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Investment in Unconsolidated Joint Ventures | 12 Months Ended
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Dec. 31, 2021
Equity Method Investments and Joint Ventures [Abstract] |
Investment in Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures On November 16, 2018, we formed Victory Abode Apartments, LLC ("VAA"), a joint venture with the Macquarie Group (“Macquarie”). VAA was formed as a result of a sale of the 50% ownership interest in 51 multifamily properties owned by us in exchange for a 50% voting interest / 49% profit participation interest ("Class A interest") in VAA a nd a note payable (“Mezzanine Loan”). Concurrent with the Contributi on, VAA issued Class B interests with a 2% profits participation interest and no voting rights to Daniel J. Moos, our former President and Chief Executive Officer (“Class B Member”). The Class B Member serves as the Manager of VAA. Interest on the Mezzanine loan is limited to cash generated from the properties and matures concurrently with the termination of VAA. Accordingly, we account for our interest in the Mezzanine Loan as additional equity interest and includes any interest payments accrued as income from unconsolidated joint ventures.In connection with the formation of VAA, ten out of the initial properties were subject to an earn-out provision ("Earn Out") that provides for a remeasurement of value after a two-year period following the completion of construction. Upon the formation of VAA, we recorded a liability ("Earn Out Obligation") for the $10,000 advance on the Earn Out that we received from Macquarie. On March 30, 2021, we sold a 50% ownership interest in Overlook at Allensville Phase II, a 144 unit multifamily property in Sevierville, Tennessee to Macquarie for $2,551 resulting in gain on sale of $1,417. Concurrent with the sale, we each contributed our 50% ownership interests in Overlook at Allensville Phase II into VAA. On July 13, 2021, we received the arbitration result of a dispute regarding the measurement of the Earn Out Obligation. Our position and claims were declined, and the position of Macquarie was fully accepted. As a result, we are required to pay approximately $39,600 to Macquarie to satisfy the Earn Out Obligation, and therefore, recorded a charge of $29,600 during the year ended December 31, 2021 (See Note 7 – Real Estate Activity). In accordance with the joint venture operating agreement, the Earn Out Obligation will be paid from our share of future distributions from VAA, which generally occur each six months. In July 2021, our $5,441 distribution from VAA was paid directly to Macquarie as a reduction of the Earn Out Obligation. On November 17, 2021, we entered into a Major Decision with Macquarie to engage a broker and initiate a sale of all the properties held by the VAA. In connection with the sale, VAA will distribute seven of its existing properties to us (referred to herein as the "Holdback Properties") and we in turn, will contribute one of our properties ("Contributed Property") into the portfolio offered for sale to third-parties. The remaining forty-five properties as referred to herein as the VAA Portfolio. The sales price for the Holdback Properties and Contributed Property will be the estimated value of these properties as stated in the agreement, multiplied by the ratio of the actual sales price of the VAA Portfolio over the estimated value of the portfolio as stated in the agreement. The Major Decision agreement will terminate on August 1, 2022, if the VAA Portfolio has not been sold. We also own a 20% ownership interest in a 20% interest in Gruppa Florentina, LLC ("Milano"), which operates several pizza parlors in Central and Northern California. Milano also has 23 franchised locations, including two operating, under the trade name Angelo & Vito’s Pizzerias. The following is a summary of our investment in unconsolidated joint ventures:
|  | As of December 31,
|  | 2021 |  | 2020
Assets (1) |  |  |  |
Real estate |  | 1,220,391 |  |  | 1,230,197 |
Other assets |  | 127,464 |  |  | 113,537 |
Total assets |  | $ | 1,347,855 |  |  | $ | 1,343,734 |
Liabilities and Partners Capital (1) |  |  |  |
Mortgage notes payable |  | 867,430 |  |  | 843,522 |
Mezzanine notes payable |  | 242,942 |  |  | 239,878 |
Other liabilities |  | 49,877 |  |  | 45,619 |
Our share of partners' capital |  | 80,602 |  |  | 93,334 |
Outside partner's capital |  | 107,004 |  |  | 121,381 |
Total liabilities and partners' capital |  | $ | 1,347,855 |  |  | $ | 1,343,734 |
Investment in unconsolidated joint ventures |  |  |  |
Our share of partners' capital |  | $ | 80,602 |  |  | $ | 93,334 |
Our share of Mezzanine note payable and accrued interest |  | 125,306 |  |  | 123,752 |
Basis adjustment (2) |  | (144,287) |  |  | (156,661) |
Total investment in unconsolidated joint ventures |  | $ | 61,621 |  |  | $ | 60,425 |
(1) These amounts include the assets of $1,280,867 and $1,279,197 of VAA at December 31, 2021 and 2020, respectively, and liabilities of $1,137,273 and $1,106,231 of VAA at December 31, 2021 and 2020, respectively. (2) We amortize the difference between the cost of our investments in unconsolidated joint ventures and the book value of our underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The following is a summary of our income (loss) from investments in unconsolidated joint ventures:
|  | For the Years Ended December 31, |  |
|  | 2021 |  | 2020 |  | 2019 |  | 3/31/2024
Revenue (1) |  |  |  |  |  |  |  |
Rental revenue |  | $ | 131,455 |  |  | $ | 117,336 |  |  | $ | 109,746 |  |  |
Other revenue |  | 67,516 |  |  | 45,725 |  |  | 59,069 |  |  |
Total revenue |  | 198,971 |  |  | 163,061 |  |  | 168,815 |  |  |
Expenses (1) |  |  |  |  |  |  |  |
Operating expenses |  | 125,513 |  |  | 99,305 |  |  | 109,588 |  |  |
Depreciation and amortization |  | 32,566 |  |  | 31,515 |  |  | 45,453 |  |  |
Interest |  | 55,790 |  |  | 57,342 |  |  | 61,867 |  |  |
Total expenses |  | 213,869 |  |  | 188,162 |  |  | 216,908 |  |  |
Net loss |  | $ | (14,898) |  |  | $ | (25,101) |  |  | $ | (48,093) |  |  |
Our share of net (loss) income in unconsolidated joint ventures |  | $ | 14,634 |  |  | $ | (379) |  |  | $ | (2,313) |  |  |
(1) These amounts include revenue of $139,161, $123,576 and $115,377 of VAA during the years ended December 31, 2021, 2020 and 2019, respectively, and expenses of $155,847, $150,278 and $165,773 of VAA during the years ended December 31, 2021, 2020 and 2019, respectively.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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