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Land and Development

6 Months Ended

Jun. 30, 2024

Note 5—Land and Development

The Company’s land and development assets were comprised of the following ($ in thousands):


	As of
	June 30,		December 31,
	2024		2023
Land and land development, at cost	$	173,221	$	193,360
Less: accumulated depreciation		(12,392)		(11,966)
Total land and development, net	$	160,829	$	181,394

Dispositions—During the three months ended June 30, 2024 and 2023, the Company sold land parcels and residential lots and units and recognized land development revenue of $15.7 million and $11.8 million, respectively, and land development cost of sales of $19.0 million and $12.4 million, respectively, from its land and development portfolio. During the six months ended June 30, 2024 and 2023, the Company sold land parcels and residential lots and units and recognized land development revenue of $32.3 million and $21.4 million, respectively, and land development cost of sales of $31.4 million and $22.3 million, respectively, from its land and development portfolio.

In September 2023, the Company sold a land parcel to a third-party and provided the buyer with a loan to finance the acquisition. The buyer had the option to prepay the loan in full on or before a specified date, it would receive a discounted purchase price. At origination, the Company recorded the loan based on the discounted purchase price since collection of the discounted portion of the sale was undetermined. The buyer elected to not prepay the loan and receive the discounted purchase price and, as such, the Company recorded additional land development revenue during the six months ended June 30, 2024. The loan to the buyer is included in “Loans receivable and other lending investments, net” on the Company’s combined and consolidated balance sheets.

In December 2023, the Company transferred the ownership interests in a subsidiary land owner to a third-party venture (the “Venture”) for its development and construction of a multifamily project in Asbury Park, NJ (the “Project”). In connection with this transfer, the Company (i) provided the Venture with a $10.6 million mezzanine loan that was fully funded at closing and is secured by the ownership interests in the subsidiary land owner; and (ii) provided a completion and carry guaranty on the Venture’s $80.0 million senior construction mortgage loan (refer to Note 9) with a third-party lender in return for a fee. The Company is a non-member manager of the Venture and is entitled to certain fees, but otherwise has no expected member-related economics. Until the mezzanine loan is repaid and the guaranties are released, the Company controls all decision-making of the Venture. The Venture is responsible for the funding and performance of all development and construction activities and the Company is not obligated to provide any capital contributions to the Venture. At closing, the third-party members provided $21.0 million in cash capital contributions to the Venture, exclusive of a $3.0 million deferred profits interest, which combined represent the total equity capitalization.

The Company determined that the Venture (and its consolidated subsidiaries developing the Project) is a VIE for which the Company is the primary beneficiary and thus consolidated it under ASC 810. As a result, for accounting purposes, the Project will be recorded on the Company’s combined and consolidated financial statements and the mezzanine loan will eliminate in consolidation. The $21.0 million in third-party cash capital contributions to the Venture represents noncontrolling interests in the Company’s combined and consolidated balance sheet. The Company expects this consolidation treatment to continue until the mezzanine loan is paid in full by the Venture and the Company’s senior loan guaranties are released by the lender.