Assets and Liabilities of Disposal Group Held for Sale

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

Assets and Liabilities of Disposal Group Held for Sale

9. Assets and Liabilities of Disposal Group Held for Sale

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 Company determined that certain joint venture equity investments met the criteria to be classified as held for sale, transferred either the assets and liabilities of the respective Consolidated VIEs or its equity investment in the joint venture entity to assets and liabilities of disposal group held for sale in the accompanying condensed consolidated balance sheets and recognized no loss.

The following table presents the carrying values of the major classes of assets and liabilities of disposal group held for sale as of March 31, 2023 and December 31, 2022, respectively (dollar amounts in thousands):


	March 31, 2023		December 31, 2022
Cash and cash equivalents (1)	$	12,236	$	13,944
Equity investments	10,070		9,010
Real estate, net (1)	1,082,722		1,079,942
Other assets (1)	45,351		48,888
Total assets of disposal group held for sale	$	1,150,379	$	1,151,784

Mortgages payable on real estate	$	878,060	$	865,414
Other liabilities	18,923		18,398
Total liabilities of disposal group held for sale (1)	$	896,983	$	883,812

(1)Certain assets and liabilities of the disposal group held for sale are in Consolidated VIEs because the Company is the primary beneficiary.

Also included in the disposal group held for sale are non-controlling interests in Consolidated VIEs in the amount of $23.0 million and $23.9 million as of March 31, 2023 and December 31, 2022, respectively.

Real estate, net included in assets of disposal group held for sale is recorded at the lower of the net carrying amount of the assets or the estimated fair value, net of selling costs. Fair value for real estate, net was based upon a discounted cash flow analysis using property financial information and assumptions regarding market rent, revenue and expense growth, capitalization rates and return rates. As of March 31, 2023, the fair value, net of selling costs of multi-family properties owned by two of the joint venture equity investments was less than the properties' net carrying values. Accordingly, the Company recognized a $11.1 million impairment in the three months ended March 31, 2023. As of March 31, 2023, the fair value, net of selling costs of the multi-family property owned by one of the joint venture equity investments that had previously been impaired was more than the property's net carrying value. Accordingly, the Company recognized a $0.8 million recovery of value in the three months ended March 31, 2023. See Note 16 for descriptions of valuation methodologies utilized for other classes of assets and liabilities of disposal group held for sale.

The following table presents the pretax losses of the disposal group held for sale for the three months ended March 31, 2023 and 2022, respectively (dollar amounts in thousands):


	For the Three Months Ended March 31,
	2023		2022
Pretax loss of disposal group held for sale	$	(16,368)	$	(16,649)
Pretax loss of disposal group attributable to non-controlling interest in Consolidated VIEs	1,214		1,786
Pretax loss of disposal group attributable to Company's common stockholders	$	(15,154)	$	(14,863)