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Investment in Unconsolidated Joint Ventures | 3 Months Ended
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Mar. 31, 2023
Equity Method Investments and Joint Ventures [Abstract] |
Investment in Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures Victory Abode Apartments, LLC On November 16, 2018, our SPC subsidiary 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 a portfolio of 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 of VAA (“Class B Member”). In connection with the formation of VAA, ten of the initial properties were subject to an earn-out provision ("Earn Out") that provided for a remeasurement of value after a two-year period following the completion of construction. Upon the formation of VAA, we recorded an initial liability ("Earn Out Obligation") of $10,000 for the advance on the Earn Out that we received from Macquarie. Upon remeasurement, the Earn Out Obligation was determined to be approximately $39,600. In accordance with the joint venture operating agreement, the Earn Out Obligation was paid from our share of distributions from VAA in 2022. On September 16, 2022, VAA sold 45 of its properties (“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 remaining seven properties of VAA (“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. On March 23, 2023, we received $17,976 from VAA, which represented the remaining distribution of the proceeds from the sale of the VAA Sale Portfolio. We plan to use our share of the proceeds from the sale of the VAA Sale Portfolio to invest in additional income-producing real estate, pay down our debt and for general corporate purposes. Gruppa Florentina, LLC 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:
|  | March 31, 2023 |  | December 31, 2022
Assets (1) |  |  |  |
Real estate |  | $ | 13,634 |  |  | $ | 13,140 |
Cash, cash equivalents and restricted cash |  | 24,180 |  |  | 66,364 |
Other assets |  | 55,258 |  |  | 35,938 |
Total assets |  | $ | 93,072 |  |  | $ | 115,442 |
Liabilities and Partners' Capital (1) |  |  |  |
Liabilities from discontinued operations |  | $ | — |  |  | $ | 8,824 |
Mortgage notes payable |  | 14,953 |  |  | 16,267 |
Other liabilities |  | 25,977 |  |  | 13,412 |
Our share of partners' capital |  | 12,641 |  |  | 27,973 |
Outside partner's capital |  | 39,501 |  |  | 48,966 |
Total liabilities and partners' capital |  | $ | 93,072 |  |  | $ | 115,442 |
Investment in unconsolidated joint ventures |  |  |  |
Our share of partners' capital |  | $ | 12,641 |  |  | $ | 27,973 |
Basis adjustment (2) |  | 28 |  |  | 253 |
Total investment in unconsolidated joint ventures |  | $ | 12,669 |  |  | $ | 28,226 |
(1) These amounts include the assets of VAA of $7,178 and $52,404 at March 31, 2023 and December 31, 2022, respectively, and liabilities of VAA of $162 and $10,812 at March 31, 2023 and December 31, 2022, 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 income from our investments in unconsolidated joint ventures:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Revenue (1) |  |  |  |  |  |  |
Rental revenue |  |  |  |  | $ | — |  |  | $ | 3,931 |
Other revenue |  |  |  |  | 10,636 |  |  | 9,801 |
Total revenue |  |  |  |  | 10,636 |  |  | 13,732 |
Expenses (2) |  |  |  |  |  |  |
Operating expenses |  |  |  |  | 9,401 |  |  | 11,471 |
Depreciation and amortization |  |  |  |  | 247 |  |  | 1,188 |
Interest |  |  |  |  | (156) |  |  | 5,775 |
Total expenses |  |  |  |  | 9,492 |  |  | 18,434 |
Income (loss) from continuing operations |  |  |  |  | 1,144 |  |  | (4,702) |
Income from discontinued operations (3) |  |  |  |  | 754 |  |  | 3,436 |
Net income (loss) |  |  |  |  | $ | 1,898 |  |  | $ | (1,266) |
Equity in income from unconsolidated joint ventures |  |  |  |  | $ | 2,419 |  |  | $ | 5,194 |
(1) These amounts include revenue of VAA of $4,073 during the three months ended March 31, 2022. (2) These amounts include expenses of VAA of $(622) and $9,179 during the three months ended March 31, 2023 and 2022, respectively. (3) These amounts represent the VAA Sale Portfolio.

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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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