Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 09, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 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 | 103,610,544 | |
Entity Central Index Key | 0001452936 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Real estate held for investment, net | $ 1,162,118 | $ 1,216,898 |
Real estate held for sale, net | 0 | 2,506 |
Real estate equity securities | 30,474 | 60,153 |
Total real estate and real estate-related investments, net | 1,192,592 | 1,279,557 |
Cash and cash equivalents | 69,521 | 97,931 |
Restricted cash | 45,984 | 61,113 |
Investments in unconsolidated entities | 52,509 | 70,842 |
Rents and other receivables, net | 23,323 | 21,518 |
Prepaid expenses and other assets | 25,211 | 22,848 |
Goodwill | 5,436 | 5,436 |
Total assets | 1,414,576 | 1,559,245 |
Liabilities and equity | ||
Notes and bonds payable, net | 975,842 | 1,044,709 |
Accounts payable and accrued liabilities | 22,203 | 25,231 |
Redeemable common stock payable | 1,426 | 2,638 |
Restricted stock payable | 508 | 508 |
Total liabilities | 1,078,048 | 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, 103,626,096 and 103,932,083 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 1,036 | 1,039 |
Additional paid-in capital | 905,046 | 907,044 |
Cumulative distributions and net loss | (572,838) | (495,782) |
Total Pacific Oak Strategic Opportunity REIT, Inc. stockholders’ equity | 333,244 | 412,301 |
Noncontrolling interests | 3,284 | 4,092 |
Total equity | 336,528 | 416,393 |
Total liabilities and equity | $ 1,414,576 | $ 1,559,245 |
Common stock, shares issued (in shares) | 103,626,096 | 103,932,083 |
Due to affiliates | ||
Liabilities and equity | ||
Liabilities | $ 6,683 | $ 2,799 |
Other liabilities | ||
Liabilities and equity | ||
Liabilities | $ 71,386 | $ 66,967 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 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) | 103,626,096 | 103,932,083 |
Common stock, shares outstanding (in shares) | 103,626,096 | 103,932,083 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Rental income | $ 32,152,000 | $ 28,979,000 | $ 64,229,000 | $ 58,360,000 |
Dividend income from real estate equity securities | 113,000 | 819,000 | 2,110,000 | 3,206,000 |
Total revenues | 35,896,000 | 43,539,000 | 74,021,000 | 82,065,000 |
Expenses: | ||||
Operating, maintenance, and management | 11,107,000 | 10,342,000 | 22,275,000 | 20,218,000 |
Real estate taxes and insurance | 5,843,000 | 5,079,000 | 12,260,000 | 10,103,000 |
Hotel expenses | 1,984,000 | 6,998,000 | 3,945,000 | 12,109,000 |
Asset management fees to affiliates | 3,710,000 | 3,189,000 | 7,684,000 | 6,315,000 |
General and administrative expenses | 3,222,000 | 2,983,000 | 6,220,000 | 5,977,000 |
Foreign currency transaction loss (gain), net | 6,272,000 | (23,833,000) | 3,553,000 | (31,098,000) |
Depreciation and amortization | 12,110,000 | 14,098,000 | 24,158,000 | 26,662,000 |
Interest expense | 15,788,000 | 10,780,000 | 31,819,000 | 20,343,000 |
Impairment charges on real estate and related intangibles | 18,926,000 | 0 | 36,589,000 | 0 |
Total expenses | 78,962,000 | 29,636,000 | 148,503,000 | 70,629,000 |
Other (loss) income: | ||||
Loss from unconsolidated entities, net | (14,630,000) | (2,075,000) | (16,962,000) | (2,754,000) |
Other interest income | 1,012,000 | 48,000 | 1,216,000 | 94,000 |
Loss on real estate equity securities, net | (4,089,000) | (20,070,000) | (16,122,000) | (27,591,000) |
Gain (loss) on sale of real estate | 3,292,000 | (175,000) | 32,761,000 | 3,348,000 |
Gain on extinguishment of debt | 0 | 0 | 0 | 2,367,000 |
Total other (loss) income, net | (14,415,000) | (22,272,000) | 893,000 | (24,536,000) |
Net loss before income taxes | (57,481,000) | (8,369,000) | (73,589,000) | (13,100,000) |
Income tax expense (benefit) | 0 | 0 | (3,662,000) | 0 |
Net loss | (57,481,000) | (8,369,000) | (77,251,000) | (13,100,000) |
Net loss (income) loss attributable to noncontrolling interests | 6,000 | (156,000) | 195,000 | (38,000) |
Net loss attributable to redeemable noncontrolling interest | 0 | 34,000 | 0 | 81,000 |
Preferred stock dividends | 0 | (528,000) | 0 | (718,000) |
Net loss attributable to common stockholders | $ (57,475,000) | $ (9,019,000) | $ (77,056,000) | $ (13,775,000) |
Net loss per common share, basic (in dollars per share) | $ (0.55) | $ (0.09) | $ (0.74) | $ (0.13) |
Net loss per common share, diluted (in dollars per share) | $ (0.55) | $ (0.09) | $ (0.74) | $ (0.13) |
Weighted-average number of common shares outstanding, basic (in shares) | 103,737,734 | 104,422,035 | 103,804,676 | 102,929,284 |
Weighted-average number of common shares outstanding, diluted (in shares) | 103,737,734 | 104,422,035 | 103,804,676 | 102,929,284 |
Hotel revenues | ||||
Revenues: | ||||
Revenue from contract with customer | $ 2,565,000 | $ 12,854,000 | $ 5,478,000 | $ 18,771,000 |
Other operating income | ||||
Revenues: | ||||
Revenue from contract with customer | $ 1,066,000 | $ 887,000 | $ 2,204,000 | $ 1,728,000 |
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 |
Beginning balance (in shares) at Dec. 31, 2021 | 94,141,251 | |||||
Beginning 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) income | (13,737) | (13,775) | (13,775) | 38 | ||
Transfers to redeemable common stock, net | (695) | (695) | (695) | |||
Redemptions of common stock (in shares) | (242,336) | |||||
Redemptions of common stock | (2,274) | (2,274) | $ (2) | (2,272) | ||
Adjustment to value of redeemable noncontrolling interest | (3,946) | (3,946) | (3,946) | |||
Stock distribution issued (in shares) | 10,420,177 | |||||
Stock distribution issued | 0 | 0 | $ 104 | 98,990 | (99,094) | |
Noncontrolling interests distribution | (34) | (34) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 104,319,092 | |||||
Ending balance at Jun. 30, 2022 | 461,373 | 451,000 | $ 1,043 | 914,463 | (464,506) | 10,373 |
Beginning balance (in shares) at Mar. 31, 2022 | 104,496,165 | |||||
Beginning balance at Mar. 31, 2022 | 471,986 | 461,735 | $ 1,045 | 914,460 | (453,770) | 10,251 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (8,863) | (9,019) | (9,019) | 156 | ||
Transfers from redeemable common stock | 1,685 | 1,685 | 1,685 | |||
Redemptions of common stock (in shares) | (177,171) | |||||
Redemptions of common stock | (1,685) | (1,685) | $ (2) | (1,683) | ||
Adjustment to value of redeemable noncontrolling interest | (1,716) | (1,716) | (1,716) | |||
Stock distribution issued (in shares) | 98 | |||||
Stock distribution issued | 0 | 0 | 1 | (1) | ||
Noncontrolling interests distribution | (34) | (34) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 104,319,092 | |||||
Ending balance at Jun. 30, 2022 | $ 461,373 | 451,000 | $ 1,043 | 914,463 | (464,506) | 10,373 |
Beginning balance (in shares) at Dec. 31, 2022 | 103,932,083 | 103,932,083 | ||||
Beginning 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) income | (77,251) | (77,056) | (77,056) | (195) | ||
Transfers from redeemable common stock | 1,213 | 1,213 | 1,213 | |||
Redemptions of common stock (in shares) | (305,987) | |||||
Redemptions of common stock | (3,214) | (3,214) | $ (3) | (3,211) | ||
Noncontrolling interests distribution | $ (613) | (613) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 103,626,096 | 103,626,096 | ||||
Ending balance at Jun. 30, 2023 | $ 336,528 | 333,244 | $ 1,036 | 905,046 | (572,838) | 3,284 |
Beginning balance (in shares) at Mar. 31, 2023 | 103,788,298 | |||||
Beginning balance at Mar. 31, 2023 | 396,623 | 392,720 | $ 1,038 | 907,045 | (515,363) | 3,903 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (57,481) | (57,475) | (57,475) | (6) | ||
Transfers to redeemable common stock, net | (297) | (297) | (297) | |||
Redemptions of common stock (in shares) | (162,202) | |||||
Redemptions of common stock | (1,704) | (1,704) | $ (2) | (1,702) | ||
Noncontrolling interests distribution | $ (613) | (613) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 103,626,096 | 103,626,096 | ||||
Ending balance at Jun. 30, 2023 | $ 336,528 | $ 333,244 | $ 1,036 | $ 905,046 | $ (572,838) | $ 3,284 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | |||||
Net loss | $ (57,481,000) | $ (8,369,000) | $ (77,251,000) | $ (13,100,000) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||
Impairment charges on real estate and related intangibles | 18,926,000 | 0 | 36,589,000 | 0 | |
Loss from unconsolidated entities, net | 16,962,000 | 2,754,000 | |||
Depreciation and amortization | 12,110,000 | 14,098,000 | 24,158,000 | 26,662,000 | |
Loss on real estate equity securities, net | 4,089,000 | 20,070,000 | 16,122,000 | 27,591,000 | |
Gain on sale of real estate | (3,292,000) | 175,000 | (32,761,000) | (3,348,000) | |
Unrealized gain on interest rate caps | (328,000) | (270,000) | |||
Deferred rent | (1,508,000) | (1,427,000) | |||
Gain on extinguishment of debt | 0 | 0 | 0 | (2,367,000) | |
Amortization of above- and below-market leases, net | (151,000) | (508,000) | |||
Amortization of deferred financing costs and debt discount and premium, net | 4,567,000 | 3,844,000 | |||
Foreign currency transaction loss (gain), net | 6,272,000 | (23,833,000) | 3,553,000 | (31,098,000) | |
Changes in assets and liabilities: | |||||
Rents and other receivables, net | (409,000) | (175,000) | |||
Prepaid expenses and other assets | (3,120,000) | (1,150,000) | |||
Accounts payable and accrued liabilities | (3,068,000) | 502,000 | |||
Due to affiliates | 3,884,000 | 3,753,000 | |||
Other liabilities | 3,355,000 | 668,000 | |||
Net cash (used in) provided by operating activities | (9,406,000) | 12,331,000 | |||
