operations before income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(16,551

)

 

 

(16,551

)

Income (loss) from continuing operations before income tax

$

4,258

 

 

$

11,625

 

 

$

195

 

 

$

—

 

 

$

(95,508

)

 

$

(79,430

)

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Three Months Ended September 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

3,085

 

 

$

17,964

 

 

$

1,889

 

 

$

1,390

 

 

$

11,000

 

 

$

35,328

 

Controllable operating expenses(3)

 

1,342

 

 

 

2,841

 

 

 

2,063

 

 

 

—

 

 

 

1,629

 

 

 

7,875

 

Real estate taxes, net of capitalized amounts

 

331

 

 

 

2,439

 

 

 

206

 

 

 

—

 

 

 

1,907

 

 

 

4,883

 

Utilities expense, net of utility reimbursements

 

641

 

 

 

234

 

 

 

64

 

 

 

1,390

 

 

 

343

 

 

 

2,672

 

Property insurance expense, net of capitalized amounts

 

325

 

 

 

415

 

 

 

44

 

 

 

—

 

 

 

543

 

 

 

1,327

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

901

 

 

 

901

 

Property operating expenses

 

2,639

 

 

 

5,929

 

 

 

2,377

 

 

 

1,390

 

 

 

5,323

 

 

 

17,658

 

Property net operating income (loss)

 

446

 

 

 

12,035

 

 

 

(488

)

 

 

—

 

 

 

5,677

 

 

 

17,670

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(29,126

)

 

 

(29,126

)

Other items included in income (loss) from continuing operations before income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(19,705

)

 

 

(19,705

)

Income (loss) from continuing operations before income tax

$

446

 

 

$

12,035

 

 

$

(488

)

 

$

—

 

 

$

(43,154

)

 

$

(31,161

)

 

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

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Nine Months Ended September 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

18,939

 

 

$

54,163

 

 

$

5,519

 

 

$

4,480

 

 

$

20,746

 

 

$

103,847

 

Controllable operating expenses(3)

 

4,546

 

 

 

8,556

 

 

 

5,323

 

 

 

—

 

 

 

2,336

 

 

 

20,761

 

Real estate taxes, net of capitalized amounts

 

3,349

 

 

 

8,552

 

 

 

680

 

 

 

—

 

 

 

4,191

 

 

 

16,772

 

Utilities expense, net of utility reimbursements

 

1,386

 

 

 

445

 

 

 

205

 

 

 

4,480

 

 

 

937

 

 

 

7,453

 

Property insurance expense, net of capitalized amounts

 

643

 

 

 

1,305

 

 

 

100

 

 

 

—

 

 

 

1,175

 

 

 

3,223

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,983

 

 

 

2,983

 

Property operating expenses

 

9,924

 

 

 

18,858

 

 

 

6,308

 

 

 

4,480

 

 

 

11,622

 

 

 

51,192

 

Property net operating income (loss)

 

9,015

 

 

 

35,305

 

 

 

(789

)

 

 

—

 

 

 

9,124

 

 

 

52,655

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(125,797

)

 

 

(125,797

)

Other items included in income (loss) from continuing operations before income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(44,598

)

 

 

(44,598

)

Income (loss) from continuing operations before income tax

$

9,015

 

 

$

35,305

 

 

$

(789

)

 

$

—

 

 

$

(161,271

)

 

$

(117,740

)

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Nine Months Ended September 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

5,517

 

 

$

53,581

 

 

$

4,888

 

 

$

3,883

 

 

$

33,768

 

 

$

101,637

 

Controllable operating expenses(3)

 

2,737

 

 

 

7,922

 

 

 

5,005

 

 

 

—

 

 

 

4,571

 

 

 

20,235

 

Real estate taxes, net of capitalized amounts

 

782

 

 

 

7,649

 

 

 

446

 

 

 

—

 

 

 

5,808

 

 

 

14,685

 

Utilities expense, net of utility reimbursements

 

1,594

 

 

 

805

 

 

 

192

 

 

 

3,883

 

 

 

993

 

 

 

7,467

 

Property insurance expense, net of capitalized amounts

 

730

 

 

 

1,228

 

 

 

98

 

 

 

—

 

 

 

1,541

 

 

 

3,597

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,627

 

 

 

3,627

 

Property operating expenses

 

5,843

 

 

 

17,604

 

 

 

5,741

 

 

 

3,883

 

 

 

16,540

 

 

 

49,611

 

Property net operating income (loss)

 

(326

)

 

 

35,977

 

 

 

(853

)

 

 

—

 

 

 

17,228

 

 

 

52,026

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(81,790

)

 

 

(81,790

)

Other items included in income (loss) from continuing operations before income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(87,506

)

 

 

(87,506

)

Income (loss) from continuing operations before income tax

$

(326

)

 

$

35,977

 

 

$

(853

)

 

$

—

 

 

$

(152,068

)

 

$

(117,270

)
(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, general and administrative expenses, and impairment on real estate.
(6)
Other items included in Income (loss) before income tax 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 September 30, 2025 and December 31, 2024, were as follows (in thousands):

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Total

 

As of September 30, 2025

 

 

 

 

 

 

 

 

 

 

 

Buildings and improvements

$

677,782

 

 

$

441,243

 

 

$

24,682

 

 

$

1,143,707

 

Land

 

162,817

 

 

 

79,746

 

 

 

364

 

 

 

242,927

 

Total real estate

 

840,599

 

 

 

520,989

 

 

 

25,046

 

 

 

1,386,634

 

Accumulated depreciation

 

(41,741

)

 

 

(288,361

)

 

 

(6,646

)

 

 

(336,748

)

Net real estate

$

798,858

 

 

$

232,628

 

 

$

18,400

 

 

$

1,049,886

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse property debt and construction loans, net

$

383,685

 

 

$

444,847

 

 

$

—

 

 

$

828,532

 

 

Development and Redevelopment

 

 

Operating

 

 

Other

 

 

Total

 

As of December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

Buildings and improvements

$

620,000

 

 

$

449,591

 

 

$

75,741

 

 

$

1,145,332

 

Land

 

165,633

 

 

 

79,745

 

 

 

1,503

 

 

 

246,881

 

Total real estate

 

785,633

 

 

 

529,336

 

 

 

77,244

 

 

 

1,392,213

 

Accumulated depreciation

 

(20,872

)

 

 

(291,474

)

 

 

(10,362

)

 

 

(322,708

)

Net real estate

$

764,761

 

 

$

237,862

 

 

$

66,882

 

 

$

1,069,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse property debt and construction loans, net

$

385,240

 

 

$

444,426

 

 

$

—

 

 

$

829,666

 

 

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

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Development and Redevelopment

$

25,776

 

 

$

29,818

 

 

$

68,169

 

 

$

102,284

 

Operating

 

3,010

 

 

 

2,183

 

 

 

7,106

 

 

 

6,009

 

Other

 

—

 

 

 

26

 

 

 

160

 

 

 

26

 

Corporate and Amounts Not Allocated to Segments (1)

 

356

 

 

 

713

 

 

 

567

 

 

 

2,199

 

Total capital additions

$

29,142

 

 

$

32,740

 

 

$

76,002

 

 

$

110,518

 
(1)
During the three and nine months ended September 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 nine months ended September 30, 2025 and 2024.

In addition to the amounts disclosed in the tables above, as of September 30, 2025 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $106.8 million and $124.4 million, respectively, and as of December 31, 2024, aggregated to $107.7 million and $121.8 million, respectively. As of September 30, 2025, right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.