Cover page
Cover page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 31, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-56428 | |
Entity Registrant Name | Brookfield Real Estate Income Trust Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 82-2365593 | |
Entity Address, Address Line One | 250 Vesey Street | |
Entity Address, Address Line Two | 15th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10281 | |
City Area Code | 212 | |
Local Phone Number | 417-7000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001713407 | |
Current Fiscal Year End Date | --12-31 | |
Entity Ex Transition Period | false | |
Common Stock Class I | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 40,769,954 | |
Common Stock Class S | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 29,364,871 | |
Common Stock Class D | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 160,631 | |
Common Stock Class C | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 8,475,900 | |
Common Stock Class E | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 3,426,925 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Investments in real estate, net | $ 1,668,545 | $ 1,525,156 |
Total investments in real estate-related loans and securities | 120,818 | 240,108 |
Investments in unconsolidated entities | 81,034 | 78,569 |
Intangible assets, net | 41,536 | 41,459 |
Cash and cash equivalents | 13,053 | 24,272 |
Restricted cash | 32,557 | 16,429 |
Accounts and other receivables, net | 9,174 | 10,794 |
Other assets | 24,352 | 53,120 |
Total Assets | 1,991,069 | 1,989,907 |
Liabilities and Equity | ||
Mortgage loans, secured term loan and secured credit facility, net | 1,149,358 | 1,058,343 |
Due to affiliates | 37,841 | 43,971 |
Intangible liabilities, net | 25,454 | 26,127 |
Accounts payable, accrued expenses and other liabilities | 42,562 | 39,224 |
Subscriptions received in advance | 17,531 | 3,003 |
Total Liabilities | 1,272,746 | 1,170,668 |
Commitments and contingencies | 0 | 0 |
Redeemable non-controlling interests attributable to OP unitholders | 923 | 933 |
Stockholders’ Equity | ||
Preferred stock, $0.01 par value per share, 50,000 shares authorized; no shares issued nor outstanding at June 30, 2024 and December 31, 2023, respectively | 0 | 0 |
Additional paid-in capital | 965,258 | 1,028,028 |
Accumulated deficit | (254,028) | (213,960) |
Total Stockholders’ Equity | 712,013 | 814,909 |
Non-controlling interests attributable to third party joint ventures | 4,637 | 3,022 |
Non-controlling interests attributable to preferred stockholders | 750 | 375 |
Total Equity | 717,400 | 818,306 |
Total Liabilities and Stockholders’ Equity | 1,991,069 | 1,989,907 |
Variable Interest Entity, Primary Beneficiary | ||
Assets | ||
Investments in real estate, net | 310,581 | 199,136 |
Intangible assets, net | 5,974 | 5,398 |
Cash and cash equivalents | 3,023 | 1,374 |
Restricted cash | 10,634 | 10,761 |
Accounts and other receivables, net | 2,964 | 2,274 |
Other assets | 1,843 | 2,651 |
Total Assets | 335,019 | 221,594 |
Liabilities and Equity | ||
Mortgage loans, secured term loan and secured credit facility, net | 242,627 | 178,458 |
Due to affiliates | 20 | 0 |
Intangible liabilities, net | 15 | 18 |
Accounts payable, accrued expenses and other liabilities | 7,097 | 6,362 |
Total Liabilities | 249,759 | 184,838 |
Common Stock Class S | ||
Stockholders’ Equity | ||
Common stock | 300 | 342 |
Common Stock Class I | ||
Stockholders’ Equity | ||
Common stock | 407 | 415 |
Common Stock Class T | ||
Stockholders’ Equity | ||
Common stock | 0 | 0 |
Common Stock Class D | ||
Stockholders’ Equity | ||
Common stock | 2 | 1 |
Common Stock Class C | ||
Stockholders’ Equity | ||
Common stock | 74 | 83 |
Common Stock Class E | ||
Stockholders’ Equity | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, outstanding (in shares) | 82,797,000 | 88,596,000 |
Common Stock Class S | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 30,042,000 | 34,244,000 |
Common stock, outstanding (in shares) | 30,042,000 | 34,244,000 |
Common Stock Class I | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 40,708,000 | 41,504,000 |
Common stock, outstanding (in shares) | 40,708,000 | 41,504,000 |
Common Stock Class T | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, outstanding (in shares) | 0 | 0 |
Common Stock Class D | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 160,000 | 148,000 |
Common stock, outstanding (in shares) | 160,000 | 148,000 |
Common Stock Class C | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 8,476,000 | 9,347,000 |
Common stock, outstanding (in shares) | 8,476,000 | 9,347,000 |
Common Stock Class E | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 3,411,000 | 3,353,000 |
Common stock, outstanding (in shares) | 3,411,000 | 3,353,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues | ||||
Rental revenues | $ 32,193 | $ 33,502 | $ 63,049 | $ 63,975 |
Other revenues | 3,333 | 3,646 | 5,690 | 6,205 |
Total revenues | 35,526 | 37,148 | 68,739 | 70,180 |
Expenses | ||||
Rental property operating | 13,262 | 14,880 | 25,636 | 26,608 |
General and administrative | 1,570 | 2,229 | 3,783 | 4,545 |
Management fee | 2,833 | 3,579 | 5,828 | 7,257 |
Depreciation and amortization | 14,337 | 12,765 | 27,098 | 25,569 |
Total expenses | 32,002 | 33,453 | 62,345 | 63,979 |
Other income (expense) | ||||
Income from real estate-related loans and securities | 3,311 | 3,841 | 10,369 | 10,844 |
Interest expense | (17,001) | (14,498) | (33,327) | (28,430) |
Gain (loss) from unconsolidated entities | 2,991 | 1,649 | 3,724 | (2,404) |
Other income, net | 30 | 6,512 | 2,184 | 5,248 |
Total other income (expense) | (10,669) | (2,496) | (17,050) | (14,742) |
Net (loss) income | (7,145) | 1,199 | (10,656) | (8,541) |
Net loss (income) attributable to non-controlling interests in third party joint ventures | 230 | (67) | 433 | 42 |
Net income attributable to non-controlling interests - preferred stockholders | (65) | (45) | (65) | (45) |
Net loss attributable to redeemable non-controlling interests | 7 | (2) | 10 | 6 |
Net (loss) income attributable to stockholders | $ (6,973) | $ 1,085 | $ (10,278) | $ (8,538) |
Net loss per share of common stock - basic (in dollars per share) | $ (0.08) | $ 0.01 | $ (0.12) | $ (0.09) |
Net loss per share of common stock - diluted (in dollars per share) | $ (0.08) | $ 0.01 | $ (0.12) | $ (0.09) |
Weighted average number of shares outstanding, basic (in shares) | 85,462,000 | 94,231,000 | 86,806,000 | 94,120,000 |
Weighted average number of shares outstanding, diluted (in shares) | 85,462,000 | 94,231,000 | 86,806,000 | 94,120,000 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock Common Stock Class I | Common Stock Common Stock Class S | Common Stock Common Stock Class C | Common Stock Common Stock Class E | Common Stock Common Stock Class D | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity | Non-controlling Interests Attributable to Third Party Joint Ventures | Non-controlling Interests Attributable to Preferred Stockholders | Non-controlling Interests Attributable to Preferred Stockholders Preferred Stock |
Beginning balance at Dec. 31, 2022 | $ 967,660 | $ 424 | $ 367 | $ 94 | $ 0 | $ 0 | $ 1,063,079 | $ (100,750) | $ 963,214 | $ 4,071 | $ 375 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Common stock issued | 94,386 | 39 | 23 | 1 | 94,323 | 94,386 | |||||||
Stock-based compensation | 177 | 177 | 177 | ||||||||||
Distribution reinvestment | 19,582 | 8 | 5 | 19,569 | 19,582 | ||||||||
Contributions from non-controlling interests | 104 | 104 | |||||||||||
Distributions | (33,199) | (33,148) | (33,148) | (6) | (45) | ||||||||
Common stock repurchased | (106,724) | (48) | (31) | (106,645) | (106,724) | ||||||||
Offering costs | 990 | 990 | 990 | ||||||||||
Net (loss) income | (8,541) | (8,544) | (8,544) | (42) | 45 | ||||||||
Allocation to redeemable non-controlling interests | 22 | 22 | 22 | ||||||||||
Ending balance at Jun. 30, 2023 | 932,477 | 423 | 364 | 94 | 0 | 1 | 1,069,535 | (142,442) | 927,975 | 4,127 | 375 | ||
Beginning balance at Mar. 31, 2023 | 944,308 | 422 | 369 | 94 | 0 | 1 | 1,066,521 | (127,453) | 939,954 | 3,979 | 375 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Common stock issued | 45,632 | 21 | 8 | 0 | 0 | 45,603 | 45,632 | ||||||
Stock-based compensation | 96 | 96 | 96 | ||||||||||
Distribution reinvestment | 9,361 | 4 | 2 | 9,355 | 9,361 | ||||||||
Contributions from non-controlling interests | 87 | 87 | |||||||||||
Distributions | (16,127) | (16,076) | (16,076) | (6) | (45) | ||||||||
Common stock repurchased | (52,018) | (24) | (15) | (51,979) | (52,018) | ||||||||
Offering costs | 75 | 75 | 75 | ||||||||||
Net (loss) income | 1,199 | 1,087 | 1,087 | 67 | 45 | ||||||||
Allocation to redeemable non-controlling interests | 14 | 14 | 14 | ||||||||||
Ending balance at Jun. 30, 2023 | 932,477 | 423 | 364 | 94 | 0 | 1 | 1,069,535 | (142,442) | 927,975 | 4,127 | 375 | ||
Beginning balance at Dec. 31, 2023 | 818,306 | 415 | 342 | 83 | 0 | 1 | 1,028,028 | (213,960) | 814,909 | 3,022 | 375 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Common stock issued | 27,739 | $ 375 | 19 | 5 | 1 | 27,714 | 27,739 | $ 375 | |||||
Stock-based compensation | 139 | 139 | 139 | ||||||||||
Distribution reinvestment | 17,628 | 9 | 4 | 17,615 | 17,628 | ||||||||
Contributions from non-controlling interests | 2,048 | 2,048 | |||||||||||
Distributions | (29,845) | (29,780) | (29,780) | (65) | |||||||||
Common stock repurchased | (111,023) | (36) | (51) | (9) | (110,927) | (111,023) | |||||||
Offering costs | (2,689) | (2,689) | (2,689) | ||||||||||
Net (loss) income | (10,656) | (10,288) | (10,288) | (433) | 65 | ||||||||
Ending balance at Jun. 30, 2024 | 717,400 | 407 | 300 | 74 | 0 | 2 | 965,258 | (254,028) | 712,013 | 4,637 | 750 | ||
Beginning balance at Mar. 31, 2024 | 766,396 | 408 | 327 | 74 | 0 | 2 | 994,255 | (232,397) | 762,669 | 2,977 | 750 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Common stock issued | 17,100 | 14 | 2 | 17,084 | 17,100 | ||||||||
Stock-based compensation | 58 | 58 | 58 | ||||||||||
Distribution reinvestment | 8,716 | 4 | 2 | 8,710 | 8,716 | ||||||||
Contributions from non-controlling interests | 1,890 | 1,890 | |||||||||||
Distributions | (14,716) | (14,651) | (14,651) | (65) | |||||||||
Common stock repurchased | (57,003) | (19) | (31) | 0 | (56,953) | (57,003) | |||||||
Offering costs | (2,119) | (2,119) | (2,119) | ||||||||||
Net (loss) income | (7,145) | (6,980) | (6,980) | (230) | 65 | ||||||||
Allocation to redeemable non-controlling interests | (15) | (15) | (15) | ||||||||||
Ending balance at Jun. 30, 2024 | $ 717,400 | $ 407 | $ 300 | $ 74 | $ 0 | $ 2 | $ 965,258 | $ (254,028) | $ 712,013 | $ 4,637 | $ 750 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||||
Net loss | $ (7,145) | $ 1,199 | $ (10,656) | $ (8,541) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Depreciation and amortization | 14,337 | 12,765 | 27,098 | 25,569 | |
Management fees | 5,828 | 7,257 | |||
Amortization of above and below market leases and lease inducements | (377) | (538) | |||
Amortization of restricted stock grants | 161 | 177 | |||
Amortization of deferred financing costs | 1,591 | 1,590 | |||
Amortization of upfront derivative acquisition costs | 1,004 | 911 | |||
Provision for current expected credit losses | (230) | 1,300 | |||
Amortization of origination fees and discount | 0 | (49) | |||
Paid-in-kind interest | (422) | 0 | |||
Realized gain on sale of derivatives | (3,615) | 0 | |||
Realized gain on investments in real estate-related loans and securities | (4,255) | (504) | |||
Unrealized loss (gain) on investments | 680 | (1,567) | |||
Distributions of earnings from unconsolidated entities | 764 | 2,333 | |||
Changes in assets and liabilities: | |||||
Increase in lease inducements and origination costs | (1,082) | (423) | |||
Upfront derivative acquisition costs | (369) | (8,781) | |||
Proceeds from settlement of derivative contracts | 10,350 | 0 | |||
Increase in other assets | (600) | (222) | |||
Decrease (increase) in accounts and other receivables | 1,136 | (929) | |||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | 655 | (2,327) | |||
Increase in due to affiliates | 349 | 1,846 | |||
Net cash provided by operating activities | 28,010 | 17,102 | |||
Cash flows from investing activities | |||||
Acquisitions of real estate | (162,990) | (1,883) | $ (1,700) | ||
Purchase of real estate-related loans and securities | (15,871) | (49,160) | |||
Proceeds from sale of real estate-related loans and securities | 130,620 | 62,600 | |||
Proceeds from principal repayments of real estate-related loans and securities | 6,588 | 7,971 | |||
Capital improvements to real estate | (2,368) | (3,568) | |||
Purchase of trading securities | (139,979) | (156,771) | |||
Proceeds from sale of trading securities | 161,276 | 143,847 | |||
Net cash (used in) provided by investing activities | (22,724) | 3,036 | |||
Cash flows from financing activities: | |||||
Borrowings from mortgage loans | 65,000 | 0 | |||
Borrowings from secured credit facility | 25,500 | 0 | |||
Repayment of mortgage loans | (27) | 0 | |||
Payment of deferred financing costs | (1,048) | (25) | |||
Proceeds from issuance of common stock | 18,765 | 72,318 | |||
Proceeds from issuance of preferred equity | 375 | 0 | |||
Repurchases of common stock | (112,716) | (93,348) | |||
Subscriptions received in advance | 17,531 | 3,804 | |||
Payment of organizational and offering costs | (3,289) | (3,496) | |||
Distributions to non-controlling interests | 0 | (6) | |||
Contributions from non-controlling interests | 2,048 | 104 | |||
Distributions | (12,451) | (13,513) | |||
Distributions to non-controlling interests attributable to preferred stockholders | (65) | (45) | |||
Net cash used in financing activities | (377) | (34,207) | |||
Net change in cash and cash-equivalents and restricted cash | 4,909 | (14,069) | |||
Cash and cash-equivalents and restricted cash, beginning of period | 40,701 | 79,999 | 79,999 | ||
Cash and cash-equivalents and restricted cash, end of period | 45,610 | 65,930 | 45,610 | 65,930 | 40,701 |
Cash and cash equivalents | 13,053 | 49,561 | 13,053 | 49,561 | 24,272 |
Restricted cash | 32,557 | 16,369 | 32,557 | 16,369 | 16,429 |
Total cash and cash equivalents and restricted cash | $ 45,610 | $ 65,930 | 45,610 | 65,930 | $ 40,701 |
Supplemental disclosures: | |||||
Interest paid | 32,216 | 27,723 | |||
Non-cash investing and financing activities: | |||||
Accrued distributions | (292) | 101 | |||
Accrued stockholder servicing fee due to affiliate | (2,998) | 571 | |||
Accrued offering costs | 110 | 245 | |||
Accrued capital improvements | (14) | 31 | |||
Accrued repurchases of common stock in accounts payable | (1,297) | 9,784 | |||
Accrued repurchases of common stock in accounts payable | $ (395) | $ 3,591 |
Organization and Business Purpo
Organization and Business Purpose | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Purpose | Organization and Business Purpose Brookfield Real Estate Income Trust Inc. (the “Company”) was formed on July 27, 2017 as a Maryland corporation and has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2019. The Company invests primarily in well-located, high-quality real estate properties that generate strong current cash flow and could further appreciate in value through proactive, best-in-class asset management. To a lesser extent, the Company invests in real estate-related debt investments, including real estate-related loans and real estate-related securities. Brookfield REIT OP GP LLC, a wholly owned subsidiary of the Company, is the sole general partner of Brookfield REIT Operating Partnership L.P. (the “Operating Partnership”). Substantially all of the Company’s business is conducted through the Operating Partnership. The Company and the Operating Partnership are externally managed by Brookfield REIT Adviser LLC (the “Adviser”), an affiliate of Brookfield Asset Management Ltd. (together with its affiliates, “Brookfield”). Prior to November 2, 2021, the Company was externally managed by Oaktree Fund Advisors, LLC (the “Oaktree Adviser” or the “Sub-Adviser”), an affiliate of Oaktree Capital Management, L.P. (“Oaktree”). Brookfield holds a majority stake in Oaktree. The Company and the Adviser have engaged the Sub-Adviser to select and manage certain of the Company’s liquid assets. The Company had previously registered with the Securities and Exchange Commission (the “SEC”) its initial public offering of up to $2.0 billion in shares of common stock (the “Initial Public Offering”), which was declared effective on April 30, 2018 and terminated on November 2, 2021. The Company subsequently registered a follow-on offering with the SEC of up to $7.5 billion in shares of common stock, consisting of up to $6.0 billion in shares in its primary offering and up to $1.5 billion in shares pursuant to its distribution reinvestment plan, which was declared effective on November 2, 2021 (the “Current Offering” and with the Initial Public Offering, the “Offering”). Pursuant to the Current Offering, the Company is offering to the public any combination of four classes of shares of its common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The publicly offered share classes have different upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. The purchase price per share for each class of common stock varies and generally equals the Company’s prior month’s net asset value (“NAV”) per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees. The Company intends to continue selling shares on a monthly basis. In addition to the Current Offering, the Company is conducting private offerings of Class I and Class C shares to feeder vehicles that offer interests in such vehicles to non-U.S. persons. The offer and sale of Class I and Class C shares to the feeder vehicles is exempt from the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”) by virtue of Section 4(a)(2) and Regulation S promulgated thereunder. The Company is also offering Class E shares to Brookfield and its affiliates and certain of Brookfield’s and Oaktree’s employees and the Company’s independent directors in one or more private offerings. The offer and sale of Class E shares is exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. As of June 30, 2024, the Company owned 20 investments in real estate, two investments in unconsolidated real estate ventures, three investments in real estate-related loans, and 48 investments in real estate-related debt securities. The Company currently operates in five reportable segments: rental housing, net lease, office, logistics, and real estate-related loans and securities. Financial results by segment are reported in Note 14. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. Certain comparative figures have been reclassified to conform to the current year presentation. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC. The Company consolidates all entities in which it retains a controlling financial interest through majority ownership or voting rights and entities that meet the definition of a variable interest entity (“VIE”) for which it is deemed to be the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE. The Operating Partnership is considered a VIE. The Company consolidates the Operating Partnership because it has the ability to direct the most significant activities of the entity as its sole general partner. The Company also consolidates all VIEs for which it is the primary beneficiary. Where the Company does not have the power to direct the activities of the VIE that most significantly impact its economic performance, the Company’s interest for those partially owned entities is accounted for using the equity method of accounting. Equity method investments for which the Company has not elected a fair value option (“FVO”) are initially recorded at cost and subsequently adjusted for the Company’s pro-rata share of net income, contributions, and distributions. When the Company elects the FVO, the Company records its share of net asset value of the entity and any related unrealized gains and losses. The Operating Partnership and the Company’s joint ventures are considered to be VIEs. The Company consolidates these entities, excluding its equity method investments, because it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans. For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities, and operations of each joint venture is included in non-controlling interests as equity of the Company. The non-controlling joint venture partner’s interest is generally computed as the joint venture partner’s ownership percentage. Certain of the joint ventures formed by the Company provide the other partner a profits interest based on certain internal rate of return hurdles being achieved. Any profits interest due to the other partner is reported within non-controlling interest. Certain amounts in the Company’s prior period Consolidated Statements of Operations have been reclassified to conform to the current period presentation. For the three and six months ended June 30, 2023, $1.3 million and $0.3 million, respectively, of unrealized losses related to changes in the fair value of the Company’s investments in real estate-related securities has been reclassified from Unrealized (loss) gain on investments, net to Income from real estate-related loans and securities to conform to the current period presentation. For the three and six months ended June 30, 2023, $0.0 million of realized gains and $0.2 million of realized losses, respectively, related to sales of investments in real estate-related loans and securities has been reclassified from Realized gain on real estate investments, net to Income from real estate-related loans and securities to conform with the current period presentation. For the three and six months ended June 30, 2023, $1.6 million of unrealized gains and $2.5 million of unrealized losses, respectively, related to changes in the fair value of the Company’s investments in unconsolidated entities has been reclassified from Unrealized (loss) gain on investments, net to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.0 million and $0.1 million, respectively, of realized gains related the Company’s foreign currency swap have been reclassified from Realized gain on financial instruments to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.1 million and $0.0 million, respectively, of unrealized gains related the Company’s foreign currency swap have been reclassified from Unrealized (loss) gain on investments, net to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $5.8 million and $4.3 million, respectively, of unrealized gains related to changes in the fair value of the Company’s interest rate derivatives have been reclassified from Unrealized (loss) gain on investments, net to Other income, net to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.7 million and $0.8 million, respectively, of net realized gains related to trading securities has been reclassified from Realized gain on real estate investments, net and Unrealized (loss) gain on investments, net to Other income, net to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.1 million and $0.1 million, respectively, of interest income related to operating properties has been reclassified from Income from real estate-related loans and securities to Other income, net to conform with the current period presentation. