Real Estate, Net

12 Months Ended

Dec. 31, 2021

As of December 31, 2021, the Company invests in 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 consolidated financial statements (see Note 7).

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 consolidated financial statements. In July 2021, the VIE redeemed its non-controlling interest, which caused the entity to no longer meet the criteria for being characterized as a VIE and become a wholly-owned subsidiary of the Company (see Note 7). In November 2021, the Company determined that the multi-family apartment community owned by the wholly-owned subsidiary met the criteria to be classified as held for sale, transferred the property held by the wholly-owned subsidiary from operating real estate to real estate held for sale and recognized a $0.2 million loss included in other income on the accompanying consolidated statements of operations.

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 years ended December 31, 2021, 2020, and 2019 in the amounts of $14.3 million, $0.4 million, and $0.2 million, respectively, is included in income from real estate on the accompanying consolidated statements of operations.

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


	December 31, 2021		December 31, 2020
Land	$	111,182	$	5,400
Building and improvements	835,635		43,764
Furniture, fixture and equipment	23,546		1,522
Operating real estate	$	970,363	$	50,686
Accumulated depreciation (1)	(3,890)		(154)
Operating real estate, net	$	966,473	$	50,532
Real estate held for sale, net (2)	$	51,110	$	—
Real estate, net	$	1,017,583	$	50,532

(1)Depreciation expense for the years ended December 31, 2021 and 2020 totaled $5.7 million and $0.2 million, respectively, and is included in expenses related to real estate on the accompanying consolidated statements of operations. For the year ended December 31, 2019, the Company recognized no depreciation expense.

(2)Real estate held for sale, net is recorded at the lower of the net carrying amount of the assets or the estimated fair value, net of selling costs.

The estimated depreciation expense related to operating real estate held in Consolidated VIEs is as follows (dollar amounts in thousands):


Year Ending December 31,	Depreciation Expense

2022	$	33,351
2023	$	33,351
2024	$	33,351
2025	$	33,351
2026	$	32,668