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Assets and Liabilities of Disposal Group Held for Sale
 9 Months Ended
Sep. 30, 2025
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

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 Company determined that certain joint venture equity investments met the criteria to be classified as held for sale and the assets and liabilities of the respective Consolidated VIEs are included in assets and liabilities of disposal group held for sale on the accompanying condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

In March 2024, the Company suspended the marketing of one joint venture equity investment, determined that it no longer met the criteria to be classified as held for sale and transferred the assets and liabilities of the Consolidated VIE to their respective categories on the accompanying consolidated balance sheets. As a result of this transfer, the Company adjusted the carrying value of the long-lived assets in the Consolidated VIE and recognized an approximately $14.6 million loss on reclassification of disposal group during the three months ended March 31, 2024.

In June 2024, in response to productive negotiations with operating partners and increased transactional activity, the Company determined that five joint venture equity investments met the criteria to be classified as held for sale and transferred the assets and liabilities of the respective Consolidated VIEs to assets and liabilities of disposal group held for sale on the accompanying condensed consolidated balance sheets as of June 30, 2024. As a result, the Company recognized a loss of $1.8 million included in impairment of real estate in the accompanying condensed consolidated statements of operations during the three months ended June 30, 2024.

During the three and nine months ended September 30, 2024, the Company sold its ownership interests in four and six joint venture equity investments that owned multi-family properties, respectively, which resulted in the de-consolidation of the respective joint venture entities' assets and liabilities and a gain on de-consolidation of approximately $3.4 million and $3.7 million, respectively, which is included in other income in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2024.

During the three months ended September 30, 2024, one of the entities in which the Company held a joint venture equity investment that was in disposal group held for sale sold its multi-family apartment community for approximately $56.4 million, subject to certain prorations and adjustments typical in such real estate transactions, and repaid the related mortgage payable in the amount of approximately $31.8 million. The sale generated a net gain of approximately $11.4 million and a loss on extinguishment of debt of approximately $1.6 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 $1.1 million, resulting in net gain attributable to the Company's common stockholders of approximately $8.7 million.

In September 2024, in response to productive negotiations with operating partners and increased transactional activity, the Company determined that two joint venture equity investments met the criteria to be classified as held for sale and transferred the assets and liabilities of the respective Consolidated VIEs to assets and liabilities of disposal group held for sale on the accompanying condensed consolidated balance sheets. As a result, the Company recognized a loss of $2.0 million, which is included in impairment of real estate in the accompanying condensed consolidated statements of operations for the three months ended September 30, 2024.

In June 2025, in response to productive negotiations with operating partners, the Company determined that two joint venture equity investments accounted for as equity investments met the criteria to be classified as held for sale and transferred its equity investments in the joint venture entities to disposal group held for sale on the accompanying condensed consolidated balance sheets as of June 30, 2025. As these investments were carried at fair value, the Company recognized no gain or loss on the transfer. The Company sold its ownership interests in the joint venture equity investments during the three months ended September 30, 2025, resulting in no gain or loss.

During the three months ended September 30, 2025, two of the entities in which the Company held joint venture equity investments that were in disposal group held for sale sold their multi-family apartment communities for approximately $108.6 million, subject to certain prorations and adjustments typical in such real estate transactions, and repaid the related mortgages payable in the amount of approximately $89.6 million. The sales generated net gains of approximately $0.6 million and losses on extinguishment of debt of approximately $0.4 million, both of which are included in other income on the accompanying condensed consolidated statements of operations. The sales also generated net income attributable to non-controlling interest of approximately $13.5 thousand, resulting in net gain attributable to the Company's common stockholders of approximately $0.1 million.
The Company completed its disposition of the real property held by its joint venture equity investments in multi-family properties during the three months ended September 30, 2025. Accordingly, assets and liabilities of disposal group held for sale as of September 30, 2025 consisted of assets and liabilities held by the respective Consolidated VIEs for the conclusion of business operations after the aforementioned real property sales. The following table presents the carrying values of the major classes of assets and liabilities of disposal group held for sale as of September 30, 2025 and December 31, 2024, respectively (dollar amounts in thousands):

September 30, 2025December 31, 2024
Cash and cash equivalents (1)
$849 $2,461 
Real estate, net (1)
— 111,032 
Other assets (1)
534 5,120 
Total assets of disposal group held for sale
$1,383 $118,613 
Mortgages payable on real estate, net (2)
$— $93,370 
Other liabilities78 3,695 
Total liabilities of disposal group held for sale (1)
$78 $97,065 

(1)Certain assets and liabilities of the disposal group held for sale are in Consolidated VIEs because the Company is the primary beneficiary.
(2)During the nine months ended September 30, 2024, two entities in which the Company held joint venture equity investments entered into debt restructuring agreements with the respective senior lenders for their mortgages payable. As part of the agreements, portions of interest payments were deferred until the maturity date. The restructurings did not result in a change in the carrying amount of the mortgage payables and no gains were recorded. During the year ended December 31, 2024, the Company sold its ownership interests in these entities, which resulted in the de-consolidation of the related mortgages payable as of December 31, 2024.

Also included in the disposal group held for sale are non-controlling interests in Consolidated VIEs in the amount of $0.6 million and $2.0 million as of September 30, 2025 and December 31, 2024, respectively.

Real estate, net included in assets of disposal group held for sale was 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 either negotiated sale prices less anticipated selling costs or a discounted cash flow analysis using property financial information and assumptions regarding market rent, revenue and expense growth, capitalization rates and equity return rates. During the nine months ended September 30, 2025, the Company recognized net impairment losses of $7.2 million for real estate, net in the disposal group held for sale. During the three and nine months ended September 30, 2024, the Company recognized net impairment losses of $3.8 million and $25.8 million, inclusive of losses recognized upon transfer into disposal group held for sale, for real estate, net in the disposal group held for sale, respectively. See Note 17 for descriptions of valuation methodologies utilized for financial instruments included in assets and liabilities of disposal group held for sale.

The following table presents the pretax losses of the disposal group held for sale as of September 30, 2025 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,
2025202420252024
Pretax income (loss) of disposal group held for sale
$155 $(1,588)$(6,886)$(62,120)
Pretax (income) loss of disposal group attributable to non-controlling interest in Consolidated VIEs
(80)273 479 6,411 
Pretax income (loss) of disposal group attributable to Company's common stockholders
$75 $(1,315)$(6,407)$(55,709)