Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 103,159,315 | |
Entity Central Index Key | 0001452936 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Real estate held for investment, net | $ 1,053,876 | $ 1,093,343 |
Real estate held for sale, net | 0 | 1,411 |
Real estate equity securities | 11,950 | 41,609 |
Total real estate and real estate-related investments, net | 1,065,826 | 1,136,363 |
Cash and cash equivalents | 19,820 | 99,160 |
Restricted cash | 27,872 | 56,049 |
Investments in unconsolidated entities | 53,345 | 45,901 |
Rents and other receivables, net | 22,109 | 22,500 |
Prepaid expenses and other assets | 25,661 | 28,170 |
Total assets | 1,214,633 | 1,388,143 |
Liabilities and equity | ||
Notes and bonds payable related to real estate held for investment, net | 935,212 | 1,027,935 |
Notes payable related to real estate held for sale, net | 0 | 748 |
Notes and bonds payable, net | 935,212 | 1,028,683 |
Accounts payable and accrued liabilities | 27,138 | 30,409 |
Redeemable common stock payable | 1,458 | 2,214 |
Total liabilities | 1,027,913 | 1,124,779 |
Commitments and contingencies (Note 9) | ||
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, 103,214,807 and 103,310,648 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 1,032 | 1,033 |
Additional paid-in capital | 901,050 | 901,049 |
Cumulative distributions and net loss | (716,406) | (639,933) |
Total stockholders’ equity | 185,676 | 262,149 |
Noncontrolling interests | 1,044 | 1,215 |
Total equity | 186,720 | 263,364 |
Total liabilities and equity | 1,214,633 | 1,388,143 |
Due to affiliates | ||
Liabilities and equity | ||
Payable as of | 10,741 | 7,902 |
Other liabilities | ||
Liabilities and equity | ||
Payable as of | $ 53,364 | $ 55,571 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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) | 103,214,807 | 103,310,648 |
Common stock, shares outstanding (in shares) | 103,214,807 | 103,310,648 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Rental income | $ 31,210 | $ 32,077 |
Dividend income from real estate equity securities | 78 | 1,998 |
Total revenues | 35,001 | 38,127 |
Expenses: | ||
Operating, maintenance, and management | 10,903 | 11,168 |
Real estate taxes and insurance | 6,477 | 6,416 |
Hotel expenses | 1,867 | 1,962 |
Asset management fees to affiliates | 4,102 | 3,973 |
General and administrative expenses | 3,252 | 3,001 |
Foreign currency transaction gain, net | (3,913) | (2,719) |
Depreciation and amortization | 10,749 | 12,048 |
Interest expense, net | 16,773 | 16,031 |
Impairment charges on real estate and related intangibles | 39,265 | 17,663 |
Total expenses | 89,475 | 69,543 |
Other (loss) income: | ||
Loss from unconsolidated entities, net | (8,077) | (2,332) |
Other interest income | 455 | 204 |
Loss on real estate equity securities, net | (15,350) | (12,033) |
Gain on sale of real estate | 452 | 29,469 |
Total other (loss) income, net | (22,520) | 15,308 |
Net loss before income taxes | (76,994) | (16,108) |
Income tax provision | 0 | (3,662) |
Net loss | (76,994) | (19,770) |
Net loss attributable to noncontrolling interests | 521 | 189 |
Net loss attributable to common stockholders | $ (76,473) | $ (19,581) |
Net loss per common share, basic (in dollars per share) | $ (0.74) | $ (0.19) |
Net loss per common share, diluted (in dollars per share) | $ (0.74) | $ (0.19) |
Weighted-average number of common shares outstanding, basic (in shares) | 103,283,507 | 103,872,363 |
Weighted-average number of common shares outstanding, diluted (in shares) | 103,283,507 | 103,872,363 |
Hotel revenues | ||
Revenues: | ||
Revenue | $ 2,804 | $ 2,913 |
Other operating income | ||
Revenues: | ||
Revenue | $ 909 | $ 1,139 |
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, 2022 | 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 | (19,770) | (19,581) | (19,581) | (189) | ||
Transfers from redeemable common stock payable | 1,510 | 1,510 | 1,510 | |||
Redemptions of common stock (in shares) | (143,785) | |||||
Redemptions of common stock | (1,510) | (1,510) | $ (1) | (1,509) | ||
Ending balance (in shares) at Mar. 31, 2023 | 103,788,298 | |||||
Ending balance at Mar. 31, 2023 | $ 396,623 | 392,720 | $ 1,038 | 907,045 | (515,363) | 3,903 |
Beginning balance (in shares) at Dec. 31, 2023 | 103,310,648 | 103,310,648 | ||||
Beginning balance at Dec. 31, 2023 | $ 263,364 | 262,149 | $ 1,033 | 901,049 | (639,933) | 1,215 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (76,994) | (76,473) | (76,473) | (521) | ||
Transfers from redeemable common stock payable | 756 | 756 | 756 | |||
Noncontrolling interests’ contributions | 350 | 350 | ||||
Redemptions of common stock (in shares) | (95,841) | |||||
Redemptions of common stock | $ (756) | (756) | $ (1) | (755) | ||
Ending balance (in shares) at Mar. 31, 2024 | 103,214,807 | 103,214,807 | ||||
Ending balance at Mar. 31, 2024 | $ 186,720 | $ 185,676 | $ 1,032 | $ 901,050 | $ (716,406) | $ 1,044 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (76,994) | $ (19,770) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Impairment charges on real estate and related intangibles | 39,265 | 17,663 |
Loss from unconsolidated entities, net | 8,077 | 2,332 |
Depreciation and amortization | 10,749 | 12,048 |
Loss on real estate equity securities | 15,350 | 12,033 |
Gain on sale of real estate | (452) | (29,469) |
Deferred rent | (35) | (850) |
Amortization of above- and below-market leases, net | (339) | (175) |
Amortization of deferred financing costs and debt discount and premium, net | 2,341 | 2,426 |
Foreign currency transaction gain, net | (3,913) | (2,719) |
Changes in assets and liabilities: | ||
Rents and other receivables, net | 453 | (402) |
Prepaid expenses and other assets | 1,286 | (2,931) |
Accounts payable and accrued liabilities | (3,201) | (5,977) |
Net cash used in operating activities | (7,398) | (10,226) |
Cash Flows from Investing Activities: | ||
Improvements to real estate | (9,862) | (6,764) |
Proceed from sales of real estate, net | 1,498 | 34,479 |
Purchase of interest rate caps | (941) | 0 |
Proceeds from interest rate caps | 1,478 | 0 |
Contributions to an unconsolidated entity | (15,634) | 0 |
Distribution of capital from an unconsolidated entity | 0 | 1,144 |
Payments on foreign currency derivatives, net | (478) | (6,250) |
Proceeds from the sale of real estate equity securities | 14,309 | 0 |
Proceeds for development obligations | 4 | 1,296 |
Funding for development obligations | (2,250) | 0 |
Net cash (used in) provided by investing activities | (11,876) | 23,905 |
Cash Flows from Financing Activities: | ||
Proceeds from notes payable | 21,562 | 980 |
Principal payments on notes and bonds payable | (108,996) | (2,841) |
Payments of deferred financing costs | (1,422) | (472) |
Redemptions of common stock | (756) | (1,510) |
Noncontrolling interests contributions | 350 | 0 |
Net cash used in financing activities | (89,262) | (3,843) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1,019 | (469) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (107,517) | 9,367 |
Cash, cash equivalents and restricted cash, beginning of period | 155,209 | 159,044 |
Cash, cash equivalents and restricted cash, end of period | 47,692 | 168,411 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid, net of capitalized interest of $1,062 and $850 for the three months ended March 31, 2024 and 2023, respectively | 16,095 | 16,458 |
Supplemental Disclosure of Significant Noncash Transaction: | ||
Accrued improvements to real estate | 4,736 | 2,554 |
Accrued development obligations | 8,967 | 9,813 |
Due to affiliates | ||
Changes in assets and liabilities: | ||
Other liabilities | 2,839 | 592 |
Other liabilities | ||
Changes in assets and liabilities: | ||
Other liabilities | $ (2,824) | $ 4,973 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 1,062 | $ 850 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Pacific 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”). The Company conducts its business primarily through Pacific Oak SOR (BVI) Holdings, Ltd. (“Pacific Oak SOR BVI”), a private company limited by shares according to the British Virgin Islands Business Companies Act, 2004, which was incorporated on December 18, 2015 and is authorized to issue a maximum of 50,000 common shares with no par value. Upon incorporation, Pacific Oak SOR BVI issued one certificate containing 10,000 common shares with no par value to Pacific Oak Strategic Opportunity Limited Partnership (the “Operating Partnership”), a Delaware limited partnership formed on December 10, 2008. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. Pacific Oak Strategic Opportunity Holdings LLC (“REIT Holdings”), a Delaware limited liability company formed on December 9, 2008, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