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities and accrued expenses at the date of the balance sheet. The Company believes the estimates and assumptions underlying the consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2024. Investments in Real Estate In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired does not constitute a business, the Company accounts for the transaction as an asset acquisition. The guidance for business combinations states that when substantially all of the fair value of the gross assets to be acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the asset or set of assets is not a business. The Company evaluates each real estate acquisition to determine whether the integrated set of acquired assets and activities meets the definition of a business. Generally, acquisitions of real estate or in-substance real estate are not expected to meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. All property acquisitions to date have been accounted for as asset acquisitions because substantially all of the fair value was concentrated in the land, buildings and related intangible assets. The Company capitalizes acquisition-related costs associated with asset acquisitions. Upon acquisition of a property, the Company assesses the fair value of the acquired tangible and intangible assets (including land, buildings, tenant improvements, above- or below-market leases, acquired in-place leases, and other intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions. The estimated fair value of acquired in-place leases include the costs the Company would have incurred to lease the properties to their occupancy levels at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs and other direct costs that would be incurred to lease the properties to such occupancy levels. The Company evaluates avoided costs over the time period over which occupancy levels at the date of acquisition would be achieved had the property been acquired vacant. Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases are amortized over the remaining lease terms as a component of depreciation and amortization expense. For acquired in-place leases, above- and below-market lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the lease acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The values of acquired above- and below-market leases are amortized over the terms of the related leases and recognized as either increases (for below-market leases) or decreases (for above-market leases) to rental revenue. Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of the above- or below-market lease value is charged to rental revenue. Significant improvements to properties are capitalized and depreciated over their estimated useful life. Expenditures for ordinary repairs and maintenance are expensed to operations as incurred. The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent improvements to such properties. The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Description Depreciable Life Building 30-40 years Building and site improvements 5-21 years Furniture, fixtures and equipment 1-9 years Tenant improvements Shorter of estimated useful life or lease term In-place lease intangibles Over lease term Above and below market leases Over lease term Lease origination costs Over lease term Present value of tax abatement savings Over tax abatement period When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period. The Company’s management reviews its real estate properties for impairment when there is an event or change in circumstances that indicates an impaired value. In reviewing the portfolio, the Company’s management examines the type of asset, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, changes in holding period, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset for which indicators of impairment are identified, the Company performs a recoverability analysis that compares future undiscounted cash flows expected to result from the Company’s use and eventual disposition of the asset to its carrying value. If the undiscounted cash flow analysis yields an amount that is less than the asset’s carrying amount, an impairment loss will be recorded equal to the amount by which the carrying value of the asset exceeds its estimated fair value. Since cash flows on real estate properties considered to be “long-lived assets to be held and used” are considered on an undiscounted basis to determine whether an asset has been impaired, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. During the periods presented, no such impairment occurred. Assets Held for Sale The Company classifies the assets and liabilities related to its real estate investments as held for sale when a sale is probable to occur within one year. The Company considers a sale to be probable when a binding contract has been executed, the buyer has posted a non-refundable deposit, and there are limited contingencies to closing. The Company classifies held for sale assets and liabilities at the lower of depreciated cost or fair value less closing costs. There were no properties held for sale as of June 30, 2024 and December 31, 2023. Investments in Unconsolidated Entities The Company has elected the FVO for its investment in unconsolidated entities and therefore reports this investment at fair value. As such, the resulting unrealized gains and losses are recorded as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. For further details on the Company’s investments in unconsolidated entities, see Note 4 — “Investments in Unconsolidated Entities” to the Company’s Consolidated Financial Statements. Investments in Real Estate-Related Loans and Securities Real estate-related loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income related to the Company’s loans is recognized based upon the contractual interest rate and unpaid principal balance of the loans as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. The Company assesses the collectability of its real estate-related loans to estimate credit losses over the contractual term of each loan on a periodic basis. The Company’s estimate of credit losses is based on relevant factors, including historical realized loss rates, current market conditions, and reasonable and supportable forecasts that affect the collectability of its investments. The Company also considers, among other things, payment status, lien position, borrower or tenant financial resources, and underlying collateral. The Company recognizes an allowance for credit loss when the carrying amount of a loan differs from the amount expected to be collected. For further details on the Company’s allowance for credit loss, see Note 6 — “Investments in Real Estate-Related Loans and Securities” to the Company’s Consolidated Financial Statements. The Company has elected to classify its real estate debt securities as trading securities and carry such investments at fair value. As such, the resulting unrealized gains and losses of such securities are recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Interest income from trading securities is recognized based on the stated terms of the security. Interest income from real estate-related debt securities is recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Revenue Recognition Rental revenue primarily consists of base rent arising from tenant leases at the Company’s properties. Base rent is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. The Company begins to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Other rental revenues include amounts due from tenants for costs related to common area maintenance, real estate taxes, and other recoverable costs included in lease agreements. The Company recognizes the reimbursement of such costs incurred as tenant reimbursement income. The Company evaluates the collectability of receivables related to rental revenue on an individual lease basis. In making this determination, the Company considers the length of time a receivable has been outstanding, tenant creditworthiness, payment history, available information about the financial condition of the tenant, and current economic trends, among other factors. Tenant receivables that are deemed uncollectible are recognized as a reduction to rental revenue. The Company will recognize revenue from such leases prospectively, based on actual amounts received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance. As of June 30, 2024 and December 31, 2023, the allowance for doubtful accounts was approximately $0.7 million and $1.0 million, respectively. These amounts are included in Accounts and other receivables on the Company’s Consolidated Balance Sheets. Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. Restricted Cash Restricted cash primarily consists of tenant security deposits and reserves held in escrow related to real estate taxes, interest rate derivatives, capital expenditures and insurance in connection with mortgages at certain of the Company’s properties. Restricted cash also consists of cash received for subscriptions prior to the date in which the subscriptions are effective, which is held in a bank account controlled by the Company’s transfer agent but in the name of the Company. Trading Securities Trading securities consist of U.S. government securities that are available to support the Company’s current operations and liquidity. Trading securities are measured at fair value. As such, the resulting unrealized gains and losses of such securities are recorded as a component of Other income, net on the Company’s Consolidated Statements of Operations. Interest income from trading securities is recognized based on the stated terms of the security and is recorded as a component of Other income, net on the Company’s Consolidated Statements of Operations. During the three and six months ended June 30, 2024, income from trading securities was $0.3 million and $0.5 million, respectively. During the three and six months ended June 30, 2023, income from trading securities was $0.7 million and $0.8 million, respectively. Foreign Currency In the normal course of business, the Company makes investments in real estate outside the United States through subsidiaries that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rate at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Gains and losses from translation of foreign denominated transactions into U.S. dollars are included in current results of operations as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. Deferred Charges The Company’s deferred charges include financing and leasing costs. Deferred financing costs include legal, structuring, and other loan costs incurred by the Company for its financing agreements. Deferred financing costs related to the Company’s mortgage notes and term loans are recorded as an offset to the related liability and amortized over the term of the applicable financing instruments. Deferred financing costs related to the Company’s revolving credit facility are recorded as a component of Other assets on the Company’s Consolidated Balance Sheets and amortized over the term of the applicable financing agreements. Deferred leasing costs incurred in connection with new leases, which consist primarily of brokerage and legal fees, are recorded as a component of Other assets on the Company’s Consolidated Balance Sheets and amortized over the life of the related lease. Derivative Instruments In the normal course of business, the Company is exposed to the effect of interest rate changes and, with regard to its non-U.S. investments, changes in foreign currency exchange rates. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate and currency rate risk. These financial instruments may include interest rate swaps and other derivative contracts. Upfront costs paid in connection with acquiring interest rate swaps and caps are amortized over the term of the applicable derivative instrument as a component of Interest expense on the Company’s Consolidated Statements of Operations. The Company recognizes all derivatives as either assets or liabilities in the accompanying Consolidated Balance Sheets and measures those instruments at fair value. Realized and unrealized gains or losses on the Company’s interest rate swaps and caps are recorded in current-period earnings as a component of Other income, net on the Company’s Consolidated Statements of Operations. The Company recognized $0.3 million of net losses and $1.5 million of net gains during the three and six months ended June 30, 2024, respectively. The Company recognized $5.8 million and $4.3 million of net gains during the three and six months ended June 30, 2023, respectively. Realized and unrealized gains or losses on foreign currency derivatives are related to the Company’s unconsolidated non-U.S investment and are recorded as a Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. The Company recognized $0.1 million of net losses and $0.5 million of net gains on its foreign currency swap contracts during the three and six months ended June 30, 2024, respectively. The Company recognized $2.2 million and $3.8 million of net losses on its foreign currency swap contracts during the three and six months ended June 30, 2023, respectively. As of June 30, 2024, the Company’s derivative instruments consisted of the following ($ and £ in thousands): Number of Instruments Notional Amount Weighted Average Strike Rate Weighted Average Maturity (years) Interest Rate Swaps 1 $ 33,800 0.6% 0.1 Interest Rate Caps 5 $ 591,810 5.7% 0.6 Foreign Currency Swap Contracts (1) 1 £ 62,100 N/A 1.1 (1) The Company’s foreign currency swap matured in August 2024, at which time the Company entered into a new foreign currency swap contract with a one-year term for the same notional amount. Refer to Note 6 — “Investments in Real Estate-Related Loans and Securities” for information regarding the Company’s interest rate derivatives related to its investments in real estate-related securities. Fair Value Measurement Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchical framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy: Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments. Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date. Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. Valuation of Assets and Liabilities Measured at Fair Value The Company’s investments in real estate-related securities and trading securities are reported at fair value. The Company generally determines the fair value of its investments in real estate-related securities and trading securities by utilizing third-party pricing service providers. In determining the value of a particular investment, the pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for securities such as real estate debt generally consider the attributes applicable to a particular class of the security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. The inputs used in determining the Company’s real estate-related securities and trading securities reported at fair value are considered Level 2 and Level 3. The Company’s derivative financial instruments are reported at fair value. The Company’s interest rate swaps are valued using a discounted cash flow analysis based on the terms of the contract and the forward interest rate curve adjusted for the Company’s nonperformance risk. The Company’s interest rate caps are valued using models developed by the respective counterparty as well as third-party pricing service providers that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data). The fair value of the Company’s foreign currency swap is determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying instruments. The inputs used in determining the Company’s derivative financial instruments reported at fair value are considered Level 2. The Company has elected the FVO for its equity method investment and therefore, reports this investment at fair value. As such, the resulting unrealized gains and losses are recorded as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. The Company separately values the assets and liabilities of the equity method investment. To determine the fair value of the assets of the equity method investments, the Company utilizes a discounted cash flow methodology, taking into consideration various factors including discount rate and exit capitalization rate. The Company determines the fair value of the indebtedness of the equity method investment by modeling the cash flows required by the debt agreements and discounting them back to the present value using an estimated market yield. Additionally, the Company considers current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. After the fair value of the assets and liabilities are determined, the Company applies its ownership interest to the net asset value and reflects this amount as its equity method investment at fair value. The inputs used in determining the Company’s equity method investment carried at fair value are considered Level 3. The Company’s carrying values of cash and cash equivalents, restricted cash, accounts receivable and other receivables, accounts payable, accrued liabilities and other liabilities approximate fair value because of the short-term nature of these instruments. The following table details the Company’s assets and liabilities measured at fair value on a recurring basis ($ in thousands): June 30, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Investments in real estate-related securities $ — $ 85,453 $ 18,390 $ 103,843 $ — $ 223,605 $ — $ 223,605 Investments in unconsolidated entities — — 81,034 81,034 — — 78,569 78,569 Trading securities — 18,972 — 18,972 — 39,824 — 39,824 Derivatives — 1,647 — 1,647 — 10,657 — 10,657 Total $ — $ 106,072 $ 99,424 $ 205,496 $ — $ 274,086 $ 78,569 $ 352,655 Liabilities: Interest rate swaps related to investments in real estate-related securities $ — $ 180 $ — $ 180 $ — $ — $ — $ — Total $ — $ 180 $ — $ 180 $ — $ — $ — $ — The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands): Investments in real estate-related securities Investments in unconsolidated entities Total Assets Balance as of December 31, 2023 $ — $ 78,569 $ 78,569 Transfer into Level 3 19,283 — 19,283 Distributions of earnings from unconsolidated entities — (764) (764) Unrealized (loss) gain (893) 3,770 2,877 Loss on foreign currency translation — (541) (541) Balance as of June 30, 2024 $ 18,390 $ 81,034 $ 99,424 The following tables contain the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands): June 30, 2024 Fair Value Valuation Technique Unobservable Inputs Average Impact to Valuation from an Increase in Input Investmen |
Investments in Real Estate
Investments in Real Estate | 6 Months Ended |
Jun. 30, 2024 | |
Investments in Real Estate [Abstract] | |
Investments in Real Estate | Investments in Real Estate As of June 30, 2024 and December 31, 2023, the Company’s investments in real estate, net, consisted of the following ($ in thousands): June 30, 2024 December 31, 2023 Building and building improvements $ 1,419,355 $ 1,304,336 Land and land improvements 296,165 262,323 Tenant improvements 30,199 35,877 Furniture, fixtures and equipment 42,461 29,071 Total 1,788,180 1,631,607 Accumulated depreciation (119,635) (106,451) Investments in real estate, net $ 1,668,545 $ 1,525,156 Acquisitions During the six months ended June 30, 2024, the Company acquired $167.9 million of investments in real estate, comprised of 181 single-family rental properties and one student housing property, which are included in the Company’s rental housing segment. During the year ended December 31, 2023, the Company acquired $1.7 million of real estate investments, comprised of six single-family rental properties, which are included in the Company’s rental housing segment. The following table provides further details of the properties acquired during the six months ended June 30, 2024 and year ended December 31, 2023 ($ in thousands): Investment Ownership Interest Location Segment Acquisition Date Units Purchase Price (1) Single-Family Rentals 100% Various Rental Housing Various 2023 6 $ 1,681 Single-Family Rentals 100% Various Rental Housing Various 2024 181 50,448 Reflection 97% Atlanta, GA Rental Housing June 2024 741 117,408 Total $ 169,537 (1) Purchase price is inclusive of closing costs. The following table summarizes the purchase price allocation of the properties acquired during the six months ended June 30, 2024 and year ended December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Building and building improvements $ 114,073 $ 1,418 Land and land improvements 36,503 263 Tenant improvements 115 — Furniture, fixtures and equipment 13,933 — In-place lease intangibles 3,171 — Lease origination costs 61 — Total purchase price (1) $ 167,856 $ 1,681 (1) Purchase price is inclusive of closing costs. |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 6 Months Ended |
Jun. 30, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities The Company holds two investments in unconsolidated joint ventures that it has elected to account for using the FVO, as the Company’s ownership interests in the joint ventures do not meet the requirements for consolidation. On December 15, 2023, the Company acquired a 2% equity interest in The Avery, a condo and multifamily property located in San Francisco, California, through an indirect interest in a joint venture that owns the property. The Company did not pay any consideration for its interest, which was granted to the Company by the borrower on the Company’s investments in The Avery Senior Loan and The Avery Mezzanine Loan. As of June 30, 2024 and December 31, 2023, the fair value of the Company’s equity interest in The Avery was zero. The Company holds a 20% interest in Principal Place, a net lease property located in London, United Kingdom, through an indirect interest in the joint venture that owns the property. As of June 30, 2024 and December 31, 2023, the fair value of the Company’s interest in Principal Place was $81.0 million and $78.6 million, respectively. The following tables provide summarized financial information of the joint venture that owns Principal Place as of and for the periods set forth below ($ in thousands): As of June 30, 2024 As of December 31, 2023 Total Assets $ 1,028,300 $ 1,042,957 Total Liabilities 627,446 634,183 Total Equity $ 400,854 $ 408,774 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Total Revenues $ 12,455 $ 12,010 $ 24,936 $ 23,483 Total Expenses 12,904 13,949 26,201 26,786 Net Loss $ (449) $ (1,939) $ (1,265) $ (3,303) |
Intangibles
Intangibles | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles | Intangibles The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities consisted of the following as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Intangible assets: In-place lease intangibles $ 33,860 $ 32,513 Lease origination costs 13,677 14,203 Lease inducements 2,208 2,690 Tax intangibles 5,249 5,249 Above-market lease intangibles 114 114 Total intangible assets 55,108 54,769 Accumulated amortization: In-place lease intangibles (7,121) (6,644) Lease origination costs (4,093) (4,188) Lease inducements (637) (1,101) Tax intangibles (1,676) (1,340) Above-market lease intangibles (45) (37) Total accumulated amortization (13,572) (13,310) Intangible assets, net $ 41,536 $ 41,459 Intangible liabilities: Below-market lease intangibles $ (28,909) $ (28,919) Accumulated amortization 3,455 2,792 Intangible liabilities, net $ (25,454) $ (26,127) The weighted average amortization periods of the Company’s intangible assets is 174 months and intangible liabilities is 266 months. As of June 30, 2024, the estimated future amortization of the Company’s intangibles for each of the next five years and thereafter is as follows ($ in thousands): In-place Lease Intangibles Above-market Lease Intangibles Other Intangibles Below-market Lease Intangibles 2024 (remaining) $ 2,960 $ 10 $ 1,481 $ (672) 2025 1,782 18 2,366 (1,340) 2026 1,629 18 2,139 (1,332) 2027 1,521 7 2,039 (1,327) 2028 1,436 5 1,604 (1,327) 2029 1,322 5 1,352 (1,327) Thereafter 16,089 6 3,747 (18,129) Total $ 26,739 $ 69 $ 14,728 $ (25,454) |
