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Investment in Unconsolidated Joint Ventures | 12 Months Ended
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Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract] |
Investment in Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures On November 16, 2018, we formed the 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 the manager (“Class B Member”). 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") of $10,000 for the 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 were required to pay approximately $39,600 to Macquarie to satisfy the Earn Out Obligation, and therefore, recorded a charge of $29,600 in 2021 (See Note 7 – Real Estate Activity). In accordance with the joint venture operating agreement, the Earn Out Obligation was paid from our share of subsequent distributions from VAA. On June 17, 2022, we entered into an agreement to sell 45 properties (“VAA Sale Portfolio”) owned by VAA and one property owned by our SPC subsidiary. On September 15, 2022, VAA, SPC, Macquarie and Pillar entered a Distribution and Holdback Property Agreement (“Distribution Agreement”), which provided the timing and ordering of the distribution of the net proceeds from the sale of the VAA Sale Portfolio, the repayment of the Mezzanine Loans, and the distribution of the remaining seven properties of VAA (“VAA Holdback Portfolio”). On September 16, 2022, VAA completed the sale of the VAA Sale Portfolio for $1,810,700, resulting in gain on sale of $738,444 to the joint venture. In connection with sale, we received an initial distribution of $182,848 from VAA, which included the payment of the remaining balance of the Earn Out Obligation. On November 1, 2022, we received an additional distribution from VAA, which included the full operational control of the VAA Holdback Portfolio (See Note 11 - Acquisitions) and a cash payment of $204,036. We are in the process of negotiating the assumption of the mortgage notes payable on the VAA Holdback Portfolio with the lenders. We plan to use our share of the proceeds from the sale of the VAA Sale Portfolio to investment in additional income-producing real estate, pay down our debt and for general corporate purposes. Our ownership interest in VAA is held by SPC, and is therefore subject to the debt covenants of bonds issued by SPC. These provisions include restrictions on the distribution of cash from SPC (See Note 13 - Bonds Payable). We also own a 20% ownership 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,
|  | 2022 |  | 2021
Assets (1) |  |  |  |
Assets from discontinued operations |  | $ | — |  |  | $ | 1,135,769 |
Real estate |  | 13,140 |  |  | 142,629 |
Other assets |  | 102,302 |  |  | 69,457 |
Total assets |  | $ | 115,442 |  |  | $ | 1,347,855 |
Liabilities and Partners Capital (1) |  |  |  |
Liabilities from discontinued operations |  | $ | 8,824 |  |  | $ | 807,382 |
Mortgage notes payable |  | 16,267 |  |  | 83,955 |
Mezzanine notes payable |  | — |  |  | 242,942 |
Other liabilities |  | 13,412 |  |  | 25,970 |
Our share of partners' capital |  | 27,973 |  |  | 80,602 |
Outside partner's capital |  | 48,966 |  |  | 107,004 |
Total liabilities and partners' capital |  | $ | 115,442 |  |  | $ | 1,347,855 |
Investment in unconsolidated joint ventures |  |  |  |
Our share of partners' capital |  | $ | 27,973 |  |  | $ | 80,602 |
Our share of Mezzanine note payable and accrued interest |  | — |  |  | 125,306 |
Basis adjustment (2) |  | 253 |  |  | (144,287) |
Total investment in unconsolidated joint ventures |  | $ | 28,226 |  |  | $ | 61,621 |
(1) These amounts include the assets of $52,404 and $1,280,867 of VAA at December 31, 2022 and 2021, respectively, and liabilities of $1,988 and $1,137,273 of VAA at December 31, 2022 and 2021, 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, |  |
|  | 2022 |  | 2021 |  | 2020 |  | 3/31/2024
Revenue (1) |  |  |  |  |  |  |  |
Rental revenue |  | $ | 11,362 |  |  | $ | 14,632 |  |  | $ | 13,402 |  |  |
Other revenue |  | 41,093 |  |  | 60,514 |  |  | 40,568 |  |  |
Total revenue |  | 52,455 |  |  | 75,146 |  |  | 53,970 |  |  |
Expenses (1) |  |  |  |  |  |  |  |
Operating expenses |  | 55,831 |  |  | 66,503 |  |  | 45,870 |  |  |
Depreciation and amortization |  | 3,499 |  |  | 4,857 |  |  | 4,403 |  |  |
Interest |  | 15,839 |  |  | 23,744 |  |  | 24,231 |  |  |
Total expenses |  | 75,169 |  |  | 95,104 |  |  | 74,504 |  |  |
Loss from continuing operations |  | (22,714) |  |  | (19,958) |  |  | (20,534) |  |  |
Income (loss) from discontinued operations (2) |  | 708,341 |  |  | 7,416 |  |  | (4,567) |  |  |
Net income (loss) |  | $ | 685,627 |  |  | $ | (12,542) |  |  | $ | (25,101) |  |  |
Our share of net income (loss) in unconsolidated joint ventures |  | $ | 469,268 |  |  | $ | 14,634 |  |  | $ | (379) |  |  |
(1) These amounts include reve nue of $11,963, $15,336 and $14,024 of VAA during the years ended December 31, 2022, 2021 and 2020, respectively, and expenses of $36,076, $39,438 and $36,159 of VAA during the years ended December 31, 2022, 2021 and 2020, respectively. (2) The amount for the year ended December 31, 2022, includes $738,444 gain on sale of asset and $31,281 loss on early extinguishment of debt that were incurred in connection with the sale of the VAA Sale Portfolio.

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- References No definition available. + Details
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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 https://asc.fasb.org/topic&trid=2196965 + Details
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