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, 2023. 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, 2023, 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’s Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. 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 variable interest entities 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 and operations using notes and bonds payable that are typically structured as non-recourse secured mortgages with maturities of approximately three Company may utilize such option if necessary. Based upon these plans, and the plans described above, management believes it will have sufficient liquidity to satisfy its obligations as they come due and to continue as a going concern. There can be no assurance as to the certainty or timing of any of management’s plans. 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: strategic opportunistic real estate and real estate-related investments (“strategic opportunistic properties”), residential homes, and hotel, which is how the Company's management manages the business. In general, the Company intends to hold its investments in strategic opportunistic properties for capital appreciation. Traditional performance metrics of strategic opportunistic properties 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 strategic opportunistic properties as similar investments and aggregates them into one reportable business segment. The Company owns residential homes in 18 markets which are all aggregated into one reportable business segment due to the homes being stabilized, having high occupancy rates and having similar economic characteristics. Additionally, as of March 31, 2024, the Company owns one hotel, which is a separate reportable business segment due to the nature of the hotel business with short-term stays. Real Estate Equity Securities These investments are carried at their estimated fair value based on quoted market prices for the security, net of any discounts for restrictions on the sale of the security. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. For the three months ended March 31, 2024, the Company recognized a realized loss on real estate equity securities of $26.8 million and an unrealized gain on real estate equity securities of $11.4 million. For the three months ended March 31, 2023, the Company recognized an unrealized loss on real estate equity securities of $12.0 million. Reclassifications Certain amounts in the prior year period have been reclassified to conform to the current period presentation. Goodwill, which was previously reported separately on the accompanying consolidated balance sheets, is now included in prepaid expenses and other assets for all periods presented. Additionally, the Company sold residential homes during the three months ended March 31, 2024 and as a result, certain assets and liabilities were reclassified to held for sale in the accompanying consolidated balance sheets for all periods presented. These reclassifications have not changed the results of operations of the prior period. 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 recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 31, 2024, that are of significance or potential significance to the Company. |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
REAL ESTATE HELD FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of March 31, 2024, the Company consolidated nine office complexes, encompassing, in the aggregate, approximately 3.2 million rentable square feet and these properties were 67% occupied. In addition, the Company owned one residential home portfolio consisting of 2,168 residential homes, and two apartment properties containing 609 units, which were 94% and 95% occupied, respectively. The Company also owned one hotel property with 196 rooms, four investments in undeveloped land with approximately 581 developable acres, and one office/retail development property. The following table summarizes the Company’s real estate held for investment as of March 31, 2024, and December 31, 2023, respectively (in thousands): March 31, 2024 December 31, 2023 Land $ 249,193 $ 253,075 Buildings and improvements 942,688 990,345 Tenant origination and absorption costs 14,045 17,080 Total real estate, cost 1,205,926 1,260,500 Accumulated depreciation and amortization (152,050) (167,157) Total real estate held for investment, net $ 1,053,876 $ 1,093,343 Operating Leases Certain of the Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of March 31, 2024, 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 16.4 years with a weighted-average remaining term of 3.3 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 $5.7 million and $5.9 million as of March 31, 2024, and December 31, 2023, respectively. During the three months ended March 31, 2024 and 2023, the Company recognized deferred rent from tenants of $0.1 million and $0.8 million, net of lease incentive amortization, respectively. As of March 31, 2024 and December 31, 2023, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $19.0 million and $19.1 million, respectively, and is included in rents and other receivables in the accompanying consolidated balance sheets. The cumulative deferred rent balance included $2.2 million and $2.5 million of unamortized lease incentives as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, the future minimum rental income from the Company’s office complexes, under non-cancelable operating leases was as follows (in thousands): April 1, 2024 through December 31, 2024 $ 43,817 2025 52,655 2026 39,732 2027 32,078 2028 25,268 Thereafter 52,730 $ 246,280 Geographic Concentration Risk As of March 31, 2024, the Company’s real estate investments in California and Georgia represented 21.1% and 12.1%, 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 Property The following table provides detailed information regarding the Company’s hotel revenues for its hotel property during the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 2023 Hotel revenues: Room $ 2,465 $ 2,565 Other 339 348 Hotel revenues $ 2,804 $ 2,913 Contract Liabilities The following table summarizes the Company’s contract liabilities, which are comprised of: hotel advanced deposits, deferred proceeds received from the buyers of the Park Highlands land sales, and value of Park Highlands land that was contributed to a master association. As of March 31, 2024 and December 31, 2023, contract liabilities were $21.3 million and $23.8 million, respectively, which are included in other liabilities on the accompanying consolidated balance sheets. During the three months ended March 31, 2024 and 2023, the Company recognized $2.5 million and $0.8 million, respectively, of income related to the contract liabilities, which are included on the accompanying consolidated statements of operations. Impairment of Real Estate During the three months ended March 31, 2024, the Company recorded impairment charges on real estate in the aggregate of $39.3 million to write down the carrying value of two of the Company’s strategic opportunistic properties and one hotel to their estimated fair values due to declines in market conditions and projected cash flows. During the three months ended March 31, 2023, the Company recorded impairment charges on real estate in the aggregate of $17.7 million to write down the carrying value of one of the Company’s strategic opportunistic properties to its estimated fair value due to a change in the discount and cap rate assumptions and related decrease in projected cash flows. Pending Real Estate Sales |
NOTES AND BOND PAYABLE
NOTES AND BOND PAYABLE | 3 Months Ended |