Investments in Real Estate-Rela
Investments in Real Estate-Related Loans and Securities | 6 Months Ended |
Jun. 30, 2024 | |
Real Estate Investments, Net [Abstract] | |
Investments in Real Estate-Related Loans and Securities | Investments in Real Estate-Related Loans and Securities The following table summarizes the components of investments in real estate-related loans and securities as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Real estate-related securities $ 103,843 $ 223,605 Real estate-related loans 17,155 16,503 Interest rate swaps (180) — Total investments in real estate-related loans and securities $ 120,818 $ 240,108 The following tables detail the Company’s real estate-related loan investments as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 Investment Collateral Interest Rate (1) Maturity Date Payment Terms Face Amount Allowance Adjustment Carrying Amount IMC/AMC Bond Investment International Markets Center SOFR+8.15% June 2026 Principal due at maturity $ 10,000 $ — $ 10,000 The Avery Senior Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 7,221 (1,482) 5,739 The Avery Mezzanine Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 1,749 (332) 1,416 Total $ 18,970 $ (1,814) $ 17,155 December 31, 2023 Investment Collateral Interest Rate (1) Maturity Date Payment Terms Face Amount Allowance Adjustment Carrying Amount IMC/AMC Bond Investment International Markets Center SOFR+8.15% June 2026 Principal due at maturity $ 10,000 $ — $ 10,000 The Avery Senior Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 6,878 (1,670) 5,208 The Avery Mezzanine Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 1,669 (374) 1,295 Total $ 18,547 $ (2,044) $ 16,503 ` (1) As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively. (2) The Company’s investment is held through its membership interest in an entity which aggregates the Company’s interest with interests held by other funds managed by the Sub-Adviser. The Company has been allocated its proportionate share of the loan based on its membership interest in the aggregating entity. In December 2023, the loan agreements were amended to change the interest rate to 10.00% and extend the maturity date to December 2024. (3) The maturity date may be extended for additional one-year periods, but no later than February 2028, subject to the borrower meeting minimum annual repayment requirements. Generally, loan repayments are made simultaneous with the closing of the sale of any condominium unit. For the three months ended June 30, 2024 the Company recognized no credit loss allowance adjustment. For the six months ended June 30, 2024, the Company recognized $0.2 million as an allowance recovery for estimated credit loss, which is recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. The allowance recovery is related to The Avery Senior Loan and The Avery Mezzanine Loan and is based on the expected timing of loan repayments, forecasted cash flows from the underlying collateral, and the current macroeconomic environment. The Company estimates its credit loss allowance primarily using the discounted cash flow method based on projected future principal cash flows for each individual loan. For the year ended December 31, 2023 the Company recognized $2.0 million as an allowance adjustment for estimated credit loss. There have been no write-offs related to the Company’s investments in real estate-related loans. The Company’s investments in real estate-related securities consist of commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), and interest rate swap contracts related to its investments in real estate-related securities. The following tables detail the Company’s investments in real estate-related securities as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 Type of Security Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value CMBS - floating 13 SOFR+3.79% March 2026 $ 47,945 $ 44,182 $ 44,123 CMBS - fixed 7 4.62% November 2026 36,413 32,384 22,638 RMBS - fixed 28 5.37% August 2026 38,059 37,091 37,082 Interest rate swaps 3 4.46% July 2026 — — (180) Total 51 6.62% (3) July 2026 $ 122,417 $ 113,657 $ 103,663 December 31, 2023 Type of Security Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value CMBS - floating 29 SOFR+3.64% November 2025 $ 149,282 $ 141,971 $ 143,423 CMBS - fixed 7 4.26% April 2026 37,913 33,413 24,322 RMBS - floating 6 SOFR+1.58% October 2024 10,752 10,757 10,765 RMBS - fixed 30 4.71% July 2026 46,611 45,105 45,095 Total 72 7.37% January 2026 $ 244,558 $ 231,246 $ 223,605 (1) As of June 30, 2024 and December 31, 2023, SOFR was equal to 5.34% and 5.38%, respectively. (2) Weighted average maturity date is based on the fully extended maturity date of the investments. (3) Total weighted average coupon is calculated on CMBS and RMBS and excludes interest rate swaps. During the three and six months ended June 30, 2024, the Company recorded net losses of $0.4 million and net gains of $1.4 million, respectively, on its investments in real estate-related securities. During the three and six months ended June 30, 2023, the Company recorded net losses on its investments in real estate-related securities of $1.2 million and $0.6 million, respectively. Such amounts are recorded as components of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. |
Accounts and Other Receivables
Accounts and Other Receivables and Other Assets | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Accounts and Other Receivables and Other Assets | Accounts and Other Receivables and Other Assets The following tables summarize the components of Accounts and other receivables, net and Other assets as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Straight-line rent receivables $ 6,685 $ 5,058 Accounts receivable, net 1,805 4,700 Interest receivable 684 1,036 Total accounts and other receivables, net $ 9,174 $ 10,794 June 30, 2024 December 31, 2023 Trading securities $ 18,972 $ 39,824 Prepaid expenses 2,817 2,170 Derivative instruments 1,647 10,657 Other 916 469 Total other assets $ 24,352 $ 53,120 |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Liabilities | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Liabilities | Accounts Payable, Accrued Expenses and Other Liabilities The following table summarizes the components of Accounts payable, accrued expenses and other liabilities as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Accounts payable and accrued expenses $ 12,574 7,547 Stock repurchases payable 12,601 $ 13,898 Real estate taxes payable 5,166 3,665 Distributions payable 4,840 5,132 Tenant security deposits 4,008 3,400 Accrued interest expense 2,497 4,204 Prepaid rent 876 1,378 Total accounts payable, accrued expenses and other liabilities $ 42,562 $ 39,224 |
Mortgage Loans and Secured Cred
Mortgage Loans and Secured Credit Facility | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Mortgage Loans and Secured Credit Facility | Mortgage Loans and Secured Credit Facility The following table summarizes the components of total indebtedness, net as of June 30, 2024 and December 31, 2023 ($ in thousands): Principal Balance Outstanding Indebtedness Weighted Average Interest Rate (1) Weighted Average Maturity Date (2) Maximum Facility Size June 30, 2024 December 31, 2023 Fixed rate loans: Fixed rate mortgages 3.77% December 2028 N/A $ 328,720 $ 263,720 Total fixed rate loans 328,720 263,720 Variable rate loans: Floating rate mortgages SOFR+1.71% May 2027 N/A 680,383 680,410 Secured credit facility (3) SOFR+2.00% January 2025 $300,000 144,485 118,985 Affiliate line of credit (4) SOFR+2.25% November 2024 $125,000 — — Total variable rate loans 824,868 799,395 Total indebtedness 1,153,588 1,063,115 Deferred financing costs, net (4,230) (4,772) Total indebtedness, net $ 1,149,358 $ 1,058,343 (1) As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively. (2) Includes the fully extended maturity date for loans with extension options that are at the Company’s discretion and the Company currently expects to be able to exercise. (3) As of June 30, 2024 borrowings on the Secured Credit Facility (defined below) were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, and certain single-family rentals. As of December 31, 2023 borrowings on the Secured Credit Facility were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, and certain single-family rentals. (4) Borrowings under the Affiliate Line of Credit (defined below) bear interest at a rate of the lowest then-current interest rate for any similar credit product offered by a third-party lender to the Company or its subsidiaries or, if not available, SOFR plus a 0.10% credit adjustment and a 2.25% margin. The following table presents the future principal payments due under the Company’s mortgage loans and other indebtedness as of June 30, 2024 ($ in thousands): Year Amount 2024 (remaining) $ 62,283 2025 171,503 2026 49,989 2027 454,208 2028 118,034 2029 254,696 Thereafter 42,875 Total $ 1,153,588 The mortgage loans and Secured Credit Facility are subject to various financial and operational covenants. These covenants require the Company to maintain certain financial ratios, which may include leverage, debt yield, and debt service coverage, among others. As of June 30, 2024, the Company is in compliance with all of its loan covenants that could result in a default under such agreements. At Two Liberty Center, cash flows from the property are currently held in a restricted cash account due to a debt service coverage ratio requirement. Mortgage Loans During the six months ended June 30, 2024 the Company obtained a $65.0 million fixed rate mortgage loan related to the acquisition of a property, which was subject to customary terms and conditions. During the year ended December 31, 2023, the Company did not obtain any new mortgage loans but received $0.9 million of additional borrowings on an existing mortgage loan during the year ended December 31, 2023. During the six months ended June 30, 2024 and year ended December 31, 2023 the Company did not repay any mortgage loans. Secured Credit Facility In November 2021, the Company entered into a credit agreement with a lender (the “Secured Credit Facility”) providing for a senior secured credit facility to be used for the acquisition or refinancing of properties. Borrowings on the Secured Credit Facility are secured by certain properties owned by the Company. The initial maximum aggregate principal amount of the facility was $250.0 million, which was increased to $500.0 million in March 2022. In May 2022, the interest rate benchmark was converted from LIBOR to SOFR plus 1.95%. The Secured Credit Facility had an initial maturity date in November 2022, which was extended to January 2023. In December 2022, the Company refinanced the Secured Credit Facility with the lender. The maximum aggregate principal amount of the facility was amended to $300.0 million, inclusive of a $100.0 million revolving credit amount that the Company may repay and re-borrow upon request, subject to certain conditions. The Company may increase the available capacity on the Secured Credit Facility by an additional $1.2 billion, subject to lender approval. The Secured Credit Facility bears interest at a rate of SOFR plus 2.00% and has a maturity date of January 2025. Affiliate Line of Credit |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Advisory Agreement Pursuant to the advisory agreement among the Adviser, the Operating Partnership and the Company (the “Advisory Agreement”), the Adviser is entitled to an annual management fee equal to 1.25% of the Company’s NAV on its Class C, Class D, Class I, Class S and Class T shares of common stock (no management fee is paid on the Class E shares), payable monthly, as compensation for the services it provides to the Company. The management fee can be paid, at the Adviser’s election, in cash or shares of the Company’s common stock. To date, the Adviser has elected to receive the management fee in Class I and Class E shares of the Company’s common stock. During the three and six months ended June 30, 2024, management fees earned by the Adviser were $2.8 million and $5.8 million, respectively. During the three and six months ended June 30, 2023, management fees earned by the Adviser were $3.6 million and $7.3 million, respectively. During the six months ended June 30, 2024, the Company issued 594,307 unregistered Class I shares of common stock to the Adviser for the payment of management fees earned from December 2023 through May 2024. The Company also had an accrued payable of $0.9 million related to the management fee as of June 30, 2024, which is included in Due to affiliates on the Company’s Consolidated Balance Sheets. During July 2024, the Adviser was issued 82,325 unregistered Class I shares as payment for the $0.9 million management fee accrued as of June 30, 2024. The Adviser is entitled to a performance fee based on the total return of the Company’s Class C, Class D, Class I, Class S and Class T shares of common stock (no performance fee is paid on the Class E shares). Total return is defined as distributions paid or accrued plus the change in the Company’s NAV, adjusted for subscriptions and repurchases. Pursuant to the Advisory Agreement, the performance fee is equal to 12.5% of the total return in excess of a 5% total return (after recouping any loss carryforward amount), subject to a catch-up. The performance fee becomes payable at the end of each calendar year and can be paid, at the Adviser’s election, in cash, shares of the Company’s common stock, or units of the Operating Partnership. During the three and six months ended June 30, 2024 and 2023, the Company accrued no performance fees in the Company’s Consolidated Statements of Operations. Repurchase of Adviser Shares During the six months ended June 30, 2024, the Company repurchased 532,352 shares of Class I common stock from the Adviser outside of its share repurchase plan for total consideration of $6.0 million. During the six months ended June 30, 2023, the Company repurchased 1,039,789 shares of Class I common stock from the Adviser outside of its share repurchase plan for total consideration of $13.6 million. Sub-Adviser Agreement The Company and the Adviser have engaged the Sub-Adviser to select and manage certain of the Company’s liquid assets (cash, cash equivalents, other short-term investments, U.S. government securities, agency securities, corporate debt, liquid real estate-related, equity or debt securities, private debt investments and other investments for which there is reasonable liquidity) (the “Investment Sleeve”) in accordance with, and subject to, the Company’s investment objectives, strategy, guidelines, policies and limitations pursuant to a sub-advisory agreement among the Company, the Adviser, the Operating Partnership and the Sub-Adviser (the “Sub-Advisory Agreement”). The Sub-Adviser earns management and performance fees pursuant to the terms of the Sub-Advisory Agreement. These fees are paid by the Adviser out of the management and performance fees earned by the Adviser; therefore, no management or performance fees related to the Sub-Advisory Agreement have been recognized in the Company’s Consolidated Statements of Operations. Dealer Manager Agreement The Company has engaged the Dealer Manager, a registered broker-dealer affiliated with the Adviser, as the dealer manager for the Current Offering. The Company pays to the Dealer Manager selling commissions, dealer manager fees and stockholder servicing fees in connection with sales of the Company’s common stock in the Current Offering. The Company accrues the full amount of the future stockholder servicing fees payable to the Dealer Manager for Class S, Class T, and Class D shares up to the 8.75% of gross proceeds limit at the time such shares are sold. The Dealer Manager has entered into agreements with the selected dealers distributing the Company’s shares in the Current Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fees and all or a portion of the stockholder servicing fees received by the Dealer Manager to such selected dealers. Advanced Organization and Offering Costs The Adviser and its affiliates advanced all of the Company’s organization and offering expenses (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) through July 5, 2023, subject to the following reimbursement terms: (1) the Company reimburses the Adviser for all such advanced expenses paid through July 5, 2022 ratably over the 60 months following July 6, 2022; and (2) the Company reimburses the Adviser for all such advanced expenses paid from July 6, 2022 through July 5, 2023 ratably over the 60 months following July 6, 2023. The Company reimburses the Adviser for any organization and offering expenses that it incurs on the Company’s behalf as and when incurred after July 6, 2023. Affiliate Line of Credit In November 2021, the Company entered into the Affiliate Line of Credit, providing for a discretionary, unsecured, uncommitted credit facility in a maximum aggregate principal amount of $125.0 million. For further details on the Affiliate Line of Credit, see Note 9 — “Mortgage Loans and Secured Credit Facility” to the Company’s Consolidated Financial Statements. Brookfield Repurchase Arrangement One or more affiliates of Brookfield (individually or collectively, as the context may require, the “Brookfield Investor”) was issued shares of the Company’s common stock and Class E units of the Operating Partnership (“OP Units”) in connection with its contribution of certain properties on November 2, 2021 (the “Brookfield Portfolio”). The Company and the Operating Partnership have entered into a repurchase arrangement with the Brookfield Investor (the “Brookfield Repurchase Arrangement”) pursuant to which the Company and the Operating Partnership will offer to repurchase shares of common stock or Class E OP Units from the Brookfield Investor at a price per unit equal to the most recently determined NAV per share or unit immediately prior to each repurchase. The Brookfield Investor has agreed to not seek repurchase of the shares of common stock and Class E OP Units that it owns if doing so would bring the value of its equity holdings in the Company and the Operating Partnership below $50.0 million. In addition, the Brookfield Investor has agreed to hold all of the shares of common stock and Class E OP Units that it received in consideration for the contribution of the Brookfield Portfolio until the earlier of (i) the first date that the Company’s NAV reaches $1.5 billion and (ii) the date that is the third anniversary of November 2, 2021. Following such date, the Brookfield Investor may cause the Company to repurchase its shares and Class E OP Units (above the $50.0 million minimum), in an amount equal to the sum of (a) the amount available under the Company’s share repurchase plan’s 2% monthly and 5% quarterly caps (after accounting for third-party investor repurchases) and (b) 25% of the amount by which net proceeds from the Offering and the Company’s private offerings of common stock for a given month exceed the amount of repurchases for such month pursuant to the Company’s share repurchase plan. The Company will not effect any such repurchase during any month in which the full amount of all shares requested to be repurchased by third-party investors under the share repurchase plan is not repurchased. The Brookfield Repurchase Arrangement does not apply to shares of common stock or OP Units held by affiliates of Brookfield that are feeder vehicles primarily created to offer interests in such feeder vehicles to non-U.S. persons. During the six months ended June 30, 2024, the Company and the Operating Partnership did not repurchase any shares or Class E OP Units from the Brookfield Investor as part of the Brookfield Repurchase Arrangement. Brookfield Investor Subscriptions On November 30, 2021, the Operating Partnership and the Brookfield Investor entered into a subscription agreement (the “Brookfield Subscription Agreement”) pursuant to which the Brookfield Investor agreed to purchase up to $83.0 million of Class E OP Units upon the request of the general partner of the Operating Partnership, of which the Company is the sole member. On December 1, 2021, the Brookfield Investor was issued 3,756,480 Class E OP Units in exchange for $45.0 million. On January 3, 2022, the Brookfield Investor was issued 3,075,006 Class E OP Units in exchange for $38.0 million. On June 29, 2022, the Company, the Operating Partnership and the Brookfield Investor entered into an agreement pursuant to which all such Class E OP Units issued to the Brookfield Investor in connection with the Brookfield Subscription Agreement were converted to Class I shares of the Company’s common stock at the then-applicable conversion factor per unit based on the most recently determined NAV of Class E OP Units and Class I shares. On April 3, 2023, the Brookfield Investor was issued 756,475 Class I shares in the Current Offering in exchange for $10.0 million. On May 1, 2023, the Brookfield Investor was issued 617,909 Class I shares in the Current Offering in exchange for $8.0 million. The Class I shares held by the Brookfield Investor in connection with the Brookfield Subscription Agreement and subsequent subscriptions are not subject to the Brookfield Repurchase Arrangement, but the Brookfield Investor may request the Company repurchase its shares, in whole or in part, subject to the terms and conditions of the Company’s share repurchase plan. Affiliate Service Provider Expenses The Company may retain certain of the Adviser’s affiliates for necessary services relating to the Company’s investments or its operations, including any administrative services, construction, special servicing, leasing, development, property oversight and other property management services, as well as services related to group purchasing, healthcare, consulting/brokerage, capital markets/credit origination, loan servicing, property, title and/or other types of insurance, management consulting and other similar operational matters. The Company has engaged Brookfield Properties, a Brookfield affiliate, to provide operational services (including, without limitation, property management, leasing, and construction management) and corporate support services (including, without limitation, accounting and administrative services) for the Company and certain of its properties. The Company has also engaged Maymont Homes, a Brookfield affiliate, to provide operational services (including, without limitation, property management, renovation, leasing, and turnover and maintenance oversight) for the Company’s single-family rental properties. The Company also reimburses Brookfield Properties, Maymont Homes and other Brookfield affiliates for corporate support and operating personnel expenses, including, but not limited to, employees who provide on-site maintenance, leasing, administrative and operational support services. Such employees may be fully dedicated or a shared resource amongst other investments. Employees’ compensation and expenses continue to be an expense of the affiliate, and if they are a shared resource, the affiliate allocates such expense to the Company according to their policies and procedures. Personnel expenses may include IT costs, HR support (i.e. payroll and benefits), rent and office services, basic financial services (i.e., account receivables, bank account administration), professional development, travel, professional fees and similar expenses. The following table summarizes the Company’s affiliate service provider expenses for the three and six months ended June 30, 2024 and 2023 ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Property management fees (1) $ 830 $ 714 $ 1,585 $ 1,432 Single-family rental leasing, maintenance and turnover oversight fees (1) 200 189 316 278 Capitalized construction management fees (2) 22 23 42 36 Capitalized single-family rental renovation oversight fees (2) 1 10 1 32 Reimbursed personnel costs (3) 2,010 1,711 3,687 3,313 Total $ 3,063 $ 2,647 $ 5,631 $ 5,091 (1) Included in Rental property operating expenses on the Company’s Consolidated Statements of Operations. (2) Included in Investments in real estate, net on the Company’s Consolidated Balance Sheets. (3) For the three and six months ended June 30, 2024, $1.7 million and $3.1 million, respectively, included in Rental property operating expenses and $0.3 million and $0.6 million, respectively, included in General and administrative expenses on the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2023, $1.5 million and $2.8 million, included in Rental property operating expenses and $0.2 million and $0.5 million included in General and administrative expenses on the Company’s Consolidated Statements of Operations. Captive Insurance Company BPG Bermuda Insurance Limited (“BAM Insurance Captive”), a Brookfield affiliate, provides property and liability insurance for certain of the Company’s properties. For the three and six months ended June 30, 2024, the Company incurred an insignificant amount for insurance premiums. For the three and six months ended June 30, 2023, the Company incurred $0.0 million and $0.1 million, respectively, for insurance premiums. On March 31, 2023, Obsidian Mutual IC (“Obsidian”), a Brookfield affiliate, replaced BAM Insurance Captive in providing property insurance for certain of the Company’s properties. For the three and six months ended June 30, 2024, the Company incurred an insignificant amount for insurance premiums provided by Obsidian. On March 15, 2024, Onyx Mutual Insurance IC (“Onyx”), a Brookfield affiliate, replaced BAM Insurance Captive in providing liability insurance for certain of the Company’s properties. For the six months ended June 30, 2024, the Company incurred an insignificant amount for insurance premiums provided by Onyx. Terrorism Insurance Provider Liberty IC Casualty LLC (“Liberty”), a Brookfield affiliate, provides terrorism insurance for certain of the Company’s properties. For the three and six months ended June 30, 2024 and 2023, the insurance premiums incurred by the Company were insignificant. Submetering Services Certain of the Company’s properties sold submetering infrastructure and associated equipment to Metergy, a Brookfield affiliate. Sale proceeds earned by the Company for the three and six months ended June 30, 2024 and 2023 was zero. Metergy provides submetering services to certain of the Company’s properties. For the three and six months ended June 30, 2024 and 2023, the Company incurred fees of an insignificant amount. Due to Affiliates The following table details the components of Due to affiliates as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Accrued stockholder servicing fee $ 20,792 $ 25,507 Advanced organization and offering costs 8,374 9,734 Stock repurchase payable to the Adviser for management fees 2,958 3,353 Other (1) 2,435 2,410 Accrued management fee 928 1,046 Accrued affiliate service provider expenses 2,348 1,915 OP Units distributions payable 6 6 Total $ 37,841 $ 43,971 (1) Represents costs advanced by the Adviser and the Sub-Adviser on behalf of the Company for general corporate expenses provided by unaffiliated third parties. |