Cash Flows from Investing Activities: | |||||
Improvements to real estate | (10,349,000) | (10,110,000) | |||
Proceed from sales of real estate, net | 40,795,000 | 357,000 | |||
Contribution to unconsolidated entity | 0 | (22,500,000) | |||
Distribution of capital from unconsolidated entity | 1,144,000 | 569,000 | |||
Purchase of interest rate caps | (347,000) | (506,000) | |||
Advance to affiliate | 0 | (1,201,000) | |||
Purchase of foreign currency derivatives | (67,140,000) | 0 | |||
Proceeds from disposition of foreign currency derivatives | 49,176,000 | 0 | |||
Proceeds from advances due from affiliates | 0 | 6,448,000 | |||
Proceeds from the sale of real estate equity securities | 13,557,000 | 0 | |||
Escrow deposit for future real estate sale | 0 | 17,000,000 | |||
Proceeds for development obligations | 1,855,000 | 0 | |||
Funding for development obligations | (1,421,000) | (4,025,000) | |||
Net cash provided by (used in) investing activities | 27,270,000 | (13,968,000) | |||
Cash Flows from Financing Activities: | |||||
Proceeds from notes payable | 980,000 | 145,104,000 | |||
Principal payments on notes payable | (56,922,000) | (61,613,000) | |||
Payments of deferred financing costs | (409,000) | (2,829,000) | |||
Payments to redeem common stock | (3,214,000) | (2,274,000) | |||
Distributions paid | 0 | (11,016,000) | |||
Preferred dividends paid | 0 | (718,000) | |||
Noncontrolling interests distribution | (613,000) | (34,000) | |||
Net cash (used in) provided by financing activities | (60,178,000) | 66,620,000 | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,225,000) | (3,619,000) | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (43,539,000) | 61,364,000 | |||
Cash, cash equivalents and restricted cash, beginning of period | 159,044,000 | 105,431,000 | $ 105,431,000 | ||
Cash, cash equivalents and restricted cash, end of period | 115,505,000 | 166,795,000 | 115,505,000 | 166,795,000 | 159,044,000 |
Supplemental Disclosure of Cash Flow Information: | |||||
Interest capitalized | 1,743,000 | 1,026,000 | |||
Interest paid, net of capitalized interest of $1,743 and $1,026 for the six months ended June 30, 2023 and 2022, respectively | 27,379,000 | 15,446,000 | |||
Supplemental Disclosure of Significant Noncash Transaction: | |||||
Accrued improvements to real estate | 1,915,000 | 3,262,000 | |||
Redeemable common stock payable | $ 1,426,000 | $ 1,379,000 | 1,426,000 | 1,379,000 | $ 2,638,000 |
Distributions paid to common stockholders through common stock issuances | 0 | 99,094,000 | |||
PPP notes forgiveness | $ 0 | $ 2,367,000 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 1,743 | $ 1,026 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended |
Jun. 30, 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 Financial Accounting Standards Board 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 and six months ended June 30, 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. 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 owned 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 June 30, 2023 the Company owned one hotel, which is a separate reportable business segment due to the nature of the hotel business with short-term stays. 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 and six months ended June 30, 2023 that are of significance or potential significance to the Company. |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 6 Months Ended |
Jun. 30, 2023 | |
Real Estate [Abstract] | |
REAL ESTATE HELD FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of June 30, 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 2,453 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 95% and 93% 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 June 30, 2023 and December 31, 2022, respectively (in thousands): June 30, 2023 December 31, 2022 Land $ 258,570 $ 267,634 Buildings and improvements 1,035,684 1,062,822 Tenant origination and absorption costs 20,937 27,996 Total real estate, cost 1,315,191 1,358,452 Accumulated depreciation and amortization (153,073) (141,554) Total real estate held for investment, net $ 1,162,118 $ 1,216,898 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 June 30, 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 12.1 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 $5.5 million and $6.5 million as of June 30, 2023 and December 31, 2022, respectively. During the three and six months ended June 30, 2023, the Company recognized deferred rent from tenants of $0.7 million and $1.5 million, net of lease incentive amortization, respectively. As of June 30, 2023 and December 31, 2022, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $20.2 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 June 30, 2023 and December 31, 2022, respectively. As of June 30, 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): July 1, 2023 through December 31, 2023 $ 31,253 2024 58,854 2025 48,673 2026 34,938 2027 26,894 Thereafter 60,377 $ 260,989 As of June 30, 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 $ 7,221 11.6 % Professional, Scientific, and Technical Services 38 7,133 11.5 % Computer Systems Design and Related Services 29 6,865 11.1 % $ 21,219 34.2 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of June 30, 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 June 30, 2023, the Company’s real estate investments in California and Georgia represented 20.4% and 10.8%, 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 property (the Springmaid Beach Resort was sold on September 1, 2022) during the three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Hotel revenues: Room $ 2,240 $ 9,905 $ 4,805 $ 14,200 Food, beverage and convention services 214 309 445 589 Campground — 1,603 — 2,395 Other 111 1,037 228 1,587 Hotel revenues $ 2,565 $ 12,854 $ 5,478 $ 18,771 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 June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 December 31, 2022 Contract liabilities $ 27,137 $ 23,904 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 1,547 $ 9,215 Real Estate Sale In May 2023, the Company sold a vacant building within the Madison Square property in Phoenix, Arizona (“Madison Square School”) for proceeds of $6.4 million, before closing costs and credits. The Company recognized a gain on sale of $3.3 million related to the disposition of the Madison Square School, net of closing costs and adjustments. The purchaser is not affiliated with the Company nor the Advisor. As a result of the sale of the Madison Square School, certain assets were reclassified to held for sale on the consolidated balance sheets as of December 31, 2022. As of June 30, 2023, the Madison Square property had three office buildings remaining. In February 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 The evolving office rental business environment and slowdown in economic growth due to rising interest rates led the Company to reassess its real estate and related intangibles. During the three and six months ended June 30, 2023, the Company recorded impairment charges on real estate and related intangibles in the amounts of $18.9 million and $36.6 million, respectively, to write down the carrying value of two strategic opportunistic properties to their estimated fair values due to increases in the discount and cap rate assumptions and decreases in projected cash flows. There were no impairment charges during the three and six months ended June 30, 2022. |
REAL ESTATE EQUITY SECURITIES
REAL ESTATE EQUITY SECURITIES | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Loss on real estate equity securities, net $ (4,089) $ (20,070) $ (16,122) $ (27,591) Less net gain recognized during the period on real estate equity securities sold during the period 5,809 — 5,809 — Unrealized loss recognized during the reporting period on real estate equity securities held at the end of the period $ (9,898) $ (20,070) $ (21,931) $ (27,591) |
NOTES AND BONDS PAYABLE
NOTES AND BONDS PAYABLE | 6 Months Ended |
Jun. 30, 2023 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BONDS PAYABLE | NOTES AND BONDS PAYABLE As of June 30, 2023 and December 31, 2022, the Company’s notes and bonds payable consisted of the following (dollars in thousands): Book Value as of June 30, 2023 Book Value as of December 31, 2022 Contractual Interest Rate as of June 30, 2023 Effective Interest Rate at June 30, 2023 (1) Payment Type (2) Maturity Date (3) Richardson Portfolio Mortgage Loan $ 18,675 $ 18,844 SOFR + 2.50% 7.57% Principal & Interest 11/01/2023 Park Centre Mortgage Loan 26,072 26,233 BSBY + 4.75% 9.92% Principal & Interest 06/27/2023 (4) 1180 Raymond Mortgage Loan (5) 31,070 31,070 BSBY + 2.25% 7.42% Interest Only 12/01/2023 Pacific Oak SOR BVI Series B Debentures (6) 314,130 331,213 3.93% 3.93% (6) 01/31/2026 Crown Pointe Mortgage Loan 54,738 53,758 SOFR + 2.30% 7.37% Interest Only 04/01/2025 The Marq Mortgage Loan 60,460 60,796 BSBY + 4.55% 9.72% Principal & Interest 06/06/2023 (4) Eight & Nine Corporate Centre Mortgage Loan (7) — 47,945 (7) (7) (7) (7) Georgia 400 Center Mortgage Loan 40,432 44,129 SOFR + 1.55% 6.62% Interest Only 05/22/2024 PORT Mortgage Loan 1 51,304 51,302 4.74% 4.74% Interest Only 10/01/2025 PORT Mortgage Loan 2 10,523 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 (8) 93,701 93,701 3.99% 3.99% Interest Only 04/10/2026 Q&C Hotel Mortgage Loan 24,671 24,784 SOFR + 3.50% 8.57% Principal & Interest 01/31/2024 Lincoln Court Mortgage Loan (5) 35,314 35,314 SOFR + 3.25% 8.32% Interest Only 08/07/2025 Lofts at NoHo Commons Mortgage Loan 71,536 71,536 