Real Estate, Net

9 Months Ended

Sep. 30, 2025

8. Real Estate, Net

The following is a summary of real estate, net, collectively, as of September 30, 2025 and December 31, 2024, respectively (dollar amounts in thousands):


	September 30, 2025		December 31, 2024
Land	$	77,899	$	80,190
Building and improvements	573,542		581,283
Furniture, fixture and equipment	18,303		16,866
Operating real estate	$	669,744	$	678,339
Accumulated depreciation	(78,523)		(61,834)
Operating real estate, net	$	591,221	$	616,505
Real estate held for sale, net (1)	$	10,527	$	6,902
Real estate, net (2)	$	601,748	$	623,407

(1)Real estate held for sale, net includes certain single-family rental properties and is recorded at the lower of the net carrying amount of the assets or the estimated fair value, net of selling costs.

(2)The Company repositioned 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 was included in assets of disposal group held for sale on the accompanying condensed consolidated balance sheets as of December 31, 2024. See Note 9 for additional information.

Multi-family Apartment Properties

As of September 30, 2025 and December 31, 2024, 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. Also as of September 30, 2025 and December 31, 2024, the Company owned a preferred equity investment in an entity that owns a multi-family apartment community, which the Company determined to be a VIE and for which the Company is the primary beneficiary. Accordingly, the Company consolidated the joint venture entities and the entity in which it holds a preferred equity investment into its condensed consolidated financial statements (see Note 7). During the nine months ended September 30, 2024, the Company determined that two of the multi-family apartment communities owned by an entity in which the Company holds a joint venture equity investment that is not in disposal group held for sale met the criteria to be classified as held for sale, transferred the properties held by the joint venture entity from operating real estate to real estate held for sale and recognized no loss.

During the three months ended September 30, 2024, an entity in which the Company holds a joint venture equity investment that is not in disposal group held for sale sold one of its multi-family apartment communities for approximately $43.5 million, subject to certain prorations and adjustments typical in such real estate transactions, including the assumption of the related mortgage payable in the amount of approximately $24.1 million. The sale generated a net gain of approximately $6.6 million and accelerated amortization of remaining loan costs of approximately $0.1 million, both of which are included in other income on the accompanying condensed consolidated statements of operations. The sale also generated net income attributable to non-controlling interest of approximately $5.0 million, resulting in a net gain attributable to the Company's common stockholders of approximately $1.5 million.

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.

Operating real estate, net is periodically evaluated for impairment. As of September 30, 2025, the Company determined that no multi-family properties owned by joint venture equity investments were impaired. As of September 30, 2024, the Company determined that two multi-family properties owned by joint venture equity investments were impaired. The calculation of impairment amounts for multi-family properties utilized fair values that were estimated based upon discounted cash flow analyses using property financial information and assumptions regarding market rent, revenue and expense growth, capitalization rates and equity return rates. Accordingly, the Company recognized a $4.6 million and $18.4 million impairment of real estate in the three and nine months ended September 30, 2024, respectively.

Single-family Rental Properties

As of September 30, 2025 and December 31, 2024, 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.

During the nine months ended September 30, 2025, the Company determined that certain single-family rental properties met the criteria to be classified as held for sale, transferred the properties from operating real estate to real estate held for sale and recognized losses upon transfer of $1.4 million and $1.6 million during the three and nine months ended September 30, 2025, respectively, which are included in impairment of real estate on the accompanying condensed consolidated statements of operations.

During the nine months ended September 30, 2024, the Company determined that certain single-family rental properties met the criteria to be classified as held for sale, transferred the properties from operating real estate to real estate held for sale and recognized a loss upon transfer of $4.0 million during the nine months ended September 30, 2024.

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. Fair value for single-family rental properties held for sale was based upon local broker price opinions and automated valuation model data. During the three and nine months ended September 30, 2025, the Company recognized $1.6 million and $2.3 million of net impairment losses on single-family rental properties, inclusive of losses recognized upon transfer to real estate held for sale, respectively. During the three and nine months ended September 30, 2024, the Company recognized a $0.6 million net recovery of impairment and $4.0 million of net impairment losses on single-family rental properties, inclusive of losses recognized upon transfer to real estate held for sale, respectively.

During the three and nine months ended September 30, 2025, the Company sold single-family rental properties for proceeds of approximately $2.2 million and $5.1 million, respectively, recognizing a net loss on sale of approximately $0.5 million and $0.6 million, respectively, which is included in other income (loss) on the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2024, the Company sold single-family rental properties for proceeds of approximately $2.7 million and $4.5 million, respectively, recognizing net losses on sale of approximately $0.1 million and net gains on sale of approximately $0.2 million, respectively.

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 were fully amortized as of September 30, 2025 and December 31, 2024.

The Company repositioned 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 were included in assets of disposal group held for sale on the accompanying condensed consolidated balance sheets as of December 31, 2024. See Note 9 for additional information.

Depreciation and Amortization Expense

The following table presents depreciation and amortization expenses for the three and nine months ended September 30, 2025 and 2024, respectively (dollar amounts in thousands):


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2025		2024		2025		2024
Depreciation expense on operating real estate	$	5,936	$	8,131	$	17,759	$	30,564
Amortization of lease intangibles related to operating real estate	—		—		—		2,378
Total depreciation and amortization	$	5,936	$	8,131	$	17,759	$	32,942