Mar. 31, 2024 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BOND PAYABLE | NOTES AND BONDS PAYABLE As of March 31, 2024 and December 31, 2023, the Company’s notes and bonds payable consisted of the following (dollars in thousands): Book Value as of March 31, 2024 Book Value as of December 31, 2023 Contractual Interest Rate as of March 31, 2024 (1) Effective Interest Rate at March 31, 2024 (1) Payment Type (2) Maturity Date (3) Richardson Office Mortgage Loan $ 12,162 $ 12,209 SOFR + 3.50% 8.84% Principal & Interest 11/01/2024 Series B Bonds (4) 210,498 321,724 3.93% 3.93% (4) 01/31/2026 Series C Bonds (4) 97,609 99,461 9.00% 9.00% (4) 06/30/2026 Crown Pointe Mortgage Loan 54,738 54,738 SOFR + 2.30% 7.64% Interest Only 04/01/2025 Georgia 400 Center Mortgage Loan (5) 40,052 40,184 SOFR + 1.55% 6.89% Principal & Interest 05/22/2024 PORT Mortgage Loan 1 34,967 34,967 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 1 58,746 59,091 3.90% 3.90% Interest Only 04/10/2026 PORT MetLife Loan 2 93,564 93,388 3.99% 3.99% Interest Only 04/10/2026 Q&C Hotel Mortgage Loan 24,529 24,579 SOFR + 3.50% 8.84% Principal & Interest 04/30/2024 (6) Lincoln Court Mortgage Loan (5) 33,110 33,310 SOFR + 3.25% 8.59% Interest Only 08/07/2025 Lofts at NoHo Commons Mortgage Loan 68,451 68,451 SOFR + 2.18% (7) 7.52% Interest Only 09/09/2024 Madison Square Mortgage Loan 19,346 17,962 4.63% 4.63% Interest Only 10/07/2024 Four Pack Mortgage Loan 173,125 175,234 BSBY + 2.75% 8.18% Principal & Interest 09/01/2026 Eight & Nine Corporate Centre Mortgage Loan 20,000 — SOFR + 4.90% (8) 10.24% Interest Only 02/09/2026 Total notes and bonds payable principal outstanding 951,420 1,045,821 Deferred financing costs and debt discount and premium, net (9) (16,208) (17,138) Total notes and bonds payable, net $ 935,212 $ 1,028,683 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of March 31, 2024. Effective interest rate was calculated as the actual interest rate in effect as of March 31, 2024 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices such as Secured Overnight Financing Rate (“SOFR”) or Bloomberg Short Term Bank Yield (“BSBY”) as of March 31, 2024, where applicable. (2) Represents the payment type required under these loans as of March 31, 2024. Certain future monthly payments due under these loans also include amortizing principal payments. (3) Represents the initial maturity date or the maturity date as extended as of March 31, 2024; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. For more information of the Company’s contractual obligations under its notes and bonds payable, see five-year maturity table, below. (4) See “Israeli Bond Financings” below. (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. As of March 31, 2024, the guaranteed amount in the aggregate was $22.8 million. (6) Subsequent to March 31, 2024, the Company was in technical default. (7) The effective interest rate is at the higher of one-month SOFR or 1.75%, plus 2.18%. (8) The effective interest rate is at the higher of one-month SOFR plus 4.50% or 8.90%. (9) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable. During the three months ended March 31, 2024 and 2023, the Company incurred $16.8 million and $16.0 million, respectively, of interest expense. Included in interest expense during the three months ended March 31, 2024 and 2023 was $2.3 million and $2.4 million, respectively of amortization of deferred financing costs and debt discount and premium. Additionally, during the three months ended March 31, 2024 and 2023, the Company capitalized $1.1 million and $0.9 million, respectively, of interest related to its investments in undeveloped land. As of March 31, 2024 and December 31, 2023, the Company’s interest payable was $7.3 million and $9.0 million, respectively. The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of March 31, 2024 (in thousands): April 1, 2024 through December 31, 2024 $ 180,840 2025 236,458 2026 534,122 2027 — 2028 — Thereafter — $ 951,420 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 and C Bonds. The Company plans to utilize available extension options or refinance the notes payable. The Company may also choose to market the properties for sale or may negotiate a turnover of the secured properties back to the related mortgage lender. The Company’s notes payable contain financial debt covenants, including minimum equity requirements and liquidity ratios. As of March 31, 2024, the Company was in compliance with all of these debt covenants with the exception that the Q&C Hotel Mortgage Loan, Madison Square 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 continuous non-compliance. Israeli Bond Financings Pacific Oak SOR BVI previously issued Series C Bonds, of which 360.0 million Israeli new shekels remain outstanding as of March 31, 2024. The Series C Bonds are collateralized by real estate (specified lands in Park Highlands and Richardson). Pacific Oak SOR BVI previously issued Series B bonds (the “Series B Bonds”), of which 776.4 million Israeli new shekels remain outstanding as of March 31, 2024. The Series B Bonds have annual principal installment payments due January 2025 and 2026. In January 2024, the Company made the first Series B Bonds installment payment of approximately 388.1 million Israeli new shekels. The deeds of trust that govern the terms of the Series B and C Bonds contain various financial covenants. As of March 31, 2024, the Company was in compliance with these financial covenants. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES The following were the carrying amounts and fair values of the Company’s financial instruments as of March 31, 2024 and December 31, 2023, which carrying amounts do not approximate the fair values (in thousands): March 31, 2024 December 31, 2023 Carrying Amount Fair Value Carrying Amount Fair Value Financial liabilities (Level 3): Notes payable $ 638,362 $ 631,653 $ 620,262 $ 611,725 Financial liabilities (Level 1): Pacific Oak SOR BVI Series B Bonds $ 202,511 $ 201,331 $ 312,458 $ 296,380 Pacific Oak SOR BVI Series C Bonds $ 94,339 $ 103,221 $ 95,963 $ 102,664 Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. As of March 31, 2024, 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 $ 11,950 $ 11,950 $ — $ — Asset derivative - interest rate caps (1) $ 2,088 $ — $ 2,088 $ — Nonrecurring Basis: Impaired real estate (2) $ 191,900 $ — $ — $ 191,900 _____________________ (1) Interest rate caps are included in prepaid expenses and other assets in the consolidated balance sheets. (2) Amount represents the fair value for a real estate asset impacted by impairment charges during the months ended March 31, 2024, 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. During the three months ended March 31, 2024, three of the Company’s real estate properties were impaired and written down to their estimated fair values due to declines in market conditions and projected cash flows. The real estate properties were measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of the properties, with discount rates between 8.25% to 8.75% and terminal cap rates between 7.0% to 8.0%. During the three months ended March 31, 2023, one of the Company’s real estate properties was impaired and written down to its estimated fair value. The real estate property was measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of the property, which are discount rate of 7.0% and terminal cap rate of 6.5%. As of December 31, 2023, the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 41,609 $ 41,609 $ — $ — Asset derivative - interest rate caps (1) $ 1,236 $ — $ 1,236 $ — Asset derivative - foreign currency collar (1) $ 3,655 $ — $ 3,655 $ — Nonrecurring Basis: Impaired real estate (2) $ 193,529 $ — $ — $ 193,529 _____________________ (1) Interest rate caps and foreign currency collars are included in prepaid expenses and other assets, respectively, on the accompanying consolidated balance sheets. (2) Amount represents the fair value for a real estate asset impacted by impairment charges during the year ended December 31, 2023, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has entered into agreements with certain affiliates pursuant to which they provide services to the Company. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2024 and 2023, respectively, and any related amounts payable as of March 31, 2024 and December 31, 2023 (in thousands): Incurred during the three months ended March 31, Payable as of 2024 2023 March 31, 2024 December 31, 2023 Expensed Asset management fees $ 4,102 $ 3,973 $ 9,738 $ 6,855 Property management fees (1) 677 664 214 153 Disposition fees (2) 15 362 — — Reimbursable offering costs (3) — — 789 894 $ 4,794 $ 4,999 $ 10,741 $ 7,902 _____________________ (1) Property management fees paid to DMH Realty, LLC (“DMH Realty”), an affiliate of Pacific Oak Capital Advisors and the advisor of the Company’s wholly-owned subsidiary, Pacific Oak Residential Trust, Inc. (“PORT”), pursuant to the property management agreement between DMH Realty and PORT, are recorded as operating, maintenance, and management expenses in the accompanying consolidated statements of operations. (2) Disposition fees with respect to real estate properties sold are recorded as a component of the gain or loss on sale of real estate in the accompanying consolidated statements of operations. (3) Reimbursable offering costs to Pacific Oak Capital Advisors related to the PORT private offering. See Note 10 for further discussion. Pacific Oak Opportunity Zone Fund I Pacific Oak Capital Advisors is entitled to certain fees in connection with Pacific Oak Opportunity Zone Fund I. During the three months ended March 31, 2024, the Company recorded $0.1 million of waived asset management fees recorded as income in the accompanying statement of operations, and during the three months ended March 31, 2023, there were no waived asset management fees. As of March 31, 2024 and December 31, 2023, the Company recorded receivable balances of $0.5 million and $0.4 million, respectively, and are included in prepaid expenses and other assets in the accompanying consolidated balance sheets. Subsequent to March 31, 2024, the Company received a distribution of capital of $1.5 million from Pacific Oak Opportunity Zone Fund I. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITIES | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED ENTITIES | INVESTMENT IN UNCONSOLIDATED ENTITIES As of March 31, 2024 and December 31, 2023, the Company’s investments in unconsolidated entities were composed of the following (dollars in thousands): Number of Properties as of March 31, 2024 Investment Balance as of Joint Venture Location Ownership % March 31, 2024 December 31, 2023 110 William Joint Venture 1 New York, New York (1) $ 30,120 (1) $ 22,314 Pacific Oak Opportunity Zone Fund I 4 Various 47.0% 23,225 (2) 23,587 353 Sacramento Joint Venture 1 San Francisco, California 55.0% — (3) — $ 53,345 $ 45,901 _____________________ (1) The 110 William Joint Venture is governed by an amended and restated limited liability company agreement, dated July 5, 2023. In July 2023, the 110 William Joint Venture entered into debt and equity restructuring agreements and as a result, the Company committed to funding up to $105.0 million (the “Capital Commitments”) to the 110 William Joint Venture in exchange for 77.5% of preferred interest in the joint venture. During the three months ended March 31, 2024, the Company made capital contributions to the 110 William Joint Venture of $15.6 million and as of March 31, 2024, $61.1 million of the Capital Commitments remains to be funded. As of March 31, 2024, the Company owned 100% of the common interest and 77.5% of preferred interest in the joint venture. (2) 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. (3) The Company suspended the equity method of accounting for the 353 Sacramento Joint Venture. Summarized financial information for investment in unconsolidated entities follows (in thousands): March 31, 2024 December 31, 2023 Assets: Real estate, net $ 400,710 $ 411,028 Total assets 467,559 468,002 Liabilities: Notes payable, net 410,183 410,563 Total liabilities 421,723 427,794 Total equity $ 45,836 $ 40,207 For the Three Months Ended March 31, 2024 2023 Total revenues $ 9,277 $ 11,120 Operating loss (10,230) (14,035) Net loss $ (10,221) $ (13,948) |
REPORTING SEGMENTS
REPORTING SEGMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENTS | REPORTING SEGMENTS The Company recognizes three reporting segments for the three months ended March 31, 2024 and 2023 and consists of strategic opportunistic properties and real estate-related investments (“strategic opportunistic properties”), residential homes, and hotel. All corporate related costs are included in the strategic opportunistic properties segment to align with how financial information is presented to the Company's Chief Executive Officer and President, who are jointly the chief operating decision maker (the “CODM”). The CODM makes key operating decisions, evaluates financial results and manages the Company’s business based on the selected financial information. The selected financial information for reporting segments for the three months ended March 31, 2024 and 2023 are as follows (in thousands): Three Months Ended March 31, 2024 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 23,131 $ 9,066 $ 2,804 $ 35,001 Total expenses (72,127) (10,933) (6,415) (89,475) Total other (loss) income, net (22,656) 107 29 (22,520) Net loss $ (71,652) $ (1,760) $ (3,582) $ (76,994) Three Months Ended March 31, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 25,890 $ 9,324 $ 2,913 $ 38,127 Total expenses (55,377) (11,265) (2,901) (69,543) Total other income, net 15,279 — 29 15,308 Net (loss) income before income taxes $ (14,208) $ (1,941) $ 41 $ (16,108) Total assets related to the reporting segments as of March 31, 2024 and December 31, 2023 are as follows (in thousands): Strategic Opportunistic Properties Residential Homes Hotel Total Total assets as of March 31, 2024 $ 877,505 $ 294,066 $ 43,062 $ 1,214,633 Total assets as of December 31, 2023 $ 1,024,555 $ 315,957 $ 47,631 $ 1,388,143 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Obligations As of March 31, 2024 and December 31, 2023, the Company’s lease and rights to a leasehold interest with respect to 210 West 31st, which was accounted as a finance lease, are included in the consolidated balance sheet as follows: March 31, 2024 December 31, 2023 Right-of-use asset (included in real estate held for investment, net, in thousands) $ 6,391 $ 6,391 Lease obligation (included in other liabilities, in thousands) 9,561 9,537 Remaining lease term 89.8 years 90.0 years Discount rate 4.8 % 4.8 % As of March 31, 2024, the Company had a leasehold interest expiring in 2114. Future minimum lease payments under the Company’s finance lease as of March 31, 2024, are as follows (in thousands): April 1, 2024 through December 31, 2024 $ 270 2025 393 2026 396 2027 396 2028 396 Thereafter 51,375 Total expected minimum lease obligations 53,226 Less: Amount representing interest (1) (43,665) Present value of net minimum lease payments (2) $ 9,561 _____________________ (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 is included in other liabilities in the accompanying consolidated balance sheets. Capital Commitments As of March 31, 2024, the Company had a future funding commitment of $61.1 million related to the Capital Commitments. Such amounts are payable as incurred and therefore, no accrual is recognized as of March 31, 2024. Guarantee Agreements As of March 31, 2024, and as part of the previous 110 William Joint Venture debt and restructuring agreements, the Company guaranteed: all debt servicing costs and timely debt payments, completion for the construction and development of tenant improvement work, capital commitments, and recourse obligations. The related debt has an initial maturity of July 5, 2026, and guarantee amounts are due upon occurrence of any one triggering event. As of March 31, 2024, and as part of the Georgia 400 Mortgage Loan and Lincoln Court Mortgage Loan, the Company guaranteed the payment of $22.8 million, whereby the Company would be required to make guaranteed payments in the event that the Company turned the property over to the lender. Economic Dependency The Company is dependent on Pacific Oak Capital Advisors and its affiliates 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 Pacific Oak Capital Advisors and its affiliates is unable to provide these services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations as of March 31, 2024. Legal Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of March 31, 2024, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. PORT Offering Termination In April 2024, Pacific Oak Residential Trust, Inc., a wholly owned subsidiary of the Company, terminated a private offering of common stock. No shares were sold in the private offering. Series D Bonds |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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’s Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. |
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 variable interest entities 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: strategic opportunistic real estate and real estate-related investments (“strategic opportunistic properties”), residential homes, and hotel, which is how the Company's management manages the business. In general, the Company intends to hold its investments in strategic opportunistic properties for capital appreciation. Traditional performance metrics of strategic opportunistic properties 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 strategic opportunistic properties as similar investments and aggregates them into one reportable business segment. The Company owns residential homes in 18 markets which are all aggregated into one reportable business segment due to the homes being stabilized, having high occupancy rates and having similar economic characteristics. Additionally, as of March 31, 2024, the Company owns one hotel, which is a separate reportable business segment due to the nature of the hotel business with short-term stays. |
Real Estate Equity Securities | These investments are carried at their estimated fair value based on quoted market prices for the security, net of any discounts for restrictions on the sale of the security. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. For the three months ended March 31, 2024, the Company recognized a realized loss on real estate equity securities of $26.8 million and an unrealized gain on real estate equity securities of $11.4 million. For the three months ended March 31, 2023, the Company recognized an unrealized loss on real estate equity securities of $12.0 million. |
