Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-54382 | |
Entity Registrant Name | PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 26-3842535 | |
Entity Address, Address Line One | 11766 Wilshire Blvd., Suite 1670 | |
Entity Address, City or Town | Los Angeles, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | 424 | |
Local Phone Number | 208-8100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 103,740,412 | |
Entity Central Index Key | 0001452936 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Real estate held for investment, net | $ 1,190,752 | $ 1,219,404 |
Real estate equity securities | 48,120 | 60,153 |
Total real estate and real estate-related investments, net | 1,238,872 | 1,279,557 |
Cash and cash equivalents | 123,784 | 97,931 |
Restricted cash | 44,627 | 61,113 |
Investments in unconsolidated entities | 67,253 | 70,842 |
Rents and other receivables, net | 22,828 | 21,518 |
Prepaid expenses and other assets | 24,941 | 22,848 |
Goodwill | 5,436 | 5,436 |
Total assets | 1,527,741 | 1,559,245 |
Liabilities and equity | ||
Notes and bonds payable, net | 1,037,371 | 1,044,709 |
Accounts payable and accrued liabilities | 18,218 | 25,231 |
Due to affiliates | 3,029 | 2,799 |
Other liabilities | 70,864 | 66,967 |
Redeemable common stock payable | 1,128 | 2,638 |
Restricted stock payable | 508 | 508 |
Total liabilities | 1,131,118 | 1,142,852 |
Commitments and contingencies (Note 10) | ||
Equity | ||
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value; 1,000,000,000 shares authorized, 103,788,298 and 103,932,083 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 1,038 | 1,039 |
Additional paid-in capital | 907,045 | 907,044 |
Cumulative distributions and net loss | (515,363) | (495,782) |
Total Pacific Oak Strategic Opportunity REIT, Inc. stockholders’ equity | 392,720 | 412,301 |
Noncontrolling interests | 3,903 | 4,092 |
Total equity | 396,623 | 416,393 |
Total liabilities and equity | $ 1,527,741 | $ 1,559,245 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 103,788,298 | 103,932,083 |
Common stock, shares outstanding (in shares) | 103,788,298 | 103,932,083 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Rental income | $ 32,077 | $ 29,382 |
Dividend income from real estate equity securities | 1,998 | 2,387 |
Total revenues | 38,127 | 38,527 |
Expenses: | ||
Operating, maintenance, and management | 11,168 | 9,875 |
Real estate taxes and insurance | 6,416 | 5,024 |
Hotel expenses | 1,962 | 5,113 |
Asset management fees to affiliates | 3,973 | 3,127 |
General and administrative expenses | 3,001 | 2,991 |
Foreign currency transaction gain, net | (2,719) | (7,266) |
Depreciation and amortization | 12,048 | 12,565 |
Interest expense | 16,031 | 9,563 |
Impairment charges on real estate and related intangibles | 17,663 | 0 |
Total expenses | 69,543 | 40,992 |
Other income (loss): | ||
Loss from unconsolidated entities | (2,332) | (679) |
Other interest income | 204 | 46 |
Loss on real estate equity securities | (12,033) | (7,521) |
Gain on sale of real estate | 29,469 | 3,523 |
Gain on extinguishment of debt | 0 | 2,367 |
Total other income (loss), net | 15,308 | (2,264) |
Net income (loss) before income taxes | (16,108) | (4,729) |
Income tax provision | (3,662) | 0 |
Net loss | (19,770) | (4,729) |
Net loss attributable to noncontrolling interests | 189 | 118 |
Net loss attributable to redeemable noncontrolling interest | 0 | 47 |
Preferred stock dividends | 0 | (191) |
Net loss attributable to common stockholders | $ (19,581) | $ (4,755) |
Net loss per common share, basic (in dollars per share) | $ (0.19) | $ (0.05) |
Net loss per common share, diluted (in dollars per share) | $ (0.19) | $ (0.05) |
Weighted-average number of common shares outstanding, basic (in shares) | 103,872,363 | 101,419,947 |
Weighted-average number of common shares outstanding, diluted (in shares) | 103,872,363 | 101,419,947 |
Hotel revenues | ||
Revenues: | ||
Revenue | $ 2,913 | $ 5,917 |
Other operating income | ||
Revenues: | ||
Revenue | $ 1,139 | $ 841 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Stockholders' Equity | Common Stock | Additional Paid-in Capital | Cumulative Distributions and Net Loss | Noncontrolling Interests |
Balance (in shares) at Dec. 31, 2021 | 94,141,251 | |||||
Balance at Dec. 31, 2021 | $ 482,059 | $ 471,690 | $ 941 | $ 818,440 | $ (347,691) | $ 10,369 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (4,873) | (4,755) | (4,755) | (118) | ||
Transfers to redeemable common stock payable, net | (2,380) | (2,380) | (2,380) | |||
Redemptions of common stock (in shares) | (65,165) | |||||
Redemptions of common stock | (589) | (589) | (589) | |||
Adjustment to redemption value of mezzanine equity redeemable noncontrolling interest | (2,231) | (2,231) | (2,231) | |||
Stock distribution issued (in shares) | 10,420,079 | |||||
Stock distribution issued | 0 | 0 | $ 104 | 98,989 | (99,093) | |
Balance (in shares) at Mar. 31, 2022 | 104,496,165 | |||||
Balance at Mar. 31, 2022 | $ 471,986 | 461,735 | $ 1,045 | 914,460 | (453,770) | 10,251 |
Balance (in shares) at Dec. 31, 2022 | 103,932,083 | 103,932,083 | ||||
Balance at Dec. 31, 2022 | $ 416,393 | 412,301 | $ 1,039 | 907,044 | (495,782) | 4,092 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (19,770) | (19,581) | (19,581) | (189) | ||
Transfers from redeemable common stock payable | 1,510 | 1,510 | 1,510 | |||
Redemptions of common stock (in shares) | (143,785) | |||||
Redemptions of common stock | $ (1,510) | (1,510) | $ (1) | (1,509) | ||
Balance (in shares) at Mar. 31, 2023 | 103,788,298 | 103,788,298 | ||||
Balance at Mar. 31, 2023 | $ 396,623 | $ 392,720 | $ 1,038 | $ 907,045 | $ (515,363) | $ 3,903 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | |||
Net loss | $ (19,770) | $ (4,729) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Impairment charges on real estate and related intangibles | 17,663 | 0 | |
Loss from unconsolidated entities | 2,332 | 1,560 | |
Depreciation and amortization | 12,048 | 12,565 | |
Loss on real estate equity securities | 12,033 | 7,521 | |
Gain on sale of real estate | (29,469) | (3,523) | |
Gain on extinguishment of debt | 0 | (2,367) | |
Unrealized loss (gain) on interest rate caps | 36 | (55) | |
Deferred rent | (850) | (1,055) | |
Amortization of above- and below-market leases, net | (175) | (256) | |
Amortization of deferred financing costs | 1,323 | 680 | |
Amortization of discount on bond and notes payable | 1,103 | 1,016 | |
Foreign currency transaction gain, net | (2,719) | (7,266) | |
Changes in assets and liabilities: | |||
Rents and other receivables | (402) | 2,937 | |
Prepaid expenses and other assets | (2,967) | (3,355) | |
Accounts payable and accrued liabilities | (5,977) | (4,983) | |
Due to affiliates | 592 | 1,978 | |
Other liabilities | 4,973 | (353) | |
Net cash (used in) provided by operating activities | (10,226) | 315 | |
Cash Flows from Investing Activities: | |||
Improvements to real estate | (6,764) | (4,888) | |
Proceed from sales of real estate, net | 34,479 | 398 | |
Contribution to unconsolidated entity | 0 | (1,500) | |
Distribution of capital from unconsolidated entity | 1,144 | 142 | |
Purchase of interest rate caps | 0 | (506) | |
Escrow deposit for future real estate sale | 0 | 13,500 | |
Advance to affiliate | 0 | (1,201) | |
Purchase of foreign currency collars | (1,936) | 0 | |
Settlement of foreign currency collars, net | (4,314) | 0 | |
Proceeds for future development obligations, net | 1,296 | 0 | |
Net cash provided by investing activities | 23,905 | 5,945 | |
Cash Flows from Financing Activities: | |||
Proceeds from notes payable | 980 | 53,758 | |
Principal payments on notes payable | (2,841) | (55,066) | |
Payments of deferred financing costs | (472) | (861) | |
Payments to redeem common stock | (1,510) | (589) | |
Distributions paid | 0 | (11,016) | |
Preferred dividends paid | 0 | (191) | |
Net cash used in financing activities | (3,843) | (13,965) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (469) | (299) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 9,367 | (8,004) | |
Cash, cash equivalents and restricted cash, beginning of period | 159,044 | 105,431 | $ 105,431 |
Cash, cash equivalents and restricted cash, end of period | 168,411 | 97,427 | 159,044 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid, net of capitalized interest of $850 and $479 for the three months ended March 31, 2023 and 2022, respectively | 16,458 | 10,950 | |
Supplemental Disclosure of Significant Noncash Transaction: | |||
Accrued improvements to real estate | 2,554 | 2,685 | |
Redeemable common stock payable | 1,128 | 3,064 | $ 2,638 |
Distributions paid to common stockholders through common stock issuances | 0 | 99,093 | |
PPP notes forgiveness | $ 0 | $ 2,367 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 850 | $ 479 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATIONPacific Oak Strategic Opportunity REIT, Inc. (the “Company”) was formed on October 8, 2008 as a Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2010. The Company conducts its business primarily through Pacific Oak SOR (BVI) Holdings, Ltd. (“Pacific Oak SOR BVI”), a private company limited by shares according to the British Virgin Islands Business Companies Act, 2004, which was incorporated on December 18, 2015 and is authorized to issue a maximum of 50,000 common shares with no par value. Upon incorporation, Pacific Oak SOR BVI issued one certificate containing 10,000 common shares with no par value to Pacific Oak Strategic Opportunity Limited Partnership (the “Operating Partnership”), a Delaware limited partnership formed on December 10, 2008. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. Pacific Oak Strategic Opportunity Holdings LLC (“REIT Holdings”), a Delaware limited liability company formed on December 9, 2008, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2022. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the FASB Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership, Pacific Oak SOR BVI and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest and VIEs in which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. Liquidity The Company generally finances its real estate investments using notes payable that are typically structured as non-recourse secured mortgages with maturities of approximately three Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Restricted Cash Restricted cash is comprised of escrow deposits for future real estate sales and lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. Segments The Company operates in three reportable business segments: opportunistic real estate and real estate-related investments, residential homes, and hotel, which is how the Company's management manages the business. In general, the Company intends to hold its investments in opportunistic real estate and real estate-related assets for capital appreciation. Traditional performance metrics of opportunistic real estate and real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views opportunistic real estate and real estate-related assets as similar investments and aggregates them into one reportable business segment. The Company owns residential homes in 18 markets which are all aggregated into one reportable business segment due to the homes being stabilized, having high occupancy rates and having similar economic characteristics. Additionally, as of March 31, 2023 the Company owns one hotel, which is a separate reportable business segment due to the nature of the hotel business with short-term stays. Per Share Data The Company determines basic earnings per share and basic earnings per unit based on the weighted average number of shares of common stock or units, as applicable, outstanding during the period and the Company considers any participating securities, including unvested restricted stock, for purposes of applying the two-class method. The Company determines diluted earnings per share and diluted earnings per unit based on the weighted average number of shares of common stock or units, as applicable, outstanding combined with the incremental weighted average number of shares or units, as applicable, that would have been outstanding assuming all potentially dilutive securities were converted into shares of common stock or units, as applicable, at the earliest date possible. Square Footage, Occupancy and Other Measures Any references to square footage, acreage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. Recently Issued Accounting Standards Updates There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 31, 2023 that are of significance or potential significance to the Company. |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 3 Months Ended |
Mar. 31, 2023 | |
Real Estate [Abstract] | |
REAL ESTATE FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of March 31, 2023, the Company owned eight office properties, one office portfolio consisting of two office buildings and 25 acres of undeveloped land, encompassing, in the aggregate, approximately 3.2 million rentable square feet and these properties were 69% occupied. In addition, the Company owned one residential home portfolio consisting of 2,456 residential homes and encompassing approximately 3.5 million rental square feet and two apartment properties, containing 609 units and encompassing approximately 0.5 million rentable square feet, which were 94% and 95% occupied, respectively. The Company also owned one hotel property with 196 rooms, two investments in undeveloped land with approximately 671 developable acres and one office/retail development property. The following table summarizes the Company’s real estate held for investment as of March 31, 2023 and December 31, 2022, respectively (in thousands): March 31, 2023 December 31, 2022 Land $ 262,940 $ 269,376 Buildings and improvements 1,052,299 1,063,782 Tenant origination and absorption costs 22,988 27,996 Total real estate, cost 1,338,227 1,361,154 Accumulated depreciation and amortization (147,475) (141,750) Total real estate held for investment, net $ 1,190,752 $ 1,219,404 Operating Leases Certain of the Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of March 31, 2023, the leases, excluding options to extend, apartment leases and residential home leases, which have terms that are generally one year or less, had remaining terms of up to 12.4 years with a weighted-average remaining term of 3.7 years. Some of the leases have provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from tenants in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash and assumed in real estate acquisitions related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets totaled $6.2 million and $6.5 million as of March 31, 2023 and December 31, 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company recognized deferred rent from tenants of $0.8 million and $1.1 million, net of lease incentive amortization, respectively. As of March 31, 2023 and December 31, 2022, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $19.3 million and $18.3 million, respectively, and is included in rents and other receivables on the accompanying consolidated balance sheets. The cumulative deferred rent balance included $2.9 million and $2.8 million of unamortized lease incentives as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, the future minimum rental income from the Company’s properties, excluding apartment and residential leases which generally have initial terms of 12 months or less, under non-cancelable operating leases was as follows (in thousands): April 1, 2023 through December 31, 2023 $ 45,637 2024 58,140 2025 47,037 2026 33,165 2027 25,276 Thereafter 55,045 $ 264,300 As of March 31, 2023, the Company’s commercial real estate properties were leased to approximately 300 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Public Administration 15 $ 7,774 12.3 % Professional, Scientific, and Technical Services 38 7,144 11.3 % Computer Systems Design and Related Services 29 6,921 11.0 % $ 21,839 34.6 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of March 31, 2023, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. Geographic Concentration Risk As of March 31, 2023, the Company’s real estate investments in California and Georgia represented 21.6% and 10.2%, respectively, of the Company’s total assets. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the California and Georgia real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. Hotel Properties The following table provides detailed information regarding the Company’s hotel revenues for its hotel properties (the Springmaid Beach Resort was sold on September 1, 2022) during the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 Hotel revenues: Room $ 2,565 $ 4,295 Food, beverage and convention services 231 280 Campground — 793 Other 117 549 Hotel revenues $ 2,913 $ 5,917 Contract Liabilities The following table summarizes the Company’s contract liabilities, which are comprised of hotel advanced deposits and deferred proceeds received from the buyers of the Park Highlands land sales (referenced below) and another developer for the value of land that was contributed to a master association that is consolidated by the Company, which are included in other liabilities in the accompanying consolidated balance sheets, as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Contract liabilities $ 27,753 $ 23,904 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 772 $ 9,215 Real Estate Sales During the three months ended March 31, 2023, the Company sold approximately 71 developable acres of undeveloped land in North Las Vegas, Nevada (“Park Highlands”) for proceeds of $34.5 million, net of closing costs and credits of $1.9 million for future development obligations. The Company recognized a pre-tax gain on sale of real estate of $29.5 million related to the disposition within the consolidated statements of operations. The purchaser is not affiliated with the Company nor the Advisor. In addition, the land parcels were held and sold through one of the Company’s taxable REIT subsidiaries (“TRS”) for certain tax planning purposes and to ensure preservation of the Company’s REIT status. For purposes of the determination of U.S. federal and state income taxes, the Company’s TRS record current or deferred income taxes based on differences (both permanent and timing) between the determination of their taxable income and net income under GAAP. In connection with the Park Highlands sales, the Company recorded an income tax provision of $3.7 million at the TRS level. There were no state taxes related to this disposition. The U.S. federal statutory and effective income tax rate for the transaction’s taxable gain is 21%. Impairment of Real Estate During the three months ended March 31, 2023, the Company recorded impairment charges on real estate in the aggregate of $17.7 million to write down the carrying value of Oakland City Center, an office property located in Oakland, California to their estimated fair value due to a change in the discount and cap rate assumptions and related decrease in projected cash flows. There were no impairment charges during the three months ended March 31, 2022. |
REAL ESTATE EQUITY SECURITIES
REAL ESTATE EQUITY SECURITIES | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE EQUITY SECURITIES | REAL ESTATE EQUITY SECURITIES The following summarizes the portion of loss for the period related to real estate equity securities held during the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 Net loss recognized during the period on real estate equity securities $ (12,033) $ (7,521) Less net gain recognized during the period on real estate equity securities sold during the period — — Unrealized loss recognized during the reporting period on real estate equity securities held at the end of the period $ (12,033) $ (7,521) During the three months ended March 31, 2023 and 2022, the Company recognized $2.0 million and $2.4 million, respectively, of dividend income from real estate equity securities. |
NOTES AND BOND PAYABLE
NOTES AND BOND PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BOND PAYABLE | NOTES AND BONDS PAYABLE As of March 31, 2023 and December 31, 2022, the Company’s notes and bonds payable consisted of the following (dollars in thousands): Book Value as of March 31, 2023 Book Value as of December 31, 2022 Contractual Interest Rate as of March 31, 2023 Effective Interest Rate at March 31, 2023 (1) Payment Type (2) Maturity Date (3) Richardson Portfolio Mortgage Loan $ 18,754 $ 18,844 SOFR + 2.50% 7.13% Principal & Interest 11/01/2023 Park Centre Mortgage Loan 26,152 26,233 BSBY + 1.75% 6.67% Principal & Interest 06/27/2023 1180 Raymond Mortgage Loan (4) 31,070 31,070 BSBY + 2.25% 7.17% Interest Only 12/01/2023 Pacific Oak SOR BVI Series B Debentures (5) 323,781 331,213 3.93% 3.93% (5) 01/31/2026 Crown Pointe Mortgage Loan 54,738 53,758 SOFR + 2.30% 6.93% Interest Only 04/01/2025 The Marq Mortgage Loan 60,594 60,796 BSBY + 1.55% 6.47% Principal & Interest 06/06/2023 Eight & Nine Corporate Centre Mortgage Loan 47,795 47,945 BSBY + 1.60% 6.52% Principal & Interest 06/08/2023 Georgia 400 Center Mortgage Loan 44,129 44,129 LIBOR + 1.55% 6.41% Interest Only 05/22/2023 PORT Mortgage Loan 1 51,302 51,302 4.74% 4.74% Interest Only 10/01/2025 PORT Mortgage Loan 2 10,525 10,523 4.72% 4.72% Interest Only 03/01/2026 PORT MetLife Loan 60,000 60,000 3.90% 3.90% Interest Only 04/10/2026 PORT II Metlife Loan (6) 93,701 93,701 3.99% 3.99% Interest Only 04/10/2026 Q&C Hotel Mortgage Loan 24,716 24,784 SOFR + 3.50% (7) 8.13% Principal & Interest 01/31/2024 Lincoln Court Mortgage Loan (4) 35,314 35,314 SOFR + 3.25% 7.88% Interest Only 08/07/2025 Lofts at NoHo Commons Mortgage Loan 71,536 71,536 SOFR + 2.18% (8) 6.48% Interest Only 09/09/2023 Oakland City Center Mortgage Loan (4) 84,750 87,000 BSBY + 3.00% 7.92% Principal & Interest 09/01/2023 