Stockholders' Equity and Redeem
Stockholders' Equity and Redeemable Non-controlling Interests | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Stockholders' Equity and Redeemable Non-controlling Interests | Stockholders’ Equity and Redeemable Non-controlling Interests Authorized Capital On April 30, 2018, the SEC declared effective the Company’s registration statement on Form S-11 for the Initial Public Offering. On November 2, 2021, the SEC declared effective the Company’s registration statement on Form S-11 (File No. 333-255557) for the Current Offering of up to $6.0 billion in shares in its primary offering and up to $1.5 billion in shares pursuant to its distribution reinvestment plan. The Initial Public Offering terminated upon the commencement of the Current Offering. Pursuant to the Current Offering, the Company is offering to sell any combination of four classes of shares of its common stock Class S shares, Class I shares, Class T shares and Class D shares with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. The Company is also offering Class I, Class C and Class E shares in private offerings exempt from registration. Other than the differences in upfront selling commissions, dealer manager fees, ongoing stockholder servicing fees, management fees and performance fees, each class of common stock has the same economic and voting rights. Classification No. of Par Value Preferred stock 50,000 $ 0.01 Class S common stock 225,000 $ 0.01 Class I common stock 250,000 $ 0.01 Class T common stock 225,000 $ 0.01 Class D common stock 100,000 $ 0.01 Class C common stock 100,000 $ 0.00 Class E common stock 100,000 $ 0.00 1,050,000 Common Stock The following table details the movement in the Company’s outstanding shares of common stock for the six months ended June 30, 2024 (in thousands): Six Months Ended June 30, 2024 Class S Class I Class D Class T (1) Class C Class E Total December 31, 2023 34,244 41,504 148 — 9,347 3,353 88,596 Common stock issued (2) 460 1,871 17 — — 71 2,419 Distribution reinvestment 459 954 — — — 108 1,521 Common stock repurchased (5,121) (3,621) (5) — (871) (121) (9,739) June 30, 2024 30,042 40,708 160 — 8,476 3,411 82,797 (1) As of June 30, 2024, no Class T shares had been issued. (2) Includes conversions between share classes. Distributions The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to its stockholders each year to comply with the REIT provisions of the Code. Each class of the Company ’ s common stock receives the same gross distribution per share. The net distribution varies for each class based on the applicable stockholder servicing fees, management fees and performance fees, which are deducted from the monthly distribution per share. The following table details the aggregate net distributions declared for each applicable class of common stock for the three and six months ended June 30, 2024: Three Months Ended June 30, 2024 Class S Class I Class D Class T (1) Class C Class E Aggregate gross distributions declared per share of common stock $ 0.2147 $ 0.2147 $ 0.2147 $ — $ 0.2147 $ 0.2147 Stockholder servicing fee per share of common stock (0.0237) — (0.0070) — — — Management fee per share of common stock (0.0350) (0.0353) (0.0356) — (0.0345) — Net distributions declared per share of common stock $ 0.1560 $ 0.1794 $ 0.1721 $ — $ 0.1802 $ 0.2147 Six Months Ended June 30, 2024 Class S Class I Class D Class T (1) Class C Class E Aggregate gross distributions declared per share of common stock $ 0.4305 $ 0.4305 $ 0.4305 $ — $ 0.4305 $ 0.4305 Stockholder servicing fee per share of common stock (0.0482) — (0.0143) — — — Management fee per share of common stock (0.0711) (0.0717) (0.0722) — (0.0701) — Net distributions declared per share of common stock $ 0.3112 $ 0.3588 $ 0.3440 $ — $ 0.3604 $ 0.4305 (1) No Class T shares of common stock were issued or outstanding, thus no distributions were declared for Class T common stock during the six months ended June 30, 2024. Distribution Reinvestment Plan The Company has adopted a distribution reinvestment plan whereby stockholders will have their cash distributions attributable to the shares they own automatically reinvested in additional shares of common stock; provided, however, that clients of certain participating broker-dealers that do not permit automatic enrollment in the distribution reinvestment plan and stockholders that are residents of certain states that do not permit automatic enrollment in the distribution reinvestment plan will automatically receive their distributions in cash unless they elect to participate in the distribution reinvestment plan. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the offering price before upfront selling commissions and dealer manager fees (the “transaction price”) at the time the distribution is payable, which will generally be equal to the Company’s prior month’s NAV per share for that share class. Stockholders will not pay upfront selling commissions or dealer manager fees when purchasing shares pursuant to the distribution reinvestment plan. The stockholder servicing fees with respect to shares of the Company’s Class T shares, Class S shares and Class D shares are calculated based on the NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under the distribution reinvestment plan. During the six months ended June 30, 2024 and 2023, $17.6 million and $19.6 million of distributions were reinvested for 1,521,358 and 1,485,033 shares of common stock, respectively. Non-controlling Interests Attributable to Preferred Shareholders Certain subsidiaries of the Company have elected to be treated as REITs for U.S. federal income tax purposes. These subsidiaries have issued preferred non-voting shares to be held by investors to ensure compliance with the Code requirement that REITs have at least 100 shareholders. The preferred shares have a price of $1,000 and an annual dividend payable ranging between 12.0% and 12.5%. As of June 30, 2024, there were $750,000 of preferred non-voting shares outstanding. Redeemable Non-controlling Interest The Brookfield Investor was issued Class E OP Units in connection with its contribution of the Brookfield Portfolio on November 2, 2021 and subsequent cash contributions to the Operating Partnership pursuant to the Brookfield Subscription Agreement. Because the Brookfield Investor has the ability to redeem its Class E OP Units for shares of common stock or cash, subject to certain restrictions, the Company has classified the Class E OP Units held by the Brookfield Investor as Redeemable non-controlling interest in mezzanine equity on the Company’s Consolidated Balance Sheets. The Redeemable non-controlling interest is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period. The following table summarizes the Redeemable non-controlling interest activity for the six months ended June 30, 2024 and 2023 ($ in thousands): Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Balance at beginning of the year $ 933 $ 990 GAAP net loss allocation (10) (6) Distributions (35) (58) Distributions reinvested 35 57 Fair value allocation — (22) Ending balance $ 923 $ 961 Share Repurchase Plan The Company has adopted a share repurchase plan, whereby, subject to certain limitations, stockholders may request on a monthly basis that the Company repurchase all or any portion of their shares. Should repurchase requests, in the Company’s judgment, place an undue burden on its liquidity, adversely affect its operations or risk having an adverse impact on the Company as a whole, or should the Company otherwise determine that investing its liquid assets in real properties or other illiquid investments rather than repurchasing its shares is in the best interests of the Company as a whole, then the Company may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Further, the Company’s board of directors may modify and suspend the Company’s share repurchase plan if it deems such action to be in the Company’s best interest and the best interest of its stockholders. In addition, the total amount of shares that the Company will repurchase is limited, in any calendar month, to shares whose aggregate value (based on the repurchase price per share on the date of the repurchase) is no more than 2% of its aggregate NAV attributable to its stockholders as of the last day of the previous calendar month and, in any calendar quarter, to shares whose aggregate value is no more than 5% of its aggregate NAV attributable to its stockholders as of the last day of the previous calendar quarter. The monthly and quarterly repurchase limits exclude shares repurchased from the Adviser that were issued as payment of management or performance fees. In the event that the Company determines to repurchase some but not all of the shares submitted for repurchase during any month, shares repurchased at the end of the month will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted after the start of the next month or quarter, or upon the recommencement of the share repurchase plan, as applicable. Shares are repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any early repurchase deduction. Shares that have not been outstanding for at least one year are repurchased at 98% of the transaction price. During the six months ended June 30, 2024 and 2023, the Company repurchased 9,206,422 and 7,189,628 shares of common stock representing a total of $105.0 million and $93.1 million, respectively, under its share repurchase plan. The Company’s board of directors, including all of the independent directors, unanimously authorized repurchases for April 2024 in excess of the 2% monthly repurchase limitation and repurchases during the quarter ended June 30, 2024 in excess of the 5% quarterly limitation, such that 100% of share repurchase requests received during the calendar quarter ended June 30, 2024 were satisfied. The Company satisfied all repurchase requests during the six months ended June 30, 2024 and 2023. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2024, the Company was not subject to any material litigation nor was the Company aware of any material litigation threatened against it. The Company may, from time to time, enter into payment guarantees related to mortgage loans at its investments in unconsolidated entities. As of June 30, 2024, the Company has a payment guarantee of $1.6 million. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company’s rental revenue primarily consists of rent earned from operating leases at the Company’s rental housing, office, logistics, and net lease properties. Leases at the Company’s office, logistics, and net lease properties generally include a fixed base rent and certain leases also contain a variable component. The variable component of the Company’s operating leases at its office, logistics, and net lease properties primarily consist of the reimbursement of operating expenses such as real estate taxes, insurance, and common area maintenance costs. Rental revenue earned from leases at the Company’s rental housing properties primarily consist of a fixed base rent and certain leases contain a variable component that allows for the pass-through of certain operating expenses such as utilities. The following table details the components of operating lease income from leases in which the Company is the lessor for the periods set forth below ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Fixed lease payments $ 30,023 $ 29,226 $ 58,936 $ 58,327 Variable lease payments 2,170 4,276 4,113 5,648 Total rental revenues $ 32,193 $ 33,502 $ 63,049 $ 63,975 The following table details the undiscounted future minimum rents the Company expects to receive for its logistics, net lease, and office properties as of June 30, 2024. The table below excludes the Company’s rental housing properties as substantially all leases are shorter term in nature ($ in thousands): Year Future Minimum Rents 2024 (remaining) $ 15,696 2025 29,754 2026 27,377 2027 26,425 2028 25,808 2029 23,594 Thereafter 103,382 Total $ 252,036 |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting As of June 30, 2024, the Company operates in five reportable segments: rental housing, office, logistics, net lease and real estate-related loans and securities. The Company continually evaluates the financial information used by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Effective June 30, 2023, rental housing was established as a new reportable segment, consisting of multifamily, student housing, and single-family rental properties due to the similar operating nature of these investments. Comparative periods have been recast to reflect these changes. The Company allocates resources and evaluates results based on the performance of each segment individually. The Company believes that segment net operating income is the key performance metric that captures the unique operating characteristics of each segment. The following table sets forth the Company’s assets by segment ($ in thousands): June 30, 2024 December 31, 2023 Rental Housing $ 1,205,942 $ 1,061,941 Office 100,775 103,179 Logistics 106,079 108,329 Net Lease 414,339 415,282 Real estate-related loans and securities 120,818 240,108 Other (Corporate) 43,116 61,068 Total assets $ 1,991,069 $ 1,989,907 The following table sets forth the financial results by segment for the three months ended June 30, 2024 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 22,079 $ 2,944 $ 1,992 $ 5,178 $ — $ 32,193 Other revenues 3,141 181 — 11 — 3,333 Total revenues 25,220 3,125 1,992 5,189 — 35,526 Expenses: Rental property operating 10,414 1,397 511 940 — 13,262 Total expenses 10,414 1,397 511 940 — 13,262 Income from real estate-related loans and securities — — — — 3,311 3,311 Segment net operating income $ 14,806 $ 1,728 $ 1,481 $ 4,249 $ 3,311 $ 25,575 Gain from unconsolidated entities 2,991 Other income, net 30 Depreciation and amortization (14,337) General and administrative expenses (1,570) Management fee (2,833) Interest expense (17,001) Net loss $ (7,145) Net loss attributable to non-controlling interests in third party joint ventures 230 Net income attributable to non-controlling interests - preferred stockholders (65) Net loss attributable to stockholders $ (6,973) The following table sets forth the financial results by segment for the three months ended June 30, 2023 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 21,034 $ 3,248 $ 1,705 $ 7,515 $ — $ 33,502 Other revenues 3,351 243 — 52 — 3,646 Total revenues 24,385 3,491 1,705 7,567 — 37,148 Expenses: Rental property operating 9,625 1,450 523 3,282 — 14,880 Total expenses 9,625 1,450 523 3,282 — 14,880 Income from real estate-related loans and securities — — — — 3,841 3,841 Segment net operating income $ 14,760 $ 2,041 $ 1,182 $ 4,285 $ 3,841 $ 26,109 Gain from unconsolidated entities 1,649 Other income, net 6,512 Depreciation and amortization (12,765) General and administrative expenses (2,229) Management fee (3,579) Interest expense (14,498) Net income $ 1,199 Net income attributable to non-controlling interests in third party joint ventures (67) Net income attributable to non-controlling interests - preferred stockholders (45) Net income attributable to redeemable non-controlling interests (2) Net income attributable to stockholders $ 1,085 The following table sets forth the financial results by segment for the six months ended June 30, 2024 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 43,177 $ 5,495 $ 4,021 $ 10,356 $ — $ 63,049 Other revenues 5,353 316 — 21 — 5,690 Total revenues 48,530 5,811 4,021 10,377 — 68,739 Expenses: Rental property operating 19,813 2,842 1,063 1,917 — 25,636 Total expenses 19,813 2,842 1,063 1,917 — 25,636 Income from real estate-related loans and securities — — — — 10,369 10,369 Segment net operating income $ 28,717 $ 2,969 $ 2,958 $ 8,460 $ 10,369 $ 53,472 Gain from unconsolidated entities 3,724 Other income, net 2,184 Depreciation and amortization (27,098) General and administrative expenses (3,783) Management fee (5,828) Interest expense (33,327) Net loss $ (10,656) Net loss attributable to non-controlling interests in third party joint ventures 433 Net income attributable to non-controlling interests - preferred stockholders (65) Net loss attributable to redeemable non-controlling interests 10 Net loss attributable to stockholders $ (10,278) The following table sets forth the financial results by segment for the six months ended June 30, 2023 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 41,709 $ 6,239 $ 3,680 $ 12,347 $ — $ 63,975 Other revenues 5,734 419 — 52 — 6,205 Total revenues 47,443 6,658 3,680 12,399 — 70,180 Expenses: Rental property operating 18,506 2,949 1,283 3,870 — 26,608 Total expenses 18,506 2,949 1,283 3,870 — 26,608 Income from real estate-related loans and securities — — — — 10,844 10,844 Segment net operating income $ 28,937 $ 3,709 $ 2,397 $ 8,529 $ 10,844 $ 54,416 Loss from unconsolidated entities (2,404) Other income, net 5,248 Depreciation and amortization (25,569) General and administrative expenses (4,545) Management fee (7,257) Interest expense (28,430) Net loss $ (8,541) Net loss attributable to non-controlling interests in third party joint ventures 42 Net income attributable to non-controlling interests - preferred stockholders (45) Net loss attributable to redeemable non-controlling interests 6 Net loss attributable to stockholders $ (8,538) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 1, 2024, BPG Manager Holdings L.P., an affiliate of Brookfield, was issued 633,194 Class I shares for consideration of $7.1 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. Certain comparative figures have been reclassified to conform to the current year presentation. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC. The Company consolidates all entities in which it retains a controlling financial interest through majority ownership or voting rights and entities that meet the definition of a variable interest entity (“VIE”) for which it is deemed to be the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE. The Operating Partnership is considered a VIE. The Company consolidates the Operating Partnership because it has the ability to direct the most significant activities of the entity as its sole general partner. The Company also consolidates all VIEs for which it is the primary beneficiary. Where the Company does not have the power to direct the activities of the VIE that most significantly impact its economic performance, the Company’s interest for those partially owned entities is accounted for using the equity method of accounting. Equity method investments for which the Company has not elected a fair value option (“FVO”) are initially recorded at cost and subsequently adjusted for the Company’s pro-rata share of net income, contributions, and distributions. When the Company elects the FVO, the Company records its share of net asset value of the entity and any related unrealized gains and losses. The Operating Partnership and the Company’s joint ventures are considered to be VIEs. The Company consolidates these entities, excluding its equity method investments, because it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans. For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities, and operations of each joint venture is included in non-controlling interests as equity of the Company. The non-controlling joint venture partner’s interest is generally computed as the joint venture partner’s ownership percentage. Certain of the joint ventures formed by the Company provide the other partner a profits interest based on certain internal rate of return hurdles being achieved. Any profits interest due to the other partner is reported within non-controlling interest. Certain amounts in the Company’s prior period Consolidated Statements of Operations have been reclassified to conform to the current period presentation. For the three and six months ended June 30, 2023, $1.3 million and $0.3 million, respectively, of unrealized losses related to changes in the fair value of the Company’s investments in real estate-related securities has been reclassified from Unrealized (loss) gain on investments, net to Income from real estate-related loans and securities to conform to the current period presentation. For the three and six months ended June 30, 2023, $0.0 million of realized gains and $0.2 million of realized losses, respectively, related to sales of investments in real estate-related loans and securities has been reclassified from Realized gain on real estate investments, net to Income from real estate-related loans and securities to conform with the current period presentation. For the three and six months ended June 30, 2023, $1.6 million of unrealized gains and $2.5 million of unrealized losses, respectively, related to changes in the fair value of the Company’s investments in unconsolidated entities has been reclassified from Unrealized (loss) gain on investments, net to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.0 million and $0.1 million, respectively, of realized gains related the Company’s foreign currency swap have been reclassified from Realized gain on financial instruments to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.1 million and $0.0 million, respectively, of unrealized gains related the Company’s foreign currency swap have been reclassified from Unrealized (loss) gain on investments, net to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $5.8 million and $4.3 million, respectively, of unrealized gains related to changes in the fair value of the Company’s interest rate derivatives have been reclassified from Unrealized (loss) gain on investments, net to Other income, net to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.7 million and $0.8 million, respectively, of net realized gains related to trading securities has been reclassified from Realized gain on real estate investments, net and Unrealized (loss) gain on investments, net to Other income, net to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.1 million and $0.1 million, respectively, of interest income related to operating properties has been reclassified from Income from real estate-related loans and securities to Other income, net to conform with the current period presentation. |