SOFR + 2.18% (9) 7.25% Interest Only 09/09/2023 Oakland City Center Mortgage Loan (5) 82,500 87,000 BSBY + 3.00% 8.17% Principal & Interest 09/01/2023 Madison Square Mortgage Loan 17,961 17,964 4.63% 4.63% Interest Only 10/07/2024 Total Notes and Bonds Payable principal outstanding 993,087 1,066,112 Deferred financing costs and debt discount and premium, net (10) (17,245) (21,403) Total Notes and Bonds Payable, net 975,842 1,044,709 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2023. The interest rate is calculated as the actual interest rate in effect as of June 30, 2023 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at June 30, 2023, where applicable. (2) Represents the payment type required under the loan as of June 30, 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 June 30, 2023; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (4) As filing date of this Quarterly Report on Form 10-Q, the Company was in refinancing negotiations with the lender for loans that have matured, see below for further discussion. (5) 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 June 30, 2023, the guaranteed amount in the aggregate was $37.2 million. (6) See “Israeli Bond Financing” below. (7) This loan was paid off during the six months ended June 30, 2023. (8) As of June 30, 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. (9) The variable rate is at the higher of one-month SOFR or 1.75%, plus 2.18%. (10) 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 and six months ended June 30, 2023, the Company incurred $15.8 million and $31.8 million, respectively, of interest expense. Included in interest expense during the three and six months ended June 30, 2023 was $1.1 million and $2.4 million, respectively, deferred financing costs and debt discount and premium, net. Included in interest expense for the three and six months ended June 30, 2023 was $1.1 million and $2.2 million, respectively, of amortization on discount on notes and bonds payable, net. Additionally, during the three and six months ended June 30, 2023, the Company capitalized $0.9 million and $1.7 million, respectively, of interest related to its investments in undeveloped land. During the three and six months ended June 30, 2022, the Company incurred $10.8 million and $20.3 million, respectively, of interest expense. Included in interest expense for the three and six months ended June 30, 2022 was $0.8 million and $1.6 million, respectively, of amortization of deferred financing costs. Included in interest expense for the three and six months ended June 30, 2022 was $1.2 million and $2.3 million, respectively, of amortization on discount on notes and bonds payable, net. Additionally, during the three and six months ended June 30, 2022, the Company capitalized $0.5 million and $1.0 million, respectively, of interest related to its investments in undeveloped land. As of June 30, 2023 and December 31, 2022, the Company’s interest payable was $9.3 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 June 30, 2023 (in thousands): July 1, 2023 through December 31, 2023 $ 264,241 2024 213,847 2025 246,066 2026 268,933 2027 — Thereafter — $ 993,087 The Company has extension options with respect to $70.3 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 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 contains financial debt covenants, including minimum equity requirements and liquidity ratios. As of June 30, 2023, the Company was in compliance with all of these debt covenants with the exception that the Park Centre Mortgage Loan, Lofts at NoHo Commons Mortgage Loan, Richardson Portfolio 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 Lincoln Court Mortgage Loan, and the remaining loans are at-risk of cash sweeps and/or principal pay downs if in consecutive non-compliance. The Company is in discussion with the lender regarding refinancing loans that have matured. As of the filing date of this Quarterly Report on Form 10-Q, the Company did not fulfill the obligation to repay $86.5 million, the outstanding principal amount, of the two mortgage loans by the maturity dates, resulting in the accrual of penalty interest. The two mortgage loans are non-recourse to the Company. There are several potential outcomes, including negotiating a modification to the loans, refinancing the loans, or consensual short sales. However, there is no assurance that the Company will be successful in achieving any of these potential outcomes. If unsuccessful, the lenders would retain their right to exercise the remedies under the loans including, but not limited to, declaring the debt to be immediately payable and foreclosing on the assets. 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 June 30, 2023, 1.2 billion Israeli new Shekels (approximately $314.1 million as of June 30, 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 June 30, 2023, the Company was in compliance with these financial covenants. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 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 June 30, 2023 and December 31, 2022, which carrying amounts do not approximate the fair values (in thousands): June 30, 2023 December 31, 2022 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liabilities (Level 3): Notes payable $ 678,957 $ 660,208 $ 660,879 $ 734,899 $ 728,433 $ 716,813 Financial liabilities (Level 1): Pacific Oak SOR BVI Series B Debentures $ 314,130 $ 315,634 $ 296,389 $ 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 June 30, 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 $ 30,474 $ 30,474 $ — $ — Asset derivative - interest rate caps (1) $ 1,764 $ — $ 1,764 $ — Liability derivative - foreign currency collar (1) $ 4,437 $ — $ 4,437 $ — Nonrecurring Basis: Impaired real estate (2) $ 182,436 $ — $ — $ 182,436 Impaired investment in unconsolidated entity (2) $ 26,290 $ — $ — $ 26,290 _____________________ (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) Amounts represent the fair value for real estate assets and investment in unconsolidated entity impacted by impairment charges during the six months ended June 30, 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 June 30, 2023, two of the Company’s real estate properties were measured at the estimated fair values. The two real estate properties were measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of these properties, including discount rates between 7.5 to 9.0% and terminal cap rates of 7.0 to 8.25%. One investment in unconsolidated entity was measured at the estimated value of the Company’s ownership calculated based on a hypothetical liquidation of the net assets, discounted for lack of marketability and control. The Company used a discount rate of 8.75% and a cap rate of 7.0% to estimate the fair value of the real estate, an interest rate adjustment of 0.15% to estimate the fair value of the debt, a discount rate of 20% for lack of marketability, and a discount rate of 20% for lack of control. 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 (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 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 | 6 Months Ended |
Jun. 30, 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 ratably reimburse the Advisor over a 60-month period following the first anniversary of the commencement of the offering. 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 and six months ended June 30, 2023 and 2022, respectively, and any related amounts payable as of June 30, 2023 and December 31, 2022 (in thousands): Incurred during the three months ended June 30, Incurred during the six months ended June 30, Payable as of Expensed 2023 2022 2023 2022 June 30, 2023 December 31, 2022 Asset management fees $ 3,710 $ 3,189 $ 7,684 $ 6,315 $ 5,491 $ 2,618 Property management fees (1) 859 133 1,523 258 298 181 Disposition fees 58 — 420 107 — — Capitalized Reimbursable offering costs (2) 894 — 894 — 894 — $ 5,521 $ 3,322 $ 10,521 $ 6,680 $ 6,683 $ 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. (2) Reimbursable offering costs to the Advisor related to the Private Offering are capitalized and recorded as prepaid expenses and other assets on the Company’s consolidated balance sheet. Pacific Oak Opportunity Zone Fund I |
INVESTMENTS IN UNCONSOLIDATED E
INVESTMENTS IN UNCONSOLIDATED ENTITIES | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | INVESTMENTS IN UNCONSOLIDATED ENTITIES As of June 30, 2023 and December 31, 2022, the Company’s investments in unconsolidated entities were composed of the following (in thousands): Number of Properties as of June 30, 2023 Investment Balance as of Joint Venture Location Ownership % June 30, 2023 December 31, 2022 110 William Joint Venture 1 New York, New York 60% (1) $ — (2) $ — 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 26,290 45,173 Pacific Oak Opportunity Zone Fund I (3) 3 Various 46.0% 26,219 25,669 $ 52,509 $ 70,842 _____________________ (1) On June 27, 2023, Pacific Oak SOR SREF III 110 William, LLC (the “110 William Joint Venture”) executed a lease for approximately 640,000 square feet of office space in the 110 William Joint Venture’s property. Additionally, in July 2023, the 110 William Joint Venture completed a debt and equity restructuring. Refer to Note 11 for further discussion. (2) As of June 30, 2023, 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 and the Company suspended the equity method of accounting. (3) The maximum exposure to loss as a result of the Company’s investment in the Pacific Oak Opportunity Zone Fund I is limited to the carrying amount of the investment. Summarized financial information for investments in unconsolidated entities (in thousands): June 30, 2023 December 31, 2022 Assets: Real estate held for investment, net $ 475,063 $ 471,503 Total assets 541,670 546,142 Liabilities: Notes payable related to real estate held for investment, net 498,579 490,302 Total liabilities 526,208 501,861 Total equity $ 15,462 $ 44,281 For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Total revenues $ 10,673 $ 12,461 $ 21,793 $ 24,570 Operating loss (13,718) (6,807) (27,753) (12,060) Net loss $ (13,771) $ (6,795) $ (27,719) $ (12,036) The Company’s investments in unconsolidated entities are reviewed for impairment annually or when conditions exist that may indicate that the decrease in the carrying amount of the investment has occurred and is other-than-temporary. Triggering events or impairment indicators for the Company’s investments in unconsolidated entities may include recurring operating losses, change in economic environment, and weakening of the general market condition of the geographic area. Upon determination that an other-than-temporary impairment has occurred, an impairment is recognized in loss from unconsolidated entities, net to reduce the carrying amount of the investment to its estimated fair value. |