Madison Square Mortgage Loan 17,962 17,964 4.63% 4.63% Interest Only 10/07/2024 Total Notes and Bonds Payable principal outstanding 1,056,819 1,066,112 Discount on Notes and Bonds Payable, net (9) (10,861) (11,964) Deferred financing costs, net (8,587) (9,439) Total Notes and Bonds Payable, net $ 1,037,371 $ 1,044,709 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of March 31, 2023. The interest rate is calculated as the actual interest rate in effect as of March 31, 2023 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at March 31, 2023, where applicable. (2) Represents the payment type required under the loan as of March 31, 2023. Certain future monthly payments due under this loan also include amortizing principal payments. For more information of the Company’s contractual obligations under its notes and bonds payable, see five-year maturity table below. (3) Represents the initial maturity date or the maturity date as extended as of March 31, 2023; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (4) The Company’s notes and bonds payable are generally non-recourse. These mortgage loans have guarantees over certain balances whereby the Company would be required to make guaranteed payments in the event that the Company turned the property over to the lender. The guarantees are typically 25% of the outstanding loan balance. As of March 31, 2023, the guaranteed amount in the aggregate was $37.8 million. (5) See “Israeli Bond Financing” below. (6) As of March 31, 2023, $93.7 million had been disbursed to the Company and up to $6.3 million was available for future disbursements, subject to certain terms and conditions contained in the loan documents. (7) Beginning February 1, 2023 through March 31, 2023, the interest rate is 8.25% and thereafter is SOFR + 3.5%. (8) The variable rate is at the higher of one-month SOFR or 1.75%, plus 2.18%. (9) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable. During the three months ended March 31, 2023 and 2022, the Company incurred $16.0 million and $9.6 million, respectively, of interest expense. Included in interest expense during the three months ended March 31, 2023 and 2022 was $1.3 million and $0.7 million, respectively, of amortization of deferred financing costs. Additionally, during the three months ended March 31, 2023 and 2022, the Company capitalized $0.9 million and $0.5 million, respectively, of interest related to its investments in undeveloped land. As of March 31, 2023 and December 31, 2022, the Company’s interest payable was $6.2 million and $9.1 million, respectively. The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of March 31, 2023 (in thousands): April 1, 2023 through December 31, 2023 $ 384,951 2024 150,434 2025 249,283 2026 272,151 2027 — Thereafter — $ 1,056,819 The Company has extension options with respect to $141.8 million of the debt obligations outstanding that are scheduled to mature over the next 12 months; however, the Company cannot exercise these options if not then in compliance with certain financial covenants in the loans without making a cash payment and there is no assurance that the Company will be able to meet these requirements. All of the Company’s debt obligations are generally non-recourse, subject to certain limited guaranty payments, as outlined in the table above, except for the Company’s Series B Debentures. The Company plans to utilize available extension options or refinance the notes payable. The Company may also choose to market the properties for sale or may negotiate a turnover of the secured properties back to the related mortgage lender. The Company’s notes payable contain financial debt covenants, including minimum equity requirements and liquidity ratios. As of March 31, 2023, the Company was in compliance with all of these debt covenants with the exception that the Georgia 400 Center Mortgage Loan, Park Centre Mortgage Loan, Lofts at NoHo Commons Mortgage Loan and Lincoln Court Mortgage Loan were not in compliance with the debt service coverage requirement. As a result of such non-compliance, the Company is required to provide a cash sweep for the Georgia 400 Center Mortgage Loan and the remaining loans are at-risk of cash sweeps and/or principal pay downs if in continuous non-compliance. Israeli Bond Financing On February 16, 2020, Pacific Oak SOR BVI issued 254.1 million Israeli new Shekels (approximately $74.1 million as of February 16, 2020) of Series B debentures (the “Series B Debentures”) to Israeli investors pursuant to a public offering registered with the Israel Securities Authority. The Series B Debentures bear interest at the rate of 3.93% per year. The Series B Debentures have principal installment payments equal to 33.33% of the face amount of the Series B Debentures on January 31st of each year from 2024 to 2026. Pacific Oak SOR BVI issued additional Series B Debentures subsequent to the initial issuance and as of March 31, 2023, 1.2 billion Israeli new Shekels (approximately $323.8 million as March 31, 2023) were outstanding. The additional Series B Debentures have an equal level of security, pari passu, amongst themselves and between them and the initial Series B Debentures without any right of precedence or preference between any of them. The deed of trust that governs the terms of the Series B Debentures contains various financial covenants. As of March 31, 2023, the Company was in compliance with these financial covenants. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES The following were the face values, carrying amounts and fair values of the Company’s financial instruments as of March 31, 2023 and December 31, 2022, which carrying amounts do not approximate the fair values (in thousands): March 31, 2023 December 31, 2022 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liabilities (Level 3): Notes payable $ 733,038 $ 727,130 $ 718,158 $ 734,899 $ 728,433 $ 716,813 Financial liabilities (Level 1): Pacific Oak SOR BVI Series B Debentures $ 323,781 $ 310,241 $ 286,725 $ 331,213 $ 316,276 $ 304,758 Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. As of March 31, 2023, the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 48,120 $ 48,120 $ — $ — Asset derivative - interest rate caps (1) $ 1,720 $ — $ 1,720 $ — Liability derivative - foreign currency collar (1) $ 870 $ — $ 870 $ — U.S. Treasury bills (2) $ 78,592 $ 78,592 $ — $ — Nonrecurring Basis: Impaired real estate (3) $ 152,635 $ — $ — $ 152,635 _____________________ (1) Interest rate caps and foreign currency collars are included in prepaid expenses and other assets and other liabilities, respectively, on the consolidated balance sheets. (2) During the three months ended March 31, 2023, the Company purchased $78.5 million in U.S. Treasury bills with an aggregate par value of $79.4 million. As of March 31, 2023, the Company’s investments in U.S. Treasury bills have an aggregate accreted cost of $78.6 million and have original maturities of less than three months and are included in cash and cash equivalents on the consolidated balance sheets. (3) Amount represents the fair value for a real estate asset impacted by impairment charges during the months ended March 31, 2023, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. As of March 31, 2023, one of the Company’s real estate properties was measured at its estimated fair value. Oakland City Center was based on an income approach with the significant unobservable inputs used in measuring the estimated fair value of this property, including a discount rate of 7.00% and a terminal cap rate of 6.5%. As of December 31, 2022, the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 60,153 $ 60,153 $ — $ — Asset derivative - interest rate caps $ 2,267 $ — $ 2,267 $ — Liability derivative - foreign currency collar $ 3,115 $ — $ 3,115 $ — Nonrecurring Basis: Impaired real estate $ 212,800 $ — $ — $ 212,800 Impaired goodwill $ 5,436 $ — $ — $ 5,436 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Pacific Oak Capital Advisors, LLC As described further below, the Company has entered into agreements with certain affiliates pursuant to which they provide services to the Company. Keith D. Hall and Peter McMillan III control and indirectly own Pacific Oak Holding Group, LLC (“Pacific Oak Holding”), the Company’s sponsor since November 1, 2019. Pacific Oak Holding is the sole owner of Pacific Oak Capital Advisors, LLC (the “Advisor”), the Company’s advisor since November 1, 2019. Messrs. Hall and McMillan are also two of the Company’s executive officers and directors. Subject to certain restrictions and limitations, the business of the Company is externally managed by the Advisor pursuant to an advisory agreement (the “Advisory Agreement”). The Advisory Agreement is currently effective through November 1, 2023; however the Company or the Advisor may terminate the Advisory Agreement without cause or penalty upon providing 60 days’ written notice. The Advisor conducts the Company’s operations and manages its portfolio of real estate and other real estate-related investments. Pacific Oak Residential Advisors, LLC Effective September 1, 2022, the Company’s wholly-owned subsidiary, Pacific Oak Residential Trust, Inc. (“PORT”), entered into an advisory agreement with Pacific Oak Residential Advisors, LLC (“PORA”) (the “PORT Advisory Agreement”) pursuant to which PORA will act as a product specialist with respect to the Company’s residential homes portfolio, held through PORT. The PORT Advisory Agreement has an initial two-year term and may be renewed for additional one-year terms. Pursuant to the PORT Advisory Agreement, PORT will pay PORA: (1) an acquisition fee equal to 1.0% of the cost of each asset which consists of the price paid for the asset plus any amounts funded or budgeted at the time of acquisition for capital expenditures; and (2) a quarterly asset management fee equal to 0.25% (1.0% annually) on the aggregate value of the Company’s residential homes portfolio assets, as determined in accordance with PORT’s valuation guidelines, as of the end of each quarter. In the case of investments made through a joint venture, the acquisition fee will be based on PORT’s proportionate share of the joint venture. For substantial assistance in connection with the sale of properties or other investments related to the Company’s residential homes portfolio, PORT also pays PORA or its affiliates 1.0% of the contract sales price with a limit to not exceed commission paid to unaffiliated third parties. In connection with the PORT Advisory Agreement, the Company amended and restated its advisory agreement with the Advisor, also effective September 1, 2022, which was subsequently renewed as of November 1, 2022. Under the Advisory Agreement, the Company does not pay acquisition fees, asset management fees or disposition fees to the Advisor with respect to the Company’s residential homes portfolio. The Company’s residential homes portfolio will still be considered when computing any