Use of Estimates | Use of Estimates |
Investments in Real Estate | Investments in Real Estate In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired does not constitute a business, the Company accounts for the transaction as an asset acquisition. The guidance for business combinations states that when substantially all of the fair value of the gross assets to be acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the asset or set of assets is not a business. The Company evaluates each real estate acquisition to determine whether the integrated set of acquired assets and activities meets the definition of a business. Generally, acquisitions of real estate or in-substance real estate are not expected to meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. All property acquisitions to date have been accounted for as asset acquisitions because substantially all of the fair value was concentrated in the land, buildings and related intangible assets. The Company capitalizes acquisition-related costs associated with asset acquisitions. Upon acquisition of a property, the Company assesses the fair value of the acquired tangible and intangible assets (including land, buildings, tenant improvements, above- or below-market leases, acquired in-place leases, and other intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions. The estimated fair value of acquired in-place leases include the costs the Company would have incurred to lease the properties to their occupancy levels at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs and other direct costs that would be incurred to lease the properties to such occupancy levels. The Company evaluates avoided costs over the time period over which occupancy levels at the date of acquisition would be achieved had the property been acquired vacant. Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases are amortized over the remaining lease terms as a component of depreciation and amortization expense. For acquired in-place leases, above- and below-market lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the lease acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The values of acquired above- and below-market leases are amortized over the terms of the related leases and recognized as either increases (for below-market leases) or decreases (for above-market leases) to rental revenue. Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of the above- or below-market lease value is charged to rental revenue. Significant improvements to properties are capitalized and depreciated over their estimated useful life. Expenditures for ordinary repairs and maintenance are expensed to operations as incurred. The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent improvements to such properties. The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Description Depreciable Life Building 30-40 years Building and site improvements 5-21 years Furniture, fixtures and equipment 1-9 years Tenant improvements Shorter of estimated useful life or lease term In-place lease intangibles Over lease term Above and below market leases Over lease term Lease origination costs Over lease term Present value of tax abatement savings Over tax abatement period When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period. The Company’s management reviews its real estate properties for impairment when there is an event or change in circumstances that indicates an impaired value. In reviewing the portfolio, the Company’s management examines the type of asset, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, changes in holding period, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset for which indicators of impairment are identified, the Company performs a recoverability analysis that compares future undiscounted cash flows expected to result from the Company’s use and eventual disposition of the asset to its carrying value. If the undiscounted cash flow analysis yields an amount that is less than the asset’s carrying amount, an impairment loss will be recorded equal to the amount by which the carrying value of the asset exceeds its estimated fair value. Since cash flows on real estate properties considered to be “long-lived assets to be held and used” are considered on an undiscounted basis to determine whether an asset has been impaired, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. During the periods presented, no such impairment occurred. |
Assets Held for Sale | Assets Held for Sale The Company classifies the assets and liabilities related to its real estate investments as held for sale when a sale is probable to occur within one year. The Company considers a sale to be probable when a binding contract has been executed, the buyer has posted a non-refundable deposit, and there are limited contingencies to closing. The Company classifies held for sale assets and liabilities at the lower of depreciated cost or fair value less closing costs. There were no properties held for sale as of June 30, 2024 and December 31, 2023. |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities The Company has elected the FVO for its investment in unconsolidated entities and therefore reports this investment at fair value. As such, the resulting unrealized gains and losses are recorded as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. For further details on the Company’s investments in unconsolidated entities, see Note 4 — “Investments in Unconsolidated Entities” to the Company’s Consolidated Financial Statements. |
Investments in Real Estate-Related Loans and Securities | Investments in Real Estate-Related Loans and Securities Real estate-related loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred. Interest income related to the Company’s loans is recognized based upon the contractual interest rate and unpaid principal balance of the loans as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income. The Company assesses the collectability of its real estate-related loans to estimate credit losses over the contractual term of each loan on a periodic basis. The Company’s estimate of credit losses is based on relevant factors, including historical realized loss rates, current market conditions, and reasonable and supportable forecasts that affect the collectability of its investments. The Company also considers, among other things, payment status, lien position, borrower or tenant financial resources, and underlying collateral. The Company recognizes an allowance for credit loss when the carrying amount of a loan differs from the amount expected to be collected. For further details on the Company’s allowance for credit loss, see Note 6 — “Investments in Real Estate-Related Loans and Securities” to the Company’s Consolidated Financial Statements. The Company has elected to classify its real estate debt securities as trading securities and carry such investments at fair value. As such, the resulting unrealized gains and losses of such securities are recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Interest income from trading securities is recognized based on the stated terms of the security. Interest income from real estate-related debt securities is recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. |
Revenue Recognition | Revenue Recognition Rental revenue primarily consists of base rent arising from tenant leases at the Company’s properties. Base rent is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. The Company begins to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Other rental revenues include amounts due from tenants for costs related to common area maintenance, real estate taxes, and other recoverable costs included in lease agreements. The Company recognizes the reimbursement of such costs incurred as tenant reimbursement income. The Company evaluates the collectability of receivables related to rental revenue on an individual lease basis. In making this determination, the Company considers the length of time a receivable has been outstanding, tenant creditworthiness, payment history, available information about the financial condition of the tenant, and current economic trends, among other factors. Tenant receivables that are deemed uncollectible are recognized as a reduction to rental revenue. The Company will recognize revenue from such leases prospectively, based on actual amounts received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance. As of June 30, 2024 and December 31, 2023, the allowance for doubtful accounts was approximately $0.7 million and $1.0 million, respectively. These amounts are included in Accounts and other receivables on the Company’s Consolidated Balance Sheets. |
Cash, Cash Equivalents, and Restricted Cash | Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. Restricted Cash |
Trading Securities | Trading Securities Trading securities consist of U.S. government securities that are available to support the Company’s current operations and liquidity. Trading securities are measured at fair value. As such, the resulting unrealized gains and losses of such securities are recorded as a component of Other income, net on the Company’s Consolidated Statements of Operations. Interest income from trading securities is recognized based on the stated terms of the security and is recorded as a component of Other income, net on the Company’s Consolidated Statements of Operations. During the three and six months ended June 30, 2024, income from trading securities was $0.3 million and $0.5 million, respectively. During the three and six months ended June 30, 2023, income from trading securities was $0.7 million and $0.8 million, respectively. |
Foreign Currency | Foreign Currency In the normal course of business, the Company makes investments in real estate outside the United States through subsidiaries that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rate at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Gains and losses from translation of foreign denominated transactions into U.S. dollars are included in current results of operations as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. |
Deferred Charges | Deferred Charges |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to the effect of interest rate changes and, with regard to its non-U.S. investments, changes in foreign currency exchange rates. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate and currency rate risk. These financial instruments may include interest rate swaps and other derivative contracts. Upfront costs paid in connection with acquiring interest rate swaps and caps are amortized over the term of the applicable derivative instrument as a component of Interest expense on the Company’s Consolidated Statements of Operations. |
Fair Value Measurement | Fair Value Measurement Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchical framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy: Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments. Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date. Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. Valuation of Assets and Liabilities Measured at Fair Value The Company’s investments in real estate-related securities and trading securities are reported at fair value. The Company generally determines the fair value of its investments in real estate-related securities and trading securities by utilizing third-party pricing service providers. In determining the value of a particular investment, the pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for securities such as real estate debt generally consider the attributes applicable to a particular class of the security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. The inputs used in determining the Company’s real estate-related securities and trading securities reported at fair value are considered Level 2 and Level 3. The Company’s derivative financial instruments are reported at fair value. The Company’s interest rate swaps are valued using a discounted cash flow analysis based on the terms of the contract and the forward interest rate curve adjusted for the Company’s nonperformance risk. The Company’s interest rate caps are valued using models developed by the respective counterparty as well as third-party pricing service providers that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data). The fair value of the Company’s foreign currency swap is determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying instruments. The inputs used in determining the Company’s derivative financial instruments reported at fair value are considered Level 2. The Company has elected the FVO for its equity method investment and therefore, reports this investment at fair value. As such, the resulting unrealized gains and losses are recorded as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. The Company separately values the assets and liabilities of the equity method investment. To determine the fair value of the assets of the equity method investments, the Company utilizes a discounted cash flow methodology, taking into consideration various factors including discount rate and exit capitalization rate. The Company determines the fair value of the indebtedness of the equity method investment by modeling the cash flows required by the debt agreements and discounting them back to the present value using an estimated market yield. Additionally, the Company considers current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. After the fair value of the assets and liabilities are determined, the Company applies its ownership interest to the net asset value and reflects this amount as its equity method investment at fair value. The inputs used in determining the Company’s equity method investment carried at fair value are considered Level 3. The Company’s carrying values of cash and cash equivalents, restricted cash, accounts receivable and other receivables, accounts payable, accrued liabilities and other liabilities approximate fair value because of the short-term nature of these instruments. The following table details the Company’s assets and liabilities measured at fair value on a recurring basis ($ in thousands): June 30, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Investments in real estate-related securities $ — $ 85,453 $ 18,390 $ 103,843 $ — $ 223,605 $ — $ 223,605 Investments in unconsolidated entities — — 81,034 81,034 — — 78,569 78,569 Trading securities — 18,972 — 18,972 — 39,824 — 39,824 Derivatives — 1,647 — 1,647 — 10,657 — 10,657 Total $ — $ 106,072 $ 99,424 $ 205,496 $ — $ 274,086 $ 78,569 $ 352,655 Liabilities: Interest rate swaps related to investments in real estate-related securities $ — $ 180 $ — $ 180 $ — $ — $ — $ — Total $ — $ 180 $ — $ 180 $ — $ — $ — $ — The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands): Investments in real estate-related securities Investments in unconsolidated entities Total Assets Balance as of December 31, 2023 $ — $ 78,569 $ 78,569 Transfer into Level 3 19,283 — 19,283 Distributions of earnings from unconsolidated entities — (764) (764) Unrealized (loss) gain (893) 3,770 2,877 Loss on foreign currency translation — (541) (541) Balance as of June 30, 2024 $ 18,390 $ 81,034 $ 99,424 The following tables contain the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands): June 30, 2024 Fair Value Valuation Technique Unobservable Inputs Average Impact to Valuation from an Increase in Input Investments in real estate-related securities $ 18,390 Discounted cash flow Discount rate 13.4% Decrease Investments in unconsolidated entities $ 81,034 Discounted cash flow Discount rate 6.3% Decrease Exit capitalization rate 5.2% Decrease December 31, 2023 Fair Value Valuation Technique Unobservable Inputs Average Impact to Valuation from an Increase in Input Investments in unconsolidated entities $ 78,569 Discounted cash flow Discount rate 5.8% Decrease Exit capitalization rate 4.8% Decrease Valuation of Assets Measured at Fair Value on a Nonrecurring Basis Certain of the Company’s assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments, such as when there is evidence of impairment, and therefore measured at fair value on a nonrecurring basis. The Company reviews its real estate properties for impairment each quarter or when there is an event or change in circumstances that could indicate the carrying amount of the real estate value may not be recoverable. Valuation of Liabilities Not Measured at Fair Value The fair value of the Company’s indebtedness is estimated by modeling the cash flows required by the Company’s debt agreements and discounting them back to the present value using an appropriate discount rate. Additionally, the Company considers current market rate and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value of the Company’s indebtedness are considered Level 3. As of June 30, 2024, the fair value of the Company’s mortgage loans and other indebtedness was approximately $39.7 million below the outstanding principal balance. |
Income Taxes | Income Taxes The Company believes that it qualifies to be taxed as a REIT for U.S. federal income tax purposes. The Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company has formed wholly-owned subsidiaries that are taxed as taxable REIT subsidiaries (“TRSs”) that are subject to taxation at the federal, state and local levels, as applicable, at regular corporate tax rates. In general, a TRS may perform additional services for the Company’s tenants and generally may engage in any real estate or non-real estate-related business. For the three and six months ended June 30, 2024, the Company recognized income tax expense of $0.0 million and $0.4 million, respectively, related to its TRSs within General and administrative on the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2023, the Company recognized income tax benefit and expense of $0.1 million and $0.2 million, respectively, related to its TRSs within General and administrative on the Company’s Consolidated Statements of Operations. |
Organization And Offering Expense | Organization and Offering Expenses Organizational expenses are expensed as incurred on the Company’s Consolidated Statements of Operations, and offering costs are charged to equity as incurred on the Company’s Consolidated Statements of Changes in Stockholders’ Equity. The Adviser and its affiliates advanced $12.5 million of organization and offering expenses on the Company’s behalf through July 5, 2022, and the Company reimburses the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2022. Additionally, the Adviser advanced $1.1 million of organization and offering costs from July 6, 2022 through July 5, 2023, and the Company reimburses the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2023. The Company reimburses the Adviser for any organization and offering expenses that it incurs on the Company’s behalf as and when incurred after July 6, 2023. Any amount due to the Adviser but not paid is recorded as a component of Due to affiliates on the Company’s Consolidated Balance Sheets. |
Earnings Per Share | Earnings Per Share The Company uses the two-class method in calculating earnings per share ( “ EPS ” ) when it issues securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the Company when, and if, the Company declares dividends on its common stock. Basic earnings per share ( “ Basic EPS ” ) for the Company ’ s common stock are computed by dividing net income allocable to common stockholders by the weighted average number of shares of common stock outstanding for the period, respectively. Diluted earnings per share ( “ Diluted EPS ” ) is calculated similarly, however, it reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount. The Company includes unvested shares of restricted stock in the computation of diluted EPS by using the more d |
Stockholder Servicing Fee | Stockholder Servicing Fee |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance which provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform Accounting Standards Update (“ASU”) 2020-04, and 2022-06 - Reference Rate Reform (“Topic 848”). Among other things, for all types of hedging relationships, Topic 848 allows an entity to change the reference rate and other critical terms related to reference rate reform without having to remeasure the value or reassess a previous accounting determination. The amendments in this guidance may be applied immediately on a prospective basis to any related changes through December 31, 2024. During the three months ended June 30, 2023, the Company entered into loan modifications in connection with the transition from LIBOR to Secured Overnight Financing Rate (“SOFR”) for its variable rate loans and applied the practical expedient to all such modifications. As of December 31, 2023, the Company adopted the guidance and it did not have a significant impact on the Company’s consolidated financial statements or disclosures. In August 2023, the FASB issued ASU 2023-05, an update to ASC Topic 805, Business Combinations. ASU 2023-05 clarifies existing guidance by requiring a joint venture to recognize and initially measure assets contributed and liabilities assumed at fair value, upon its formation. These amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. The Company will apply the provisions of ASU 2023-05 to new joint ventures, as applicable, but does not believe the adoption of ASU 2023-05 will have a material impact on the Company’s consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income tax expense and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09 on the Company’s consolidated financial statements. In March 2024, the SEC issued a final rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors that requires registrants to provided climate disclosures in their annual reports and registration statements beginning with annual reports for the years ended December 31, 2027, for calendar year end non-accelerated filers. Registrants must provide information about specified financial statement effects of severe weather events and other natural conditions, certain carbon offsets and renewable energy certificates, and material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans. Disclosures required outside of the financial statements include governance and oversight of material climate-related risks, the material impact of climate risks on the company’s strategy, business model, and outlook, risk management processes for material climate-related risks and, material climate targets and goals. The Company is currently evaluating the impact of this rule on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Description Depreciable Life Building 30-40 years Building and site improvements 5-21 years Furniture, fixtures and equipment 1-9 years Tenant improvements Shorter of estimated useful life or lease term In-place lease intangibles Over lease term Above and below market leases Over lease term Lease origination costs Over lease term Present value of tax abatement savings Over tax abatement period |