REPORTING SEGMENTS
REPORTING SEGMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENTS | REPORTING SEGMENTS The Company recognizes three reporting segments for the three and six months ended June 30, 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. The selected financial information for reporting segments for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three Months Ended June 30, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 23,874 $ 9,457 $ 2,565 $ 35,896 Total expenses (64,298) (11,403) (3,261) (78,962) Total other (loss) income (14,482) 21 46 (14,415) Net (loss) before income taxes $ (54,906) $ (1,925) $ (650) $ (57,481) Six Months Ended June 30, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 49,761 $ 18,782 $ 5,478 $ 74,021 Total expenses (119,673) (22,668) (6,162) (148,503) Total other income 797 21 75 893 Net (loss) income before income taxes $ (69,115) $ (3,865) $ (609) $ (73,589) Three Months Ended June 30, 2022 Strategic Opportunistic Properties Single-Family Homes Hotels Total Total revenues $ 24,884 $ 5,801 $ 12,854 $ 43,539 Total expenses (13,699) (6,505) (9,432) (29,636) Total other (loss) income (21,797) (479) 4 (22,272) Net (loss) income before income taxes $ (10,612) $ (1,183) $ 3,426 $ (8,369) Six Months Ended June 30, 2022 Strategic Opportunistic Properties Single-Family Homes Hotels Total Total revenues $ 51,750 $ 11,544 $ 18,771 $ 82,065 Total expenses (40,776) (13,009) (16,844) (70,629) Total other (loss) income (26,387) (521) 2,372 (24,536) Net (loss) income before income taxes $ (15,413) $ (1,986) $ 4,299 $ (13,100) Total assets and goodwill related to the reporting segments as of June 30, 2023 and December 31, 2022 are as follows (in thousands): June 30, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total assets $ 1,029,968 $ 333,241 $ 51,367 $ 1,414,576 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 | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Obligations As of June 30, 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 sheets 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) 9,491 Remaining lease term 90.4 Discount rate 4.8 % The components of lease expense were as follows: Interest on lease obligation for the three months ended June 30, 2023 (in thousands) $ 113 Interest on lease obligation for the six months ended June 30, 2023 (in thousands) 225 As of June 30, 2023, the Company had a leasehold interest expiring in 2114. Future minimum lease payments owed by the Company under the finance lease as of June 30, 2023 are as follows (in thousands): July 1, 2023 through December 31, 2023 $ 180 2024 360 2025 393 2026 396 2027 396 Thereafter 51,771 Total expected minimum lease obligations 53,496 Less: Amount representing interest (1) (44,005) Present value of net minimum lease payments (2) $ 9,491 _____________________ (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 June 30, 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. Legal Matters |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. 110 William Joint Venture On July 5, 2023, in exchange for the Company’s 77.5% preferred interest ownership percentage in the 110 William Joint Venture, the Company agreed to make future capital contributions of up to $105.0 million to fund expenditures and improvements (the “Capital Contributions”). The 110 William Joint Venture also exchanged a mezzanine loan encumbering the property of approximately $85.7 million between 110 William Mezz III, LLC, an indirect subsidiary of 110 William Joint Venture, as a borrower and Invesco CMI Investments 110 William, LLC (“Invesco”) as lender, into Invesco’s 22.5% preferred equity interest in the 110 William Joint Venture. As part of the restructuring, SREF III 110 William JV, LLC’s previous 40% membership interest was diluted in exchange for contingent consideration of 10% of net cash received. Following the buyout of SREF III 110 William JV, LLC, the Company held 100% of the common interests in the joint venture for previously contributed capital. 110 William Joint Venture entered into an amended loan agreement, which restructured the original loan of $248.7 million (the “Original Loan”), and increased the supplemental loan by $56.7 million (the “Supplemental Loan”). The initial maturity date of the Original Loan and the Supplemental Loan are July 5, 2026, although the maturity date may be extended. The interest rate with respect to the Original Loan is the sum of SOFR plus a spread beginning at 2% and increasing up to 3% during the term of the loan and any extension period, and the interest rate with respect to the Supplemental Loan is the sum of SOFR plus a spread beginning at 3% and increasing up to 3.5% during the term of the loan and any extension period. Pacific Oak SOR Properties, LLC, an indirect subsidiary of the Company is the guarantor for all debt service under the amended loan agreement and the Capital Contributions. Series C Bonds On July 6, 2023, Pacific Oak SOR BVI, completed a public offering to Israeli investors, of 319.6 million Israeli new Shekels (approximately $86.4 million) Series C Bonds. The Series C Bonds were issued and registered with the Tel Aviv Stock Exchange on July 9, 2023. The terms of the Series C Bonds are governed by a deed of trust, containing various financial covenants, among Pacific Oak SOR BVI and Reznik Paz Nevo Trusts Ltd., as trustee. The notes will bear interest at the rate of 9% per year. The Series C Bonds mature on June 30, 2026 and are collateralized by land. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 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 Financial Accounting Standards Board 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 and six months ended June 30, 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. |
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 owned 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 June 30, 2023 the Company owned one hotel, which is a separate reportable business segment due to the nature of the hotel business with short-term stays. |
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 and six months ended June 30, 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) | 6 Months Ended |
Jun. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of June 30, 2023 and December 31, 2022, respectively (in thousands): June 30, 2023 December 31, 2022 Land $ 258,570 $ 267,634 Buildings and improvements 1,035,684 1,062,822 Tenant origination and absorption costs 20,937 27,996 Total real estate, cost 1,315,191 1,358,452 Accumulated depreciation and amortization (153,073) (141,554) Total real estate held for investment, net $ 1,162,118 $ 1,216,898 |
Schedule of Future Minimum Rental Income for Company's Properties | As of June 30, 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): July 1, 2023 through December 31, 2023 $ 31,253 2024 58,854 2025 48,673 2026 34,938 2027 26,894 Thereafter 60,377 $ 260,989 |
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 $ 7,221 11.6 % Professional, Scientific, and Technical Services 38 7,133 11.5 % Computer Systems Design and Related Services 29 6,865 11.1 % $ 21,219 34.2 % |
Schedule of Hotel Revenue | The following table provides detailed information regarding the Company’s hotel revenues for its hotel property (the Springmaid Beach Resort was sold on September 1, 2022) during the three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Hotel revenues: Room $ 2,240 $ 9,905 $ 4,805 $ 14,200 Food, beverage and convention services 214 309 445 589 Campground — 1,603 — 2,395 Other 111 1,037 228 1,587 Hotel revenues $ 2,565 $ 12,854 $ 5,478 $ 18,771 |
Schedule of Contract Liability | 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 June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 December 31, 2022 Contract liabilities $ 27,137 $ 23,904 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 1,547 $ 9,215 |
REAL ESTATE EQUITY SECURITIES (
REAL ESTATE EQUITY SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Gain (Loss) on Investments | The following summarizes the portion of loss for the period related to real estate equity securities held during the three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Loss on real estate equity securities, net $ (4,089) $ (20,070) $ (16,122) $ (27,591) Less net gain recognized during the period on real estate equity securities sold during the period 5,809 — 5,809 — Unrealized loss recognized during the reporting period on real estate equity securities held at the end of the period $ (9,898) $ (20,070) $ (21,931) $ (27,591) |
