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REVENUES
 12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
REVENUES REVENUES
The following tables present the Company’s consolidated revenues disaggregated by revenue source and reporting segment (see Note 15) (in thousands):
Year Ended December 31, 2024
Valencia San Francisco
Great Park(1)
UnallocatedTotal
Land sales and land sales—related party
$139,097 $— $— $— $139,097 
Management services—related party
— — 95,955 449 96,404 
Operating properties483 — — — 483 
139,580 — 95,955 449 235,984 
Operating properties leasing revenues1,264 678 — — 1,942 
$140,844 $678 $95,955 $449 $237,926 
Year Ended December 31, 2023
Valencia San Francisco
Great Park(1)
UnallocatedTotal
Land sales and land sales—related party
$161,391 $— $— $— $161,391 
Management services—related party
— — 47,190 431 47,621 
Operating properties840 — — — 840 
162,231 — 47,190 431 209,852 
Operating properties leasing revenues1,226 654 — — 1,880 
$163,457 $654 $47,190 $431 $211,732 
Year Ended December 31, 2022
Valencia San Francisco
Great Park(1)
UnallocatedTotal
Land sales and land sales—related party
$8,425 $— $— $— $8,425 
Management services—related party
— — 31,015 418 31,433 
Operating properties1,177 — — — 1,177 
9,602 — 31,015 418 41,035 
Operating properties leasing revenues969 690 — — 1,659 
$10,571 $690 $31,015 $418 $42,694 
(1) The tables above do not include revenues of the Great Park Venture, which are included in the Company’s reporting segment totals (see Notes 4 and 15).
The Company, through Five Point Communities, LP (“FP LP”), and Five Point Communities Management, Inc., (“FP Inc.” and together with FP LP, the “Management Company”), has a development management agreement, as amended and restated (“A&R DMA”), with the Great Park Venture. The A&R DMA had an original term commencing on December 29, 2010 and ending on December 31, 2021 (the “Initial Term”). In addition to an annual fixed base fee and variable cost reimbursements, the Initial Term of the A&R DMA included incentive compensation that becomes payable in connection with and as a percentage of distributions made to the members of the Great Park Venture, including distributions made in periods after the Initial Term. Consideration in the form of
contingent incentive compensation from the A&R DMA was recognized as revenue and a contract asset as services were provided over the contract term. By mutual agreement, the Initial Term had been extended through December 31, 2022 (the “2022 Extension”). The 2022 Extension resulted in the elimination of variable cost reimbursements and an increase in the annual fixed base fee to $12.0 million for 2022. The 2022 Extension did not change the incentive compensation provisions of the A&R DMA applicable to the Initial Term. In December 2022, the Company and the Great Park Venture entered into a second amendment to the A&R DMA establishing the terms of service through December 31, 2024 (the “First Renewal Term”). The compensation payable to the Company during the First Renewal Term remained unchanged from the 2022 Extension and included the annual fixed base fee and incentive compensation payments. In September 2024, the Company and the Great Park Venture entered into a third amendment to the A&R DMA. Under the third amendment, the term of the A&R DMA has been renewed through December 31, 2026 (the “Second Renewal Term”). The compensation payable to the Company during the Second Renewal Term includes a $13.5 million annual fixed base fee beginning in 2025, which reflects an increase from the current $12.0 million annual fixed base fee under the First Renewal Term, and incentive compensation payments. The incentive compensation provisions of the A&R DMA were not changed pursuant to the third amendment.
Due to the contingencies associated with estimating the amount of incentive compensation that ultimately will become payable for services provided through the Initial Term, the Company has constrained, under the guidance of ASC Topic 606, its estimate of incentive compensation revenues such that the Company believes that a significant reversal of revenues is not probable of occurring. As the contingencies are resolved in future periods, the Company may record adjustments to revenue to reflect changes in the Company’s estimate of incentive compensation expected to be received. Significant judgment is involved in management’s estimate of the amount of variable consideration included in the transaction price. In making this estimate, management utilizes projected cash flows of the operations of the Great Park Venture. These cash flows are significantly affected by estimates and assumptions related to market supply and demand, the local economy, projected pace of sales of homesites, projected pricing over the estimated selling period, the length of the estimated development and selling periods, remaining development, general, and administrative costs, the contract period, and other factors.
Contract balances are recorded on the consolidated balance sheet in either related party assets or other assets for receivables from customers and contract assets (unbilled receivables) depending on whether the customer is a related party. Similarly, contract liabilities (deferred revenue) are included in accounts payable and other liabilities or related party liabilities.
The opening and closing balances of the Company’s contract assets for the year ended December 31, 2024 were $72.1 million ($69.1 million related party, see Note 9) and $101.8 million ($100.8 million related party, see Note 9), respectively. The net increase of $29.7 million between the opening and closing balances of the Company’s contract assets primarily resulted from additional incentive compensation revenue recognized during the period that resulted from changes in the estimated constrained transaction price of the A&R DMA partially offset by the receipt of $50.9 million in incentive compensation payments from the Great Park Venture and the receipt of marketing fees from homebuilders from prior period land sales.
The opening and closing balances of the Company’s contract assets for the year ended December 31, 2023 were $86.5 million ($79.9 million related party, see Note 9) and $72.1 million ($69.1 million related party, see Note 9), respectively. The net decrease of $14.4 million between the opening and closing balances of the Company’s contract assets primarily resulted from additional incentive compensation revenue recognized during the period that resulted from changes in the estimated constrained transaction price of the A&R DMA offset by the receipt of $46.5 million in incentive compensation payments from the Great Park Venture and the receipt of marketing fees from prior period land sales.
The opening and closing balances of the Company’s other receivables from contracts with customers and contract liabilities for the years ended December 31, 2024 and 2023 were insignificant.
The Company applies the disclosure exemptions associated with remaining performance obligations for contracts with an original expected term of one year or less, contracts for which revenue is recognized in proportion to the amount of services performed and variable consideration that is allocated to wholly unsatisfied performance obligations for services that form part of a series of services.