potential incentive fees due to the Advisor under the Advisory Agreement. DMH Realty, LLC Effective September 1, 2022, PORT entered into a property management agreement with DMH Realty, LLC (“DMH Realty”), an affiliate of PORA and the Advisor (the “PORT Property Management Agreement”) for the Company’s residential homes portfolio. The PORT Property Management Agreement has an initial two-year term and may be renewed for additional one-year terms. Pursuant to the PORT Property Management Agreement, PORT will pay DMH Realty a property management fee equal to the following: (a) 8% of Collected Rental Revenues, as defined below, up to $50.0 million per annum; (b) 7% of Collected Rental Revenues in excess of $50.0 million per annum, but less than or equal to $75.0 million per annum; and (c) 6% of Collected Rental Revenues in excess of $75.0 million per annum, “Collected Rental Revenues” means the amount of rental revenue actually collected for each property per the terms of the lease pertaining to each property (including lease breakage fees) or pursuant to any early termination buyouts, but excluding other income items, fees or revenue collected by DMH Realty, including but not limited to: application fees, insufficient funds fees, late fees, move-in fees, pet fees, and security deposits (except to the extent applied to rent per the terms of the lease pertaining to any property). Pacific Oak Capital Markets, LLC On September 9, 2022, PORT commenced a private offering of up to $500 million of common stock in a primary offering and up to $50 million of common stock under its distribution reinvestment plan (the “Private Offering”). PORT engaged Pacific Oak Capital Markets, LLC (“POCM”), an affiliate of the Advisor, PORA and DHM Realty, to be the dealer manager for the Private Offering, pursuant to a dealer manager agreement effective as of September 9, 2022, which was subsequently amended and restated as of January 13, 2023 to reflect the creation of a $5 million escrow arrangement (the “PORT Dealer Manager Agreement”). Pursuant to the PORT Dealer Manager Agreement, with respect to Class A shares, PORT will generally pay POCM: (1) selling commissions equal to up to 6.0% of the net asset value (“NAV”) of each share sold in the primary offering, which POCM may reallow in part or in full to participating broker-dealers; (2) a dealer manager fee equal to up to 1.5% of the NAV of each share sold in the primary offering, which POCM may reallow in part or in full to participating broker-dealers; and (3) a placement agent fee equal to up to 1.5% of the NAV of each share sold in the primary offering. With respect to Class T shares, PORT will generally pay POCM: (1) selling commissions equal to up to 3.0% of the NAV of each share sold in the primary offering, which POCM may reallow in part or in full to participating broker-dealers; (2) a dealer manager fee equal to up to 0.75% of the NAV of each share sold in the primary offering, which POCM may reallow in part or in full to participating broker-dealers; and (3) a placement agent fee equal to up to 0.75% of the NAV of each share sold in the primary offering. PORT will not pay any selling commissions, dealer manager or placement agent fees in connection with the sale of shares under the distribution reinvestment plan. The Advisor is the sponsor for the Private Offering and as the sponsor, they will incur reimbursable organization and offering costs on behalf of PORT. PORT will incur an organization and offering expense fee equal to 0.5% of the NAV of each share sold in the Private Offering to help fund the reimbursement to the sponsor. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2023 and 2022, respectively, and any related amounts payable as of March 31, 2023 and December 31, 2022 (in thousands): Incurred during the three months ended March 31, Payable as of 2023 2022 March 31, 2023 December 31, 2022 Expensed Asset management fees $ 3,973 $ 3,127 $ 2,830 $ 2,618 Property management fees (1) 664 125 199 181 Disposition fees 362 107 — — $ 4,999 $ 3,359 $ 3,029 $ 2,799 _____________________ (1) Property management fees related to DMH Realty are recorded as operating, maintenance, and management expenses on the Company’s consolidated statements of operations. Pacific Oak Opportunity Zone Fund I As of March 31, 2023, the Company’s investment balance in the Pacific Oak Opportunity Zone Fund I, LLC (“Pacific Oak Opportunity Zone Fund I”) is $25.0 million, which is included in investments in unconsolidated entities on the consolidated balance sheets. The Advisor is entitled to certain fees in connection with the fund. Pacific Oak Opportunity Zone Fund I will pay an acquisition fee equal to 1.5% of the purchase price of each asset (including any debt incurred or assumed and significant capital improvement costs budgeted as of the date of acquisition) with a purchase price less than or equal to $25.0 million plus 1.0% of the purchase price in excess of $25.0 million; a quarterly asset management fee equal to 0.25% of the total purchase price of all assets (including any debt incurred or assumed and significant capital improvement costs budgeted as of the date of acquisition) as of the end of the applicable quarter; and a financing fee equal to 0.5% of the original principal amount of any indebtedness incurred (reduced by any financing fee previously paid with respect to indebtedness being refinanced). In the case of investments made through joint ventures, the fees above will be determined based on the Company’s proportionate share of the investment. The Advisor is also entitled to certain distributions paid by the Pacific Oak Opportunity Zone Fund I after the Class A Members have received their preferred return. These fees and distributions have been waived for the Company’s investment. In addition, side letter agreements between the Advisor and Pacific Oak Opportunity Zone Fund I were executed on February 28, 2020 and stipulate that any asset management fees allocable to the Company and waived by Pacific Oak Capital Advisors for Pacific Oak Opportunity Zone Fund I will distributed to the Company. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITIES | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED ENTITIES | INVESTMENT IN UNCONSOLIDATED ENTITIES As of March 31, 2023 and December 31, 2022, the Company’s investments in unconsolidated entities were composed of the following (dollars in thousands): Number of Properties as of March 31, 2023 Investment Balance as of Joint Venture Location Ownership % March 31, 2023 December 31, 2022 110 William Joint Venture (1) 1 New York, New York 60.0% $ — $ — 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 42,302 45,173 Pacific Oak Opportunity Zone Fund I 3 Various 46.0% 24,951 25,669 $ 67,253 $ 70,842 _____________________ (1) The book value of the Company’s investment in the 110 William Joint Venture was $0 due to historical distributions from the 110 William Joint Venture exceeding the Company’s book value. As such, the Company suspended the equity method of accounting and will not record the Company's share of losses or income for the 110 William Joint Venture until the Company’s share of net income exceeds the gain recorded and the Company’s share of the net losses not recognized during the period the equity method was suspended. Summarized financial information for investment in unconsolidated entities follows (in thousands): March 31, 2023 December 31, 2022 Assets: Real estate held for investment, net $ 479,262 $ 471,503 Total assets 532,982 546,142 Liabilities: Notes payable related to real estate held for investment, net 494,442 490,302 Total liabilities 503,836 501,861 Total equity $ 29,146 $ 44,281 For the Three Months Ended March 31, 2023 2022 Total revenues $ 11,120 $ 17,887 Operating loss (14,035) (10,411) Net loss $ (13,948) $ (10,207) |
REPORTING SEGMENTS
REPORTING SEGMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENTS | REPORTING SEGMENTS The Company recognizes three reporting segments for the three months ended March 31, 2023 and 2022: strategic opportunistic properties, residential homes and hotels. All corporate related costs are included in the strategic opportunistic properties segment to align with how financial information is presented to the chief operating decision maker. On July 1, 2022, the Company made a prospective name change to the “Single-Family Homes” segment to “Residential Homes” to reflect the Company’s consolidation of Pacific Oak Residential Trust II, Inc. (“PORT II”) residential homes. On September 1, 2022, the Company made a prospective name change to the “Hotels” segment to “Hotel” to reflect the September 1, 2022 disposition of the Springmaid Beach Resort. The selected financial information for reporting segments for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended March 31, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 25,890 $ 9,324 $ 2,913 $ 38,127 Total expenses (55,377) (11,265) (2,901) (69,543) Total other income 15,279 — 29 15,308 Net income (loss) before income taxes $ (14,208) $ (1,941) $ 41 $ (16,108) Three Months Ended March 31, 2022 Strategic Opportunistic Properties Single-Family Homes Hotels Total Total revenues $ 26,867 $ 5,743 $ 5,917 $ 38,527 Total expenses (27,076) (6,504) (7,412) (40,992) Total other (loss) income (4,589) (42) 2,367 (2,264) Net (loss) income before income taxes $ (4,798) $ (803) $ 872 $ (4,729) Total assets and goodwill related to the reporting segments as of March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total assets $ 1,144,432 $ 330,863 $ 52,446 $ 1,527,741 Goodwill 4,220 — 1,216 5,436 December 31, 2022 Strategic Opportunistic Properties Residential Homes Hotel Total Total assets $ 1,173,481 $ 333,128 $ 52,636 $ 1,559,245 Goodwill 4,220 — 1,216 5,436 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Obligations As of March 31, 2023, the Company’s lease and rights to a leasehold interest with respect to 210 West 31st, which was accounted for as a finance lease, are included in the consolidated balance sheet as follows: Right-of-use asset (included in real estate held for investment, net, in thousands) $ 7,281 Lease obligation (included in other liabilities, in thousands) 9,469 Remaining lease term 90.8 years Discount rate 4.8 % The components of lease expense were as follows: Interest on lease obligation (in thousands) $ 112 As of March 31, 2023, the Company had a leasehold interest expiring in 2114. Future minimum lease payments owed by the Company under the finance lease as of March 31, 2023 are as follows (in thousands): April 1, 2023 through December 31, 2023 $ 270 2024 360 2025 393 2026 396 2027 396 Thereafter 51,771 Total expected minimum lease obligations 53,586 Less: Amount representing interest (1) (44,117) Present value of net minimum lease payments (2) $ 9,469 _____________________ (1) Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company’s incremental borrowing rate at acquisition. (2) The present value of net minimum lease payments are presented in other liabilities in the accompanying consolidated balance sheets. Economic Dependency The Company is dependent on the Advisor, PORA, and DMH Realty for certain services that are essential to the Company, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that the Advisor, PORA, and DMH Realty are unable to provide these services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations as of March 31, 2023. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSThe Company evaluates subsequent events up until the date the consolidated financial statements are issued. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the FASB Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership, Pacific Oak SOR BVI and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest and VIEs in which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Restricted Cash | Restricted cash is comprised of escrow deposits for future real estate sales and lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. |