Reclassifications | Certain amounts in the prior year period have been reclassified to conform to the current period presentation. Goodwill, which was previously reported separately on the accompanying consolidated balance sheets, is now included in prepaid expenses and other assets for all periods presented. Additionally, the Company sold residential homes during the three months ended March 31, 2024 and as a result, certain assets and liabilities were reclassified to held for sale in the accompanying consolidated balance sheets for all periods presented. These reclassifications have not changed the results of operations of the prior period. |
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 recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 31, 2024, that are of significance or potential significance to the Company. |
Fair Value Measurement | Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. |
REAL ESTATE HELD FOR INVESTME_2
REAL ESTATE HELD FOR INVESTMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of March 31, 2024, and December 31, 2023, respectively (in thousands): March 31, 2024 December 31, 2023 Land $ 249,193 $ 253,075 Buildings and improvements 942,688 990,345 Tenant origination and absorption costs 14,045 17,080 Total real estate, cost 1,205,926 1,260,500 Accumulated depreciation and amortization (152,050) (167,157) Total real estate held for investment, net $ 1,053,876 $ 1,093,343 |
Schedule of Future Minimum Rental Income for Company's Properties | As of March 31, 2024, the future minimum rental income from the Company’s office complexes, under non-cancelable operating leases was as follows (in thousands): April 1, 2024 through December 31, 2024 $ 43,817 2025 52,655 2026 39,732 2027 32,078 2028 25,268 Thereafter 52,730 $ 246,280 |
Schedule of Hotel Revenue and Expense | The following table provides detailed information regarding the Company’s hotel revenues for its hotel property during the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 2023 Hotel revenues: Room $ 2,465 $ 2,565 Other 339 348 Hotel revenues $ 2,804 $ 2,913 |
NOTES AND BOND PAYABLE (Tables)
NOTES AND BOND PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of March 31, 2024 and December 31, 2023, the Company’s notes and bonds payable consisted of the following (dollars in thousands): Book Value as of March 31, 2024 Book Value as of December 31, 2023 Contractual Interest Rate as of March 31, 2024 (1) Effective Interest Rate at March 31, 2024 (1) Payment Type (2) Maturity Date (3) Richardson Office Mortgage Loan $ 12,162 $ 12,209 SOFR + 3.50% 8.84% Principal & Interest 11/01/2024 Series B Bonds (4) 210,498 321,724 3.93% 3.93% (4) 01/31/2026 Series C Bonds (4) 97,609 99,461 9.00% 9.00% (4) 06/30/2026 Crown Pointe Mortgage Loan 54,738 54,738 SOFR + 2.30% 7.64% Interest Only 04/01/2025 Georgia 400 Center Mortgage Loan (5) 40,052 40,184 SOFR + 1.55% 6.89% Principal & Interest 05/22/2024 PORT Mortgage Loan 1 34,967 34,967 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 1 58,746 59,091 3.90% 3.90% Interest Only 04/10/2026 PORT MetLife Loan 2 93,564 93,388 3.99% 3.99% Interest Only 04/10/2026 Q&C Hotel Mortgage Loan 24,529 24,579 SOFR + 3.50% 8.84% Principal & Interest 04/30/2024 (6) Lincoln Court Mortgage Loan (5) 33,110 33,310 SOFR + 3.25% 8.59% Interest Only 08/07/2025 Lofts at NoHo Commons Mortgage Loan 68,451 68,451 SOFR + 2.18% (7) 7.52% Interest Only 09/09/2024 Madison Square Mortgage Loan 19,346 17,962 4.63% 4.63% Interest Only 10/07/2024 Four Pack Mortgage Loan 173,125 175,234 BSBY + 2.75% 8.18% Principal & Interest 09/01/2026 Eight & Nine Corporate Centre Mortgage Loan 20,000 — SOFR + 4.90% (8) 10.24% Interest Only 02/09/2026 Total notes and bonds payable principal outstanding 951,420 1,045,821 Deferred financing costs and debt discount and premium, net (9) (16,208) (17,138) Total notes and bonds payable, net $ 935,212 $ 1,028,683 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of March 31, 2024. Effective interest rate was calculated as the actual interest rate in effect as of March 31, 2024 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices such as Secured Overnight Financing Rate (“SOFR”) or Bloomberg Short Term Bank Yield (“BSBY”) as of March 31, 2024, where applicable. (2) Represents the payment type required under these loans as of March 31, 2024. Certain future monthly payments due under these loans also include amortizing principal payments. (3) Represents the initial maturity date or the maturity date as extended as of March 31, 2024; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. For more information of the Company’s contractual obligations under its notes and bonds payable, see five-year maturity table, below. (4) See “Israeli Bond Financings” below. (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. As of March 31, 2024, the guaranteed amount in the aggregate was $22.8 million. (6) Subsequent to March 31, 2024, the Company was in technical default. (7) The effective interest rate is at the higher of one-month SOFR or 1.75%, plus 2.18%. (8) The effective interest rate is at the higher of one-month SOFR plus 4.50% or 8.90%. (9) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of March 31, 2024 (in thousands): April 1, 2024 through December 31, 2024 $ 180,840 2025 236,458 2026 534,122 2027 — 2028 — Thereafter — $ 951,420 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the carrying amounts and fair values of the Company’s financial instruments as of March 31, 2024 and December 31, 2023, which carrying amounts do not approximate the fair values (in thousands): March 31, 2024 December 31, 2023 Carrying Amount Fair Value Carrying Amount Fair Value Financial liabilities (Level 3): Notes payable $ 638,362 $ 631,653 $ 620,262 $ 611,725 Financial liabilities (Level 1): Pacific Oak SOR BVI Series B Bonds $ 202,511 $ 201,331 $ 312,458 $ 296,380 Pacific Oak SOR BVI Series C Bonds $ 94,339 $ 103,221 $ 95,963 $ 102,664 |
Fair Value, Assets Measured on Recurring Basis | As of March 31, 2024, 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 $ 11,950 $ 11,950 $ — $ — Asset derivative - interest rate caps (1) $ 2,088 $ — $ 2,088 $ — Nonrecurring Basis: Impaired real estate (2) $ 191,900 $ — $ — $ 191,900 _____________________ (1) Interest rate caps are included in prepaid expenses and other assets in the consolidated balance sheets. (2) Amount represents the fair value for a real estate asset impacted by impairment charges during the months ended March 31, 2024, 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, 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 $ 41,609 $ 41,609 $ — $ — Asset derivative - interest rate caps (1) $ 1,236 $ — $ 1,236 $ — Asset derivative - foreign currency collar (1) $ 3,655 $ — $ 3,655 $ — Nonrecurring Basis: Impaired real estate (2) $ 193,529 $ — $ — $ 193,529 _____________________ (1) Interest rate caps and foreign currency collars are included in prepaid expenses and other assets, respectively, on the accompanying consolidated balance sheets. (2) Amount represents the fair value for a real estate asset impacted by impairment charges during the year ended December 31, 2023, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2024 and 2023, respectively, and any related amounts payable as of March 31, 2024 and December 31, 2023 (in thousands): Incurred during the three months ended March 31, Payable as of 2024 2023 March 31, 2024 December 31, 2023 Expensed Asset management fees $ 4,102 $ 3,973 $ 9,738 $ 6,855 Property management fees (1) 677 664 214 153 Disposition fees (2) 15 362 — — Reimbursable offering costs (3) — — 789 894 $ 4,794 $ 4,999 $ 10,741 $ 7,902 _____________________ (1) Property management fees paid to DMH Realty, LLC (“DMH Realty”), an affiliate of Pacific Oak Capital Advisors and the advisor of the Company’s wholly-owned subsidiary, Pacific Oak Residential Trust, Inc. (“PORT”), pursuant to the property management agreement between DMH Realty and PORT, are recorded as operating, maintenance, and management expenses in the accompanying consolidated statements of operations. (2) Disposition fees with respect to real estate properties sold are recorded as a component of the gain or loss on sale of real estate in the accompanying consolidated statements of operations. (3) |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Joint Ventures | As of March 31, 2024 and December 31, 2023, the Company’s investments in unconsolidated entities were composed of the