Real Estate, Net

12 Months Ended

Dec. 31, 2022

8. Real Estate, Net

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


	December 31, 2022		December 31, 2021
Land	$	89,550	$	111,182
Building and improvements	611,102		835,635
Furniture, fixture and equipment	13,540		23,546
Operating real estate	$	714,192	$	970,363
Accumulated depreciation	(21,224)		(3,890)
Operating real estate, net	$	692,968	$	966,473
Real estate held for sale, net (1) (2)	$	—	$	51,110
Real estate, net	$	692,968	$	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.

(2)In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of its capital away from such assets to its targeted assets. Accordingly, as of December 31, 2022, the real estate, net related to certain joint venture equity investments in multi-family properties is included in assets of disposal group held for sale on the accompanying consolidated balance sheets. See Note 9 for additional information.

Multi-family Apartment Properties

As of December 31, 2022 and 2021, the Company invested in joint venture equity 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).

In August 2022, one of the joint ventures in which the Company held a common equity investment sold its multi-family apartment community for approximately $48.0 million, subject to certain prorations and adjustments typical in such real estate transactions and repaid the related mortgage payable in the amount of approximately $26.0 million. The sale generated a net gain of approximately $16.8 million and a loss on extinguishment of debt of approximately $0.5 million, both of which are included in other income on the accompanying consolidated statements of operations, resulting in a net gain attributable to the Company's common shareholders of approximately $14.4 million.

During the year ended December 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 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 became 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 consolidated statements of operations.

The multi-family apartment communities generally 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 December 31, 2022 and 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 consolidated balance sheets. The following table presents the components of lease intangibles, net as of December 31, 2022 and 2021, respectively (dollar amounts in thousands):


	December 31, 2022		December 31, 2021
Lease intangibles	$	30,094	$	51,969
Accumulated amortization	(30,094)		(12,200)
Lease intangibles, net (1)	$	—	$	39,769

(1)In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of its capital away from such assets to its targeted assets. Accordingly, as of December 31, 2022, the lease intangibles, net related to certain joint venture equity investments in multi-family properties are included in assets of disposal group held for sale on the accompanying consolidated balance sheets. See Note 9 for additional information.

Depreciation and Amortization Expense

Depreciation and amortization expenses related to operating real estate are included in expenses related to real estate on the accompanying consolidated statements of operations. The following table presents depreciation and amortization expenses for the years ended December 31, 2022, 2021 and 2020, respectively, (dollar amounts in thousands):


	For the Years Ended December 31,
		2022		2021		2020
Depreciation expense on operating real estate		$	47,179	$	5,662	$	155
Amortization of lease intangibles related to operating real estate		79,645		13,588		231
Total depreciation and amortization		$	126,824	$	19,250	$	386

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


Year Ending December 31,	Depreciation Expense

2023	$	23,780
2024	$	23,780
2025	$	23,780
2026	$	23,780
2027	$	21,587