Operating Real Estate, Net

9 Months Ended

Sep. 30, 2021

As of September 30, 2021, the Company invested in five joint venture investments that own multi-family apartment communities, which the Company determined to be VIEs and for which the Company is the primary beneficiary. Accordingly, the Company consolidated the joint venture entities into its condensed consolidated financial statements (see Note 7). Additionally, as of September 30, 2021, a wholly-owned subsidiary of the Company owns a multi-family apartment community that is included in operating real estate, net on the accompanying condensed consolidated balance sheets.

As of December 31, 2020, the Company was the primary beneficiary of a VIE that owned a multi-family apartment community and in which the Company held a preferred equity investment. Accordingly, the Company consolidated the VIE into its condensed consolidated financial statements (see Note 7).

The multi-family apartment communities lease their apartment units to individual tenants at market rates for the production of rental income. These apartment units are generally leased at a fixed monthly rate with no option for the lessee to purchase the leased unit at any point. Rental income for the three and nine months ended September 30, 2021 in the amounts of $3.8 million and $7.3 million, respectively, is included in income from operating real estate on the accompanying condensed consolidated statements of operations.

The following is a summary of the operating real estate investments, collectively, as of September 30, 2021 and December 31, 2020, respectively (dollar amounts in thousands):


	September 30, 2021		December 31, 2020
Land	$	34,405	$	5,400
Building and improvements	229,426		43,764
Furniture, fixture and equipment	10,197		1,522
Real estate	$	274,028	$	50,686
Accumulated depreciation (1)	(3,422)		(154)
Operating real estate, net	$	270,606	$	50,532

(1)Depreciation expense for the three and nine months ended September 30, 2021 totaled $1.7 million and $3.3 million, respectively, and is included in expenses related to operating real estate on the accompanying condensed consolidated statements of operations.