following (dollars in thousands): Number of Properties as of March 31, 2024 Investment Balance as of Joint Venture Location Ownership % March 31, 2024 December 31, 2023 110 William Joint Venture 1 New York, New York (1) $ 30,120 (1) $ 22,314 Pacific Oak Opportunity Zone Fund I 4 Various 47.0% 23,225 (2) 23,587 353 Sacramento Joint Venture 1 San Francisco, California 55.0% — (3) — $ 53,345 $ 45,901 _____________________ (1) The 110 William Joint Venture is governed by an amended and restated limited liability company agreement, dated July 5, 2023. In July 2023, the 110 William Joint Venture entered into debt and equity restructuring agreements and as a result, the Company committed to funding up to $105.0 million (the “Capital Commitments”) to the 110 William Joint Venture in exchange for 77.5% of preferred interest in the joint venture. During the three months ended March 31, 2024, the Company made capital contributions to the 110 William Joint Venture of $15.6 million and as of March 31, 2024, $61.1 million of the Capital Commitments remains to be funded. As of March 31, 2024, the Company owned 100% of the common interest and 77.5% of preferred interest in the joint venture. (2) 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. (3) The Company suspended the equity method of accounting for the 353 Sacramento Joint Venture. Summarized financial information for investment in unconsolidated entities follows (in thousands): March 31, 2024 December 31, 2023 Assets: Real estate, net $ 400,710 $ 411,028 Total assets 467,559 468,002 Liabilities: Notes payable, net 410,183 410,563 Total liabilities 421,723 427,794 Total equity $ 45,836 $ 40,207 For the Three Months Ended March 31, 2024 2023 Total revenues $ 9,277 $ 11,120 Operating loss (10,230) (14,035) Net loss $ (10,221) $ (13,948) |
REPORTING SEGMENTS (Tables)
REPORTING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Three Months Ended March 31, 2024 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 23,131 $ 9,066 $ 2,804 $ 35,001 Total expenses (72,127) (10,933) (6,415) (89,475) Total other (loss) income, net (22,656) 107 29 (22,520) Net loss $ (71,652) $ (1,760) $ (3,582) $ (76,994) Three Months Ended March 31, 2023 Strategic Opportunistic Properties Residential Homes Hotel Total Total revenues $ 25,890 $ 9,324 $ 2,913 $ 38,127 Total expenses (55,377) (11,265) (2,901) (69,543) Total other income, net 15,279 — 29 15,308 Net (loss) income before income taxes $ (14,208) $ (1,941) $ 41 $ (16,108) Total assets related to the reporting segments as of March 31, 2024 and December 31, 2023 are as follows (in thousands): Strategic Opportunistic Properties Residential Homes Hotel Total Total assets as of March 31, 2024 $ 877,505 $ 294,066 $ 43,062 $ 1,214,633 Total assets as of December 31, 2023 $ 1,024,555 $ 315,957 $ 47,631 $ 1,388,143 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Cost | As of March 31, 2024 and December 31, 2023, the Company’s lease and rights to a leasehold interest with respect to 210 West 31st, which was accounted as a finance lease, are included in the consolidated balance sheet as follows: March 31, 2024 December 31, 2023 Right-of-use asset (included in real estate held for investment, net, in thousands) $ 6,391 $ 6,391 Lease obligation (included in other liabilities, in thousands) 9,561 9,537 Remaining lease term 89.8 years 90.0 years Discount rate 4.8 % 4.8 % |
Schedule of Finance Lease, Liability, Fiscal Year Maturity | As of March 31, 2024, the Company had a leasehold interest expiring in 2114. Future minimum lease payments under the Company’s finance lease as of March 31, 2024, are as follows (in thousands): April 1, 2024 through December 31, 2024 $ 270 2025 393 2026 396 2027 396 2028 396 Thereafter 51,375 Total expected minimum lease obligations 53,226 Less: Amount representing interest (1) (43,665) Present value of net minimum lease payments (2) $ 9,561 _____________________ (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 is included in other liabilities in the accompanying consolidated balance sheets. |
ORGANIZATION (Details)
ORGANIZATION (Details) | 3 Months Ended | ||
Mar. 31, 2024 shares | Dec. 31, 2023 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) | 103,214,807 | 103,310,648 | |
Operating Partnership | |||
Organizational Structure [Line Items] | |||
Partnership interest in Operating Partnership | 0.10% | ||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% | ||
Pacific Oak Strategic Opportunity BVI | |||
Organizational Structure [Line Items] | |||
Common stock, shares authorized (in shares) | 50,000 | ||
Number of certificates issued | certificate | 1 | ||
Pacific Oak Strategic Opportunity BVI | Operating Partnership | |||
Organizational Structure [Line Items] | |||
Common stock, shares issued (in shares) | 10,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) market property segment | Mar. 31, 2023 USD ($) segment | May 10, 2024 USD ($) | |
Segment Reporting Information [Line Items] | |||
Periodic payment | $ 236,458 | ||
Number of reportable segments | segment | 3 | 3 | |
Equity securities, realized loss | $ 26,800 | ||
Unrealized gain on real estate equity securities | $ 11,400 | ||
Unrealized loss on real estate equity securities | $ 12,000 | ||
Subsequent Event | |||
Segment Reporting Information [Line Items] | |||
Periodic payment | $ 342,900 | ||
Hotel | |||
Segment Reporting Information [Line Items] | |||
Number of real estate properties | property | 1 | ||
Residential Homes | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Single family home markets | market | 18 | ||
Minimum | Mortgages | |||
Segment Reporting Information [Line Items] | |||
Long-term debt, term | 3 years | ||
Maximum | Mortgages | |||
Segment Reporting Information [Line Items] | |||
Long-term debt, term | 5 years |
REAL ESTATE HELD FOR INVESTME_3
REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details) ft² in Millions | Mar. 31, 2024 a ft² property portfolio room investment unit |
Office Properties | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 9 |
Percentage of portfolio occupied | 67% |
Undeveloped Land, Portfolio | |
Real Estate Properties [Line Items] | |
Rentable square feet | ft² | 3.2 |
Residential Home Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | portfolio | 1 |
Percentage of portfolio occupied | 94% |
Number of units in real estate property | 2,168 |
Apartment Building | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 2 |
Percentage of portfolio occupied | 95% |
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] | |
Number of investments in real estate | investment | 4 |
Developable acres | a | 581 |
Office/ Retail Property | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
REAL ESTATE HELD FOR INVESTME_4
REAL ESTATE HELD FOR INVESTMENT (Real Estate Investments) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 1,205,926 | $ 1,260,500 |
Accumulated depreciation and amortization | (152,050) | (167,157) |
Total real estate held for investment, net | 1,053,876 | 1,093,343 |
Land | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 249,193 | 253,075 |
Buildings and improvements | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 942,688 | 990,345 |
Tenant origination and absorption costs | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 14,045 | $ 17,080 |
REAL ESTATE HELD FOR INVESTME_5
REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 5.7 | $ 5.9 | |
Recognition of deferred revenue, net of discontinued operations | 0.1 | $ 0.8 | |
Deferred rent receivables | 19 | 19.1 | |
Incentive to lessee | $ 2.2 | $ 2.5 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 16 years 4 months 24 days | ||
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years 3 months 18 days | ||
Apartment Building | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 1 year |
REAL ESTATE HELD FOR INVESTME_6
REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income for Company's Properties) (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Real Estate [Abstract] | |
April 1, 2024 through December 31, 2024 | $ 43,817 |
2025 | 52,655 |
2026 | 39,732 |
2027 | 32,078 |
2028 | 25,268 |
Thereafter | 52,730 |
Future minimum rental income | $ 246,280 |
REAL ESTATE HELD FOR INVESTME_7
REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details) - Assets, Total - Geographic Concentration Risk | 3 Months Ended |
Mar. 31, 2024 | |
California | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 21.10% |
Georgia | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 12.10% |
REAL ESTATE HELD FOR INVESTME_8
REAL ESTATE HELD FOR INVESTMENT (Hotel Revenue and Expense) (Details) - Hotel revenues - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Revenue | $ 2,804 | $ 2,913 |
Room | ||
Revenues: | ||
Revenue | 2,465 | 2,565 |