NOTES AND BONDS PAYABLE (Tables
NOTES AND BONDS PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of June 30, 2023 and December 31, 2022, the Company’s notes and bonds payable consisted of the following (dollars in thousands): Book Value as of June 30, 2023 Book Value as of December 31, 2022 Contractual Interest Rate as of June 30, 2023 Effective Interest Rate at June 30, 2023 (1) Payment Type (2) Maturity Date (3) Richardson Portfolio Mortgage Loan $ 18,675 $ 18,844 SOFR + 2.50% 7.57% Principal & Interest 11/01/2023 Park Centre Mortgage Loan 26,072 26,233 BSBY + 4.75% 9.92% Principal & Interest 06/27/2023 (4) 1180 Raymond Mortgage Loan (5) 31,070 31,070 BSBY + 2.25% 7.42% Interest Only 12/01/2023 Pacific Oak SOR BVI Series B Debentures (6) 314,130 331,213 3.93% 3.93% (6) 01/31/2026 Crown Pointe Mortgage Loan 54,738 53,758 SOFR + 2.30% 7.37% Interest Only 04/01/2025 The Marq Mortgage Loan 60,460 60,796 BSBY + 4.55% 9.72% Principal & Interest 06/06/2023 (4) Eight & Nine Corporate Centre Mortgage Loan (7) — 47,945 (7) (7) (7) (7) Georgia 400 Center Mortgage Loan 40,432 44,129 SOFR + 1.55% 6.62% Interest Only 05/22/2024 PORT Mortgage Loan 1 51,304 51,302 4.74% 4.74% Interest Only 10/01/2025 PORT Mortgage Loan 2 10,523 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 (8) 93,701 93,701 3.99% 3.99% Interest Only 04/10/2026 Q&C Hotel Mortgage Loan 24,671 24,784 SOFR + 3.50% 8.57% Principal & Interest 01/31/2024 Lincoln Court Mortgage Loan (5) 35,314 35,314 SOFR + 3.25% 8.32% Interest Only 08/07/2025 Lofts at NoHo Commons Mortgage Loan 71,536 71,536 SOFR + 2.18% (9) 7.25% Interest Only 09/09/2023 Oakland City Center Mortgage Loan (5) 82,500 87,000 BSBY + 3.00% 8.17% Principal & Interest 09/01/2023 Madison Square Mortgage Loan 17,961 17,964 4.63% 4.63% Interest Only 10/07/2024 Total Notes and Bonds Payable principal outstanding 993,087 1,066,112 Deferred financing costs and debt discount and premium, net (10) (17,245) (21,403) Total Notes and Bonds Payable, net 975,842 1,044,709 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2023. The interest rate is calculated as the actual interest rate in effect as of June 30, 2023 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at June 30, 2023, where applicable. (2) Represents the payment type required under the loan as of June 30, 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 June 30, 2023; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (4) As filing date of this Quarterly Report on Form 10-Q, the Company was in refinancing negotiations with the lender for loans that have matured, see below for further discussion. (5) 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 June 30, 2023, the guaranteed amount in the aggregate was $37.2 million. (6) See “Israeli Bond Financing” below. (7) This loan was paid off during the six months ended June 30, 2023. (8) As of June 30, 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. (9) The variable rate is at the higher of one-month SOFR or 1.75%, plus 2.18%. (10) 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 June 30, 2023 (in thousands): July 1, 2023 through December 31, 2023 $ 264,241 2024 213,847 2025 246,066 2026 268,933 2027 — Thereafter — $ 993,087 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2023 and December 31, 2022, which carrying amounts do not approximate the fair values (in thousands): June 30, 2023 December 31, 2022 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liabilities (Level 3): Notes payable $ 678,957 $ 660,208 $ 660,879 $ 734,899 $ 728,433 $ 716,813 Financial liabilities (Level 1): Pacific Oak SOR BVI Series B Debentures $ 314,130 $ 315,634 $ 296,389 $ 331,213 $ 316,276 $ 304,758 |
Schedule of Fair Value, Assets Measured on Recurring Basis | As of June 30, 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 $ 30,474 $ 30,474 $ — $ — Asset derivative - interest rate caps (1) $ 1,764 $ — $ 1,764 $ — Liability derivative - foreign currency collar (1) $ 4,437 $ — $ 4,437 $ — Nonrecurring Basis: Impaired real estate (2) $ 182,436 $ — $ — $ 182,436 Impaired investment in unconsolidated entity (2) $ 26,290 $ — $ — $ 26,290 _____________________ (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) Amounts represent the fair value for real estate assets and investment in unconsolidated entity impacted by impairment charges during the six months ended June 30, 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 (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 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) | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 2023 and 2022, respectively, and any related amounts payable as of June 30, 2023 and December 31, 2022 (in thousands): Incurred during the three months ended June 30, Incurred during the six months ended June 30, Payable as of Expensed 2023 2022 2023 2022 June 30, 2023 December 31, 2022 Asset management fees $ 3,710 $ 3,189 $ 7,684 $ 6,315 $ 5,491 $ 2,618 Property management fees (1) 859 133 1,523 258 298 181 Disposition fees 58 — 420 107 — — Capitalized Reimbursable offering costs (2) 894 — 894 — 894 — $ 5,521 $ 3,322 $ 10,521 $ 6,680 $ 6,683 $ 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. (2) Reimbursable offering costs to the Advisor related to the Private Offering are capitalized and recorded as prepaid expenses and other assets on the Company’s consolidated balance sheet. |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Joint Ventures | As of June 30, 2023 and December 31, 2022, the Company’s investments in unconsolidated entities were composed of the following (in thousands): Number of Properties as of June 30, 2023 Investment Balance as of Joint Venture Location Ownership % June 30, 2023 December 31, 2022 110 William Joint Venture 1 New York, New York 60% (1) $ — (2) $ — 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 26,290 45,173 Pacific Oak Opportunity Zone Fund I (3) 3 Various 46.0% 26,219 25,669 $ 52,509 $ 70,842 _____________________ (1) On June 27, 2023, Pacific Oak SOR SREF III 110 William, LLC (the “110 William Joint Venture”) executed a lease for approximately 640,000 square feet of office space in the 110 William Joint Venture’s property. Additionally, in July 2023, the 110 William Joint Venture completed a debt and equity restructuring. Refer to Note 11 for further discussion. (2) As of June 30, 2023, 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 and the Company suspended the equity method of accounting. (3) The maximum exposure to loss as a result of the Company’s investment in the Pacific Oak Opportunity Zone Fund I is limited to the carrying amount of the investment. Summarized financial information for investments in unconsolidated entities (in thousands): June 30, 2023 December 31, 2022 Assets: Real estate held for investment, net $ 475,063 $ 471,503 Total assets 541,670 546,142 Liabilities: Notes payable related to real estate held for investment, net 498,579 490,302 Total liabilities 526,208 501,861 Total equity $ 15,462 $ 44,281 For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Total revenues $ 10,673 $ 12,461 $ 21,793 $ 24,570 Operating loss (13,718) (6,807) (27,753) (12,060) Net loss $ (13,771) $ (6,795) $ (27,719) $ (12,036) |
REPORTING SEGMENTS (Tables)
REPORTING SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The selected financial information for reporting segments for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three Months Ended June 30, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 23,874 $ 9,457 $ 2,565 $ 35,896 Total expenses (64,298) (11,403) (3,261) (78,962) Total other (loss) income (14,482) 21 46 (14,415) Net (loss) before income taxes $ (54,906) $ (1,925) $ (650) $ (57,481) Six Months Ended June 30, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 49,761 $ 18,782 $ 5,478 $ 74,021 Total expenses (119,673) (22,668) (6,162) (148,503) Total other income 797 21 75 893 Net (loss) income before income taxes $ (69,115) $ (3,865) $ (609) $ (73,589) Three Months Ended June 30, 2022 Strategic Opportunistic Properties Single-Family Homes Hotels Total Total revenues $ 24,884 $ 5,801 $ 12,854 $ 43,539 Total expenses (13,699) (6,505) (9,432) (29,636) Total other (loss) income (21,797) (479) 4 (22,272) Net (loss) income before income taxes $ (10,612) $ (1,183) $ 3,426 $ (8,369) Six Months Ended June 30, 2022 Strategic Opportunistic Properties Single-Family Homes Hotels Total Total revenues $ 51,750 $ 11,544 $ 18,771 $ 82,065 Total expenses (40,776) (13,009) (16,844) (70,629) Total other (loss) income (26,387) (521) 2,372 (24,536) Net (loss) income before income taxes $ (15,413) $ (1,986) $ 4,299 $ (13,100) Total assets and goodwill related to the reporting segments as of June 30, 2023 and December 31, 2022 are as follows (in thousands): June 30, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total assets $ 1,029,968 $ 333,241 $ 51,367 $ 1,414,576 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) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Cost | As of June 30, 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 sheets 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) 9,491 Remaining lease term 90.4 Discount rate 4.8 % The components of lease expense were as follows: Interest on lease obligation for the three months ended June 30, 2023 (in thousands) $ 113 Interest on lease obligation for the six months ended June 30, 2023 (in thousands) 225 |
