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Real Estate, Net
 6 Months Ended
Jun. 30, 2024
Real Estate [Abstract]  
Real Estate, Net

Note 5 – Real Estate, Net

 

Real Estate Under Construction

 

The following table provides the activity of our Real estate under construction in the consolidated balance sheets (amounts in thousands):

 

   June 30, 2024   December 31, 2023 
   (unaudited)     
Beginning balance  $291,130   $133,898 
Placed into service   (109,935)   — 
Capitalized costs (1) (2)   80,077    155,969 
Capitalized interest   2,161    387 
Impairment charges (3)   (777)   (4,060)
Land held for development (4)   —    4,936 
Ending balance  $262,656   $291,130 

 

 

(1)Includes development fees and employee reimbursement expenditures. See “Note 4 – Related Party Arrangements” for additional details regarding our transactions with related parties.

 

 

(2)Includes direct and indirect project costs to the construction and development of real estate projects, including but not limited to loan fees, property taxes, and insurance, incurred of $2.6 million and $3.4 million for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.
  
(3)Impairment charges during six months ended June 30, 2024 and the year ended December 31, 2023 are in relation to one of our real estate assets located in Nashville, Tennessee, based on our conclusion that the estimated fair market value of the real estate asset was lower than the carrying value, and as a result, we reduced the carrying value to the estimated fair market value.
  
(4)Includes the acquisition of land located in Sarasota, Florida during the year ended December 31, 2023.

 

Placed into Service

 

During the six months ended June 30, 2024 certain phases of our 1991 Main Street, Sarasota, Florida (“1991 Main”) development project reached substantial completion, and as a result, we reclassified the related real estate under construction to their respective fixed asset accounts.

 

Non-cash Disclosures

 

Real estate under construction includes non-cash investing activity of $16.2 million for the six months ended months ended June 30, 2024 (inclusive of unpaid development fees of $1.0 million and unpaid employee cost sharing and reimbursements of $0.4 million) and $27.6 million for the year ended December 31, 2023 (inclusive of unpaid development fees of $6.1 million and unpaid employee cost sharing and reimbursements of $1.3 million).

 

Depreciation Expense

 

Depreciation expense was $0.6 million and $0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $0.8 million and $0.4 million for the six months ended June 30, 2024 and 2023, respectively, and is included in Depreciation and amortization on the consolidated statements of operations.