Other | ||
Revenues: | ||
Revenue | $ 339 | $ 348 |
REAL ESTATE HELD FOR INVESTME_9
REAL ESTATE HELD FOR INVESTMENT (Contract Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Product Liability Contingency [Line Items] | |||
Contract with customer, liability, revenue recognized | $ 35 | $ 850 | |
Other Liabilities | |||
Product Liability Contingency [Line Items] | |||
Contract with customer, liability | 21,300 | $ 23,800 | |
Contract with customer, liability, revenue recognized | $ 2,500 | $ 800 |
REAL ESTATE HELD FOR INVESTM_10
REAL ESTATE HELD FOR INVESTMENT (Impairment) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) property | Mar. 31, 2023 USD ($) property | |
Real Estate Properties [Line Items] | ||
Impairment charges on real estate and related intangibles | $ | $ 39,265 | $ 17,663 |
Strategic Opportunistic Properties | ||
Real Estate Properties [Line Items] | ||
Number of properties with write down in carrying value | 2 | 1 |
Hotel revenues | ||
Real Estate Properties [Line Items] | ||
Number of properties with write down in carrying value | 1 |
REAL ESTATE HELD FOR INVESTM_11
REAL ESTATE HELD FOR INVESTMENT (Park Highlands Land Purchase and Sale Contract) (Details) - Developable Land - Disposed of by Sale - Park Highlands $ in Millions | 1 Months Ended |
Mar. 31, 2024 USD ($) a | |
Schedule of Equity Method Investments [Line Items] | |
Developable land sold | a | 454 |
Proceeds from sale of real estate | $ | $ 195 |
Phase One- Closing Date of July 31, 2024 | |
Schedule of Equity Method Investments [Line Items] | |
Developable land sold | a | 212.14 |
Proceeds from sale of real estate | $ | $ 91 |
Phase One- Closing Date of July 31, 2025 | |
Schedule of Equity Method Investments [Line Items] | |
Developable land sold | a | 242.17 |
Proceeds from sale of real estate | $ | $ 104 |
NOTES AND BOND PAYABLE - Long-t
NOTES AND BOND PAYABLE - Long-term Debt Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Total notes and bonds payable principal outstanding | $ 951,420 | $ 1,045,821 |
Deferred financing costs and debt discount and premium, net | (16,208) | (17,138) |
Total notes and bonds payable, net | 935,212 | 1,028,683 |
Richardson Office Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 12,162 | 12,209 |
Interest rate, effective percentage | 8.84% | |
Richardson Office Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Pacific Oak SOR BVI Series B Bonds | Bonds Payable | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 210,498 | 321,724 |
Interest rate, effective percentage | 3.93% | |
Contractual interest rate, percentage | 3.93% | |
Pacific Oak SOR BVI Series C Bonds | Bonds Payable | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 97,609 | 99,461 |
Interest rate, effective percentage | 9% | |
Contractual interest rate, percentage | 9% | |
Crown Pointe Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 54,738 | 54,738 |
Interest rate, effective percentage | 7.64% | |
Crown Pointe Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.30% | |
Georgia 400 Center Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 40,052 | 40,184 |
Interest rate, effective percentage | 6.89% | |
Georgia 400 Center Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.55% | |
PORT Mortgage Loan 1 | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 34,967 | 34,967 |
Interest rate, effective percentage | 4.74% | |
Contractual interest rate, percentage | 4.74% | |
PORT Mortgage Loan 2 | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 10,523 | 10,523 |
Interest rate, effective percentage | 4.72% | |
Contractual interest rate, percentage | 4.72% | |
PORT MetLife Loan 1 | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 58,746 | 59,091 |
Interest rate, effective percentage | 3.90% | |
Contractual interest rate, percentage | 3.90% | |
PORT MetLife Loan 2 | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 93,564 | 93,388 |
Interest rate, effective percentage | 3.99% | |
Contractual interest rate, percentage | 3.99% | |
Q&C Hotel Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 24,529 | 24,579 |
Interest rate, effective percentage | 8.84% | |
Q&C Hotel Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Lincoln Court Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 33,110 | 33,310 |
Interest rate, effective percentage | 8.59% | |
Amount under guarantees | $ 22,800 | |
Lincoln Court Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.25% | |
Lofts at NoHo Commons Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 68,451 | 68,451 |
Interest rate, effective percentage | 7.52% | |
Lofts at NoHo Commons Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.18% | |
Lofts at NoHo Commons Mortgage Loan | Mortgages | One-month SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.18% | |
Lofts at NoHo Commons Mortgage Loan | Mortgages | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.75% | |
Madison Square Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 19,346 | 17,962 |
Interest rate, effective percentage | 4.63% | |
Contractual interest rate, percentage | 4.63% | |
Four Pack Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 173,125 | 175,234 |
Interest rate, effective percentage | 8.18% | |
Four Pack Mortgage Loan | Mortgages | Bloomberg Short-Term Bank Yield Index | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.75% | |
Eight & Nine Corporate Centre Mortgage Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Notes payable, net | $ 20,000 | $ 0 |
Interest rate, effective percentage | 10.24% | |
Eight & Nine Corporate Centre Mortgage Loan | Mortgages | One-month SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.90% | |
Eight & Nine Corporate Centre Mortgage Loan | Mortgages | One-month SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.50% | |
Eight & Nine Corporate Centre Mortgage Loan | Mortgages | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 8.90% |
NOTES AND BOND PAYABLE - Narrat
NOTES AND BOND PAYABLE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Interest expense, net | $ 16,773 | $ 16,031 | |
Amortization of deferred financing costs and debt discount and premium, net | 2,300 | 2,400 | |
Interest capitalized | 1,062 | 850 | |
Interest payable | 7,300 | $ 9,000 | |
Undeveloped Land | |||
Debt Instrument [Line Items] | |||
Interest capitalized | $ 1,100 | $ 900 |
NOTES AND BOND PAYABLE - Maturi
NOTES AND BOND PAYABLE - Maturities of Long-term Debt (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Notes and Bonds Payable [Abstract] | |
April 1, 2024 through December 31, 2024 | $ 180,840 |
2025 | 236,458 |
2026 | 534,122 |
2027 | 0 |
2028 | 0 |
Thereafter | 0 |
Notes and bond payable outstanding | $ 951,420 |
NOTES AND BOND PAYABLE - Israel
NOTES AND BOND PAYABLE - Israeli Bond Financings (Details) - Bonds Payable - ILS (₪) | Jan. 31, 2024 | Mar. 31, 2024 |
Pacific Oak SOR BVI Series C Bonds | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 9% | |
Pacific Oak SOR BVI Series C Bonds | Public Offering | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | ₪ 360,000,000 | |
Pacific Oak SOR BVI Series B Bonds | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 3.93% | |
Periodic payment | ₪ 388,100,000 | |
Pacific Oak SOR BVI Series B Bonds | Public Offering | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | ₪ 776,400,000 |
FAIR VALUE DISCLOSURES - Face V
FAIR VALUE DISCLOSURES - Face Value, Carrying Amounts and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Level 3 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | $ 638,362 | $ 620,262 |
Level 3 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 631,653 | 611,725 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Carrying Amount | Pacific Oak SOR BVI Series B Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 202,511 | 312,458 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Carrying Amount | Pacific Oak SOR BVI Series C Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 94,339 | 95,963 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value | Pacific Oak SOR BVI Series B Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | 201,331 | 296,380 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value | Pacific Oak SOR BVI Series C Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, value | $ 103,221 | $ 102,664 |
FAIR VALUE DISCLOSURES - Fair V
FAIR VALUE DISCLOSURES - Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | $ 11,950 | $ 41,609 |
Asset derivative - interest rate caps | 1,236 | |
Asset derivative - foreign currency collar | 3,655 | |
Recurring Basis | Interest rate caps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 2,088 | |
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 | 11,950 | 41,609 |
Asset derivative - interest rate caps | 0 | |