Schedule of Finance Lease, Liability, Fiscal Year Maturity | As of June 30, 2023, the Company had a leasehold interest expiring in 2114. Future minimum lease payments owed by the Company under the finance lease as of June 30, 2023 are as follows (in thousands): July 1, 2023 through December 31, 2023 $ 180 2024 360 2025 393 2026 396 2027 396 Thereafter 51,771 Total expected minimum lease obligations 53,496 Less: Amount representing interest (1) (44,005) Present value of net minimum lease payments (2) $ 9,491 _____________________ (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) | 6 Months Ended | ||
Jun. 30, 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) | 103,626,096 | 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 | 6 Months Ended | |||||
Jun. 30, 2023 USD ($) segment property | Jun. 30, 2022 segment | Jun. 30, 2023 USD ($) property | Jun. 30, 2023 USD ($) segment property | Jun. 30, 2023 USD ($) market property | Jun. 30, 2022 segment | Jul. 01, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Debt obligations, next twelve months | $ | $ 213,847 | $ 213,847 | $ 213,847 | $ 213,847 | $ 460,100 | ||
Number of reportable segments | 3 | 3 | 3 | 3 | 3 | ||
Hotel revenues | |||||||
Segment Reporting Information [Line Items] | |||||||
Number of real estate properties | property | 1 | 1 | 1 | 1 | |||
Mortgages | Minimum | |||||||
Segment Reporting Information [Line Items] | |||||||
Long-term debt, term | 3 years | 3 years | 3 years | 3 years | |||
Mortgages | Maximum | |||||||
Segment Reporting Information [Line Items] | |||||||
Long-term debt, term | 5 years | 5 years | 5 years | 5 years | |||
Single-Family Homes | |||||||
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | segment | 1 | ||||||
Single family home markets | market | 18 |
REAL ESTATE HELD FOR INVESTME_3
REAL ESTATE HELD FOR INVESTMENT - Narrative (Details) | Jun. 30, 2023 ft² property room investment unit |
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 | 1 |
Office Buildings, Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 2 |
Undeveloped Land, Portfolio | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | ft² | 25 |
Rentable square feet | ft² | 3,200,000 |
Residential Home Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Rentable square feet | ft² | 3,500,000 |
Percentage of portfolio occupied | 95% |
Number of units in real estate property | 2,453 |
Apartment Building | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 2 |
Rentable square feet | ft² | 500,000 |
Percentage of portfolio occupied | 93% |
Number of units in real estate property | unit | 609 |
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 | ft² | 671 |
Number of investments in real estate | investment | 2 |
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 | Jun. 30, 2023 | Dec. 31, 2022 |
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 1,315,191 | $ 1,358,452 |
Accumulated depreciation and amortization | (153,073) | (141,554) |
Total real estate held for investment, net | 1,162,118 | 1,216,898 |
Land | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 258,570 | 267,634 |
Buildings and improvements | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 1,035,684 | 1,062,822 |
Tenant origination and absorption costs | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 20,937 | $ 27,996 |
REAL ESTATE HELD FOR INVESTME_5
REAL ESTATE HELD FOR INVESTMENT - Operating Leases (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 USD ($) tenant | Jun. 30, 2023 USD ($) tenant | Dec. 31, 2022 USD ($) | |
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 5.5 | $ 5.5 | $ 6.5 |
Recognition of deferred revenue, net of discontinued operations | 0.7 | 1.5 | |
Deferred rent receivables | 20.2 | 20.2 | 18.3 |
Incentive to lessee | $ 2.9 | $ 2.9 | $ 2.8 |
Number of Tenants | tenant | 300 | 300 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 12 years 1 month 6 days | 12 years 1 month 6 days | |
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years 8 months 12 days | 3 years 8 months 12 days | |
Apartment Building | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 1 year | 1 year |
REAL ESTATE HELD FOR INVESTME_6
REAL ESTATE HELD FOR INVESTMENT - Future Minimum Rental Income (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Real Estate [Abstract] | |
July 1, 2023 through December 31, 2023 | $ 31,253 |
2024 | 58,854 |
2025 | 48,673 |
2026 | 34,938 |
2027 | 26,894 |
Thereafter | 60,377 |
Future minimum rental income | $ 260,989 |
REAL ESTATE HELD FOR INVESTME_7
REAL ESTATE HELD FOR INVESTMENT - Highest Tenant Industry Concentrations - Greater than 10% of Annual Base Rent (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) tenant property | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 300 |
Annualized base rent | $ 21,219 |
Industry | Industry | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 34.20% |
Public Administration | |
Concentration Risk [Line Items] | |
Number of Tenants | property | 15 |
Annualized base rent | $ 7,221 |
Public Administration | Industry | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 11.60% |
Professional, Scientific, and Technical Services | |
Concentration Risk [Line Items] | |
Number of Tenants | property | 38 |
Annualized base rent | $ 7,133 |
Professional, Scientific, and Technical Services | Industry | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 11.50% |
Computer Systems Design and Related Services | |
Concentration Risk [Line Items] | |
Number of Tenants | property | 29 |
Annualized base rent | $ 6,865 |
Computer Systems Design and Related Services | Industry | Revenue Benchmark | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 11.10% |
REAL ESTATE HELD FOR INVESTME_8
REAL ESTATE HELD FOR INVESTMENT - Geographic Concentration Risk (Details) - Assets, Total - Geographic Concentration Risk | 6 Months Ended |
Jun. 30, 2023 | |
California | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 20.40% |
Georgia | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.80% |
REAL ESTATE HELD FOR INVESTME_9
REAL ESTATE HELD FOR INVESTMENT - Hotel Revenue and Expenses (Details) - Hotel revenues - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Revenue from contract with customer | $ 2,565 | $ 12,854 | $ 5,478 | $ 18,771 |
Room | ||||
Revenues: | ||||
Revenue from contract with customer | 2,240 | 9,905 | 4,805 | 14,200 |
Food, beverage and convention services | ||||
Revenues: | ||||
Revenue from contract with customer | 214 | 309 | 445 | 589 |
Campground | ||||
Revenues: | ||||
Revenue from contract with customer | 0 | 1,603 | 0 | 2,395 |
Other | ||||
Revenues: | ||||
Revenue from contract with customer | $ 111 | $ 1,037 | $ 228 | $ 1,587 |
REAL ESTATE HELD FOR INVESTM_10
REAL ESTATE HELD FOR INVESTMENT - Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Product Liability Contingency [Line Items] | |||
Amounts included in contract liabilities at the beginning of the period | $ 1,508 | $ 1,427 | |
Other Liabilities | |||
Product Liability Contingency [Line Items] | |||
Contract liabilities | 27,137 | $ 23,904 | |
Amounts included in contract liabilities at the beginning of the period | $ 1,547 | $ 9,215 |
REAL ESTATE HELD FOR INVESTM_11
REAL ESTATE HELD FOR INVESTMENT - Real Estate Sales (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2023 USD ($) a | Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) | May 31, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of real estate | $ 3,292 | $ (175) | $ 32,761 | $ 3,348 | ||
Income tax expense (benefit) | $ 0 | $ 0 | $ (3,662) | $ 0 | ||
Office Properties | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of real estate properties | property | 8 | 8 | ||||
Madison Square School | Office Properties | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of real estate properties | property | 3 | 3 | ||||
Madison Square School | Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration | $ 6,400 | |||||
Park Highlands | Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration | $ 34,500 | |||||
Gain on sale of real estate | $ 29,500 | |||||
Area of land (in acres) | a | 71 | |||||
Closing costs and credits for development obligations | $ 1,900 | |||||
Income tax expense (benefit) | $ (3,700) |
REAL ESTATE HELD FOR INVESTM_12
REAL ESTATE HELD FOR INVESTMENT - Impairment of Real Estate (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Real Estate [Abstract] | ||||
Impairment charges on real estate and related intangibles | $ 18,926,000 | $ 0 | $ 36,589,000 | $ 0 |
REAL ESTATE EQUITY SECURITIES_2
REAL ESTATE EQUITY SECURITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Loss on real estate equity securities, net | $ (4,089) | $ (20,070) | $ (16,122) | $ (27,591) |
Less net gain recognized during the period on real estate equity securities sold during the period | 5,809 | 0 | 5,809 | 0 |
Unrealized loss recognized during the reporting period on real estate equity securities held at the end of the period | $ (9,898) | $ (20,070) | $ (21,931) | $ (27,591) |
NOTES AND BONDS PAYABLE - Long-
NOTES AND BONDS PAYABLE - Long-term Debt Instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total Notes and Bonds Payable principal outstanding | $ 993,087 | $ 1,066,112 |
Deferred financing costs and debt discount and premium, net | (17,245) | (21,403) |
Notes and bond payable, net | $ 975,842 | 1,044,709 |
The Marq Mortgage Loan | BSBY | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.55% | |
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 | $ 18,675 | 18,844 |
Interest rate, effective percentage | 7.57% | |
