Real Estate, Net

3 Months Ended

Mar. 31, 2023

8. Real Estate, Net

The following is a summary of real estate, net, collectively, as of March 31, 2023 and December 31, 2022, respectively (dollar amounts in thousands):


	March 31, 2023		December 31, 2022
Land	$	89,550	$	89,550
Building and improvements	629,123		611,102
Furniture, fixture and equipment	14,496		13,540
Real estate	$	733,169	$	714,192
Accumulated depreciation	(27,263)		(21,224)


Real estate, net (1)	$	705,906	$	692,968

(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, 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 condensed consolidated balance sheets. See Note 9 for additional information.

Multi-family Apartment Properties

As of March 31, 2023 and December 31, 2022, the Company owned joint venture equity investments in entities 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).

In March 2022, a wholly-owned subsidiary of the Company 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 (see Note 7). 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 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 March 31, 2023 and December 31, 2022, 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. Lease intangibles included in other assets were fully amortized as of March 31, 2023 and December 31, 2022.

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, 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 condensed 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 condensed consolidated statements of operations. The following table presents depreciation and amortization expenses for the three months ended March 31, 2023 and 2022, respectively (dollar amounts in thousands):


	For the Three Months Ended March 31,
	2023		2022
Depreciation expense on operating real estate	$	6,039	$	10,111
Amortization of lease intangibles related to operating real estate	—		25,475
Total depreciation and amortization (1)	$	6,039	$	35,586

(1)Amounts for the three months ended March 31, 2022 include depreciation and amortization of multi-family properties that have been reclassified to assets held in the disposal group held for sale