Derivatives Not Designated as Hedging Instruments | As of June 30, 2024, the Company’s derivative instruments consisted of the following ($ and £ in thousands): Number of Instruments Notional Amount Weighted Average Strike Rate Weighted Average Maturity (years) Interest Rate Swaps 1 $ 33,800 0.6% 0.1 Interest Rate Caps 5 $ 591,810 5.7% 0.6 Foreign Currency Swap Contracts (1) 1 £ 62,100 N/A 1.1 (1) The Company’s foreign currency swap matured in August 2024, at which time the Company entered into a new foreign currency swap contract with a one-year term for the same notional amount. Refer to Note 6 — “Investments in Real Estate-Related Loans and Securities” for information regarding the Company’s interest rate derivatives related to its investments in real estate-related securities. |
Fair Value, Assets Measured on Recurring Basis | The following table details the Company’s assets and liabilities measured at fair value on a recurring basis ($ in thousands): June 30, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Investments in real estate-related securities $ — $ 85,453 $ 18,390 $ 103,843 $ — $ 223,605 $ — $ 223,605 Investments in unconsolidated entities — — 81,034 81,034 — — 78,569 78,569 Trading securities — 18,972 — 18,972 — 39,824 — 39,824 Derivatives — 1,647 — 1,647 — 10,657 — 10,657 Total $ — $ 106,072 $ 99,424 $ 205,496 $ — $ 274,086 $ 78,569 $ 352,655 Liabilities: Interest rate swaps related to investments in real estate-related securities $ — $ 180 $ — $ 180 $ — $ — $ — $ — Total $ — $ 180 $ — $ 180 $ — $ — $ — $ — The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands): Investments in real estate-related securities Investments in unconsolidated entities Total Assets Balance as of December 31, 2023 $ — $ 78,569 $ 78,569 Transfer into Level 3 19,283 — 19,283 Distributions of earnings from unconsolidated entities — (764) (764) Unrealized (loss) gain (893) 3,770 2,877 Loss on foreign currency translation — (541) (541) Balance as of June 30, 2024 $ 18,390 $ 81,034 $ 99,424 The following tables contain the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands): June 30, 2024 Fair Value Valuation Technique Unobservable Inputs Average Impact to Valuation from an Increase in Input Investments in real estate-related securities $ 18,390 Discounted cash flow Discount rate 13.4% Decrease Investments in unconsolidated entities $ 81,034 Discounted cash flow Discount rate 6.3% Decrease Exit capitalization rate 5.2% Decrease December 31, 2023 Fair Value Valuation Technique Unobservable Inputs Average Impact to Valuation from an Increase in Input Investments in unconsolidated entities $ 78,569 Discounted cash flow Discount rate 5.8% Decrease Exit capitalization rate 4.8% Decrease |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments in Real Estate [Abstract] | |
Schedule of Real Estate Properties | As of June 30, 2024 and December 31, 2023, the Company’s investments in real estate, net, consisted of the following ($ in thousands): June 30, 2024 December 31, 2023 Building and building improvements $ 1,419,355 $ 1,304,336 Land and land improvements 296,165 262,323 Tenant improvements 30,199 35,877 Furniture, fixtures and equipment 42,461 29,071 Total 1,788,180 1,631,607 Accumulated depreciation (119,635) (106,451) Investments in real estate, net $ 1,668,545 $ 1,525,156 The following table provides further details of the properties acquired during the six months ended June 30, 2024 and year ended December 31, 2023 ($ in thousands): Investment Ownership Interest Location Segment Acquisition Date Units Purchase Price (1) Single-Family Rentals 100% Various Rental Housing Various 2023 6 $ 1,681 Single-Family Rentals 100% Various Rental Housing Various 2024 181 50,448 Reflection 97% Atlanta, GA Rental Housing June 2024 741 117,408 Total $ 169,537 (1) Purchase price is inclusive of closing costs. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation of the properties acquired during the six months ended June 30, 2024 and year ended December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Building and building improvements $ 114,073 $ 1,418 Land and land improvements 36,503 263 Tenant improvements 115 — Furniture, fixtures and equipment 13,933 — In-place lease intangibles 3,171 — Lease origination costs 61 — Total purchase price (1) $ 167,856 $ 1,681 (1) Purchase price is inclusive of closing costs. |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information of Unconsolidated Joint Venture | The following tables provide summarized financial information of the joint venture that owns Principal Place as of and for the periods set forth below ($ in thousands): As of June 30, 2024 As of December 31, 2023 Total Assets $ 1,028,300 $ 1,042,957 Total Liabilities 627,446 634,183 Total Equity $ 400,854 $ 408,774 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Total Revenues $ 12,455 $ 12,010 $ 24,936 $ 23,483 Total Expenses 12,904 13,949 26,201 26,786 Net Loss $ (449) $ (1,939) $ (1,265) $ (3,303) |
Intangibles (Tables)
Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Carrying Amount and Accumulated Amortization of Intangible Assets | The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities consisted of the following as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Intangible assets: In-place lease intangibles $ 33,860 $ 32,513 Lease origination costs 13,677 14,203 Lease inducements 2,208 2,690 Tax intangibles 5,249 5,249 Above-market lease intangibles 114 114 Total intangible assets 55,108 54,769 Accumulated amortization: In-place lease intangibles (7,121) (6,644) Lease origination costs (4,093) (4,188) Lease inducements (637) (1,101) Tax intangibles (1,676) (1,340) Above-market lease intangibles (45) (37) Total accumulated amortization (13,572) (13,310) Intangible assets, net $ 41,536 $ 41,459 Intangible liabilities: Below-market lease intangibles $ (28,909) $ (28,919) Accumulated amortization 3,455 2,792 Intangible liabilities, net $ (25,454) $ (26,127) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of June 30, 2024, the estimated future amortization of the Company’s intangibles for each of the next five years and thereafter is as follows ($ in thousands): In-place Lease Intangibles Above-market Lease Intangibles Other Intangibles Below-market Lease Intangibles 2024 (remaining) $ 2,960 $ 10 $ 1,481 $ (672) 2025 1,782 18 2,366 (1,340) 2026 1,629 18 2,139 (1,332) 2027 1,521 7 2,039 (1,327) 2028 1,436 5 1,604 (1,327) 2029 1,322 5 1,352 (1,327) Thereafter 16,089 6 3,747 (18,129) Total $ 26,739 $ 69 $ 14,728 $ (25,454) |
Investments in Real Estate-Re_2
Investments in Real Estate-Related Loans and Securities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Real Estate Investments, Net [Abstract] | |
Schedule Of Investments in Real Estate-Related Loans and Securities | The following table summarizes the components of investments in real estate-related loans and securities as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Real estate-related securities $ 103,843 $ 223,605 Real estate-related loans 17,155 16,503 Interest rate swaps (180) — Total investments in real estate-related loans and securities $ 120,818 $ 240,108 |
Investment In Real Estate Loans | The following tables detail the Company’s real estate-related loan investments as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 Investment Collateral Interest Rate (1) Maturity Date Payment Terms Face Amount Allowance Adjustment Carrying Amount IMC/AMC Bond Investment International Markets Center SOFR+8.15% June 2026 Principal due at maturity $ 10,000 $ — $ 10,000 The Avery Senior Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 7,221 (1,482) 5,739 The Avery Mezzanine Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 1,749 (332) 1,416 Total $ 18,970 $ (1,814) $ 17,155 December 31, 2023 Investment Collateral Interest Rate (1) Maturity Date Payment Terms Face Amount Allowance Adjustment Carrying Amount IMC/AMC Bond Investment International Markets Center SOFR+8.15% June 2026 Principal due at maturity $ 10,000 $ — $ 10,000 The Avery Senior Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 6,878 (1,670) 5,208 The Avery Mezzanine Loan (2) The Avery Condominium 10.00% December 2024 Principal due at maturity (3) 1,669 (374) 1,295 Total $ 18,547 $ (2,044) $ 16,503 ` (1) As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively. (2) The Company’s investment is held through its membership interest in an entity which aggregates the Company’s interest with interests held by other funds managed by the Sub-Adviser. The Company has been allocated its proportionate share of the loan based on its membership interest in the aggregating entity. In December 2023, the loan agreements were amended to change the interest rate to 10.00% and extend the maturity date to December 2024. (3) The maturity date may be extended for additional one-year periods, but no later than February 2028, subject to the borrower meeting minimum annual repayment requirements. Generally, loan repayments are made simultaneous with the closing of the sale of any condominium unit. |
Schedule Of Investments In Real Estate-Related Securities | The following tables detail the Company’s investments in real estate-related securities as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 Type of Security Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value CMBS - floating 13 SOFR+3.79% March 2026 $ 47,945 $ 44,182 $ 44,123 CMBS - fixed 7 4.62% November 2026 36,413 32,384 22,638 RMBS - fixed 28 5.37% August 2026 38,059 37,091 37,082 Interest rate swaps 3 4.46% July 2026 — — (180) Total 51 6.62% (3) July 2026 $ 122,417 $ 113,657 $ 103,663 December 31, 2023 Type of Security Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value CMBS - floating 29 SOFR+3.64% November 2025 $ 149,282 $ 141,971 $ 143,423 CMBS - fixed 7 4.26% April 2026 37,913 33,413 24,322 RMBS - floating 6 SOFR+1.58% October 2024 10,752 10,757 10,765 RMBS - fixed 30 4.71% July 2026 46,611 45,105 45,095 Total 72 7.37% January 2026 $ 244,558 $ 231,246 $ 223,605 (1) As of June 30, 2024 and December 31, 2023, SOFR was equal to 5.34% and 5.38%, respectively. (2) Weighted average maturity date is based on the fully extended maturity date of the investments. (3) Total weighted average coupon is calculated on CMBS and RMBS and excludes interest rate swaps. |
Accounts and Other Receivable_2
Accounts and Other Receivables and Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Schedule of Accounts and Other Receivables and Other Assets | The following tables summarize the components of Accounts and other receivables, net and Other assets as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Straight-line rent receivables $ 6,685 $ 5,058 Accounts receivable, net 1,805 4,700 Interest receivable 684 1,036 Total accounts and other receivables, net $ 9,174 $ 10,794 June 30, 2024 December 31, 2023 Trading securities $ 18,972 $ 39,824 Prepaid expenses 2,817 2,170 Derivative instruments 1,647 10,657 Other 916 469 Total other assets $ 24,352 $ 53,120 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table summarizes the components of Accounts payable, accrued expenses and other liabilities as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Accounts payable and accrued expenses $ 12,574 7,547 Stock repurchases payable 12,601 $ 13,898 Real estate taxes payable 5,166 3,665 Distributions payable 4,840 5,132 Tenant security deposits 4,008 3,400 Accrued interest expense 2,497 4,204 Prepaid rent 876 1,378 Total accounts payable, accrued expenses and other liabilities $ 42,562 $ 39,224 |
Mortgage Loans and Secured Cr_2
Mortgage Loans and Secured Credit Facility (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the components of total indebtedness, net as of June 30, 2024 and December 31, 2023 ($ in thousands): Principal Balance Outstanding Indebtedness Weighted Average Interest Rate (1) Weighted Average Maturity Date (2) Maximum Facility Size June 30, 2024 December 31, 2023 Fixed rate loans: Fixed rate mortgages 3.77% December 2028 N/A $ 328,720 $ 263,720 Total fixed rate loans 328,720 263,720 Variable rate loans: Floating rate mortgages SOFR+1.71% May 2027 N/A 680,383 680,410 Secured credit facility (3) SOFR+2.00% January 2025 $300,000 144,485 118,985 Affiliate line of credit (4) SOFR+2.25% November 2024 $125,000 — — Total variable rate loans 824,868 799,395 Total indebtedness 1,153,588 1,063,115 Deferred financing costs, net (4,230) (4,772) Total indebtedness, net $ 1,149,358 $ 1,058,343 (1) As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively. (2) Includes the fully extended maturity date for loans with extension options that are at the Company’s discretion and the Company currently expects to be able to exercise. (3) As of June 30, 2024 borrowings on the Secured Credit Facility (defined below) were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, and certain single-family rentals. As of December 31, 2023 borrowings on the Secured Credit Facility were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, and certain single-family rentals. (4) Borrowings under the Affiliate Line of Credit (defined below) bear interest at a rate of the lowest then-current interest rate for any similar credit product offered by a third-party lender to the Company or its subsidiaries or, if not available, SOFR plus a 0.10% credit adjustment and a 2.25% margin. |
Schedule of Maturities of Long-term Debt | The following table presents the future principal payments due under the Company’s mortgage loans and other indebtedness as of June 30, 2024 ($ in thousands): Year Amount 2024 (remaining) $ 62,283 2025 171,503 2026 49,989 2027 454,208 2028 118,034 2029 254,696 Thereafter 42,875 Total $ 1,153,588 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Components Due To Affiliates | The following table summarizes the Company’s affiliate service provider expenses for the three and six months ended June 30, 2024 and 2023 ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Property management fees (1) $ 830 $ 714 $ 1,585 $ 1,432 Single-family rental leasing, maintenance and turnover oversight fees (1) 200 189 316 278 Capitalized construction management fees (2) 22 23 42 36 Capitalized single-family rental renovation oversight fees (2) 1 10 1 32 Reimbursed personnel costs (3) 2,010 1,711 3,687 3,313 Total $ 3,063 $ 2,647 $ 5,631 $ 5,091 (1) Included in Rental property operating expenses on the Company’s Consolidated Statements of Operations. (2) Included in Investments in real estate, net on the Company’s Consolidated Balance Sheets. (3) For the three and six months ended June 30, 2024, $1.7 million and $3.1 million, respectively, included in Rental property operating expenses and $0.3 million and $0.6 million, respectively, included in General and administrative expenses on the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2023, $1.5 million and $2.8 million, included in Rental property operating expenses and $0.2 million and $0.5 million included in General and administrative expenses on the Company’s Consolidated Statements of Operations. The following table details the components of Due to affiliates as of June 30, 2024 and December 31, 2023 ($ in thousands): June 30, 2024 December 31, 2023 Accrued stockholder servicing fee $ 20,792 $ 25,507 Advanced organization and offering costs 8,374 9,734 Stock repurchase payable to the Adviser for management fees 2,958 3,353 Other (1) 2,435 2,410 Accrued management fee 928 1,046 Accrued affiliate service provider expenses 2,348 1,915 OP Units distributions payable 6 6 Total $ 37,841 $ 43,971 (1) Represents costs advanced by the Adviser and the Sub-Adviser on behalf of the Company for general corporate expenses provided by unaffiliated third parties. |
Stockholders' Equity and Rede_2
Stockholders' Equity and Redeemable Non-controlling Interests (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of Stock by Class | Classification No. of Par Value Preferred stock 50,000 $ 0.01 Class S common stock 225,000 $ 0.01 Class I common stock 250,000 $ 0.01 Class T common stock 225,000 $ 0.01 Class D common stock 100,000 $ 0.01 Class C common stock 100,000 $ 0.00 Class E common stock 100,000 $ 0.00 1,050,000 |
Schedule of Common Stock Outstanding Roll Forward | The following table details the movement in the Company’s outstanding shares of common stock for the six months ended June 30, 2024 (in thousands): Six Months Ended June 30, 2024 Class S Class I Class D Class T (1) Class C Class E Total December 31, 2023 34,244 41,504 148 — 9,347 3,353 88,596 Common stock issued (2) 460 1,871 17 — — 71 2,419 Distribution reinvestment 459 954 — — — 108 1,521 Common stock repurchased (5,121) (3,621) (5) — (871) (121) (9,739) June 30, 2024 30,042 40,708 160 — 8,476 3,411 82,797 (1) As of June 30, 2024, no Class T shares had been issued. (2) Includes conversions between share classes. |
Dividends Declared | The following table details the aggregate net distributions declared for each applicable class of common stock for the three and six months ended June 30, 2024: Three Months Ended June 30, 2024 Class S Class I Class D Class T (1) Class C Class E Aggregate gross distributions declared per share of common stock $ 0.2147 $ 0.2147 $ 0.2147 $ — $ 0.2147 $ 0.2147 Stockholder servicing fee per share of common stock (0.0237) — (0.0070) — — — Management fee per share of common stock (0.0350) (0.0353) (0.0356) — (0.0345) — Net distributions declared per share of common stock $ 0.1560 $ 0.1794 $ 0.1721 $ — $ 0.1802 $ 0.2147 Six Months Ended June 30, 2024 Class S Class I Class D Class T (1) Class C Class E Aggregate gross distributions declared per share of common stock $ 0.4305 $ 0.4305 $ 0.4305 $ — $ 0.4305 $ 0.4305 Stockholder servicing fee per share of common stock (0.0482) — (0.0143) — — — Management fee per share of common stock (0.0711) (0.0717) (0.0722) — (0.0701) — Net distributions declared per share of common stock $ 0.3112 $ 0.3588 $ 0.3440 $ — $ 0.3604 $ 0.4305 (1) No Class T shares of common stock were issued or outstanding, thus no distributions were declared for Class T common stock during the six months ended June 30, 2024. |
Redeemable Noncontrolling Interest | The following table summarizes the Redeemable non-controlling interest activity for the six months ended June 30, 2024 and 2023 ($ in thousands): Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Balance at beginning of the year $ 933 $ 990 GAAP net loss allocation (10) (6) Distributions (35) (58) Distributions reinvested 35 57 Fair value allocation — (22) Ending balance $ 923 $ 961 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Operating Lease Income | The following table details the components of operating lease income from leases in which the Company is the lessor for the periods set forth below ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Fixed lease payments $ 30,023 $ 29,226 $ 58,936 $ 58,327 Variable lease payments 2,170 4,276 4,113 5,648 Total rental revenues $ 32,193 $ 33,502 $ 63,049 $ 63,975 |
Lessee, Operating Lease, Liability, Maturity | The table below excludes the Company’s rental housing properties as substantially all leases are shorter term in nature ($ in thousands): Year Future Minimum Rents 2024 (remaining) $ 15,696 2025 29,754 2026 27,377 2027 26,425 2028 25,808 2029 23,594 Thereafter 103,382 Total $ 252,036 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth the Company’s assets by segment ($ in thousands): June 30, 2024 December 31, 2023 Rental Housing $ 1,205,942 $ 1,061,941 Office 100,775 103,179 Logistics 106,079 108,329 Net Lease 414,339 415,282 Real estate-related loans and securities 120,818 240,108 Other (Corporate) 43,116 61,068 Total assets $ 1,991,069 $ 1,989,907 The following table sets forth the financial results by segment for the three months ended June 30, 2024 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 22,079 $ 2,944 $ 1,992 $ 5,178 $ — $ 32,193 Other revenues 3,141 181 — 11 — 3,333 Total revenues 25,220 3,125 1,992 5,189 — 35,526 Expenses: Rental property operating 10,414 1,397 511 940 — 13,262 Total expenses 10,414 1,397 511 940 — 13,262 Income from real estate-related loans and securities — — — — 3,311 3,311 Segment net operating income $ 14,806 $ 1,728 $ 1,481 $ 4,249 $ 3,311 $ 25,575 Gain from unconsolidated entities 2,991 Other income, net 30 Depreciation and amortization (14,337) General and administrative expenses (1,570) Management fee (2,833) Interest expense (17,001) Net loss $ (7,145) Net loss attributable to non-controlling interests in third party joint ventures 230 Net income attributable to non-controlling interests - preferred stockholders (65) Net loss attributable to stockholders $ (6,973) The following table sets forth the financial results by segment for the three months ended June 30, 2023 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 21,034 $ 3,248 $ 1,705 $ 7,515 $ — $ 33,502 Other revenues 3,351 243 — 52 — 3,646 Total revenues 24,385 3,491 1,705 7,567 — 37,148 Expenses: Rental property operating 9,625 1,450 523 3,282 — 14,880 Total expenses 9,625 1,450 523 3,282 — 14,880 Income from real estate-related loans and securities — — — — 3,841 3,841 Segment net operating income $ 14,760 $ 2,041 $ 1,182 $ 4,285 $ 3,841 $ 26,109 Gain from unconsolidated entities 1,649 Other income, net 6,512 Depreciation and amortization (12,765) General and administrative expenses (2,229) Management fee (3,579) Interest expense (14,498) Net income $ 1,199 Net income attributable to non-controlling interests in third party joint ventures (67) Net income attributable to non-controlling interests - preferred stockholders (45) Net income attributable to redeemable non-controlling interests (2) Net income attributable to stockholders $ 1,085 The following table sets forth the financial results by segment for the six months ended June 30, 2024 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 43,177 $ 5,495 $ 4,021 $ 10,356 $ — $ 63,049 Other revenues 5,353 316 — 21 — 5,690 Total revenues 48,530 5,811 4,021 10,377 — 68,739 Expenses: Rental property operating 19,813 2,842 1,063 1,917 — 25,636 Total expenses 19,813 2,842 1,063 1,917 — 25,636 Income from real estate-related loans and securities — — — — 10,369 10,369 Segment net operating income $ 28,717 $ 2,969 $ 2,958 $ 8,460 $ 10,369 $ 53,472 Gain from unconsolidated entities 3,724 Other income, net 2,184 Depreciation and amortization (27,098) General and administrative expenses (3,783) Management fee (5,828) Interest expense (33,327) Net loss $ (10,656) Net loss attributable to non-controlling interests in third party joint ventures 433 Net income attributable to non-controlling interests - preferred stockholders (65) Net loss attributable to redeemable non-controlling interests 10 Net loss attributable to stockholders $ (10,278) The following table sets forth the financial results by segment for the six months ended June 30, 2023 ($ in thousands): Rental Housing Office Logistics Net Lease Real estate-related loans and securities Total Revenues: Rental revenues $ 41,709 $ 6,239 $ 3,680 $ 12,347 $ — $ 63,975 Other revenues 5,734 419 — 52 — 6,205 Total revenues 47,443 6,658 3,680 12,399 — 70,180 Expenses: Rental property operating 18,506 2,949 1,283 3,870 — 26,608 Total expenses 18,506 2,949 1,283 3,870 — 26,608 Income from real estate-related loans and securities — — — — 10,844 10,844 Segment net operating income $ 28,937 $ 3,709 $ 2,397 $ 8,529 $ 10,844 $ 54,416 Loss from unconsolidated entities (2,404) Other income, net 5,248 Depreciation and amortization (25,569) General and administrative expenses (4,545) Management fee (7,257) Interest expense (28,430) Net loss $ (8,541) Net loss attributable to non-controlling interests in third party joint ventures 42 Net income attributable to non-controlling interests - preferred stockholders (45) Net loss attributable to redeemable non-controlling interests 6 Net loss attributable to stockholders $ (8,538) |