Segments | The Company operates in three reportable business segments: opportunistic real estate and real estate-related investments, residential homes, and hotel, which is how the Company's management manages the business. In general, the Company intends to hold its investments in opportunistic real estate and real estate-related assets for capital appreciation. Traditional performance metrics of opportunistic real estate and real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views opportunistic real estate and real estate-related assets as similar investments and aggregates them into one reportable business segment. The Company owns residential homes in 18 markets which are all aggregated into one reportable business segment due to the homes being stabilized, having high occupancy rates and having similar economic characteristics. Additionally, as of March 31, 2023 the Company owns one hotel, which is a separate reportable business segment due to the nature of the hotel business with short-term stays. |
Per Share Data | The Company determines basic earnings per share and basic earnings per unit based on the weighted average number of shares of common stock or units, as applicable, outstanding during the period and the Company considers any participating securities, including unvested restricted stock, for purposes of applying the two-class method. The Company determines diluted earnings per share and diluted earnings per unit based on the weighted average number of shares of common stock or units, as applicable, outstanding combined with the incremental weighted average number of shares or units, as applicable, that would have been outstanding assuming all potentially dilutive securities were converted into shares of common stock or units, as applicable, at the earliest date possible. |
Square Footage, Occupancy and Other Measures | Any references to square footage, acreage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. |
Recently Issued Accounting Standards Updates | There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 31, 2023 that are of significance or potential significance to the Company. |
Fair Value Measurement | Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. |
REAL ESTATE HELD FOR INVESTME_2
REAL ESTATE HELD FOR INVESTMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of March 31, 2023 and December 31, 2022, respectively (in thousands): March 31, 2023 December 31, 2022 Land $ 262,940 $ 269,376 Buildings and improvements 1,052,299 1,063,782 Tenant origination and absorption costs 22,988 27,996 Total real estate, cost 1,338,227 1,361,154 Accumulated depreciation and amortization (147,475) (141,750) Total real estate held for investment, net $ 1,190,752 $ 1,219,404 |
Schedule of Future Minimum Rental Income for Company's Properties | As of March 31, 2023, the future minimum rental income from the Company’s properties, excluding apartment and residential leases which generally have initial terms of 12 months or less, under non-cancelable operating leases was as follows (in thousands): April 1, 2023 through December 31, 2023 $ 45,637 2024 58,140 2025 47,037 2026 33,165 2027 25,276 Thereafter 55,045 $ 264,300 |
Schedule of Real Estate by Industry | The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Public Administration 15 $ 7,774 12.3 % Professional, Scientific, and Technical Services 38 7,144 11.3 % Computer Systems Design and Related Services 29 6,921 11.0 % $ 21,839 34.6 % |
Schedule of Hotel Revenue and Expense | The following table provides detailed information regarding the Company’s hotel revenues for its hotel properties (the Springmaid Beach Resort was sold on September 1, 2022) during the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 Hotel revenues: Room $ 2,565 $ 4,295 Food, beverage and convention services 231 280 Campground — 793 Other 117 549 Hotel revenues $ 2,913 $ 5,917 |
Schedule of Contract Liabilities | The following table summarizes the Company’s contract liabilities, which are comprised of hotel advanced deposits and deferred proceeds received from the buyers of the Park Highlands land sales (referenced below) and another developer for the value of land that was contributed to a master association that is consolidated by the Company, which are included in other liabilities in the accompanying consolidated balance sheets, as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Contract liabilities $ 27,753 $ 23,904 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 772 $ 9,215 |
REAL ESTATE EQUITY SECURITIES (
REAL ESTATE EQUITY SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Loss on Investments | The following summarizes the portion of loss for the period related to real estate equity securities held during the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 Net loss recognized during the period on real estate equity securities $ (12,033) $ (7,521) Less net gain recognized during the period on real estate equity securities sold during the period — — Unrealized loss recognized during the reporting period on real estate equity securities held at the end of the period $ (12,033) $ (7,521) |
NOTES AND BOND PAYABLE (Tables)
NOTES AND BOND PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of March 31, 2023 and December 31, 2022, the Company’s notes and bonds payable consisted of the following (dollars in thousands): Book Value as of March 31, 2023 Book Value as of December 31, 2022 Contractual Interest Rate as of March 31, 2023 Effective Interest Rate at March 31, 2023 (1) Payment Type (2) Maturity Date (3) Richardson Portfolio Mortgage Loan $ 18,754 $ 18,844 SOFR + 2.50% 7.13% Principal & Interest 11/01/2023 Park Centre Mortgage Loan 26,152 26,233 BSBY + 1.75% 6.67% Principal & Interest 06/27/2023 1180 Raymond Mortgage Loan (4) 31,070 31,070 BSBY + 2.25% 7.17% Interest Only 12/01/2023 Pacific Oak SOR BVI Series B Debentures (5) 323,781 331,213 3.93% 3.93% (5) 01/31/2026 Crown Pointe Mortgage Loan 54,738 53,758 SOFR + 2.30% 6.93% Interest Only 04/01/2025 The Marq Mortgage Loan 60,594 60,796 BSBY + 1.55% 6.47% Principal & Interest 06/06/2023 Eight & Nine Corporate Centre Mortgage Loan 47,795 47,945 BSBY + 1.60% 6.52% Principal & Interest 06/08/2023 Georgia 400 Center Mortgage Loan 44,129 44,129 LIBOR + 1.55% 6.41% Interest Only 05/22/2023 PORT Mortgage Loan 1 51,302 51,302 4.74% 4.74% Interest Only 10/01/2025 PORT Mortgage Loan 2 10,525 10,523 4.72% 4.72% Interest Only 03/01/2026 PORT MetLife Loan 60,000 60,000 3.90% 3.90% Interest Only 04/10/2026 PORT II Metlife Loan (6) 93,701 93,701 3.99% 3.99% Interest Only 04/10/2026 Q&C Hotel Mortgage Loan 24,716 24,784 SOFR + 3.50% (7) 8.13% Principal & Interest 01/31/2024 Lincoln Court Mortgage Loan (4) 35,314 35,314 SOFR + 3.25% 7.88% Interest Only 08/07/2025 Lofts at NoHo Commons Mortgage Loan 71,536 71,536 SOFR + 2.18% (8) 6.48% Interest Only 09/09/2023 Oakland City Center Mortgage Loan (4) 84,750 87,000 BSBY + 3.00% 7.92% Principal & Interest 09/01/2023 Madison Square Mortgage Loan 17,962 17,964 4.63% 4.63% Interest Only 10/07/2024 Total Notes and Bonds Payable principal outstanding 1,056,819 1,066,112 Discount on Notes and Bonds Payable, net (9) (10,861) (11,964) Deferred financing costs, net (8,587) (9,439) Total Notes and Bonds Payable, net $ 1,037,371 $ 1,044,709 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of March 31, 2023. The interest rate is calculated as the actual interest rate in effect as of March 31, 2023 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at March 31, 2023, where applicable. (2) Represents the payment type required under the loan as of March 31, 2023. Certain future monthly payments due under this loan also include amortizing principal payments. For more information of the Company’s contractual obligations under its notes and bonds payable, see five-year maturity table below. (3) Represents the initial maturity date or the maturity date as extended as of March 31, 2023; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (4) The Company’s notes and bonds payable are generally non-recourse. These mortgage loans have guarantees over certain balances whereby the Company would be required to make guaranteed payments in the event that the Company turned the property over to the lender. The guarantees are typically 25% of the outstanding loan balance. As of March 31, 2023, the guaranteed amount in the aggregate was $37.8 million. (5) See “Israeli Bond Financing” below. (6) As of March 31, 2023, $93.7 million had been disbursed to the Company and up to $6.3 million was available for future disbursements, subject to certain terms and conditions contained in the loan documents. (7) Beginning February 1, 2023 through March 31, 2023, the interest rate is 8.25% and thereafter is SOFR + 3.5%. (8) The variable rate is at the higher of one-month SOFR or 1.75%, plus 2.18%. (9) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of March 31, 2023 (in thousands): April 1, 2023 through December 31, 2023 $ 384,951 2024 150,434 2025 249,283 2026 272,151 2027 — Thereafter — $ 1,056,819 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the face values, carrying amounts and fair values of the Company’s financial instruments as of March 31, 2023 and December 31, 2022, which carrying amounts do not approximate the fair values (in thousands): March 31, 2023 December 31, 2022 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liabilities (Level 3): Notes payable $ 733,038 $ 727,130 $ 718,158 $ 734,899 $ 728,433 $ 716,813 Financial liabilities (Level 1): Pacific Oak SOR BVI Series B Debentures $ 323,781 $ 310,241 $ 286,725 $ 331,213 $ 316,276 $ 304,758 |
