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Impairment

12 Months Ended

Dec. 31, 2024

3.	Impairment

The Company reviews its long-lived assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment or disposal of long-lived assets in accordance with ASC 360 Property, Plant, and Equipment (ASC 360) requires that if impairment indicators exist and expected undiscounted cash flows generated by the asset over an anticipated holding period are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of the asset to its fair value. The impairment analysis does not consider the timing of future cash flows and whether the asset is expected to earn an above- or below-market rate of return.

The Company evaluates each investment in an unconsolidated venture discussed in Note 2 – Investments in Unconsolidated Ventures periodically for recoverability and valuation declines that are other-than-temporary. If the decrease in value of an investment is deemed to be other-than-temporary, the investment is reduced to its estimated fair value.

During the year ended December 31, 2023, the Company recorded a $709.5 million impairment charge related to Seaport properties in the Landlord Operations segment and investments in the Hospitality segment. The Company recognized the impairment due to decreases in estimated future cash flows due to significant uncertainty of future performance as stabilization and profitability are taking longer than expected, pressure on the current cost structure, decreased demand for office space, as well as an increase in the capitalization rate and a decrease in restaurant multiples used to evaluate future cash flows. The Company used a discounted cash flow analysis to determine fair value, with capitalization rates ranging from 5.5% to 6.75%, discount rates ranging from 8.5% to 13.3%, and restaurant multiples ranging from 8.3 to 11.8.

During the year ended December 31, 2024, the Company recorded a $10.0 million impairment charge related to the warrant agreement with Jean-Georges to acquire up to an additional 20% interest in Jean-Georges Restaurants at a fixed exercise price per share. The Company recognized the impairment as a result of the Company’s planned internalization of hospitality operations currently managed by CCMC, the resulting decrease in estimated near term cash flows to the parent company Jean-George Restaurants, and the near term expiration of the warrants. See Note 15 – Subsequent Events for additional information on the shared services agreement and planned internalization of hospitality operations.

The assumptions and estimates included in the Company’s impairment analysis require significant judgment about future events, market conditions, and financial performance. Actual results may differ from these assumptions. There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future.

The following table summarizes the pre-tax impacts of the impairments mentioned above to the Consolidated and Combined Statements of Operations for the year ended December 31, 2024 and Combined Statements of Operations for the year ended December 31, 2023. There were no impairments recorded in the year ended December 31, 2022.


in thousands	Statements of Operations Line Item	2024		2023
Building and equipment	Provision for impairment	$	—	$	445,818
Land	Provision for impairment		—		11,734
Developments	Provision for impairment		—		214,940
Net investments in real estate			—		672,492
Investments in unconsolidated ventures ^(a)	Equity in losses from unconsolidated ventures		10,000		37,001
Total impairment		$	10,000	$	709,493

(a)

As of December 31, 2024, impairment charges relate to the warrants which were issued of Jean-Georges Restaurants. As of December 2023, impairment charges relate to the Company’s investments in Jean-Georges Restaurants, Ssäm Bar, and Tin Building by Jean-Georges unconsolidated ventures. See Note 2 – Investments in Unconsolidated Ventures for additional information.