Equity Investments, at Fair Value

12 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

6. Equity Investments, at Fair Value

The Company's equity investments consist of, or have consisted of, preferred equity ownership interests in entities that invest in multi-family properties where the risks and payment characteristics are equivalent to an equity investment (or multi-family preferred equity ownership interests), equity ownership interests in entities that invest in single-family properties and invest in or originate residential loans (or single-family equity ownership interests) and joint venture equity investments in multi-family properties. The Company's equity investments are accounted for under the equity method and are presented at fair value on its consolidated balance sheets as a result of a fair value election.

The following table presents the Company's equity investments as of December 31, 2022 and 2021, respectively (dollar amounts in thousands):


	December 31, 2022			December 31, 2021
Investment Name	Ownership Interest	Fair Value		Ownership Interest	Fair Value
Multi-Family Preferred Equity Ownership Interests
1122 Chicago DE, LLC	53%	$	8,276	53%	$	7,723
Bighaus, LLC	42%	16,482		42%	15,471
FF/RMI 20 Midtown, LLC	51%	27,079		51%	25,499
Palms at Cape Coral, LLC	34%	5,429		34%	5,175
America Walks at Port St. Lucie, LLC	62%	29,873		62%	30,383
EHOF-NYMT Sunset Apartments Preferred, LLC	57%	18,139		57%	17,213
Lucie at Tradition Holdings, LLC	70%	17,576		70%	16,597
Syracuse Apartments and Townhomes, LLC	58%	20,115		—	—
Hudson Bridge Apartments, LLC - Series A, Briar Hill Apartments, LLC, Kings Glen Apartments, LLC, Flagstone Apartments, LLC, Brookfield Apartments II, LLC - Series B, and Silber JBSM Properties, LLC (collectively)	58%	9,277		—	—
DCP Gold Creek, LLC	—	—		44%	6,686
Rigsbee Ave Holdings, LLC	—	—		56%	11,331
Walnut Creek Properties Holdings, L.L.C.	—	—		36%	9,482
Lurin-RMI, LLC	—	—		38%	9,548
Somerset Deerfield Investor, LLC	—	—		45%	19,965
RS SWD Owner, LLC, RS SWD Mitchell Owner, LLC, RS SWD IF Owner, LLC, RS SWD Mullis Owner, LLC, RS SWD JH Mullis Owner, LLC and RS SWD Saltzman Owner, LLC (collectively)	—	—		43%	5,725
Total - Multi-Family Preferred Equity Ownership Interests		152,246			180,798

Joint Venture Equity Investments in Multi-Family Properties
GWR Cedars Partners, LLC (1)	—	—		70%	3,770
GWR Gateway Partners, LLC (1)	—	—		70%	6,670
Total - Joint Venture Equity Investments in Multi-Family Properties		—			10,440

Single-Family Equity Ownership Interests
Constructive Loans, LLC (2)	—	27,500		—	29,250
Morrocroft Neighborhood Stabilization Fund II, LP (3)	—	—		11%	19,143
Total - Single-Family Equity Ownership Interests		27,500			48,393
Total		$	179,746		$	239,631

(1)The Company's joint venture equity investments in multi-family properties were transferred to assets of disposal group held for sale during the year ended December 31, 2022 (see Note 9).

(2)As of December 31, 2022, the Company had the option to purchase 50% of the issued and outstanding interests of an entity that originates residential loans. The Company accounts for this investment using the equity method and has elected the fair value option. After acquiring this investment in November 2021, the Company purchased $260.6 million and $94.0 million of residential loans from the entity for the years ended December 31, 2022 and 2021, respectively. In February 2023, the Company exercised its option in full related to this investment.

(3)The Company's equity investment was redeemed as a result of a sale transaction initiated by the general partner during the year ended December 31, 2022.

The following table presents income from multi-family preferred equity ownership interests for the years ended December 31, 2022, 2021, and 2020, respectively (dollar amounts in thousands). Income from these investments is presented in income from equity investments in the Company's accompanying consolidated statements of operations. Income from these investments during the years ended December 31, 2022, 2021 and 2020 includes $3.6 million of net unrealized losses and $0.4 million and $0.3 million of net unrealized gains, respectively.