Fair Value, Assets Measured on Recurring Basis | As of March 31, 2023, the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 48,120 $ 48,120 $ — $ — Asset derivative - interest rate caps (1) $ 1,720 $ — $ 1,720 $ — Liability derivative - foreign currency collar (1) $ 870 $ — $ 870 $ — U.S. Treasury bills (2) $ 78,592 $ 78,592 $ — $ — Nonrecurring Basis: Impaired real estate (3) $ 152,635 $ — $ — $ 152,635 _____________________ (1) Interest rate caps and foreign currency collars are included in prepaid expenses and other assets and other liabilities, respectively, on the consolidated balance sheets. (2) During the three months ended March 31, 2023, the Company purchased $78.5 million in U.S. Treasury bills with an aggregate par value of $79.4 million. As of March 31, 2023, the Company’s investments in U.S. Treasury bills have an aggregate accreted cost of $78.6 million and have original maturities of less than three months and are included in cash and cash equivalents on the consolidated balance sheets. (3) Amount represents the fair value for a real estate asset impacted by impairment charges during the months ended March 31, 2023, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. As of December 31, 2022, the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 60,153 $ 60,153 $ — $ — Asset derivative - interest rate caps $ 2,267 $ — $ 2,267 $ — Liability derivative - foreign currency collar $ 3,115 $ — $ 3,115 $ — Nonrecurring Basis: Impaired real estate $ 212,800 $ — $ — $ 212,800 Impaired goodwill $ 5,436 $ — $ — $ 5,436 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2023 and 2022, respectively, and any related amounts payable as of March 31, 2023 and December 31, 2022 (in thousands): Incurred during the three months ended March 31, Payable as of 2023 2022 March 31, 2023 December 31, 2022 Expensed Asset management fees $ 3,973 $ 3,127 $ 2,830 $ 2,618 Property management fees (1) 664 125 199 181 Disposition fees 362 107 — — $ 4,999 $ 3,359 $ 3,029 $ 2,799 _____________________ (1) Property management fees related to DMH Realty are recorded as operating, maintenance, and management expenses on the Company’s consolidated statements of operations. |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Joint Ventures | As of March 31, 2023 and December 31, 2022, the Company’s investments in unconsolidated entities were composed of the following (dollars in thousands): Number of Properties as of March 31, 2023 Investment Balance as of Joint Venture Location Ownership % March 31, 2023 December 31, 2022 110 William Joint Venture (1) 1 New York, New York 60.0% $ — $ — 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 42,302 45,173 Pacific Oak Opportunity Zone Fund I 3 Various 46.0% 24,951 25,669 $ 67,253 $ 70,842 _____________________ (1) The book value of the Company’s investment in the 110 William Joint Venture was $0 due to historical distributions from the 110 William Joint Venture exceeding the Company’s book value. As such, the Company suspended the equity method of accounting and will not record the Company's share of losses or income for the 110 William Joint Venture until the Company’s share of net income exceeds the gain recorded and the Company’s share of the net losses not recognized during the period the equity method was suspended. Summarized financial information for investment in unconsolidated entities follows (in thousands): March 31, 2023 December 31, 2022 Assets: Real estate held for investment, net $ 479,262 $ 471,503 Total assets 532,982 546,142 Liabilities: Notes payable related to real estate held for investment, net 494,442 490,302 Total liabilities 503,836 501,861 Total equity $ 29,146 $ 44,281 For the Three Months Ended March 31, 2023 2022 Total revenues $ 11,120 $ 17,887 Operating loss (14,035) (10,411) Net loss $ (13,948) $ (10,207) |
REPORTING SEGMENTS (Tables)
REPORTING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The selected financial information for reporting segments for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended March 31, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 25,890 $ 9,324 $ 2,913 $ 38,127 Total expenses (55,377) (11,265) (2,901) (69,543) Total other income 15,279 — 29 15,308 Net income (loss) before income taxes $ (14,208) $ (1,941) $ 41 $ (16,108) Three Months Ended March 31, 2022 Strategic Opportunistic Properties Single-Family Homes Hotels Total Total revenues $ 26,867 $ 5,743 $ 5,917 $ 38,527 Total expenses (27,076) (6,504) (7,412) (40,992) Total other (loss) income (4,589) (42) 2,367 (2,264) Net (loss) income before income taxes $ (4,798) $ (803) $ 872 $ (4,729) Total assets and goodwill related to the reporting segments as of March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total assets $ 1,144,432 $ 330,863 $ 52,446 $ 1,527,741 Goodwill 4,220 — 1,216 5,436 December 31, 2022 Strategic Opportunistic Properties Residential Homes Hotel Total Total assets $ 1,173,481 $ 333,128 $ 52,636 $ 1,559,245 Goodwill 4,220 — 1,216 5,436 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Cost | As of March 31, 2023, the Company’s lease and rights to a leasehold interest with respect to 210 West 31st, which was accounted for as a finance lease, are included in the consolidated balance sheet as follows: Right-of-use asset (included in real estate held for investment, net, in thousands) $ 7,281 Lease obligation (included in other liabilities, in thousands) 9,469 Remaining lease term 90.8 years Discount rate 4.8 % The components of lease expense were as follows: Interest on lease obligation (in thousands) $ 112 |
Schedule of Finance Lease, Liability, Fiscal Year Maturity | As of March 31, 2023, the Company had a leasehold interest expiring in 2114. Future minimum lease payments owed by the Company under the finance lease as of March 31, 2023 are as follows (in thousands): April 1, 2023 through December 31, 2023 $ 270 2024 360 2025 393 2026 396 2027 396 Thereafter 51,771 Total expected minimum lease obligations 53,586 Less: Amount representing interest (1) (44,117) Present value of net minimum lease payments (2) $ 9,469 _____________________ (1) Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company’s incremental borrowing rate at acquisition. (2) The present value of net minimum lease payments are presented in other liabilities in the accompanying consolidated balance sheets. |
ORGANIZATION (Details)
ORGANIZATION (Details) | 3 Months Ended | ||
Mar. 31, 2023 shares | Dec. 31, 2022 shares | Dec. 18, 2015 certificate shares | |
Organizational Structure [Line Items] | |||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, shares issued (in shares) | 103,788,298 | 103,932,083 | |
Operating Partnership | |||
Organizational Structure [Line Items] | |||
Partnership interest in Operating Partnership | 0.10% | ||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% | ||
Pacific Oak Strategic Opportunity BVI | |||
Organizational Structure [Line Items] | |||
Common stock, shares authorized (in shares) | 50,000 | ||
Number of certificates issued | certificate | 1 | ||
Pacific Oak Strategic Opportunity BVI | Operating Partnership | |||
Organizational Structure [Line Items] | |||
Common stock, shares issued (in shares) | 10,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment property market | Mar. 31, 2022 segment | May 12, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||
Maturities, next 12 months | $ | $ 150,434 | ||
Number of reportable segments | segment | 3 | 3 | |
Hotel revenues | |||
Segment Reporting Information [Line Items] | |||
Number of real estate properties | property | 1 | ||
Residential Homes | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Single family home markets | market | 18 | ||
Subsequent Event | |||
Segment Reporting Information [Line Items] | |||
Maturities, next 12 months | $ | $ 517,400 | ||
Mortgages | Minimum | |||
Segment Reporting Information [Line Items] | |||
Long-term debt, term | 3 years | ||
Mortgages | Maximum | |||
Segment Reporting Information [Line Items] | |||
Long-term debt, term | 5 years |
REAL ESTATE HELD FOR INVESTME_3
REAL ESTATE HELD FOR INVESTMENT - Narrative (Details) ft² in Millions | Mar. 31, 2023 ft² a property portfolio unit room investment |
Real Estate Properties [Line Items] | |
Number of investments in real estate | investment | 2 |
Office Properties | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 8 |
Percentage of portfolio occupied | 69% |
Office Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | portfolio | 1 |
Office Buildings, Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties consolidated | 2 |
Undeveloped Land, Portfolio | |
Real Estate Properties [Line Items] | |
Undeveloped land, encompassing rentable space | a | 25 |
Rentable square feet | ft² | 3.2 |
Apartment Building | |
Real Estate Properties [Line Items] | |
Number of real estate properties consolidated | 2 |
Rentable square feet | ft² | 0.5 |
Percentage of portfolio occupied | 95% |
Number of units in real estate property | unit | 609 |
Residential Home Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | portfolio | 1 |
Rentable square feet | ft² | 3.5 |
Percentage of portfolio occupied | 94% |
Number of units in real estate property | unit | 2,456 |
Hotel revenues | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Number of rooms | room | 196 |
Undeveloped Land | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | a | 671 |
Office/ Retail Property | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
REAL ESTATE HELD FOR INVESTME_4
REAL ESTATE HELD FOR INVESTMENT - Real Estate Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 1,338,227 | $ 1,361,154 |
Accumulated depreciation and amortization | (147,475) | (141,750) |
Total real estate held for investment, net | 1,190,752 | 1,219,404 |
Land | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 262,940 | 269,376 |
Buildings and improvements | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 1,052,299 | 1,063,782 |
Tenant origination and absorption costs | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 22,988 | $ 27,996 |
REAL ESTATE HELD FOR INVESTME_5
REAL ESTATE HELD FOR INVESTMENT - Operating Leases (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) tenant | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 6.2 | $ 6.5 | |
Recognition of deferred revenue, net of discontinued operations | 0.8 | $ 1.1 | |
Deferred rent receivables | 19.3 | 18.3 | |
Incentive to lessee | $ 2.9 | $ 2.8 | |
Number of tenants | tenant | 300 | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 12 years 4 months 24 days | ||
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years 8 months 12 days | ||
Apartment Building | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 1 year |
REAL ESTATE HELD FOR INVESTME_6
REAL ESTATE HELD FOR INVESTMENT - Future Minimum Rental Income for Company's Properties (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Real Estate [Abstract] | |
April 1, 2023 through December 31, 2023 | $ 45,637 |
2024 | 58,140 |
2025 | 47,037 |
2026 | 33,165 |
2027 | 25,276 |
Thereafter | 55,045 |
Future minimum rental income | $ 264,300 |
REAL ESTATE HELD FOR INVESTME_7
REAL ESTATE HELD FOR INVESTMENT - Real Estate by Industry (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) tenant | |
Concentration Risk [Line Items] | |
