Investments in Unconsolidated Entities

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

7. Investments in Unconsolidated Entities

The Partnership has non-controlling investments in unconsolidated entities. The Partnership applies the equity method of accounting by initially recording these investments at cost, subsequently adjusted for accrued preferred returns, the Partnership’s share of earnings (losses) of the unconsolidated entities, cash contributions, and distributions. The carrying value of the equity investments represents the Partnership’s maximum exposure to loss. The Partnership is entitled to a preferred return on invested capital in each unconsolidated entity. The Partnership’s preferred return is reported as “Investment income” on the Partnership’s consolidated statements of operations.

An affiliate of the Vantage Properties guarantees a preferred return on the Partnership’s invested capital through a date approximately five years after commencement of construction in connection with each Vantage Property.

In October 2024, the Partnership entered into the Construction Lending JV to invest in loans to finance the construction and/or rehabilitation of affordable multifamily housing properties across the United States, such as the Partnership’s current GIL, taxable GIL and property loan investments. The Partnership will provide 10% of the capital for the Construction Lending JV with the remainder to be funded by a third-party investor with each party contributing its proportionate capital contributions upon funding of future investments. The Partnership’s initial maximum capital contribution to the Construction Lending JV is approximately $8.3 million. A wholly owned subsidiary of the Partnership is the Construction Lending JV’s managing member responsible for identifying, evaluating, underwriting, and closing investments, subject to the conditions of the joint venture and third-party investor evaluation and approval. The Partnership will earn proportionate returns on its invested capital plus promote income if the joint venture meets certain earnings thresholds. The Partnership will account for its investment in the Construction Lending JV using the equity method. There were no assets, liabilities, or net income of the Construction Lending JV as of and for the year ended December 31, 2024.

The following table provides the details of the investments in unconsolidated entities as of December 31, 2024 and 2023:


Property Name	Location	Units			Construction Commencement Date	Construction Completion Date	Carrying Value as of December 31, 2024		Carrying Value as of December 31, 2023
Current Investments
Vantage at Tomball	Tomball, TX		288		August 2020	April 2022	$	14,199,870		13,235,090
Vantage at Hutto	Hutto, TX		288		December 2021	December 2023		14,573,715		13,908,660
Vantage at Loveland	Loveland, CO		288		April 2021	October 2024		26,560,347		20,464,906
Vantage at Helotes	Helotes, TX		288		May 2021	November 2022		15,090,681		15,090,681
Vantage at Fair Oaks	Boerne, TX		288		September 2021	May 2023		13,535,176		12,996,316
Vantage at McKinney Falls	McKinney Falls, TX		288		December 2021	July 2024		15,633,593		13,131,272
Freestone Greeley	Greeley, CO		296		N/A	N/A		6,230,785		5,346,007
Freestone Cresta Bella	San Antonio, TX		296		February 2023	November 2024		16,759,593		17,325,494
Valage Senior Living Carson Valley	Minden, NV		102	(1)	February 2023	N/A		8,471,445		8,608,322
The Jessam at Hays Farm	Huntsville, AL		318		July 2023	N/A		17,696,609		7,518,717
Freestone Greenville	Greenville, TX		300		April 2024	N/A		20,853,691		5,366,551
Freestone Ladera	Ladera, TX		288		August 2024	N/A		9,804,364		3,661,230
							$	179,409,869	$	136,653,246

(1)

Valage Senior Living Carson Valley is a seniors housing property with 102 beds in 88 units.

The Partnership has remaining commitments to provide additional equity funding for certain unconsolidated entities as of December 31, 2024. See Note 16 for further details regarding the Partnership's remaining funding commitments.

Activity in 2024

Sales Activity:

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the year ended December 31, 2024:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership		Investment Income		Gain on Sale
Vantage at Coventry	Omaha, NE		294	(1)	$	50,000	$	-	$	50,000
Vantage at Westover Hills	San Antonio, TX		288	(2)		6,986		-		6,986
Vantage at Murfreesboro	Murfreesboro, TN		288	(3)		60,858		-		60,858
					$	117,844	$	-	$	117,844

(1)

In January 2024, the Partnership received sales proceeds of approximately $50,000 associated with final settlements of the Vantage at Coventry sale in January 2023. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s consolidated statement of operations.

