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SEGMENT DISCLOSURE | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
SEGMENT DISCLOSURE | 17. SEGMENT DISCLOSURE The Company’s reportable segments during the three and six months ended June 30, 2024 and June 30, 2023 consist of three types of commercial real estate properties, namely, office, hotel and multifamily, as well as a segment for the Company’s lending business. Management internally evaluates the operating performance and financial results of the segments based on net operating income. The Company also has certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments. The reportable segments are accounted for on the same basis of accounting as described in the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2023 included in the 2023 Form 10-K. For the Company’s real estate segments, the Company defines net operating income (loss) as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes. For the Company’s lending segment, the Company defines net operating income as interest income net of interest expense and general overhead expenses. The net operating income (loss) of the Company’s segments for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Office: |  |  |  |  |  |  |  |
Revenues |  | $ | 14,101 |  |  | $ | 13,975 |  |  | $ | 28,712 |  |  | $ | 27,462 |
Property expenses: |  |  |  |  |  |  |  |
Operating |  | 6,331 |  |  | 6,369 |  |  | 13,190 |  |  | 12,892 |
General and administrative |  | 66 |  |  | 57 |  |  | 70 |  |  | 157 |
Total property expenses |  | 6,397 |  |  | 6,426 |  |  | 13,260 |  |  | 13,049 |
Income (loss) from unconsolidated entities |  | 1,204 |  |  | (710) |  |  | 1,321 |  |  | (774) |
Segment net operating income—office |  | 8,908 |  |  | 6,839 |  |  | 16,773 |  |  | 13,639 |
Hotel: |  |  |  |  |  |  |  |
Revenues |  | 12,155 |  |  | 11,668 |  |  | 24,009 |  |  | 23,160 |
Property expenses: |  |  |  |  |  |  |  |
Operating |  | 7,831 |  |  | 7,543 |  |  | 15,616 |  |  | 14,882 |
General and administrative |  | 4 |  |  | 12 |  |  | 11 |  |  | 20 |
Total property expenses |  | 7,835 |  |  | 7,555 |  |  | 15,627 |  |  | 14,902 |
Segment net operating income—hotel |  | 4,320 |  |  | 4,113 |  |  | 8,382 |  |  | 8,258 |
Multifamily: |  |  |  |  |  |  |  |
Revenues |  | 5,449 |  |  | 4,078 |  |  | 10,198 |  |  | 5,301 |
Property expenses: |  |  |  |  |  |  |  |
Operating |  | 3,034 |  |  | 3,067 |  |  | 6,371 |  |  | 4,430 |
General and administrative |  | 82 |  |  | 295 |  |  | 134 |  |  | 312 |
Total property expenses |  | 3,116 |  |  | 3,362 |  |  | 6,505 |  |  | 4,742 |
(Loss) income from unconsolidated entity |  | (81) |  |  | (194) |  |  | (524) |  |  | 638 |
Segment net operating income—multifamily |  | 2,252 |  |  | 522 |  |  | 3,169 |  |  | 1,197 |
Lending: |  |  |  |  |  |  |  |
Revenues |  | 2,564 |  |  | 2,963 |  |  | 5,204 |  |  | 5,673 |
Lending expenses: |  |  |  |  |  |  |  |
Interest expense |  | 880 |  |  | 1,315 |  |  | 1,800 |  |  | 1,560 |
Expense reimbursements to related parties—lending segment |  | 673 |  |  | 910 |  |  | 1,236 |  |  | 1,518 |
General and administrative |  | 268 |  |  | 214 |  |  | 636 |  |  | 713 |
Total lending expenses |  | 1,821 |  |  | 2,439 |  |  | 3,672 |  |  | 3,791 |
Segment net operating income—lending |  | 743 |  |  | 524 |  |  | 1,532 |  |  | 1,882 |
Total segment net operating income |  | $ | 16,223 |  |  | $ | 11,998 |  |  | $ | 29,856 |  |  | $ | 24,976 |
A reconciliation of segment net operating income to net income attributable to the Company for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Total segment net operating income |  | $ | 16,223 |  |  | $ | 11,998 |  |  | $ | 29,856 |  |  | $ | 24,976 |
Interest and other income |  | 170 |  |  | 76 |  |  | 314 |  |  | 76 |
Asset management and other fees to related parties |  | (425) |  |  | (627) |  |  | (819) |  |  | (1,347) |
Expense reimbursements to related parties—corporate |  | (612) |  |  | (677) |  |  | (1,217) |  |  | (1,205) |
Interest expense |  | (8,346) |  |  | (7,394) |  |  | (16,403) |  |  | (13,385) |
General and administrative |  | (983) |  |  | (1,106) |  |  | (2,171) |  |  | (2,407) |
Transaction-related costs |  | (135) |  |  | — |  |  | (825) |  |  | (3,360) |
Depreciation and amortization |  | (6,456) |  |  | (20,472) |  |  | (12,934) |  |  | (29,974) |
Gain on sale of real estate |  | — |  |  | — |  |  | — |  |  | 1,104 |
Loss before provision for income taxes |  | (564) |  |  | (18,202) |  |  | (4,199) |  |  | (25,522) |
Provision for income taxes |  | (288) |  |  | (159) |  |  | (558) |  |  | (415) |
Net loss |  | (852) |  |  | (18,361) |  |  | (4,757) |  |  | (25,937) |
Net loss attributable to non-controlling interests |  | 56 |  |  | 1,002 |  |  | 231 |  |  | 1,627 |
Net loss attributable to the Company |  | $ | (796) |  |  | $ | (17,359) |  |  | $ | (4,526) |  |  | $ | (24,310) |
The condensed assets for each of the segments as of June 30, 2024 and December 31, 2023 are as follows (in thousands):
|  | June 30, 2024 |  | December 31, 2023
Condensed assets: |  |  |  |
Office |  | $ | 418,985 |  |  | $ | 419,443 |
Hotel |  | 102,067 |  |  | 95,998 |
Multifamily |  | 273,951 |  |  | 278,492 |
Lending |  | 75,663 |  |  | 76,374 |
Non-segment assets |  | 20,562 |  |  | 20,893 |
Total assets |  | $ | 891,228 |  |  | $ | 891,200 |

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- Definition The entire disclosure for reporting segments including data and tables. 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