	For the Years Ended December 31,
Investment Name		2022		2021		2020
Somerset Deerfield Investor, LLC		$	1,944	$	2,295	$	2,168
RS SWD Owner, LLC, RS SWD Mitchell Owner, LLC, RS SWD IF Owner, LLC, RS SWD Mullis Owner, LLC, RS SWD JH Mullis Owner, LLC and RS SWD Saltzman Owner, LLC (collectively)		529		585		551
Walnut Creek Properties Holdings, L.L.C.		(153)		1,240		928
DCP Gold Creek, LLC		254		780		701
1122 Chicago DE, LLC		959		908		835
Rigsbee Ave Holdings, LLC		(174)		1,683		1,148
Bighaus, LLC		1,852		1,786		1,002
FF/RMI 20 Midtown, LLC		2,904		3,059		686
Lurin-RMI, LLC		558		931		81
Palms at Cape Coral, LLC		554		342		—
America Walks at Port St. Lucie, LLC		3,140		1,678		—
EHOF-NYMT Sunset Apartments Preferred, LLC		1,939		661		—
Lucie at Tradition Holdings, LLC		2,008		484		—
Syracuse Apartments and Townhomes, LLC		1,816		—		—
Hudson Bridge Apartments, LLC - Series A, Briar Hill Apartments, LLC, Kings Glen Apartments, LLC, Flagstone Apartments, LLC, Brookfield Apartments II, LLC - Series B, and Silber JBSM Properties, LLC (collectively)		540		—		—
BBA-EP320 II, L.L.C., BBA-Ten10 II, L.L.C., and Lexington on the Green Apartments, L.L.C. (collectively)		—		1,304		1,260
Audubon Mezzanine Holdings, L.L.C. (Series A)		—		1,251		1,213
EP 320 Growth Fund, L.L.C. (Series A) and Turnbury Park Apartments - BC, L.L.C. (Series A) (collectively)		—		735		782
Towers Property Holdings, LLC		—		1,192		1,243
Mansions Property Holdings, LLC		—		1,148		1,198
Sabina Montgomery Holdings, LLC - Series B and Oakley Shoals Apartments, LLC - Series A (collectively)		—		412		454
Gen1814, LLC - Series A, Highlands - Mtg. Holdings, LLC - Series A, and Polos at Hudson Investments, LLC - Series A (collectively)		—		966		1,044
Axis Apartments Holdings, LLC, Arbor-Stratford Holdings II, LLC - Series B, Highlands - Mtg. Holdings, LLC - Series B, Oakley Shoals Apartments, LLC - Series C, and Woodland Park Apartments II, LLC (collectively)		—		1,193		1,293
Total Income - Multi-Family Preferred Equity Ownership Interests		$	18,670	$	24,633	$	16,587

For the years ended December 31, 2022 and 2021, the Company recognized $2.9 million and $2.8 million in premiums resulting from early redemption of multi-family preferred equity ownership interests included in equity investments, respectively, which are included in other income on the accompanying consolidated statements of operations. For the year ended December 31, 2020, the Company recognized no premiums resulting from early redemption of multi-family preferred equity ownership interests included in equity investments.

Income from single-family equity ownership interests and joint venture equity investments in multi-family properties that are accounted for under the equity method using the fair value option is presented in income from equity investments in the Company's accompanying consolidated statements of operations. The following table presents income (loss) from these investments for the years ended December 31, 2022, 2021 and 2020, respectively (dollar amounts in thousands):


	For the Years Ended December 31,
Investment Name		2022		2021		2020
Single-Family Equity Ownership Interests
Morrocroft Neighborhood Stabilization Fund II, LP (1)		$	(416)	$	6,378	$	1,519
Constructive Loans, LLC (2)		(1,750)		2,750		—
Headlands Asset Management Fund III (Cayman), LP (Headlands Flagship Opportunity Fund Series I) (3)		—		(15)		9,513
Total (Loss) Income - Single Family Equity Ownership Interests		$	(2,166)	$	9,113	$	11,032

Joint Venture Equity Investments in Multi-Family Properties (4)
GWR Cedars Partners, LLC		$	(1,050)	$	60	$	—
GWR Gateway Partners, LLC		(380)		90		—
The Preserve at Port Royal Venture, LLC (5)		—		—		(949)
Total (Loss) Income - Joint Venture Equity Investments in Multi-Family Properties		$	(1,430)	$	150	$	(949)

(1)The Company's equity investment was redeemed during the year ended December 31, 2022.

(2)Includes net unrealized loss of $1.8 million and net unrealized gain of $2.8 million for the years ended December 31, 2022 and 2021, respectively.

(3)The Company's equity investment was redeemed during the year ended December 31, 2021.

(4)Includes net unrealized losses of $1.4 million and no realized gains for the year ended December 31, 2022, net unrealized gains of $0.2 million and no realized gains for the year ended December 31, 2021 and net unrealized losses of $9.7 million and a realized gain of $8.8 million for the year ended December 31, 2020.

(5)The Company's equity investment was redeemed during the year ended December 31, 2020.

Summary combined financial information for the Company’s equity investments as of December 31, 2022 and 2021, respectively, and for the years ended December 31, 2022, 2021, and 2020, respectively, is shown below and includes summary financial information for the Company's joint venture equity investments in multi-family properties that are included in assets of disposal group held for sale as of December 31, 2022 (dollar amounts in thousands):


	December 31, 2022		December 31, 2021
Balance Sheets:
Real estate, net	$	553,356	$	727,963
Residential loans	71,077		38,423
Other assets	38,616		95,016
Total assets	$	663,049	$	861,402

Notes payable, net	$	301,118	$	469,120
Other liabilities	120,850		80,672
Total liabilities	421,968		549,792
Members' equity	241,081		311,610
Total liabilities and members' equity	$	663,049	$	861,402


	For the Years Ended December 31,
	2022		2021		2020
Operating Statements: (1)
Rental revenues	$	23,237	$	87,147	$	80,339
Real estate sales	399,783		205,000		54,100
Cost of real estate sales	(277,740)		(140,800)		(32,779)
Interest income	—		3,875		14,438
Realized and unrealized (losses) gains, net	—		(7,693)		27,107
Other income	27,555		15,046		7,566
Operating expenses	(43,061)		(55,799)		(54,691)
Income before debt service and depreciation and amortization	129,774		106,776		96,080
Interest expense	(7,751)		(28,849)		(36,601)

Depreciation and amortization	(14,779)		(37,172)		(38,112)
Net income	$	107,244	$	40,755	$	21,367

(1)The Company records income (loss) from equity investments under either the hypothetical liquidation of book value method of accounting or the equity method using the fair value option. Accordingly, the combined net income (loss) shown above is not indicative of the income (loss) recognized by the Company from equity investments.