(2)

In May 2024, the Partnership received sales proceeds of approximately $7,000 associated with final settlements of the Vantage at Westover Hills sale in May 2022. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s consolidated statement of operations.

(3)

In December 2024, the Partnership received tax refund proceeds of approximately $61,000 primarily associated with final settlements of the Vantage at Murfreesboro sale in March 2022. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s consolidated statements of operations.

During the year ended December 31, 2024, the Partnership advanced funds beyond its original commitments to five Vantage Properties totaling $9.0 million to cover additional construction and interest costs.

Activity in 2023

Sales Activity:

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the year ended December 31, 2023:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership			Investment Income		Gain (Loss) on Sale
Vantage at Stone Creek	Omaha, NE		294	January 2023	$	14,689,244		$	108,295	$	9,114,980
Vantage at Coventry	Omaha, NE		294	January 2023		13,220,218			135,501		6,258,133
Vantage at Murfreesboro	Murfreesboro, TN		288	(1)		(6,184	)		-		(6,184	)
Vantage at O'Connor	San Antonio, TX		288	(2)		(11,744	)		-		(11,744	)
Vantage at Conroe	Conroe, TX		288	June 2023		19,828,060			2,065,608		7,337,828
Vantage at Powdersville	Powdersville, SC		288	(3)		32,385			-		32,385
					$	47,751,979		$	2,309,404	$	22,725,398

(1)

In February 2023, the Partnership returned sales proceeds of approximately $6,200 associated with final settlements of the Vantage at Murfreesboro sale in March 2022. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s consolidated statements of operations.

(2)

In May 2023, the Partnership returned sales proceeds of approximately $12,000 associated with final settlements of the Vantage at O’Connor sale in July 2022. The Partnership recognized the amount in "Gain on sale of investment in an unconsolidated entity" on the Partnership’s consolidated statements of operations.

(3)

In August 2023, the Partnership received sales proceeds of approximately $32,000 associated with final settlements of the Vantage at Powdersville sale in May 2021. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s consolidated statements of operations.

New Equity Commitments

In February 2023, the Partnership executed an $8.2 million equity commitment to fund the construction of Valage Senior Living Carson Valley.

In July 2023, the Partnership executed a $16.5 million equity commitment to fund the construction of The Jessam at Hays Farm.

In December 2023, the Partnership executed equity commitments of $19.9 million and $17.1 million to fund the construction of Freestone Greenville and Freestone Ladera, respectively.

Activity in 2022

Sales Activity:

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the year ended December 31, 2022:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership		Investment Income		Gain on Sale
Vantage at Murfreesboro	Murfreesboro, TN		288	March 2022	$	29,399,532	$	657,937	$	16,501,596
Vantage at Westover Hills	San Antonio, TX		288	May 2022		20,923,784		-		12,658,501
Vantage at Bulverde	Bulverde, TX		288	(1)		60,000		-		60,000
Vantage at Germantown	Germantown, TN		288	(2)		4,407		-		4,407
Vantage at O’Connor	San Antonio, TX		288	July 2022		19,381,976		1,195		10,580,781
					$	69,769,699	$	659,132	$	39,805,285

(1)

During 2022, the Partnership received net cash of approximately $60,000 associated with final settlements of the Vantage at Bulverde sale in August 2021. The Partnership recognized the full amount as "Gain on sale of investment in an unconsolidated entity" on the Partnership’s consolidated statements of operations.

(2)

During 2022, the Partnership received cash of approximately $4,000 associated with final settlements of the Vantage at Germantown sale in March 2021. The Partnership recognized the full amount as "Gain on sale of investment in an unconsolidated entity" on the Partnership’s consolidated statements of operations.

Summarized Unconsolidated Entity Level Financial Data

The following table provides summary combined financial information for the properties underlying the Partnership’s investments in unconsolidated entities as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022:


	December 31, 2024		December 31, 2023
Assets	$	456,310,813	$	317,027,557
Liabilities	$	307,735,879	$	195,330,159


	For the Years Ended December 31,
	2024			2023		2022
Property revenues	$	19,953,172		$	13,321,584	$	22,048,926
Gain on sale of property	$	-		$	56,959,112	$	87,602,712
Net income (loss)	$	(16,168,741	)	$	48,500,277	$	83,943,337