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Segments | 3 Months Ended
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Mar. 31, 2021
Segment Reporting [Abstract] |
Segments | Segments Net operating income (segment revenues minus segment expenses) is the measure used by the Company’s chief operating decision-maker to assess segment performance. Net operating income is not a measure of operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, net operating income should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate net operating income in the same manner. The Company considers net operating income to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of the Company’s real estate and construction businesses. Net operating income of the Company’s reportable segments for the three months ended March 31, 2021 and 2020 was as follows (in thousands):
|  | Three Months Ended March 31, |  |
|  | 2021 |  | 2020 |  |  |  |
Office real estate |  |  |  |  |  |  |  |
Rental revenues |  | $ | 11,635 |  |  | $ | 10,192 |  |  |  |  |
Rental expenses |  | 2,875 |  |  | 2,546 |  |  |  |  |
Real estate taxes |  | 1,358 |  |  | 1,146 |  |  |  |  |
Segment net operating income |  | 7,402 |  |  | 6,500 |  |  |  |  |
Retail real estate |  |  |  |  |  |  |  |
Rental revenues |  | 18,255 |  |  | 20,411 |  |  |  |  |
Rental expenses |  | 2,836 |  |  | 3,020 |  |  |  |  |
Real estate taxes |  | 2,027 |  |  | 2,166 |  |  |  |  |
Segment net operating income |  | 13,392 |  |  | 15,225 |  |  |  |  |
Multifamily residential real estate |  |  |  |  |  |  |  |
Rental revenues |  | 15,851 |  |  | 11,686 |  |  |  |  |
Rental expenses |  | 5,121 |  |  | 3,809 |  |  |  |  |
Real estate taxes |  | 1,921 |  |  | 1,021 |  |  |  |  |
Segment net operating income |  | 8,809 |  |  | 6,856 |  |  |  |  |
General contracting and real estate services |  |  |  |  |  |  |  |
Segment revenues |  | 35,563 |  |  | 47,268 |  |  |  |  |
Segment expenses |  | 34,275 |  |  | 45,550 |  |  |  |  |
Segment gross profit |  | 1,288 |  |  | 1,718 |  |  |  |  |
Net operating income |  | $ | 30,891 |  |  | $ | 30,299 |  |  |  |  |
Rental expenses represent costs directly associated with the operation and management of the Company’s real estate properties. Rental expenses include asset management expenses, property management fees, repairs and maintenance, insurance, and utilities. General contracting and real estate services revenues for the three months ended March 31, 2021 and 2020 exclude revenue related to intercompany construction contracts of $2.0 million and $13.1 million, respectively, as it is eliminated in consolidation. General contracting and real estate services expenses for the three months ended March 31, 2021 and 2020 exclude expenses related to intercompany construction contracts of $2.0 million and $13.0 million, respectively. The following table reconciles net operating income to net income, the most directly comparable GAAP measure, for the three months ended March 31, 2021 and 2020 (in thousands):
|  | Three Months Ended March 31, |  |
|  | 2021 |  | 2020 |  |  |  |
Net operating income |  | $ | 30,891 |  |  | $ | 30,299 |  |  |  |  |
Depreciation and amortization |  | (18,066) |  |  | (14,279) |  |  |  |  |
Amortization of right-of-use assets - finance leases |  | (189) |  |  | (147) |  |  |  |  |
General and administrative expenses |  | (4,021) |  |  | (3,793) |  |  |  |  |
Acquisition, development and other pursuit costs |  | (71) |  |  | (27) |  |  |  |  |
Impairment charges |  | (3,039) |  |  | (158) |  |  |  |  |
Gain on real estate dispositions |  | 3,717 |  |  | — |  |  |  |  |
Interest income |  | 4,116 |  |  | 7,226 |  |  |  |  |
Interest expense on indebtedness |  | (7,613) |  |  | (7,959) |  |  |  |  |
Interest expense on finance leases |  | (362) |  |  | (229) |  |  |  |  |
Change in fair value of derivatives and other |  | 393 |  |  | (1,736) |  |  |  |  |
Unrealized credit loss release (provision) |  | 55 |  |  | (377) |  |  |  |  |
Other income (expense), net |  | 179 |  |  | 58 |  |  |  |  |
Income tax benefit |  | 19 |  |  | 257 |  |  |  |  |
Net income |  | $ | 6,009 |  |  | $ | 9,135 |  |  |  |  |
General and administrative expenses represent costs not directly associated with the operation and management of the Company’s real estate properties and general contracting and real estate services businesses, including corporate office personnel salaries and benefits, bank fees, accounting fees, legal fees, and other corporate office expenses.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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