Real Estate, Net

3 Months Ended

Mar. 31, 2022

The following is a summary of real estate, net, collectively, as of March 31, 2022 and December 31, 2021, respectively (dollar amounts in thousands):



	March 31, 2022		December 31, 2021
Land	$	188,043	$	111,182
Building and improvements	1,323,401		835,635
Furniture, fixture and equipment	37,390		23,546
Operating real estate	$	1,548,834	$	970,363
Accumulated depreciation	(14,001)		(3,890)
Operating real estate, net	$	1,534,833	$	966,473
Real estate held for sale, net (1)	$	—	$	51,110
Real estate, net	$	1,534,833	$	1,017,583

(1)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.

Multi-family Apartment Properties

As of March 31, 2022 and December 31, 2021, the Company invested 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 condensed consolidated financial statements (see Note 7).

As of March 31, 2021, 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. 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. In March 2022, the entity completed the sale of its multi-family apartment community for approximately $52.0 million, subject to certain prorations and adjustments typical in such real estate transactions, repaid the related mortgage payable in the amount of approximately $37.0 million and redeemed the Company's preferred equity investment. The sale generated a net gain of approximately $0.4 million and a loss on extinguishment of debt of approximately $0.6 million, both of which are included in other income on the accompanying condensed 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.

Single-family Rental Properties

As of March 31, 2022 and December 31, 2021, the Company owned single-family rental homes. These units are leased to individual tenants for the production of rental income and are generally leased at a fixed monthly rate with no option for the lessee to purchase the leased unit at any point.

Lease Intangibles

Intangibles related to multi-family properties consist of the value of in-place leases and are included in other assets on the accompanying condensed consolidated balance sheets. The following table presents the components of lease intangibles, net as of March 31, 2022 and December 31, 2021, respectively (dollar amounts in thousands):


	March 31, 2022		December 31, 2021
Lease intangibles	$	79,431	$	51,969
Accumulated amortization	(37,672)		(12,200)
Lease intangibles, net	$	41,759	$	39,769

Real Estate Income and Expenses

Rental income and other income derived from real estate are included in income from real estate in the accompanying condensed consolidated statements of operations. Depreciation and amortization expenses related to operating real estate and other expenses incurred on real estate are included in expenses related to real estate on the accompanying condensed consolidated statements of operations. The following table presents the components of income from real estate and expenses related to real estate for the three months ended March 31, 2022 and 2021, respectively (dollar amounts in thousands):


	For the Three Months Ended March 31,
	2022		2021
Rental income	$	23,287	$	1,489
Other income	2,302		6
Total income from real estate	$	25,589	$	1,495

Interest expense, mortgages payable on real estate (1)	$	7,157	$	311

Depreciation expense on operating real estate	$	10,111	$	681
Amortization of lease intangibles related to operating real estate	25,475		1,242
Other expenses	12,403		1,001
Total expenses related to real estate	$	47,989	$	2,924

(1)Included in interest expense in the accompanying condensed consolidated statements of operations.