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Preferred Equity Investments

12 Months Ended

Dec. 31, 2025

Preferred Equity Investments

Preferred Equity Investments

Note 8 – Preferred Equity Investments

At December 31, 2025, the Company, through wholly-owned subsidiaries of the Operating Partnership, had entered into five joint venture agreements for preferred equity investments which are classified as available-for-sale debt securities. The Company earns a fixed return on these investments which is included within income from preferred equity investments on its consolidated statements of operations and comprehensive income (loss). Each joint venture’s purpose is to develop or operate a portfolio of residential units.

The carrying amount of the Company’s preferred equity investments at December 31, 2025 and 2024 is summarized in the table below (amounts in thousands):


Investment Name		2025			2024
Archer at RiverBlue ⁽¹⁾		$	—		$	—
Canvas at Wildwood			9,862			1,928
Chandler ⁽²⁾			—			15,000
Indigo Cove ⁽³⁾			—			3,581
River Ford			5,391			3,788
Sanford Marketplace			5,044			—
The Cottages at Myrtle Beach ⁽²⁾			—			17,913
The Cottages of Port St. Lucie ⁽²⁾			—			18,785
Wayford at Innovation Park			15,400			13,400
Wayford at Pringle ⁽³⁾			—			7,800
Total		$	35,697		$	82,195
Gross unrealized gain (loss), net			41			(527)
Total, net		$	35,738		$	81,668

(1)

In December 2025, the Company entered into a joint venture agreement and made a commitment to invest capital for preferred equity interests in Archer at RiverBlue. No capital had been funded as of December 31, 2025. Refer to the Preferred Equity Investment Summary disclosure below for further information.

(2)	The Company’s preferred equity investments in Chandler, The Cottages at Myrtle Beach and The Cottages of Port St. Lucie were fully redeemed in November, April and July of 2025, respectively. Refer to the Preferred Equity Investment Summary disclosure below for further information.

(3)	In April 2025, the Company’s preferred equity interests in Indigo Cove and Wayford at Pringle were sold. Refer to the Preferred Equity Investment Summary disclosure below for further information.

The following table summarizes the net carrying amount and fair value of the Company’s preferred equity investments, which are classified as available-for-sale debt securities, by contractual maturity at December 31, 2025 (amounts in thousands):


		Available-for-sale
		Net carrying amount			Fair value
Due within one year		$	20,748		$	20,748
Due after one year through three years			14,990			14,990
Total		$	35,738		$	35,738

The following table summarizes the Company’s income from preferred equity investments for the years ended December 31, 2025 and 2024 (amounts in thousands):


Investment Name		2025			2024
Archer at RiverBlue ⁽¹⁾		$	—		$	—
Canvas at Wildwood			886			17
Chandler ⁽²⁾			1,806			2,060
Indigo Cove ⁽³⁾			200			256
Peak Housing ⁽⁴⁾			—			523
River Ford			903			44
Sanford Marketplace			226			—
The Cottages at Myrtle Beach ⁽²⁾			815			2,641
The Cottages of Port St. Lucie ⁽²⁾			1,552			2,770
The Woods at Forest Hill ⁽⁴⁾			—			861
Wayford at Innovation Park			1,993			1,702
Wayford at Pringle ⁽³⁾			378			1,063
Total income from preferred equity investments ⁽⁵⁾		$	8,759		$	11,937

(1)	In December 2025, the Company entered into a joint venture agreement and made a commitment to invest capital for preferred equity interests in Archer at RiverBlue. No capital had been funded as of December 31, 2025.

(2)	The Company’s preferred equity investments in Chandler, The Cottages at Myrtle Beach and The Cottages of Port St. Lucie were fully redeemed in November, April and July of 2025, respectively.

(3)	In April 2025, the Company’s preferred equity interests in Indigo Cove and Wayford at Pringle were sold.

(4)	The Company’s preferred equity investments in Peak Housing and The Woods at Forest Hill were fully redeemed in September 2024 and November 2024, respectively.

(5)

Total income from preferred equity investments includes both current and accrued income amounts. For the years ended December 31, 2025 and 2024, the accrued portion of the total income was $4.0 million and $10.6 million, respectively. At December 31, 2025 and 2024, the Company had $7.9 million and $23.3 million, respectively, of total accrued preferred equity income, which is recorded in accounts receivable, prepaids and other assets, net on its consolidated balance sheets.

Preferred Equity Investment Summary

During the year ended December 31, 2025, the Company’s preferred equity investment activity was as follows: (i) it increased its original capital commitment for preferred equity interests in Wayford at Innovation Park by $2.0 million, increasing its total investment to $15.4 million, and (ii) it entered into two separate joint venture agreements with unaffiliated third parties and made commitments to invest up to (a) $16.2 million for preferred equity interests in the development of an approximately 300- unit residential community located in Sanford, North Carolina known as Sanford Marketplace, and (b) $9.5 million for preferred equity interests in the development of an approximately 245-unit residential community located in Asheville, North Carolina known as Archer at RiverBlue.

In addition, the Company had its preferred equity investments in three separate joint ventures with unaffiliated third parties fully redeemed as follows: (i) The Cottages at Myrtle Beach redeemed in the aggregate amount of $28.1 million, which included the Company’s principal investment of $17.9 million, and accrued preferred return and outstanding amounts of $10.2 million, (ii) The Cottages of Port St. Lucie redeemed in the aggregate amount of $30.0 million, which included the Company’s principal investment of $18.8 million, and accrued preferred return and outstanding amounts of $11.2 million, and (iii) Chandler redeemed in the aggregate amount of $19.6 million, which included the Company’s principal investment of $15.0 million, and accrued preferred return and outstanding amounts of $4.6 million.

The Company sold its preferred equity interests in Indigo Cove and Wayford at Pringle to a joint venture, with such joint venture including an affiliate of Bluerock Homes Manager, LLC (the Company’s external manager), in the aggregate amounts of $4.2 million and $9.2 million, respectively, which included the Company’s outstanding principal investments and accrued preferred returns, net of any reimbursements.

As of December 31, 2025, the Company had funded $20.3 million of its $47.3 million aggregate commitment to fund capital for preferred equity interests in Archer at RiverBlue, Canvas at Wildwood, River Ford, and Sanford Marketplace.