Number of tenants | tenant | 300 |
Annualized Base Rent | $ | $ 21,839 |
Public Administration | |
Concentration Risk [Line Items] | |
Number of tenants | tenant | 15 |
Annualized Base Rent | $ | $ 7,774 |
Professional, Scientific, and Technical Services | |
Concentration Risk [Line Items] | |
Number of tenants | tenant | 38 |
Annualized Base Rent | $ | $ 7,144 |
Computer Systems Design and Related Services | |
Concentration Risk [Line Items] | |
Number of tenants | tenant | 29 |
Annualized Base Rent | $ | $ 6,921 |
Product Concentration Risk | Industry | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 34.60% |
Product Concentration Risk | Public Administration | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 12.30% |
Product Concentration Risk | Professional, Scientific, and Technical Services | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 11.30% |
Product Concentration Risk | Computer Systems Design and Related Services | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 11% |
REAL ESTATE HELD FOR INVESTME_8
REAL ESTATE HELD FOR INVESTMENT - Geographic Concentration Risk (Details) - Assets, Total - Geographic Concentration Risk | 3 Months Ended |
Mar. 31, 2023 | |
California | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 21.60% |
Georgia | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.20% |
REAL ESTATE HELD FOR INVESTME_9
REAL ESTATE HELD FOR INVESTMENT - Hotel Revenue and Expense (Details) - Hotel revenues $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) property | Mar. 31, 2022 USD ($) | |
Real Estate Properties [Line Items] | ||
Number of real estate properties | property | 1 | |
Revenues: | ||
Revenue | $ 2,913 | $ 5,917 |
Room | ||
Revenues: | ||
Revenue | 2,565 | 4,295 |
Food, beverage and convention services | ||
Revenues: | ||
Revenue | 231 | 280 |
Campground | ||
Revenues: | ||
Revenue | 0 | 793 |
Other | ||
Revenues: | ||
Revenue | $ 117 | $ 549 |
REAL ESTATE HELD FOR INVESTM_10
REAL ESTATE HELD FOR INVESTMENT - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Product Liability Contingency [Line Items] | |||
Amounts included in contract liability at the beginning of the period | $ 850 | $ 1,055 | |
Other Liabilities | |||
Product Liability Contingency [Line Items] | |||
Contract liability | 27,753 | $ 23,904 | |
Amounts included in contract liability at the beginning of the period | $ 772 | $ 9,215 |
REAL ESTATE HELD FOR INVESTM_11
REAL ESTATE HELD FOR INVESTMENT - Real Estate Sales And Impairment (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) a | Mar. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||
Proceed from sales of real estate, net | $ 34,479 | $ 398 |
(Funding) proceeds for future development obligations | 1,296 | 0 |
Gain on sale of real estate | 29,469 | 3,523 |
Income tax provision | 3,662 | 0 |
Impairment charges on real estate and related intangibles | 17,663 | $ 0 |
Oakland City Center | ||
Business Acquisition [Line Items] | ||
Impairment charges on real estate and related intangibles | $ 17,700 | |
Disposed of by Sale | Park Highlands | ||
Business Acquisition [Line Items] | ||
Area of land | a | 71 | |
Undeveloped Land | ||
Business Acquisition [Line Items] | ||
Proceed from sales of real estate, net | $ 34,500 | |
(Funding) proceeds for future development obligations | $ 1,900 |
REAL ESTATE EQUITY SECURITIES -
REAL ESTATE EQUITY SECURITIES - Loss on Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net loss recognized during the period on real estate equity securities | $ (12,033) | $ (7,521) |
Less net gain recognized during the period on real estate equity securities sold during the period | 0 | 0 |
Unrealized loss recognized during the reporting period on real estate equity securities held at the end of the period | $ (12,033) | $ (7,521) |
REAL ESTATE EQUITY SECURITIES_2
REAL ESTATE EQUITY SECURITIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Dividend income from real estate equity securities | $ 2 | $ 2.4 |
NOTES AND BOND PAYABLE - Long-t
NOTES AND BOND PAYABLE - Long-term Debt Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total Notes and Bonds Payable principal outstanding | $ 1,056,819 | $ 1,066,112 |
Discount on Notes and Bonds Payable, net | (10,861) | (11,964) |
Deferred financing costs, net | (8,587) | (9,439) |
Total Notes and Bonds Payable, net | 1,037,371 | 1,044,709 |
PORT II MetLife Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | 6,300 | |
Mortgages | Richardson Portfolio Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 18,754 | 18,844 |
Interest rate, effective percentage | 7.13% | |
Mortgages | Richardson Portfolio Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Mortgages | Park Centre Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 26,152 | 26,233 |
Interest rate, effective percentage | 6.67% | |
Mortgages | Park Centre Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.75% | |
Mortgages | 1180 Raymond Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 31,070 | 31,070 |
Interest rate, effective percentage | 7.17% | |
Mortgages | 1180 Raymond Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Mortgages | Pacific Oak SOR BVI Series B Debentures | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 323,781 | 331,213 |
Interest rate, effective percentage | 3.93% | |
Contractual Interest Rate | 3.93% | |
Mortgages | Crown Pointe Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 54,738 | 53,758 |
Interest rate, effective percentage | 6.93% | |
Guarantees as percent of outstanding loan balance | 25% | |
Amount under guarantees | $ 37,800 | |
Mortgages | Crown Pointe Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.30% | |
Mortgages | The Marq Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 60,594 | 60,796 |
Interest rate, effective percentage | 6.47% | |
Mortgages | The Marq Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.55% | |
Mortgages | Eight & Nine Corporate Centre Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 47,795 | 47,945 |
Interest rate, effective percentage | 6.52% | |
Mortgages | Eight & Nine Corporate Centre Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.60% | |
Mortgages | Georgia 400 Center Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 44,129 | 44,129 |
Interest rate, effective percentage | 6.41% | |
Mortgages | Georgia 400 Center Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.55% | |
Mortgages | PORT Mortgage Loan 1 | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 51,302 | 51,302 |
Interest rate, effective percentage | 4.74% | |
Contractual Interest Rate | 4.74% | |
Mortgages | PORT Mortgage Loan 2 | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 10,525 | 10,523 |
Interest rate, effective percentage | 4.72% | |
Contractual Interest Rate | 4.72% | |
Mortgages | PORT MetLife Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 60,000 | 60,000 |
Interest rate, effective percentage | 390% | |
Contractual Interest Rate | 390% | |
Mortgages | PORT II Metlife Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 93,701 | 93,701 |
Interest rate, effective percentage | 399% | |
Contractual Interest Rate | 399% | |
Mortgages | Q&C Hotel Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 24,716 | 24,784 |
Interest rate, effective percentage | 8.13% | |
Mortgages | Q&C Hotel Mortgage Loan | Beginning February 1, 2023 through March 31, 2023 | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 8.25% | |
Mortgages | Q&C Hotel Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Mortgages | Q&C Hotel Mortgage Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Beginning April 1, 2023 and Thereafter | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Mortgages | Lincoln Court Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 35,314 | 35,314 |
Interest rate, effective percentage | 7.88% | |
Mortgages | Lincoln Court Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.25% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 71,536 | 71,536 |
Interest rate, effective percentage | 6.48% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.18% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.75% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.18% | |
Mortgages | Oakland City Center Mortgage Loan (4) | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 84,750 | 87,000 |
Interest rate, effective percentage | 7.92% | |
Mortgages | Oakland City Center Mortgage Loan (4) | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3% | |
Mortgages | Madison Square Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 17,962 | $ 17,964 |
Interest rate, effective percentage | 4.63% | |
Contractual Interest Rate | 4.63% | |
Mortgages | PORT II MetLife Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 93,700 |
NOTES AND BOND PAYABLE - Narrat
NOTES AND BOND PAYABLE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 16,031 | $ 9,563 | |
Amortization of deferred financing costs | 1,323 | 680 | |
Interest capitalized | 850 | 479 | |
Interest payable | 6,200 | $ 9,100 | |
Long-term debt, maturity, year one with extension options | 141,800 | ||
Undeveloped Land | |||
Debt Instrument [Line Items] | |||
Interest capitalized | $ 900 | $ 500 |
NOTES AND BOND PAYABLE - Maturi
NOTES AND BOND PAYABLE - Maturities of Long-term Debt (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Notes and Bonds Payable [Abstract] | |
April 1, 2023 through December 31, 2023 | $ 384,951 |
2024 | 150,434 |
2025 | 249,283 |
2026 | 272,151 |
2027 | 0 |
Long-term Debt, Maturities, after Year Four | 0 |
Notes and bond payable outstanding | $ 1,056,819 |
NOTES AND BOND PAYABLE - Israel
NOTES AND BOND PAYABLE - Israeli Bond Financings (Details) - Pacific Oak SOR BVI Series B Debentures - Bonds Payable $ in Thousands | Feb. 16, 2020 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2023 ILS (₪) | Feb. 16, 2020 ILS (₪) |
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 74,100 | ₪ 254,100,000 | ||
Contractual Interest Rate | 3.93% | 3.93% | ||
Principal of installment payments as percent of face amount | 33.33% | |||
Notes payable, net | $ | $ 323,800 | |||
Public Offering | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | ₪ | ₪ 1,200,000,000 |
FAIR VALUE DISCLOSURES - Face V
FAIR VALUE DISCLOSURES - Face Value, Carrying Amounts and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Face amount | $ 733,038 | $ 734,899 |
Level 3 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, value | 727,130 | 728,433 |
Level 3 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, value | 718,158 | 716,813 |
Level 1 | Pacific Oak SOR BVI Series B Debentures | Pacific Oak SOR BVI Series B Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Face amount | 323,781 | 331,213 |
Level 1 | Carrying Amount | Pacific Oak SOR BVI Series B Debentures | Pacific Oak SOR BVI Series B Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, value | 310,241 | 316,276 |
Level 1 | Fair Value | Pacific Oak SOR BVI Series B Debentures | Pacific Oak SOR BVI Series B Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, value | $ 286,725 | $ 304,758 |