Mortgages | Richardson Portfolio Mortgage Loan | SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Mortgages | Park Centre Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 26,072 | 26,233 |
Interest rate, effective percentage | 9.92% | |
Mortgages | Park Centre Mortgage Loan | BSBY | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.75% | |
Mortgages | 1180 Raymond Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 31,070 | 31,070 |
Interest rate, effective percentage | 7.42% | |
Mortgages | 1180 Raymond Mortgage Loan | BSBY | ||
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 | $ 314,130 | 331,213 |
Interest rate, effective percentage | 3.93% | |
Contractual interest rate, percentage | 3.93% | |
Mortgages | Crown Pointe Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 54,738 | 53,758 |
Interest rate, effective percentage | 7.37% | |
Guarantees as percent of outstanding loan balance | 25% | |
Amount under guarantees | $ 37,200 | |
Mortgages | Crown Pointe Mortgage Loan | SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.30% | |
Mortgages | The Marq Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 60,460 | 60,796 |
Interest rate, effective percentage | 9.72% | |
Mortgages | Eight & Nine Corporate Centre Mortgage Loan (7) | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 0 | 47,945 |
Mortgages | Georgia 400 Center Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 40,432 | 44,129 |
Interest rate, effective percentage | 6.62% | |
Mortgages | Georgia 400 Center Mortgage Loan | SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.55% | |
Mortgages | PORT Mortgage Loan 1 | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 51,304 | 51,302 |
Interest rate, effective percentage | 4.74% | |
Contractual interest rate, percentage | 4.74% | |
Mortgages | PORT Mortgage Loan 2 | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 10,523 | 10,523 |
Interest rate, effective percentage | 4.72% | |
Contractual interest rate, percentage | 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, percentage | 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, percentage | 399% | |
Mortgages | Q&C Hotel Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 24,671 | 24,784 |
Interest rate, effective percentage | 8.57% | |
Mortgages | Q&C Hotel Mortgage Loan | SOFR | ||
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 | 8.32% | |
Mortgages | Lincoln Court Mortgage Loan | SOFR | ||
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 | 7.25% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.18% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.75% | |
Mortgages | Lofts at NoHo Commons Mortgage Loan | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.18% | |
Mortgages | Oakland City Center Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 82,500 | 87,000 |
Interest rate, effective percentage | 8.17% | |
Mortgages | Oakland City Center Mortgage Loan | BSBY | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3% | |
Mortgages | Madison Square Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 17,961 | $ 17,964 |
Interest rate, effective percentage | 4.63% | |
Contractual interest rate, percentage | 4.63% | |
Mortgages | PORT II MetLife Loan | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 93,700 |
NOTES AND BONDS PAYABLE - Narra
NOTES AND BONDS PAYABLE - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) loan | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) loan | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 15,788 | $ 10,780 | $ 31,819 | $ 20,343 | |
Amortization of deferred financing costs and debt discount and premium, net | 1,100 | 800 | 2,400 | 1,600 | |
Amortization of net premium/discount on bond and notes payable | 1,100 | 1,200 | 2,200 | 2,300 | |
Interest capitalized | 1,743 | 1,026 | |||
Interest payable | 9,300 | 9,300 | $ 9,100 | ||
Long-term debt, maturity, year one with extension options | $ 70,300 | 70,300 | |||
Mortgages | |||||
Debt Instrument [Line Items] | |||||
Repayments of debt | $ 86,500 | ||||
Number of mortgage loans | loan | 2 | 2 | |||
Undeveloped Land | |||||
Debt Instrument [Line Items] | |||||
Interest capitalized | $ 900 | $ 500 | $ 1,700 | $ 1,000 |
NOTES AND BONDS PAYABLE - Matur
NOTES AND BONDS PAYABLE - Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Jul. 01, 2023 | Jun. 30, 2023 |
Notes and Bonds Payable [Abstract] | ||
July 1, 2023 through December 31, 2023 | $ 264,241 | |
2024 | $ 460,100 | 213,847 |
2025 | 246,066 | |
2026 | 268,933 | |
2027 | 0 | |
Thereafter | 0 | |
Notes and bond payable outstanding | $ 993,087 |
NOTES AND BONDS PAYABLE - Israe
NOTES AND BONDS PAYABLE - Israeli Bond Financing (Details) - Bonds Payable $ in Millions | Feb. 16, 2020 USD ($) | Jul. 17, 2023 USD ($) | Jul. 17, 2023 ILS (₪) | Jul. 06, 2023 USD ($) | Jul. 06, 2023 ILS (₪) | Jun. 30, 2023 ILS (₪) | Feb. 16, 2020 ILS (₪) |
Series B Debentures | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 74.1 | ₪ 254,100,000 | |||||
Contractual interest rate | 3.93% | 3.93% | |||||
Principal of installment payments as percent of face amount | 33.33% | ||||||
Series B Debentures | Public Offering | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | ₪ 1,200,000,000 | ||||||
Series C Bonds | Public Offering | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 5.6 | ₪ 20,700,000 | $ 86.4 | ₪ 319,600,000 |
FAIR VALUE DISCLOSURES - Face V
FAIR VALUE DISCLOSURES - Face Value, Carrying Amounts and Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, face value | $ 678,957 | $ 734,899 |
Series B Debentures | Pacific Oak SOR BVI Series B Debentures | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, face value | 314,130 | 331,213 |
Carrying Amount | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 660,208 | 728,433 |
Carrying Amount | Series B Debentures | Pacific Oak SOR BVI Series B Debentures | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 315,634 | 316,276 |
Fair Value | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 660,879 | 716,813 |
Fair Value | Series B Debentures | Pacific Oak SOR BVI Series B Debentures | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | $ 296,389 | $ 304,758 |
FAIR VALUE DISCLOSURES - Narrat
FAIR VALUE DISCLOSURES - Narrative (Details) | Jun. 30, 2023 property |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Number of real estate properties measured at fair value | 2 |
Unconsolidated Entity Measured at Estimated Value | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Number of real estate properties measured at estimated value | 1 |
Interest rate adjustment | 0.15% |
Measurement Input, Discount Rate | Unconsolidated Entity Measured at Estimated Value | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 8.75% |
Measurement Input, Discount Rate | Minimum | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 750% |
Measurement Input, Discount Rate | Maximum | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 9% |
Measurement Input Terminal Cap Rate | Unconsolidated Entity Measured at Estimated Value | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 7% |
Measurement Input Terminal Cap Rate | Minimum | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 700% |
Measurement Input Terminal Cap Rate | Maximum | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 8.25% |
Measurement Input, Discount for Lack of Marketability | Unconsolidated Entity Measured at Estimated Value | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 20% |
Measurement Input, Discount for Lack of Control | Unconsolidated Entity Measured at Estimated Value | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Real estate properties, measurement input | 20% |
FAIR VALUE DISCLOSURES - Assets
FAIR VALUE DISCLOSURES - Assets at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2023 | |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | $ 60,153 | $ 30,474 |
Asset derivative - interest rate caps | 2,267 | |
Liability derivative - foreign currency collar | 3,115 | 4,437 |
Recurring Basis | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 1,764 | |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | 60,153 | 30,474 |
Asset derivative - interest rate caps | 0 | |
Liability derivative - foreign currency collar | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 0 | |
Recurring Basis | Significant Other Observable Inputs (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 | 3,115 | 4,437 |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 1,764 | |
Recurring Basis | Significant Unobservable Inputs (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 |
Recurring Basis | Significant Unobservable Inputs (Level 3) | Interest Rate Cap | ||
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 | 212,800 | 182,436 |
Impaired investment in unconsolidated entity (2) | 26,290 | |
Impaired goodwill | 5,436 | |
Nonrecurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate | 0 | 0 |
Impaired investment in unconsolidated entity (2) | 0 | |
Impaired goodwill | 0 | |
Nonrecurring Basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate | 0 | 0 |
Impaired investment in unconsolidated entity (2) | 0 | |
Impaired goodwill | 0 | |
Nonrecurring Basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate | 212,800 | 182,436 |
Impaired investment in unconsolidated entity (2) | $ 26,290 | |
Impaired goodwill | $ 5,436 |
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 | DMH Realty, LLC | Maximum | |||
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 | DMH Realty, LLC | Maximum | |||
Related Party Transaction [Line Items] | |||
Base fee, benchmark of rent collections per year | $ 75 | ||