Asset derivative - foreign currency collar | 0 | |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate caps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 0 | |
Recurring Basis | 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 | 1,236 | |
Asset derivative - foreign currency collar | 3,655 | |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Interest rate caps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 2,088 | |
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 | |
Asset derivative - foreign currency collar | 0 | |
Recurring Basis | Significant Unobservable Inputs (Level 3) | Interest rate caps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivative - interest rate caps | 0 | |
Nonrecurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate | 191,900 | 193,529 |
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 |
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 |
Nonrecurring Basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate | $ 191,900 | $ 193,529 |
FAIR VALUE DISCLOSURES - Narrat
FAIR VALUE DISCLOSURES - Narrative (Details) - property | Mar. 31, 2024 | Mar. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of real estate properties | 3 | 1 |
Real Estate Properties Measured at Estimated Fair Values | Measurement Input Terminal Cap Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate properties, measurement input | 6.50% | |
Real Estate Properties Measured at Estimated Fair Values | Measurement Input Terminal Cap Rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate properties, measurement input | 7% | |
Real Estate Properties Measured at Estimated Fair Values | Measurement Input Terminal Cap Rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate properties, measurement input | 8% | |
Real Estate Properties Measured at Estimated Fair Values | Measurement Input, Discount Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate properties, measurement input | 7% | |
Real Estate Properties Measured at Estimated Fair Values | Measurement Input, Discount Rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate properties, measurement input | 8.25% | |
Real Estate Properties Measured at Estimated Fair Values | Measurement Input, Discount Rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate properties, measurement input | 8.75% |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||
Expensed | $ 1,867 | $ 1,962 | |
DMH Realty, LLC | |||
Related Party Transaction [Line Items] | |||
Capitalized | 4,794 | 4,999 | |
Payable as of | 10,741 | $ 7,902 | |
DMH Realty, LLC | Asset management fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 4,102 | 3,973 | |
Payable as of | 9,738 | 6,855 | |
DMH Realty, LLC | Property management fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 677 | 664 | |
Payable as of | 214 | 153 | |
DMH Realty, LLC | Disposition fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 15 | 362 | |
Payable as of | 0 | 0 | |
DMH Realty, LLC | Reimbursable offering costs | |||
Related Party Transaction [Line Items] | |||
Capitalized | 0 | $ 0 | |
Payable as of | $ 789 | $ 894 |
RELATED PARTY TRANSACTIONS - Pa
RELATED PARTY TRANSACTIONS - Pacific Oak Opportunity Zone Fund I (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
May 10, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | ||||
Distribution of capital from an unconsolidated entity | $ 0 | $ 1,144 | ||
Pacific Oak Opportunity Zone Fund I | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Waived asset management fees | 100 | $ 0 | ||
Accounts receivable, current | $ 500 | $ 400 | ||
Pacific Oak Opportunity Zone Fund I | Subsequent Event | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Distribution of capital from an unconsolidated entity | $ 1,500 |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED ENTITIES (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) property | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jul. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||
Investment Balance | $ 53,345 | $ 45,901 | |||
Other commitment | 61,100 | ||||
Real estate held for investment, net | 1,053,876 | 1,093,343 | |||
Total assets | 1,214,633 | 1,388,143 | |||
Notes payable, net | 0 | 748 | |||
Total liabilities | 1,027,913 | 1,124,779 | |||
Total equity | 186,720 | $ 396,623 | 263,364 | $ 416,393 | |
Total revenues | 35,001 | 38,127 | |||
Total other (loss) income, net | (22,520) | 15,308 | |||
Net loss | (76,994) | (19,770) | |||
Unconsolidated Entities | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Real estate held for investment, net | 400,710 | 411,028 | |||
Total assets | 467,559 | 468,002 | |||
Notes payable, net | 410,183 | 410,563 | |||
Total liabilities | 421,723 | 427,794 | |||
Total equity | 45,836 | 40,207 | |||
Total revenues | 9,277 | 11,120 | |||
Total other (loss) income, net | (10,230) | (14,035) | |||
Net loss | $ (10,221) | $ (13,948) | |||
110 William Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of Properties | property | 1 | ||||
Ownership % | 77.50% | ||||
Investment Balance | $ 30,120 | 22,314 | |||
Other commitment | 61,100 | ||||
Payments to acquire equity method investments | $ 15,600 | ||||
110 William Joint Venture | Maximum | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Other commitment | $ 105,000 | ||||
Pacific Oak Opportunity Zone Fund I | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of Properties | property | 4 | ||||
Ownership % | 47% | ||||
Investment Balance | $ 23,225 | 23,587 | |||
353 Sacramento Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of Properties | property | 1 | ||||
Ownership % | 55% | ||||
Investment Balance | $ 0 | $ 0 |
REPORTING SEGMENTS (Details)
REPORTING SEGMENTS (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) segment | Dec. 31, 2023 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | 3 | |
Income Statement [Abstract] | |||
Total revenues | $ 35,001 | $ 38,127 | |
Total expenses | (89,475) | (69,543) | |
Total other (loss) income, net | (22,520) | 15,308 | |
Net loss | (76,994) | (16,108) | |
Assets and Liabilities held for Sale | |||
Total assets | 1,214,633 | $ 1,388,143 | |
Strategic Opportunistic Properties | |||
Income Statement [Abstract] | |||
Total revenues | 23,131 | 25,890 | |
Total expenses | (72,127) | (55,377) | |
Total other (loss) income, net | (22,656) | 15,279 | |
Net loss | (71,652) | (14,208) | |
Assets and Liabilities held for Sale | |||
Total assets | $ 877,505 | 1,024,555 | |
Residential Homes | |||
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Income Statement [Abstract] | |||
Total revenues | $ 9,066 | 9,324 | |
Total expenses | (10,933) | (11,265) | |
Total other (loss) income, net | 107 | 0 | |
Net loss | (1,760) | (1,941) | |
Assets and Liabilities held for Sale | |||
Total assets | 294,066 | 315,957 | |
Hotel | |||
Income Statement [Abstract] | |||
Total revenues | 2,804 | 2,913 | |
Total expenses | (6,415) | (2,901) | |
Total other (loss) income, net | 29 | 29 | |
Net loss | (3,582) | $ 41 | |
Assets and Liabilities held for Sale | |||
Total assets | $ 43,062 | $ 47,631 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Lease Cost (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Real estate held for investment, net | Real estate held for investment, net |
Right-of-use asset (included in real estate held for investment, net, in thousands) | $ 6,391 | $ 6,391 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Payable as of | Payable as of |
Lease obligation (included in other liabilities, in thousands) | $ 9,561 | $ 9,537 |
Remaining lease term | 89 years 9 months 18 days | 90 years |
Discount rate | 4.80% | 4.80% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Finance Lease, Liability, Fiscal Year Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
April 1, 2024 through December 31, 2024 | $ 270 | |
2025 | 393 | |
2026 | 396 | |
2027 | 396 | |
2028 | 396 | |
Thereafter | 51,375 | |
Total expected minimum lease obligations | 53,226 | |
Less: Amount representing interest | (43,665) | |
Present value of net minimum lease payments | $ 9,561 | $ 9,537 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Loss Contingencies [Line Items] | |
Other commitment | $ 61,100 |
Lincoln Court Mortgage Loan | Mortgages | |
Loss Contingencies [Line Items] | |
Amount under guarantees | 22,800 |
110 William Joint Venture | |
Loss Contingencies [Line Items] | |
Other commitment | $ 61,100 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - Series D Bonds - Bonds Payable ₪ in Millions, $ in Millions | 1 Months Ended | |
Apr. 30, 2024 ILS (₪) | Apr. 24, 2024 USD ($) | |
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | ₪ 288.1 | $ 76.2 |
Interest rate, effective percentage | 9.50% | |
Principal of installment payments as percent of face amount | 33.33% |