Organization and Business Pur_2
Organization and Business Purpose (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) classOfCommonStock investment_in_real_estate investment | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) classOfCommonStock investment_in_real_estate reportableSegment investment | Jun. 30, 2023 USD ($) | |
Class of Stock [Line Items] | ||||
Common stock issued | $ 17,100 | $ 45,632 | $ 27,739 | $ 94,386 |
Number of classes of common shares | classOfCommonStock | 4 | 4 | ||
Number of real estate properties | investment_in_real_estate | 20 | 20 | ||
Number of real estate investments, unconsolidated real estate and other joint ventures | investment | 2 | 2 | ||
Number of positions in real estate-related loans | investment | 3 | 3 | ||
Number of investments in floating-rate commercial mortgage backed securities | investment | 48 | 48 | ||
Number of reportable segments | reportableSegment | 5 | |||
Maximum | Primary Offering | ||||
Class of Stock [Line Items] | ||||
Common stock issued | $ 2,000,000 | |||
Maximum | Distribution Reinvestment Plan | ||||
Class of Stock [Line Items] | ||||
Common stock issued | 7,500,000 | |||
Maximum | Follow-On Primary Offering | ||||
Class of Stock [Line Items] | ||||
Common stock issued | 6,000,000 | |||
Maximum | Follow-On Distribution Reinvestment Plan Offering | ||||
Class of Stock [Line Items] | ||||
Common stock issued | $ 1,500,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Useful Life (Details) | Jun. 30, 2024 |
Minimum | Building | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life (in years) | 30 years |
Minimum | Building and site improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life (in years) | 5 years |
Minimum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life (in years) | 1 year |
Maximum | Building | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life (in years) | 40 years |
Maximum | Building and site improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life (in years) | 21 years |
Maximum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life (in years) | 9 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Jul. 05, 2023 | Jul. 05, 2022 | |
Accounting Policies [Line Items] | |||||||
Realized gain (loss) on investments in real estate-related loans and securities | $ (4,255) | $ (504) | |||||
Gain (loss) from unconsolidated entities | $ 2,991 | $ 1,649 | 3,724 | (2,404) | |||
Income from real estate-related loans and securities | 3,311 | 3,841 | 10,369 | 10,844 | |||
Allowance for doubtful accounts | 700 | 700 | $ 1,000 | ||||
Trading securities income | $ 300 | $ 700 | $ 500 | $ 800 | |||
Advanced organization and offering expense | $ 1,100 | $ 12,500 | |||||
Reimbursement period | 60 months | ||||||
Dilutive participating securities | 0 | 0 | 0 | 0 | |||
TRSs | |||||||
Accounting Policies [Line Items] | |||||||
Income tax expense (benefit) | $ 0 | $ (100) | $ 400 | $ 200 | |||
Foreign Exchange Forward | |||||||
Accounting Policies [Line Items] | |||||||
Unrealized gain (loss) on derivatives | (100) | (2,200) | 500 | (3,800) | |||
Interest Rate Contract | |||||||
Accounting Policies [Line Items] | |||||||
Derivative, gain (loss) on derivative, net | (300) | 5,800 | 1,500 | 4,300 | |||
Revision of Prior Period, Reclassification, Adjustment | |||||||
Accounting Policies [Line Items] | |||||||
Unrealized gain (loss) on investment in real estate | 1,300 | 300 | |||||
Realized gain (loss) on investments in real estate-related loans and securities | 0 | 200 | |||||
Gain (loss) from unconsolidated entities | 1,600 | (2,500) | |||||
Debt securities, trading, realized gain | 700 | 800 | |||||
Income from real estate-related loans and securities | 100 | 100 | |||||
Revision of Prior Period, Reclassification, Adjustment | Foreign Exchange Forward | |||||||
Accounting Policies [Line Items] | |||||||
Derivative, gain (loss) on derivative, net | 0 | 100 | |||||
Unrealized gain (loss) on derivatives | 100 | 0 | |||||
Revision of Prior Period, Reclassification, Adjustment | Interest Rate Contract | |||||||
Accounting Policies [Line Items] | |||||||
Unrealized gain (loss) on derivatives | $ 5,800 | $ 4,300 | |||||
Fair Value, Recurring | |||||||
Accounting Policies [Line Items] | |||||||
Notes payable, fair value disclosure | $ 39,700 | $ 39,700 | |||||
Common Stock Class D | |||||||
Accounting Policies [Line Items] | |||||||
Payment of stock issuance costs commission and dealer manager fees percentage of gross proceeds | 1.50% | 1.50% | |||||
Payment of stock issuance costs, annual servicing fees, percentage of gross proceeds | 0.25% | 0.25% | |||||
Payment of stock issuance costs, maximum aggregate fees, percentage of gross proceeds | 8.75% | 8.75% | |||||
Common Stock Class I | |||||||
Accounting Policies [Line Items] | |||||||
Payment of stock issuance costs commission and dealer manager fees percentage of gross proceeds | 0% | 0% | |||||
Class S And Class T Member | |||||||
Accounting Policies [Line Items] | |||||||
Payment of stock issuance costs commission and dealer manager fees percentage of gross proceeds | 3.50% | 3.50% | |||||
Payment of stock issuance costs, annual servicing fees, percentage of gross proceeds | 0.85% | 0.85% | |||||
Payment of stock issuance costs, maximum aggregate fees, percentage of gross proceeds | 8.75% | 8.75% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Derivative Information (Details) | 6 Months Ended |
Jun. 30, 2024 USD ($) segment | |
Interest Rate Swaps | |
Derivative [Line Items] | |
Number of Instruments | segment | 1 |
Notional Amount | $ | $ 33,800,000 |
Weighted Average Strike Rate | 0.006 |
Weighted Average Maturity (years) | 1 month 6 days |
Interest Rate Caps | |
Derivative [Line Items] | |
Number of Instruments | segment | 5 |
Notional Amount | $ | $ 591,810,000 |
Weighted Average Strike Rate | 0.057 |
Weighted Average Maturity (years) | 7 months 6 days |
Foreign Currency Swap Contracts(1) | |
Derivative [Line Items] | |
Number of Instruments | segment | 1 |
Notional Amount | $ | $ 62,100,000 |
Weighted Average Maturity (years) | 1 year 1 month 6 days |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Assets: | ||
Trading securities | $ 18,972 | $ 39,824 |
Total Assets | ||
Balance as of December 31, 2023 | 78,569 | |
Transfer into Level 3 | 19,283 | |
Distributions of earnings from unconsolidated entities | (764) | |
Unrealized (loss) gain | 2,877 | |
Loss on foreign currency translation | (541) | |
Balance as of June 30, 2024 | 99,424 | |
Investments in real estate-related securities | ||
Total Assets | ||
Balance as of December 31, 2023 | 0 | |
Transfer into Level 3 | 19,283 | |
Distributions of earnings from unconsolidated entities | 0 | |
Unrealized (loss) gain | (893) | |
Loss on foreign currency translation | 0 | |
Balance as of June 30, 2024 | 18,390 | |
Investments in unconsolidated entities | ||
Total Assets | ||
Balance as of December 31, 2023 | 78,569 | |
Transfer into Level 3 | 0 | |
Distributions of earnings from unconsolidated entities | (764) | |
Unrealized (loss) gain | 3,770 | |
Loss on foreign currency translation | (541) | |
Balance as of June 30, 2024 | $ 81,034 | |
Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow | Investments in real estate-related securities | ||
Total Assets | ||
Average | 13.40% | |
Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow | Investments in unconsolidated entities | ||
Total Assets | ||
Average | 6.30% | 5.80% |
Measurement Input, Cap Rate | Valuation Technique, Discounted Cash Flow | ||
Total Assets | ||
Average | 5.20% | 4.80% |
Fair Value, Recurring | ||
Assets: | ||
Investments in real estate-related securities | $ 103,843 | $ 223,605 |
Investments in unconsolidated entities | 81,034 | 78,569 |
Trading securities | 18,972 | 39,824 |
Derivatives | 1,647 | 10,657 |
Total | 205,496 | 352,655 |
Liabilities: | ||
Interest rate swaps related to investments in real estate-related securities | 180 | 0 |
Total | 180 | 0 |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Investments in real estate-related securities | 0 | 0 |
Investments in unconsolidated entities | 0 | 0 |
Trading securities | 0 | 0 |
Derivatives | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Interest rate swaps related to investments in real estate-related securities | 0 | 0 |
Total | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Investments in real estate-related securities | 103,663 | 223,605 |
Investments in unconsolidated entities | 0 | 0 |
Trading securities | 18,972 | 39,824 |
Derivatives | 1,647 | 10,657 |
Total | 106,072 | 274,086 |
Liabilities: | ||
Interest rate swaps related to investments in real estate-related securities | 180 | 0 |
Total | 180 | 0 |
Fair Value, Recurring | Level 2 | Investments in real estate-related securities | ||
Assets: | ||
Investments in real estate-related securities | 85,453 | |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Investments in real estate-related securities | 0 | |
Investments in unconsolidated entities | 78,569 | |
Trading securities | 0 | 0 |
Derivatives | 0 | 0 |
Total | 99,424 | 78,569 |
Liabilities: | ||
Interest rate swaps related to investments in real estate-related securities | 0 | 0 |
Total | 0 | 0 |
Fair Value, Recurring | Level 3 | Investments in real estate-related securities | ||
Assets: | ||
Investments in real estate-related securities | 18,390 | |
Fair Value, Recurring | Level 3 | Investments in unconsolidated entities | ||
Assets: | ||
Investments in unconsolidated entities | $ 81,034 | $ 78,569 |
Investments in Real Estate - Ne
Investments in Real Estate - Net Real Estate Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Investments in Real Estate [Abstract] | ||
Building and building improvements | $ 1,419,355 | $ 1,304,336 |
Land and land improvements | 296,165 | 262,323 |
Tenant improvements | 30,199 | 35,877 |
Furniture, fixtures and equipment | 42,461 | 29,071 |
Total | 1,788,180 | 1,631,607 |
Accumulated depreciation | (119,635) | (106,451) |
Investments in real estate, net | $ 1,668,545 | $ 1,525,156 |
Investments in Real Estate - Na
Investments in Real Estate - Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 USD ($) unit student_housing_property | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) singleFamilyRentalProperty | |
Real Estate [Line Items] | |||
Payments to Acquire Real Estate | $ 162,990 | $ 1,883 | $ 1,700 |
Number of properties acquired | singleFamilyRentalProperty | 6 | ||
Single Family Rental Portfolio 2024 | |||
Real Estate [Line Items] | |||
Payments to Acquire Real Estate | $ 167,900 | ||
Number of properties acquired | unit | 181 | ||
Number of student housing properties | student_housing_property | 1 |
Investments in Real Estate - Re
Investments in Real Estate - Real Estate Acquired (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) unit | Dec. 31, 2023 singleFamilyRentalProperty | |
Real Estate [Line Items] | ||
Number of properties acquired | singleFamilyRentalProperty | 6 | |
Purchase price | $ 169,537 | |
Single Family Rental Portfolio 2023 | ||
Real Estate [Line Items] | ||
Ownership Interest | 100% | |
Number of properties acquired | unit | 6 | |
Purchase price | $ 1,681 | |
Single Family Rental Portfolio 2024 | ||
Real Estate [Line Items] | ||
Ownership Interest | 100% | |
Number of properties acquired | unit | 181 | |
Purchase price | $ 50,448 | |
Single Family Rental Portfolio June 2024 | ||
Real Estate [Line Items] | ||
Ownership Interest | 97% | |
Number of properties acquired | unit | 741 | |
Purchase price | $ 117,408 |
Investments in Real Estate - Th
Investments in Real Estate - The Company's Investments in Real Estate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||||
Building and building improvements | $ 1,419,355 | $ 1,419,355 | $ 1,304,336 | ||
Land and land improvements | 296,165 | 296,165 | 262,323 | ||
Tenant improvements | 30,199 | 30,199 | 35,877 | ||
Payments to Acquire Real Estate | 162,990 | $ 1,883 | 1,700 | ||
1110 Key Federal Hill Mortgage | |||||
Property, Plant and Equipment [Line Items] | |||||
Building and building improvements | 114,073 | 114,073 | 1,418 | ||
Land and land improvements | 36,503 | 36,503 | 263 | ||
Tenant improvements | 115 | 115 | 0 | ||
Furniture, fixtures and equipment | 13,933 | 13,933 | 0 | ||
In-place lease intangibles | 3,171 | 3,171 | 0 | ||
Lease origination costs | 61 | $ 61 | $ 0 | ||
Payments to Acquire Real Estate | $ 167,856 | $ 1,681 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Narrative (Details) | Jun. 30, 2024 USD ($) investment | Dec. 31, 2023 USD ($) | Dec. 15, 2023 | Nov. 02, 2021 |
Schedule of Equity Method Investments [Line Items] | ||||
Number of investments in joint ventures | investment | 2 | |||
Fair Value, Recurring | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in unconsolidated entities | $ 81,034,000 | $ 78,569,000 | ||
Level 3 | Fair Value, Recurring | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in unconsolidated entities | 78,569,000 | |||
Principal Place | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Fair value | 81,000,000 | 78,600,000 | ||
Principal Place | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 20% | |||
The Avery | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 2% | |||
The Avery | Level 3 | Fair Value, Recurring | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in unconsolidated entities | $ 0 | $ 0 |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Summarized Financial Information of Unconsolidated Joint Venture (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Real estate-related loans and securities | $ 1,991,069 | $ 1,991,069 | $ 1,989,907 | |||||
Total Liabilities | 1,272,746 | 1,272,746 | 1,170,668 | |||||
Total Equity | 717,400 | $ 932,477 | 717,400 | $ 932,477 | $ 766,396 | 818,306 | $ 944,308 | $ 967,660 |
Total revenues | 35,526 | 37,148 | 68,739 | 70,180 | ||||
Total Expenses | 32,002 | 33,453 | 62,345 | 63,979 | ||||
Net loss | (7,145) | 1,199 | (10,656) | (8,541) | ||||
Principal Place | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Real estate-related loans and securities | 1,028,300 | 1,028,300 | 1,042,957 | |||||
Total Liabilities | 627,446 | 627,446 | 634,183 | |||||
Total Equity | 400,854 | 400,854 | $ 408,774 | |||||
Total revenues | 12,455 | 12,010 | 24,936 | 23,483 | ||||
Total Expenses | 12,904 | 13,949 | 26,201 | 26,786 | ||||
Net loss | $ (449) | $ (1,939) | $ (1,265) | $ (3,303) |
Intangibles - Gross Carrying Am
Intangibles - Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 55,108 | $ 54,769 |
Intangible assets, accumulated amortization | (13,572) | (13,310) |
Intangible assets, net | 41,536 | 41,459 |
Below Market Lease, Net [Abstract] | ||
Intangible liabilities, gross | (28,909) | (28,919) |
Intangible liabilities, accumulated amortization | 3,455 | 2,792 |
Intangible liabilities, net | (25,454) | (26,127) |
In-place lease intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 33,860 | 32,513 |
Intangible assets, accumulated amortization | (7,121) | (6,644) |
Lease origination costs | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 13,677 | 14,203 |
Intangible assets, accumulated amortization | (4,093) | (4,188) |
Lease inducements | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 2,208 | 2,690 |
Intangible assets, accumulated amortization | (637) | (1,101) |
Tax intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 5,249 | 5,249 |
Intangible assets, accumulated amortization | (1,676) | (1,340) |
Above-market lease intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 114 | 114 |
Intangible assets, accumulated amortization | $ (45) | $ (37) |
Intangibles - Additional Inform
Intangibles - Additional Information (Details) | Jun. 30, 2024 |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, remaining amortization period | 174 months |
Finite-lived intangible liabilities, remaining amortization period | 266 months |
Intangibles - Intangible Assets
Intangibles - Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
In-place lease intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
2024 (remaining) | $ 2,960 |
2025 | 1,782 |
2026 | 1,629 |
2027 | 1,521 |
2028 | 1,436 |
2029 | 1,322 |
Thereafter | 16,089 |
Total | 26,739 |
Above-market lease intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
2024 (remaining) | 10 |
2025 | 18 |
2026 | 18 |
2027 | 7 |
2028 | 5 |
2029 | 5 |
Thereafter | 6 |
Total | 69 |
Other Intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
2024 (remaining) | 1,481 |
2025 | 2,366 |
2026 | 2,139 |
2027 | 2,039 |
2028 | 1,604 |
2029 | 1,352 |
Thereafter | 3,747 |
Total | 14,728 |
Below-market Lease Intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
2024 (remaining) | 672 |
2025 | 1,340 |
2026 | 1,332 |
2027 | 1,327 |
2028 | 1,327 |
2029 | 1,327 |
Thereafter | 18,129 |
Total | $ 25,454 |
Investments in Real Estate-Re_3
Investments in Real Estate-Related Loans and Securities - Investment in Real Estate Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Real estate-related loans | $ 17,155 | $ 16,503 |
Total investments in real estate-related loans and securities | 120,818 | 240,108 |
Fair Value, Recurring | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investments in real estate-related securities | 103,843 | 223,605 |
Level 2 | Fair Value, Recurring | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investments in real estate-related securities | 103,663 | 223,605 |
Fair Value, Inputs, Level 1, Level 2, and Level 3 | Fair Value, Recurring | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investments in real estate-related securities | 103,843 | |
Operating Segments | Logistics | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate swaps | (180) | 0 |
Total investments in real estate-related loans and securities | $ 120,818 | $ 240,108 |
Investments in Real Estate-Re_4
Investments in Real Estate-Related Loans and Securities - Schedule Of Real Estate Related Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, basis spread on variable rate | 10% | ||
Face Amount | $ 18,970 | $ 18,547 | |
Allowance Adjustment | $ (2,044) | (1,814) | (2,000) |
Real estate-related loans | $ 17,155 | $ 16,503 | |
Investment interest rate | 6.62% | 7.37% | |
IMC/AMC Bond Investment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, basis spread on variable rate | 8.15% | 8.15% | |
Face Amount | $ 10,000 | $ 10,000 | |
Allowance Adjustment | 0 | 0 | |
Real estate-related loans | $ 10,000 | $ 10,000 | |
The Avery Senior Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, basis spread on variable rate | 10% | 10% | |
Face Amount | $ 7,221 | $ 6,878 | |
Allowance Adjustment | (1,670) | (1,482) | |
Real estate-related loans | $ 5,739 | $ 5,208 | |
The Avery Mezzanine Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, basis spread on variable rate | 10% | 10% | |
Face Amount | $ 1,749 | $ 1,669 | |
Allowance Adjustment | $ (374) | (332) | |
Real estate-related loans | $ 1,416 | $ 1,295 |
Investments in Real Estate-Re_5
Investments in Real Estate-Related Loans and Securities - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, basis spread on variable rate | 10% | |||||
Face Amount | $ 18,970,000 | $ 18,970,000 | $ 18,547,000 | |||
Allowance Adjustment | $ (2,044,000) | (1,814,000) | (2,000,000) | |||
Unrealized gain (loss) on real estate related securities | (400,000) | $ (1,200,000) | 1,400,000 | $ (600,000) | ||
Writeoff | $ 0 | |||||
Interest Rate Swap - Real Estate Investments | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Notional Amount | $ 72,000,000 | $ 72,000,000 | ||||
Derivative, weighted average strike rate | 4.46% | 4.46% | ||||
IMC/AMC Bond Investment | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, basis spread on variable rate | 8.15% | 8.15% | 8.15% | |||
Face Amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||
Allowance Adjustment | 0 | $ 0 | ||||
The Avery Senior Loan | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, basis spread on variable rate | 10% | 10% | 10% | |||
Face Amount | $ 7,221,000 | $ 7,221,000 | $ 6,878,000 | |||
Allowance Adjustment | (1,670,000) | $ (1,482,000) | ||||
The Avery Mezzanine Loan | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, basis spread on variable rate | 10% | 10% | 10% | |||
Face Amount | $ 1,749,000 | $ 1,749,000 | $ 1,669,000 | |||
Allowance Adjustment | $ (374,000) | (332,000) | ||||
The Avery Senior Loan and The Avery Mezzanine Loan | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance Adjustment | $ 0 | $ (200,000) |
Investments in Real Estate-Re_6
Investments in Real Estate-Related Loans and Securities - Securities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Jun. 30, 2024 USD ($) investment | Dec. 31, 2023 USD ($) investment | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face Amount | $ 122,417 | $ 244,558 | |
Cost Basis | $ 113,657 | $ 231,246 | |
Investment interest rate | 6.62% | 7.37% | |
Number of Positions | investment | 51 | 72 | |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Investment interest rate | 5.34% | 5.38% | |
Fair Value, Recurring | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Investments in real estate-related securities | $ 103,843 | $ 223,605 | |
Fair Value, Inputs, Level 1, Level 2, and Level 3 | Fair Value, Recurring | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Investments in real estate-related securities | 103,843 | ||
Level 2 | Fair Value, Recurring | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Investments in real estate-related securities | 103,663 | 223,605 | |
CMBS - floating | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face Amount | 47,945 | 149,282 | |
Cost Basis | 44,182 | 141,971 | |
Investments in real estate-related securities | $ 44,123 | $ 143,423 | |
Investment interest rate | 3.64% | 3.79% | |
Number of Positions | investment | 13 | 29 | |
CMBS - fixed | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face Amount | $ 36,413 | $ 37,913 | |
Cost Basis | 32,384 | 33,413 | |
Investments in real estate-related securities | $ 22,638 | $ 24,322 | |
Investment interest rate | 4.26% | 4.62% | |
Number of Positions | investment | 7 | 7 | |
RMBS - floating | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face Amount | $ 10,752 | ||
Cost Basis | 10,757 | ||
Investments in real estate-related securities | $ 10,765 | ||
Investment interest rate | 1.58% | ||
Number of Positions | investment | 6 | ||
RMBS - fixed | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face Amount | $ 38,059 | $ 46,611 | |
Cost Basis | 37,091 | 45,105 | |
Investments in real estate-related securities | $ 37,082 | $ 45,095 | |
Investment interest rate | 4.71% | 5.37% | |