FAIR VALUE DISCLOSURES - Fair V
FAIR VALUE DISCLOSURES - Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired real estate | $ 17,663 | $ 0 | |
US Treasury Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Purchase of treasury bills | 78,500 | ||
Aggregated par value | 79,400 | ||
Aggregated accreted cost | 78,600 | ||
Recurring Basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate equity securities | 48,120 | $ 60,153 | |
Asset derivative - interest rate caps | 2,267 | ||
Liability derivative - foreign currency collar | 870 | 3,115 | |
U.S. Treasury bills | 78,592 | ||
Recurring Basis | Interest rate caps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset derivative - interest rate caps | 1,720 | ||
Recurring Basis | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate equity securities | 48,120 | 60,153 | |
Asset derivative - interest rate caps | 0 | ||
Liability derivative - foreign currency collar | 0 | 0 | |
U.S. Treasury bills | 78,592 | ||
Recurring Basis | Level 1 | Interest rate caps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset derivative - interest rate caps | 0 | ||
Recurring Basis | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate equity securities | 0 | 0 | |
Asset derivative - interest rate caps | 2,267 | ||
Liability derivative - foreign currency collar | 870 | 3,115 | |
U.S. Treasury bills | 0 | ||
Recurring Basis | Level 2 | Interest rate caps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset derivative - interest rate caps | 1,720 | ||
Recurring Basis | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate equity securities | 0 | 0 | |
Asset derivative - interest rate caps | 0 | ||
Liability derivative - foreign currency collar | 0 | 0 | |
U.S. Treasury bills | 0 | ||
Recurring Basis | Level 3 | Interest rate caps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset derivative - interest rate caps | 0 | ||
Nonrecurring Basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired real estate | 152,635 | 212,800 | |
Impaired goodwill | 5,436 | ||
Nonrecurring Basis | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired real estate | 0 | ||
Impaired goodwill | 0 | ||
Nonrecurring Basis | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired real estate | 0 | ||
Impaired goodwill | 0 | ||
Nonrecurring Basis | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired real estate | $ 152,635 | 212,800 | |
Impaired goodwill | $ 5,436 |
FAIR VALUE DISCLOSURES - Narrat
FAIR VALUE DISCLOSURES - Narrative (Details) | Mar. 31, 2023 |
Measurement Input, Discount Rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate properties, measurement input | 7% |
Measurement Input Terminal Cap Rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate properties, measurement input | 6.50% |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions | Sep. 09, 2022 | Sep. 01, 2022 | Nov. 01, 2019 |
Related Party Transaction [Line Items] | |||
Period of termination of advisory agreement without cause or penalty | 60 days | ||
Tier 1 | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, percent of rent collections per year | 8% | ||
Tier 1 | Maximum | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, benchmark of rent collections per year | $ 50 | ||
Tier 2 | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, percent of rent collections per year | 7% | ||
Tier 2 | Maximum | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, benchmark of rent collections per year | $ 75 | ||
Tier 2 | Minimum | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, benchmark of rent collections per year | $ 50 | ||
Tier 3 | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, percent of rent collections per year | 6% | ||
Tier 3 | Minimum | DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Base fee, benchmark of rent collections per year | $ 75 | ||
Pacific Oak Residential Advisors, LLC | |||
Related Party Transaction [Line Items] | |||
Management agreement Term | 2 years | ||
Management agreement, renewal term | 1 year | ||
Acquisition fee, percent of purchase price fee | 1% | ||
Asset management fee, annual, percent | 0.25% | ||
Asset management fee per annum, percent | 1% | ||
Selling commissions fees paid percent of sales price | 1% | ||
DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Management agreement Term | 2 years | ||
Management agreement, renewal term | 1 year | ||
Pacific Oak Capital Markets | |||
Related Party Transaction [Line Items] | |||
Sale of stock, consideration received on transaction | $ 500 | ||
Organization and offering expense fee percent of NAV | 0.50% | ||
Pacific Oak Capital Markets | Common Class A | |||
Related Party Transaction [Line Items] | |||
Selling commissions fee , percent | 6% | ||
Dealer manager fee, percent | 1.50% | ||
Placement agent fee, percent | 1.50% | ||
Pacific Oak Capital Markets | Common Class T | |||
Related Party Transaction [Line Items] | |||
Selling commissions fee , percent | 3% | ||
Dealer manager fee, percent | 0.75% | ||
Placement agent fee, percent | 0.75% | ||
Pacific Oak Capital Markets | Private Offering | |||
Related Party Transaction [Line Items] | |||
Sale of stock, consideration received on transaction | $ 50 | ||
Pacific Oak Capital Markets | PORT Dealer Manager Agreement | |||
Related Party Transaction [Line Items] | |||
Sale of stock, consideration received on transaction | $ 5 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Payable as of | $ 3,029 | $ 2,799 | |
Pacific Oak Capital Advisors LLC | |||
Related Party Transaction [Line Items] | |||
Capitalized | 4,999 | $ 3,359 | |
Payable as of | 3,029 | 2,799 | |
Pacific Oak Capital Advisors LLC | Asset management fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 3,973 | 3,127 | |
Payable as of | 2,830 | 2,618 | |
Pacific Oak Capital Advisors LLC | Property management fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 664 | 125 | |
Payable as of | 199 | 181 | |
Pacific Oak Capital Advisors LLC | Disposition fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 362 | $ 107 | |
Payable as of | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS - Pa
RELATED PARTY TRANSACTIONS - Pacific Oak Opportunity Zone Fund I (Details) - Pacific Oak Opportunity Zone Fund I $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |
Investments, fair value | $ 25,000 |
Acquisition fee, percent of purchase price fee | 1.50% |
Investment, purchase price, benchmark | $ 25,000 |
Acquisition fee of purchase price fee in excess of benchmark purchase price | 1% |
Asset management fee, annual, percent | 0.25% |
Financing fee as percent of original principal amount of any indebtedness | 0.50% |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED ENTITIES (Details) | 3 Months Ended | |||
Mar. 31, 2023 USD ($) property | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Investment Balance | $ 67,253,000 | $ 70,842,000 | ||
Real estate held for investment, net | 1,190,752,000 | 1,219,404,000 | ||
Total assets | 1,527,741,000 | 1,559,245,000 | ||
Total liabilities | 1,131,118,000 | 1,142,852,000 | ||
Total equity | 396,623,000 | $ 471,986,000 | 416,393,000 | $ 482,059,000 |
Total revenues | 38,127,000 | 38,527,000 | ||
Total other income (loss), net | 15,308,000 | (2,264,000) | ||
Net loss | (19,770,000) | (4,729,000) | ||
Unconsolidated Entities | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Real estate held for investment, net | 479,262,000 | 471,503,000 | ||
Total assets | 532,982,000 | 546,142,000 | ||
Note payable related to real estate held for sale, net | 494,442,000 | 490,302,000 | ||
Total liabilities | 503,836,000 | 501,861,000 | ||
Total equity | 29,146,000 | 44,281,000 | ||
Total revenues | 11,120,000 | 17,887,000 | ||
Total other income (loss), net | (14,035,000) | (10,411,000) | ||
Net loss | $ (13,948,000) | $ (10,207,000) | ||
110 William Joint Venture (1) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of Properties | property | 1 | |||
Ownership % | 60% | |||
Investment Balance | $ 0 | 0 | ||
353 Sacramento Joint Venture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of Properties | property | 1 | |||
Ownership % | 55% | |||
Investment Balance | $ 42,302,000 | 45,173,000 | ||
Pacific Oak Opportunity Zone Fund I | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of Properties | property | 3 | |||
Ownership % | 46% | |||
Investment Balance | $ 24,951,000 | $ 25,669,000 |
REPORTING SEGMENTS (Details)
REPORTING SEGMENTS (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) segment | Dec. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | 3 | |
Income Statement [Abstract] | |||
Total revenues | $ 38,127 | $ 38,527 | |
Total expenses | (69,543) | (40,992) | |
Total other income | 15,308 | (2,264) | |
Net income (loss) before income taxes | (16,108) | (4,729) | |
Assets and Liabilities held for Sale | |||
Total assets | 1,527,741 | $ 1,559,245 | |
Goodwill | 5,436 | 5,436 | |
Strategic Opportunistic Properties | |||
Income Statement [Abstract] | |||
Total revenues | 25,890 | 26,867 | |
Total expenses | (55,377) | (27,076) | |
Total other income | 15,279 | (4,589) | |
Net income (loss) before income taxes | (14,208) | (4,798) | |
Assets and Liabilities held for Sale | |||
Total assets | 1,144,432 | 1,173,481 | |
Goodwill | $ 4,220 | 4,220 | |
Residential Homes | |||
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Income Statement [Abstract] | |||
Total revenues | $ 9,324 | ||
Total expenses | (11,265) | ||
Total other income | 0 | ||
Net income (loss) before income taxes | (1,941) | ||
Assets and Liabilities held for Sale | |||
Total assets | 330,863 | 333,128 | |
Goodwill | 0 | 0 | |
Single-Family Homes | |||
Income Statement [Abstract] | |||
Total revenues | 5,743 | ||
Total expenses | (6,504) | ||
Total other income | (42) | ||
Net income (loss) before income taxes | (803) | ||
Hotel | |||
Income Statement [Abstract] | |||
Total revenues | 2,913 | 5,917 | |
Total expenses | (2,901) | (7,412) | |
Total other income | 29 | 2,367 | |
Net income (loss) before income taxes | 41 | $ 872 | |
Assets and Liabilities held for Sale | |||
Total assets | 52,446 | 52,636 | |
Goodwill | $ 1,216 | $ 1,216 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Right-of-use asset (included in real estate held for investment, net, in thousands) | $ 7,281 |
Lease obligation (included in other liabilities, in thousands) | $ 9,469 |
Remaining lease term | 90 years 9 months 18 days |
Discount rate | 4.80% |
Interest on lease obligation (in thousands) | $ 112 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Finance Lease, Liability, Fiscal Year Maturity (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
April 1, 2023 through December 31, 2023 | $ 270 |
2024 | 360 |
2025 | 393 |
2026 | 396 |
2027 | 396 |
Thereafter | 51,771 |
Total expected minimum lease obligations | 53,586 |
Less: Amount representing interest | (44,117) |
Present value of net minimum lease payments | $ 9,469 |