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Real Estate, Net

12 Months Ended

Dec. 31, 2024

Real Estate [Abstract]

Real Estate, Net

Note 5 – Real Estate, Net

Acquisitions of Real Estate During 2023

On June 28, 2022, through an indirect majority-owned subsidiary of our Operating Company, we acquired a 70.2% controlling interest (the “CMC Interest”) in CMC Storrs SPV, LLC (“CMC”), a holding company for an approximately 60-acre site located in Mansfield, Connecticut. As part of the transaction, two unaffiliated joint venture partners (the “CMC JV Partners”) were deemed to have made initial capital contributions to CMC. Following our acquisition of the CMC Interest, we discovered that one of the CMC JV Partners had misappropriated cash from the other’s cash account. Accordingly, the CMC JV Partner forfeited $1.0 million, or 29.8%, of their noncontrolling interest in CMC on March 24, 2023 (a non-cash financing activity during the year ended December 31, 2023). As a result of the forfeiture, we indirectly own a 100% controlling interest in CMC.

On August 24, 2023, through an indirect majority-owned subsidiary of our Operating Company, we acquired land located in Sarasota, Florida, that was previously subject to a ground lease for a purchase price of $4.9 million, inclusive of transaction costs of $0.1 million. We accounted for the transaction as an asset acquisition. As the acquired land is being held for development, the total purchase price was allocated to Real estate under construction on the consolidated balance sheets.

Real Estate Under Construction

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

		2024				2023
		December 31,
		2024				2023
Beginning balance		$	291,130			$	133,898
Placed in service			(235,675	)			—
Capitalized costs ^{(1) (2)}			133,236				155,969
Capitalized interest			3,394				387
Impairment charges ⁽³⁾			(777	)			(4,060	)
Land held for development ⁽⁴⁾			—				4,936
Ending balance		$	191,308			$	291,130

⁽¹⁾	Includes development fees and employee reimbursement expenditures. See “Note 4 – Related Party Agreements” 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 $5.4 million and $3.4 million for the years ended December 31, 2024 and 2023, respectively.
⁽³⁾	Impairments for the years ended December 31, 2024 and 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 as discussed above.

Placed in Service

During the year ended December 31, 2024, our 1991 Main Street, Sarasota, Florida (“Aster & Links”) development project reached substantial completion, and as a result, we reclassified $235.7 million from Real estate under construction to Land ($12.3 million), Building and improvements ($220.8 million), and Furniture, fixtures and equipment ($2.6 million) on our consolidated balance sheets.

Non-cash Disclosures

Real estate under construction includes non-cash investing activity of $21.0 million for year ended December 31, 2024 (inclusive of unpaid development fees of $2.2 million and unpaid employee cost sharing and reimbursements of $0.9 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 $4.0 million, and $0.8 million for the years ended December 31, 2024, and 2023, respectively, and is included in Depreciation and amortization in our consolidated statements of operations.