Number of Positions | investment | 28 | 30 | |
Interest Rate Swaps | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face Amount | $ 0 | ||
Cost Basis | $ 0 | ||
Number of Positions | investment | 3 |
Accounts and Other Receivable_3
Accounts and Other Receivables and Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivative [Line Items] | ||
Straight-line rent receivables | $ 6,685 | $ 5,058 |
Accounts receivable, net | 1,805 | 4,700 |
Interest receivable | 684 | 1,036 |
Total accounts and other receivables, net | 9,174 | 10,794 |
Trading securities | 18,972 | 39,824 |
Prepaid expenses | 2,817 | 2,170 |
Other assets | 916 | 469 |
Total other assets | 24,352 | 53,120 |
Fair Value, Recurring | ||
Derivative [Line Items] | ||
Trading securities | 18,972 | 39,824 |
Derivatives | 1,647 | 10,657 |
Level 2 | Fair Value, Recurring | ||
Derivative [Line Items] | ||
Trading securities | 18,972 | 39,824 |
Derivatives | $ 1,647 | $ 10,657 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Stock repurchases payable | $ 5,166 | $ 3,665 |
Accounts payable and accrued expenses | 12,574 | 7,547 |
Distributions payable | 876 | 1,378 |
Real estate taxes payable | 2,497 | 4,204 |
Accrued interest expense | 4,008 | 3,400 |
Tenant security deposits | 4,840 | 5,132 |
Prepaid rent | 12,601 | 13,898 |
Total accounts payable, accrued expenses and other liabilities | $ 42,562 | $ 39,224 |
Mortgage Loans and Secured Cr_3
Mortgage Loans and Secured Credit Facility - Schedule of Mortgage Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 1,153,588 | $ 1,063,115 |
Deferred financing costs, net | (4,230) | (4,772) |
Total indebtedness, net | $ 1,149,358 | $ 1,058,343 |
Basis spread on variable rate | 6.62% | 7.37% |
Basis spread on variable rate, margin | 2.25% | |
Fixed rate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 328,720 | $ 263,720 |
Variable rate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 824,868 | 799,395 |
Fixed rate mortgages | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Stated interest rate | 3.77% | |
Fixed rate mortgages | Fixed rate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 328,720 | 263,720 |
Floating rate mortgages | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Basis spread on variable rate | 1.71% | |
Floating rate mortgages | Variable rate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 680,383 | 680,410 |
Secured Credit Facility | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Basis spread on variable rate | 2% | |
Secured Credit Facility | Variable rate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 144,485 | 118,985 |
Secured Credit Facility | Variable rate loans: | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 300,000 | |
Affiliate Line of Credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Affiliate Line of Credit | Variable rate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 0 | $ 0 |
Affiliate Line of Credit | Variable rate loans: | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total indebtedness | $ 125,000 | |
If Affiliate Line of Credit Not Available | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Basis spread on variable rate | 0.10% |
Mortgage Loans and Secured Cr_4
Mortgage Loans and Secured Credit Facility - Schedule of Future Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Receivables [Abstract] | ||
2024 (remaining) | $ 62,283 | |
2025 | 171,503 | |
2026 | 49,989 | |
2027 | 454,208 | |
2028 | 118,034 | |
2029 | 254,696 | |
Thereafter | 42,875 | |
Total | $ 1,153,588 | $ 1,063,115 |
Mortgage Loans and Secured Cr_5
Mortgage Loans and Secured Credit Facility - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2021 | Mar. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Nov. 01, 2022 | Mar. 09, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Borrowings from secured credit facility | $ 25,500 | $ 0 | |||||
Total indebtedness | $ 1,153,588 | $ 1,063,115 | |||||
Basis spread on variable rate | 6.62% | 7.37% | |||||
Secured Debt | Line of Credit | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Basis spread on variable rate | 1.95% | 2% | |||||
Maximum borrowing capacity | $ 250,000 | $ 300,000 | $ 500,000 | ||||
Potential maximum borrowing capacity | 1,200,000 | ||||||
Revolving Credit Facility | Line of Credit | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Maximum borrowing capacity | $ 125,000 | 100,000 | |||||
Extension period, term | 1 year | ||||||
Mortgage Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Borrowings from secured credit facility | $ 65,000 | $ 900 | |||||
Repayments of secured debt | $ 0 | $ 0 | |||||
Secured Credit Facility | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Basis spread on variable rate | 2% | ||||||
Affiliate Line of Credit | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Basis spread on variable rate | 2.25% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
May 01, 2023 | Apr. 03, 2023 | Jan. 03, 2022 | Dec. 01, 2021 | Nov. 30, 2021 | Jul. 31, 2024 | Apr. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | ||||||||||||
Management fee | $ 2,833,000 | $ 3,579,000 | $ 5,828,000 | $ 7,257,000 | ||||||||
Percentage of perfomance fee | 0.125 | |||||||||||
Percentage of performance participation interest to annual total return held by adviser | 5% | |||||||||||
Stock repurchased during period, value | $ 105,000,000 | 93,100,000 | ||||||||||
Common stock issued | 17,100,000 | 45,632,000 | $ 27,739,000 | 94,386,000 | ||||||||
Common stock issued (in shares) | 2,419,000 | |||||||||||
Proceeds from issuance of common stock | $ 18,765,000 | 72,318,000 | ||||||||||
Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Performance fee | 0 | 0 | ||||||||||
Revolving Credit Facility | Line of Credit | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 125,000,000 | $ 100,000,000 | ||||||||||
Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Due to affiliates | 37,841,000 | 37,841,000 | 43,971,000 | |||||||||
Repurchase of equity, NAV threshold | 1,500,000,000 | |||||||||||
Proceeds from submetering | 0 | 0 | 0 | 0 | ||||||||
Related Party | Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Management fee | 2,800,000 | 3,600,000 | 5,800,000 | 7,300,000 | ||||||||
Due to affiliates | $ 928,000 | 928,000 | $ 1,046,000 | |||||||||
Brookfield Adviser | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Repurchase of equity, value | $ 50,000,000 | |||||||||||
Equity repurchase, monthly cap | 0.02 | |||||||||||
Equity repurchase, quarterly cap | 0.05 | |||||||||||
Equity repurchase, percentage of net proceeds | 0.25 | |||||||||||
BAM Insurance Captive | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Real estate insurance | $ 0 | $ 100,000 | ||||||||||
Common Stock Class I | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Performance fees (in shares) | 594,307 | |||||||||||
Common stock issued (in shares) | 617,909 | 756,475 | 1,871,000 | |||||||||
Proceeds from issuance of common stock | $ 8,000,000 | $ 10,000,000 | ||||||||||
Common Stock Class I | Subsequent Event | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Performance fees (in shares) | 82,325 | |||||||||||
Common Stock Class I | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares repurchased (in shares) | 532,352 | 1,039,789 | ||||||||||
Stock repurchased during period, value | $ 6,000,000 | $ 13,600,000 | ||||||||||
Common Stock Class I | Related Party | Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of management fee to NAV | 1.25% | |||||||||||
Common Stock Class C | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Common stock issued (in shares) | 0 | |||||||||||
Common Stock Class C | Related Party | Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of management fee to NAV | 1.25% | |||||||||||
Common Stock Class D | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Servicing fees payable, percentage accrued | 0.0875 | |||||||||||
Common stock issued (in shares) | 17,000 | |||||||||||
Common Stock Class D | Related Party | Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of management fee to NAV | 1.25% | |||||||||||
Common Stock Class S | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Servicing fees payable, percentage accrued | 0.0875 | |||||||||||
Common stock issued (in shares) | 460,000 | |||||||||||
Common Stock Class S | Related Party | Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of management fee to NAV | 1.25% | |||||||||||
Common Stock Class T | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Servicing fees payable, percentage accrued | 0.0875 | |||||||||||
Common stock issued (in shares) | 0 | |||||||||||
Common Stock Class T | Related Party | Advisory Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of management fee to NAV | 1.25% | |||||||||||
Common Stock Class E | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Common stock issued (in shares) | 71,000 | |||||||||||
Common Stock Class E | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Common stock issued | $ 38,000,000 | $ 45,000,000 | $ 83,000,000 | |||||||||
Common stock issued (in shares) | 3,075,006 | 3,756,480 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Affiliate Service Provider Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||||
Affiliate provider expenses | $ 3,063 | $ 2,647 | $ 5,631 | $ 5,091 |
Rental property operating | 13,262 | 14,880 | 25,636 | 26,608 |
Property Management Fees | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Affiliate provider expenses | 830 | 714 | 1,585 | 1,432 |
Single-family rental leasing, maintenance and turnover oversight fees | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Affiliate provider expenses | 200 | 189 | 316 | 278 |
Capitalized Construction Management Fees | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Affiliate provider expenses | 22 | 23 | 42 | 36 |
Capitalized Single-Family Rental Renovation Oversight Fees | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Affiliate provider expenses | 1 | 10 | 1 | 32 |
Reimbursed Personnel Costs | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Affiliate provider expenses | 2,010 | 1,711 | 3,687 | 3,313 |
Selling, general and administrative expense | 300 | 200 | 600 | 500 |
Rental property operating | $ 1,700 | $ 1,500 | $ 3,100 | $ 2,800 |
Related Party Transactions - _2
Related Party Transactions - Schedule of Due to Affiliates (Details) - Related Party - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 37,841 | $ 43,971 |
Accrued stockholder servicing fee | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 20,792 | 25,507 |
Advanced organization and offering costs | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 8,374 | 9,734 |
Stock repurchase payable to the Adviser for management fees | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 2,958 | 3,353 |
Other | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 2,435 | 2,410 |
Advisory Agreement | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 928 | 1,046 |
Accrued affiliate service provider expenses | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | 2,348 | 1,915 |
OP Units distributions payable | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 6 | $ 6 |
Stockholders' Equity and Rede_3
Stockholders' Equity and Redeemable Non-controlling Interests - Additional Information (Detail) - USD ($) $ / shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Nov. 02, 2021 | |
Class of Stock [Line Items] | |||||
Common and preferred stock, value authorized | $ 6,000,000 | ||||
Shares authorized (in shares) | 1,050,000,000 | 1,050,000,000 | 1,500,000,000 | ||
Distribution reinvestment | $ 8,716 | $ 9,361 | $ 17,628 | $ 19,582 | |
Preferred shares price (in USD per share) | $ 1 | ||||
Repurchase of shares to NAV per month, percentage | 2% | 2% | |||
Repurchase of shares to NAV per quarter, percentage | 5% | 5% | |||
Repurchase of shares outstanding less than one year to transaction price, percentage | 98% | 98% | |||
Stock repurchased during period (in shares) | 9,206,422 | 7,189,628 | |||
Stock repurchased during period, value | $ 105,000 | $ 93,100 | |||
Stock distribution reinvestments (in shares) | 1,521,000 | ||||
Minimum | |||||
Class of Stock [Line Items] | |||||
Preferred stock, dividend rate, percentage | 12% | ||||
Maximum | |||||
Class of Stock [Line Items] | |||||
Preferred stock, dividend rate, percentage | 12.50% | ||||
Cash Distribution | |||||
Class of Stock [Line Items] | |||||
Distribution reinvestment | $ 17,600 | $ 19,600 | |||
Stock distribution reinvestments (in shares) | 1,521,358 | 1,485,033 |
Stockholders' Equity and Rede_4
Stockholders' Equity and Redeemable Non-controlling Interests - Stock by Class (Details) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 | Nov. 02, 2021 |
Class of Stock [Line Items] | |||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Shares authorized (in shares) | 1,050,000,000 | 1,500,000,000 | |
Common Stock Class T | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 | |
Common Stock Class S | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 | |
Common Stock Class D | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common Stock Class C | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0 | $ 0 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common Stock Class E | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0 | $ 0 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common Stock Class I | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Stockholders' Equity and Rede_5
Stockholders' Equity and Redeemable Non-controlling Interests - Outstanding Stock Rollforward (Details) - shares | 6 Months Ended | ||
May 01, 2023 | Apr. 03, 2023 | Jun. 30, 2024 | |
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 88,596,000 | ||
Common stock issued (in shares) | 2,419,000 | ||
Stock distribution reinvestments (in shares) | 1,521,000 | ||
Stock Redemption (in shares) | (9,739,000) | ||
Common stock, shares outstanding, ending balance (in shares) | 82,797,000 | ||
Common Stock Class S | |||
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 34,244,000 | ||
Common stock issued (in shares) | 460,000 | ||
Stock distribution reinvestments (in shares) | 459,000 | ||
Stock Redemption (in shares) | (5,121,000) | ||
Common stock, shares outstanding, ending balance (in shares) | 30,042,000 | ||
Common Stock Class I | |||
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 41,504,000 | ||
Common stock issued (in shares) | 617,909 | 756,475 | 1,871,000 |
Stock distribution reinvestments (in shares) | 954,000 | ||
Stock Redemption (in shares) | (3,621,000) | ||
Common stock, shares outstanding, ending balance (in shares) | 40,708,000 | ||
Common Stock Class T | |||
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 0 | ||
Common stock issued (in shares) | 0 | ||
Stock distribution reinvestments (in shares) | 0 | ||
Stock Redemption (in shares) | 0 | ||
Common stock, shares outstanding, ending balance (in shares) | 0 | ||
Common Stock Class D | |||
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 148,000 | ||
Common stock issued (in shares) | 17,000 | ||
Stock distribution reinvestments (in shares) | 0 | ||
Stock Redemption (in shares) | (5,000) | ||
Common stock, shares outstanding, ending balance (in shares) | 160,000 | ||
Common Stock Class C | |||
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 9,347,000 | ||
Common stock issued (in shares) | 0 | ||
Stock distribution reinvestments (in shares) | 0 | ||
Stock Redemption (in shares) | (871,000) | ||
Common stock, shares outstanding, ending balance (in shares) | 8,476,000 | ||
Common Stock Class E | |||
Outstanding Stock [Roll Forward] | |||
Common stock, shares outstanding, beginning balance (in shares) | 3,353,000 | ||
Common stock issued (in shares) | 71,000 | ||
Stock distribution reinvestments (in shares) | 108,000 | ||
Stock Redemption (in shares) | (121,000) | ||
Common stock, shares outstanding, ending balance (in shares) | 3,411,000 |
Stockholders' Equity and Rede_6
Stockholders' Equity and Redeemable Non-controlling Interests - Dividends (Details) - $ / shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Common Stock Class S | ||
Class of Stock [Line Items] | ||
Dividends declared (in dollars per share) | $ 0.2147 | $ 0.4305 |
Stockholder servicing fee per share of common stock (in dollars per share) | (0.0237) | (0.0482) |
Management fee per share of common stock (in dollars per share) | (0.0350) | (0.0711) |
Net distributions declared per share of common stock (in dollars per share) | 0.1560 | 0.3112 |
Common Stock Class I | ||
Class of Stock [Line Items] | ||
Dividends declared (in dollars per share) | 0.2147 | 0.4305 |
Stockholder servicing fee per share of common stock (in dollars per share) | 0 | 0 |
Management fee per share of common stock (in dollars per share) | (0.0353) | (0.0717) |
Net distributions declared per share of common stock (in dollars per share) | 0.1794 | 0.3588 |
Common Stock Class C | ||
Class of Stock [Line Items] | ||
Dividends declared (in dollars per share) | 0.2147 | 0.4305 |
Stockholder servicing fee per share of common stock (in dollars per share) | 0 | 0 |
Management fee per share of common stock (in dollars per share) | (0.0345) | (0.0701) |
Net distributions declared per share of common stock (in dollars per share) | 0.1802 | 0.3604 |
Common Stock Class E | ||
Class of Stock [Line Items] | ||
Dividends declared (in dollars per share) | 0.2147 | 0.4305 |
Stockholder servicing fee per share of common stock (in dollars per share) | 0 | 0 |
Management fee per share of common stock (in dollars per share) | 0 | 0 |
Net distributions declared per share of common stock (in dollars per share) | 0.2147 | 0.4305 |
Common Stock Class T | ||
Class of Stock [Line Items] | ||
Dividends declared (in dollars per share) | 0 | 0 |
Stockholder servicing fee per share of common stock (in dollars per share) | 0 | 0 |
Management fee per share of common stock (in dollars per share) | 0 | 0 |
Net distributions declared per share of common stock (in dollars per share) | 0 | 0 |
Common Stock Class D | ||
Class of Stock [Line Items] | ||
Dividends declared (in dollars per share) | 0.2147 | 0.4305 |
Stockholder servicing fee per share of common stock (in dollars per share) | (0.0070) | (0.0143) |
Management fee per share of common stock (in dollars per share) | (0.0356) | (0.0722) |
Net distributions declared per share of common stock (in dollars per share) | $ 0.1721 | $ 0.3440 |
Stockholders' Equity and Rede_7
Stockholders' Equity and Redeemable Non-controlling Interests - Schedule of Redeemable Non-controlling Interests (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Balance at beginning of the year | $ 933 | $ 990 |
GAAP net loss allocation | (10) | (6) |
Distributions | (35) | (58) |
Distributions reinvested | 35 | 57 |
Fair value allocation | 0 | (22) |
Ending balance | $ 923 | $ 961 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Payment Guarantee | |
Loss Contingencies [Line Items] | |
Guarantor obligations, current carrying value | $ 1.6 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Fixed lease payments | $ 30,023 | $ 29,226 | $ 58,936 | $ 58,327 |
Variable lease payments | 2,170 | 4,276 | 4,113 | 5,648 |
Total rental revenues | $ 32,193 | $ 33,502 | $ 63,049 | $ 63,975 |
Leases - Liability Maturity (De
Leases - Liability Maturity (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
2024 (remaining) | $ 15,696 |
2025 | 29,754 |
2026 | 27,377 |
2027 | 26,425 |
2028 | 25,808 |
2029 | 23,594 |
Thereafter | 103,382 |
Total | $ 252,036 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) reportableSegment | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | reportableSegment | 5 | ||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | $ 1,991,069 | $ 1,991,069 | $ 1,989,907 | ||
Rental revenues | 32,193 | $ 33,502 | 63,049 | $ 63,975 | |
Other revenues | 3,333 | 3,646 | 5,690 | 6,205 | |
Total revenues | 35,526 | 37,148 | 68,739 | 70,180 | |
Rental property operating | 13,262 | 14,880 | 25,636 | 26,608 | |
Income from real estate-related loans and securities | 3,311 | 3,841 | 10,369 | 10,844 | |
Segment net operating income | 25,575 | 26,109 | 53,472 | 54,416 | |
Net gain on dispositions of real estate | 4,255 | 504 | |||
Other income, net | 30 | 6,512 | 2,184 | 5,248 | |
Gain (loss) from unconsolidated entities | 2,991 | 1,649 | 3,724 | (2,404) | |
Depreciation and amortization | (14,337) | (12,765) | (27,098) | (25,569) | |
General and administrative expenses | (1,570) | (2,229) | (3,783) | (4,545) | |
Management fee | (2,833) | (3,579) | (5,828) | (7,257) | |
Interest expense | (17,001) | (14,498) | (33,327) | (28,430) | |
Net loss | (7,145) | 1,199 | (10,656) | (8,541) | |
Net loss attributable to non-controlling interests in third party joint ventures | (230) | 67 | (433) | (42) | |
Net income attributable to non-controlling interests - preferred stockholders | (65) | (45) | (65) | (45) | |
Net loss attributable to redeemable non-controlling interests | 7 | (2) | 10 | 6 | |
Net loss attributable to stockholders | (6,973) | 1,085 | (10,278) | (8,538) | |
Gain (Loss) on Investments | 2,991 | 1,649 | 3,724 | 2,404 | |
Rental Housing | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | 1,205,942 | 1,205,942 | 1,061,941 | ||
Rental revenues | 22,079 | 21,034 | 43,177 | 41,709 | |
Other revenues | 3,141 | 3,351 | 5,353 | 5,734 | |
Total revenues | 25,220 | 24,385 | 48,530 | 47,443 | |
Rental property operating | 10,414 | 9,625 | 19,813 | 18,506 | |
Income from real estate-related loans and securities | 0 | 0 | 0 | 0 | |
Segment net operating income | 14,806 | 14,760 | 28,717 | 28,937 | |
Office | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | 100,775 | 100,775 | 103,179 | ||
Rental revenues | 2,944 | 3,248 | 5,495 | 6,239 | |
Other revenues | 181 | 243 | 316 | 419 | |
Total revenues | 3,125 | 3,491 | 5,811 | 6,658 | |
Rental property operating | 1,397 | 1,450 | 2,842 | 2,949 | |
Income from real estate-related loans and securities | 0 | 0 | 0 | 0 | |
Segment net operating income | 1,728 | 2,041 | 2,969 | 3,709 | |
Logistics | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | 106,079 | 106,079 | 108,329 | ||
Rental revenues | 1,992 | 1,705 | 4,021 | 3,680 | |
Other revenues | 0 | 0 | 0 | 0 | |
Total revenues | 1,992 | 1,705 | 4,021 | 3,680 | |
Rental property operating | 511 | 523 | 1,063 | 1,283 | |
Income from real estate-related loans and securities | 0 | 0 | 0 | 0 | |
Segment net operating income | 1,481 | 1,182 | 2,958 | 2,397 | |
Investments in unconsolidated entities | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | 414,339 | 414,339 | 415,282 | ||
Rental revenues | 5,178 | 7,515 | 10,356 | 12,347 | |
Other revenues | 11 | 52 | 21 | 52 | |
Total revenues | 5,189 | 7,567 | 10,377 | 12,399 | |
Rental property operating | 940 | 3,282 | 1,917 | 3,870 | |
Income from real estate-related loans and securities | 0 | 0 | 0 | 0 | |
Segment net operating income | 4,249 | 4,285 | 8,460 | 8,529 | |
Logistics | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | 120,818 | 120,818 | 240,108 | ||
Rental revenues | 0 | 0 | 0 | 0 | |
Other revenues | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Rental property operating | 0 | 0 | 0 | 0 | |
Income from real estate-related loans and securities | 3,311 | 3,841 | 10,369 | 10,844 | |
Segment net operating income | 3,311 | $ 3,841 | 10,369 | $ 10,844 | |
Other (Corporate) | Corporate, Non-Segment | |||||
Segment Reporting Information [Line Items] | |||||
Real estate-related loans and securities | $ 43,116 | $ 43,116 | $ 61,068 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Affiliated Entity - Common Stock Class I $ in Millions | Aug. 01, 2024 USD ($) shares |
Subsequent Event [Line Items] | |
Number of shares acquired by affiliate (in shares) | shares | 633,194 |
Proceeds from sale of stock | $ | $ 7.1 |