Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40911 | |
Entity Registrant Name | Belpointe PREP, LLC | |
Entity Central Index Key | 0001807046 | |
Entity Tax Identification Number | 84-4412083 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 255 Glenville Road | |
Entity Address, City or Town | Greenwich | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06831 | |
City Area Code | (203) | |
Local Phone Number | 883-1944 | |
Title of 12(b) Security | Class A units | |
Trading Symbol | OZ | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Common Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 3,523,449 | |
Common Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 100,000 | |
Common Class M [Member] | ||
Entity Common Stock, Shares Outstanding | 1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate | ||
Land | $ 38,741 | $ 38,741 |
Building and improvements | 17,929 | 17,843 |
Intangible assets | 9,495 | 9,495 |
Real estate under construction | 157,194 | 133,898 |
Total real estate | 223,359 | 199,977 |
Accumulated depreciation and amortization | (2,225) | (1,719) |
Real estate, net | 221,134 | 198,258 |
Cash and cash equivalents | 115,676 | 143,467 |
Other assets | 15,959 | 12,270 |
Total assets | 352,769 | 353,995 |
Liabilities | ||
Due to affiliates | $ 5,689 | $ 5,803 |
Other Liability, Related and Nonrelated Party Status [Extensible Enumeration] | srt:AffiliatedEntityMember | srt:AffiliatedEntityMember |
Lease liabilities | $ 7,041 | $ 7,126 |
Accounts payable | 2,880 | 1,686 |
Accrued expenses and other liabilities | 8,396 | 6,728 |
Total liabilities | 24,006 | 21,343 |
Members’ Capital | ||
Total members’ capital excluding noncontrolling interests | 326,553 | 329,482 |
Noncontrolling interests | 2,210 | 3,170 |
Total members’ capital | 328,763 | 332,652 |
Total liabilities and members’ capital | 352,769 | 353,995 |
Class A Units [Member] | ||
Members’ Capital | ||
Total members’ capital excluding noncontrolling interests | 326,553 | 329,482 |
Class B Units [Member] | ||
Members’ Capital | ||
Total members’ capital excluding noncontrolling interests | ||
Class M Units [Member] | ||
Members’ Capital | ||
Total members’ capital excluding noncontrolling interests |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Common Class A [Member] | ||
Common stock authorized unlimited | Unlimited | Unlimited |
Common stock shares, issued | 3,523,449 | 3,523,449 |
Common stock shares, outstanding | 3,523,449 | 3,523,449 |
Common Class B [Member] | ||
Common stock shares, issued | 100,000 | 100,000 |
Common stock shares, outstanding | 100,000 | 100,000 |
Common stock authorized | 100,000 | 100,000 |
Class M Units [Member] | ||
Common stock shares, issued | 1 | 1 |
Common stock shares, outstanding | 1 | 1 |
Common stock authorized | 1 | 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Rental revenue | $ 497 | $ 329 |
Total revenue | 497 | 329 |
Expenses | ||
Property expenses | 1,018 | 907 |
General and administrative | 1,771 | 1,641 |
Depreciation and amortization expense | 512 | 284 |
Total expenses | 3,301 | 2,832 |
Other (loss) income | ||
Interest income | 501 | |
Other (expense) income | (3) | (7) |
Total other (loss) income | (3) | 494 |
Net loss | (2,807) | (2,009) |
Net income attributable to noncontrolling interests | (3) | (7) |
Net loss attributable to Belpointe PREP, LLC | $ (2,810) | $ (2,016) |
Loss per Class A unit (basic and diluted) | ||
Net loss per unit | $ (0.80) | $ (0.60) |
Weighted-average units outstanding | 3,523,449 | 3,382,149 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Capital (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Beginning Balance | $ 332,652 | $ 323,875 |
Acquisition of Non-Controlling Interest (Note 5) | (963) | |
Offering Costs | (119) | (20) |
Net (loss) income | (2,807) | (2,009) |
Ending Balance | 328,763 | 321,846 |
Common Stock [Member] | Common Class A [Member] | ||
Beginning Balance | $ 329,482 | $ 323,683 |
Beginning Balance, shares | 3,523,449 | 3,382,149 |
Acquisition of Non-Controlling Interest (Note 5) | ||
Offering Costs | (119) | $ (20) |
Net (loss) income | (2,810) | (2,016) |
Ending Balance | $ 326,553 | $ 321,647 |
Ending Balance, shares | 3,523,449 | 3,382,149 |
Common Stock [Member] | Common Class B [Member] | ||
Beginning Balance | ||
Beginning Balance, shares | 100,000 | 100,000 |
Acquisition of Non-Controlling Interest (Note 5) | ||
Offering Costs | ||
Net (loss) income | ||
Ending Balance | ||
Ending Balance, shares | 100,000 | 100,000 |
Common Stock [Member] | Common Class M [Member] | ||
Beginning Balance | ||
Beginning Balance, shares | 1 | 1 |
Acquisition of Non-Controlling Interest (Note 5) | ||
Offering Costs | ||
Net (loss) income | ||
Ending Balance | ||
Ending Balance, shares | 1 | 1 |
Total Members Capital Excluding Noncontrolling Interests [Member] | ||
Beginning Balance | $ 329,482 | $ 323,683 |
Acquisition of Non-Controlling Interest (Note 5) | ||
Offering Costs | (119) | (20) |
Net (loss) income | (2,810) | (2,016) |
Ending Balance | 326,553 | 321,647 |
Noncontrolling Interest [Member] | ||
Beginning Balance | 3,170 | 192 |
Acquisition of Non-Controlling Interest (Note 5) | (963) | |