Tier 2 | DMH Realty, LLC | Minimum | |||
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 | DMH Realty, LLC | Minimum | |||
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 | ||
Period of reimbursement | 60 months | ||
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 | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Hotel expenses | $ 1,984 | $ 6,998 | $ 3,945 | $ 12,109 | |
Pacific Oak Capital Advisors LLC | |||||
Related Party Transaction [Line Items] | |||||
Capitalized | 5,521 | 3,322 | 10,521 | 6,680 | |
Payable as of | 6,683 | 6,683 | $ 2,799 | ||
Pacific Oak Capital Advisors LLC | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Hotel expenses | 3,710 | 3,189 | 7,684 | 6,315 | |
Payable as of | 5,491 | 5,491 | 2,618 | ||
Pacific Oak Capital Advisors LLC | Property management fee | |||||
Related Party Transaction [Line Items] | |||||
Hotel expenses | 859 | 133 | 1,523 | 258 | |
Payable as of | 298 | 298 | 181 | ||
Pacific Oak Capital Advisors LLC | Disposition fees | |||||
Related Party Transaction [Line Items] | |||||
Hotel expenses | 58 | 0 | 420 | 107 | |
Payable as of | 0 | 0 | 0 | ||
Pacific Oak Capital Advisors LLC | Reimbursable offering costs | |||||
Related Party Transaction [Line Items] | |||||
Capitalized | 894 | $ 0 | 894 | $ 0 | |
Payable as of | $ 894 | $ 894 | $ 0 |
RELATED PARTY TRANSACTIONS - Pa
RELATED PARTY TRANSACTIONS - Pacific Oak Opportunity Zone Fund I (Details) - Pacific Oak Opportunity Zone Fund I (3) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |
Investments, fair value | $ 26.2 |
Acquisition fee, percent of purchase price fee | 1.50% |
Investment, purchase price, benchmark | $ 25 |
Acquisition fee of purchase price fee in excess of benchmark purchase price | 1% |
Asset management fee, percent | 0.25% |
Financing fee as percent of original principal amount of any indebtedness | 0.50% |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) | Jun. 27, 2023 ft² | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Investment balance | $ 52,509 | $ 52,509 | $ 70,842 | ||||||
Real estate held for investment, net | 1,162,118 | 1,162,118 | 1,216,898 | ||||||
Total assets | 1,414,576 | 1,414,576 | 1,559,245 | ||||||
Total liabilities | 1,078,048 | 1,078,048 | 1,142,852 | ||||||
Total equity | 336,528 | $ 461,373 | 336,528 | $ 461,373 | $ 396,623 | 416,393 | $ 471,986 | $ 482,059 | |
Total revenues | 35,896 | 43,539 | 74,021 | 82,065 | |||||
Operating loss | (14,415) | (22,272) | 893 | (24,536) | |||||
Net loss | (57,481) | (8,369) | (77,251) | (13,100) | |||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Real estate held for investment, net | 475,063 | 475,063 | 471,503 | ||||||
Total assets | 541,670 | 541,670 | 546,142 | ||||||
Notes payable related to real estate held for investment, net | 498,579 | 498,579 | 490,302 | ||||||
Total liabilities | 526,208 | 526,208 | 501,861 | ||||||
Total equity | 15,462 | 15,462 | 44,281 | ||||||
Total revenues | 10,673 | 12,461 | 21,793 | 24,570 | |||||
Operating loss | (13,718) | (6,807) | (27,753) | (12,060) | |||||
Net loss | $ (13,771) | $ (6,795) | $ (27,719) | $ (12,036) | |||||
110 William Joint Venture | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of real estate properties | property | 1 | 1 | |||||||
Ownership percentage | 60% | 60% | |||||||
Investment balance | $ 0 | $ 0 | 0 | ||||||
Net rentable area (in sq feet) | ft² | 640 | ||||||||
353 Sacramento Joint Venture | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of real estate properties | property | 1 | 1 | |||||||
Ownership percentage | 55% | 55% | |||||||
Investment balance | $ 26,290 | $ 26,290 | 45,173 | ||||||
Impairment losses | $ 14,800 | $ 14,800 | |||||||
Pacific Oak Opportunity Zone Fund I (3) | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of real estate properties | property | 3 | 3 | |||||||
Ownership percentage | 46% | 46% | |||||||
Investment balance | $ 26,219 | $ 26,219 | $ 25,669 |
REPORTING SEGMENTS (Details)
REPORTING SEGMENTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) segment | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) property | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) segment | Dec. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||||||
Number of reportable segments | 3 | 3 | 3 | 3 | 3 | ||
Income Statement [Abstract] | |||||||
Total revenues | $ 35,896 | $ 43,539 | $ 74,021 | $ 82,065 | |||
Total expenses | (78,962) | (29,636) | (148,503) | (70,629) | |||
Total other (loss) income | (14,415) | (22,272) | 893 | (24,536) | |||
Net (loss) before income taxes | (57,481) | (8,369) | (73,589) | (13,100) | |||
Assets and Liabilities held for Sale | |||||||
Total assets | 1,414,576 | 1,414,576 | $ 1,414,576 | $ 1,414,576 | $ 1,559,245 | ||
Goodwill | 5,436 | 5,436 | 5,436 | 5,436 | 5,436 | ||
Strategic Opportunistic Properties | |||||||
Income Statement [Abstract] | |||||||
Total revenues | 23,874 | 24,884 | 49,761 | 51,750 | |||
Total expenses | (64,298) | (13,699) | (119,673) | (40,776) | |||
Total other (loss) income | (14,482) | (21,797) | 797 | (26,387) | |||
Net (loss) before income taxes | (54,906) | (10,612) | (69,115) | (15,413) | |||
Assets and Liabilities held for Sale | |||||||
Total assets | 1,029,968 | 1,029,968 | 1,029,968 | 1,029,968 | 1,173,481 | ||
Goodwill | 4,220 | 4,220 | 4,220 | 4,220 | 4,220 | ||
Residential Homes | |||||||
Income Statement [Abstract] | |||||||
Total revenues | 9,457 | 18,782 | |||||
Total expenses | (11,403) | (22,668) | |||||
Total other (loss) income | 21 | 21 | |||||
Net (loss) before income taxes | (1,925) | (3,865) | |||||
Assets and Liabilities held for Sale | |||||||
Total assets | 333,241 | 333,241 | 333,241 | 333,241 | 333,128 | ||
Goodwill | 0 | 0 | 0 | 0 | 0 | ||
Single-Family Homes | |||||||
Income Statement [Abstract] | |||||||
Total revenues | 5,801 | 11,544 | |||||
Total expenses | (6,505) | (13,009) | |||||
Total other (loss) income | (479) | (521) | |||||
Net (loss) before income taxes | (1,183) | (1,986) | |||||
Hotels | |||||||
Income Statement [Abstract] | |||||||
Total revenues | 2,565 | 12,854 | 5,478 | 18,771 | |||
Total expenses | (3,261) | (9,432) | (6,162) | (16,844) | |||
Total other (loss) income | 46 | 4 | 75 | 2,372 | |||
Net (loss) before income taxes | (650) | $ 3,426 | (609) | $ 4,299 | |||
Assets and Liabilities held for Sale | |||||||
Total assets | 51,367 | 51,367 | 51,367 | 51,367 | 52,636 | ||
Goodwill | $ 1,216 | $ 1,216 | $ 1,216 | $ 1,216 | $ 1,216 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Lease Cost (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-use asset (included in real estate held for investment, net) | $ 7,281 | $ 7,281 |
Lease obligation (included in other liabilities) | $ 9,491 | $ 9,491 |
Remaining lease term | 90 years 4 months 24 days | 90 years 4 months 24 days |
Discount rate | 4.80% | 4.80% |
Interest on lease obligation | $ 113 | $ 225 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
July 1, 2023 through December 31, 2023 | $ 180 |
2024 | 360 |
2025 | 393 |
2026 | 396 |
2027 | 396 |
Thereafter | 51,771 |
Total expected minimum lease obligations | 53,496 |
Less: Amount representing interest | (44,005) |
Lease obligation (included in other liabilities) | $ 9,491 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jul. 17, 2023 ILS (₪) | Jul. 17, 2023 USD ($) | Jul. 05, 2023 USD ($) | Jul. 17, 2023 USD ($) | Jul. 06, 2023 ILS (₪) | Jul. 06, 2023 USD ($) | Jul. 04, 2023 | Jun. 30, 2023 |
110 William Joint Venture | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage | 60% | |||||||
Subsequent Event | 110 William Joint Venture | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage for contributed capital | 100% | |||||||
Subsequent Event | Original Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Face amount | $ 248,700,000 | |||||||
Subsequent Event | Original Loan | Minimum | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate | 2% | |||||||
Subsequent Event | Original Loan | Maximum | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate | 3% | |||||||
Subsequent Event | Supplemental Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Increase borrowing capacity | $ 56,700,000 | |||||||
Subsequent Event | Supplemental Loan | Minimum | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate | 3% | |||||||
Subsequent Event | Supplemental Loan | Maximum | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate | 3.50% | |||||||
Subsequent Event | Series C Bonds | Bonds Payable | Public Offering | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity | ₪ 20,700,000 | $ 5,600,000 | ₪ 319,600,000 | $ 86,400,000 | ||||
Bearing interest, rate | 9% | 9% | ||||||
Debt instrument, percent of discount at issuance | 1% | 1% | ||||||
Proceeds from issuance of debt | ₪ 20,500,000 | $ 5,600,000 | ||||||
Subsequent Event | SREF III 110 William JV, LLC | 110 William Joint Venture | ||||||||
Subsequent Event [Line Items] | ||||||||
Percent of contingent consideration exchanged | 10% | |||||||
Subsequent Event | 110 William Joint Venture | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage | 77.50% | |||||||
Payments to acquire equity method investments | $ 105,000,000 | |||||||
Subsequent Event | 110 William Joint Venture | 110 William Mezz III, LLC | ||||||||
Subsequent Event [Line Items] | ||||||||
Mezzanine loan | $ 85,700,000 | |||||||
Subsequent Event | 110 William Joint Venture | Invesco | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage | 22.50% | |||||||
Subsequent Event | 110 William Joint Venture | SREF III 110 William JV, LLC | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership percentage | 40% |