Offering Costs | ||
Net (loss) income | 3 | 7 |
Ending Balance | $ 2,210 | $ 199 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (2,807) | $ (2,009) |
Adjustments to net loss | ||
Depreciation and amortization | 512 | 284 |
Accretion of rent-related intangibles and deferred rental revenue | (151) | (47) |
Increase in due to affiliates | 594 | 26 |
Decrease (increase) in other assets | 33 | (220) |
Decrease in accounts payable | (1) | (8) |
Increase in accrued expenses and other liabilities | 434 | 204 |
Net cash used in operating activities | (1,386) | (1,770) |
Cash flows from investing activities | ||
Development of real estate | (21,094) | (3,273) |
Other investing activity | (75) | (2) |
Funding of loans receivable | (34,955) | |
Acquisitions of real estate | (898) | |
Net cash used in investing activities | (21,169) | (39,128) |
Cash flows from financing activities | ||
Payment of offering costs | (97) | (113) |
Other financing activities | (44) | 1 |
Proceeds from subscriptions receivable | 20,295 | |
Net cash (used in) provided by financing activities | (141) | 20,183 |
Net decrease in cash and cash equivalents and restricted cash | (22,696) | (20,715) |
Cash and cash equivalents and restricted cash, beginning of period | 144,967 | 192,346 |
Cash and cash equivalents and restricted cash, end of period | 122,271 | 171,631 |
Cash paid during the period for interest, net of amount capitalized |
Organization, Business Purpose
Organization, Business Purpose and Capitalization | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Purpose and Capitalization | Note 1 - Organization, Business Purpose and Capitalization Organization and Business Purpose Belpointe PREP, LLC (together with its subsidiaries, the “Company,” “we,” “us,” or “our”) is focused on identifying, acquiring, developing or redeveloping and managing commercial real estate located within “qualified opportunity zones.” We were formed on January 24, 2020 as a Delaware limited liability company and qualify as a partnership and qualified opportunity fund for U.S. federal income tax purposes. At least 90% of our assets consist of qualified opportunity zone property, and all of our assets are held by, and all of our operations are conducted through, one or more operating companies (each an “Operating Company” and together, our “Operating Companies”), either directly or indirectly through their subsidiaries. We are externally managed by Belpointe PREP Manager, LLC (our “Manager”), an affiliate of our sponsor, Belpointe, LLC (our “Sponsor”). Subject to the oversight of our board of directors (our “Board”), our Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making acquisitions and investments on our behalf. Capitalization On May 9, 2023, the U.S. Securities and Exchange Commission (the “SEC”) declared effective our registration statement on Form S-11, as amended (File No. 333-271262) (the “Follow-on Registration Statement”), registering the offer and sale of up to $ 750,000,000 In connection with the Follow-on Registration Statement, we entered into a non-exclusive dealer manager agreement with Emerson Equity LLC (“Dealer Manager”), a registered broker-dealer, for the sale of our Class A units through the Dealer Manager. The Dealer Manager will enter into participating dealer agreements and wholesale agreements with other broker-dealers, referred to as “selling group members,” to authorize those broker-dealers to solicit offers to purchase our Class A units. We will pay our Dealer Manager commissions of up to 0.25% 0.25% 4.50% In addition, the Follow-on Registration Statement constitutes a post-effective amendment to the registration statement on Form S-11, as amended (File No. 333-255424), registering the offer and sale of our ongoing initial public offering of up to $ 750,000,000 522,656,100 The purchase price for Class A units in the Public Offering will be the lesser of (i) the current net asset value (the “NAV”) of our Class A units, and (ii) the average of the high and low sale prices of our Class A units on the NYSE American (the “NYSE”) during regular trading hours on the last trading day immediately preceding the investment date on which the NYSE was open for trading and trading in our Class A units occurred. As of May 9, 2023 the assumed NAV of our Class A units was equal to $ 100.00 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and Article 8 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission. In the opinion of management, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, are unaudited and may not include year-end adjustments necessary to make them comparable to audited results. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022, included in our Annual Report on Form 10-K. The operating results for interim periods are not necessarily indicative of operating results for any other interim period or for the entire year. Basis of Consolidation The accompanying unaudited consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portion of members’ capital in controlled subsidiaries that are not attributable, directly or indirectly, to us are presented in noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. We have evaluated our economic interest in entities to determine if they are deemed to be variable interest entities (“VIEs”) and whether the entities should be consolidated. An entity is a VIE if it has any one of the following characteristics: (i) the entity does not have enough equity at risk to finance its activities without additional subordinated financial support; (ii) the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. The distinction between a VIE and other entities is based on the nature and amount of the equity investment and the rights and obligations of the equity investors. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered VIEs unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review all agreements and contractual arrangements to determine whether (i) we or another party have any variable interests in an entity, (ii) the entity is considered a VIE, and (iii) which variable interest holder, if any, is the primary beneficiary of the VIE. Determination of the primary beneficiary is based on whether a party (a) has the power to direct the activities that most significantly impact the economic performance of the VIE, and (b) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The following table presents the financial data of the consolidated VIEs included in the consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively (amounts in thousands): Schedule of Carrying Value Net Assets March 31, 2023 December 31, 2022 (unaudited) Assets Real estate Land $ 24,967 $ 24,967 Building and improvements 11,383 11,297 Intangible assets 6,725 6,725 Real estate under construction 157,045 133,773 Total real estate 200,120 176,762 Accumulated depreciation and amortization (1,045 ) (672 ) Real estate, net 199,075 176,090 Cash and cash equivalents 99,424 124,159 Other assets 15,424 11,773 Total assets $ 313,923 $ 312,022 Liabilities Due to affiliates $ 4,029 $ 4,399 Lease liabilities 5,316 5,350 Accounts payable 2,875 1,679 Accrued expenses and other liabilities 7,401 6,064 Total liabilities $ 19,621 $ 17,492 An interest in a VIE requires reconsideration when an event occurs that was not originally contemplated. At each reporting period we will reassess whether there are any events that require us to reconsider our determination of whether an entity is a VIE and whether it should be consolidated. Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jump Start Our Business Startups Act of 2012 (“JOBS Act”). Under Section 107 of the JOBS Act, emerging growth companies are permitted to use an extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards that have different effective dates for public and private companies. We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company, or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B). By electing to extend the transition period for complying with new or revised accounting standards, these consolidated financial statements may not be comparable to the consolidated financial statements of companies that comply with public company effective dates. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and the accompanying notes. Actual results could materially differ from those estimates. Restricted Cash Restricted cash consists of amounts required to be reserved pursuant to contractual obligations and amounts held in escrow on behalf of the company. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the unaudited consolidated statements of cash flows (amounts in thousands): Schedule of Restricted Cash and Cash Equivalents March 31, 2023 December 31, 2022 (unaudited) Cash and cash equivalents $ 115,676 $ 143,467 Restricted cash (1) 6,595 1,500 Total cash and cash equivalents and restricted cash $ 122,271 $ 144,967 (1) Restricted cash is included within Other assets on our consolidated balance sheets. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , Leases (Topic 842). We adopted ASU 2016-13 on January 1, 2023 using the modified retrospective method. The adoption of this standard did not have a material impact on our unaudited consolidated financial statements, and no cumulative-effect adjustment was recorded to retained earnings. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | Note 3 – Leases Lessor Accounting We own rental properties which are leased to tenants under operating leases with current expirations ranging from 2023 to 2040, with options to extend or terminate the leases. Revenues from such leases are reported as Rental revenue in our unaudited consolidated statements of operations, and are comprised of (i) lease components, which includes fixed and variable lease payments and (ii) non-lease components which includes reimbursements of property level operating expenses. We do not separate non-lease components from the related lease components as allowed under the Accounting Standards Codification (“ASC”) 842 practical expedient, as the timing and pattern of transfer are the same, and account for the combined component in accordance with ASC 842. Fixed lease revenues represent the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancelable term of the lease. Variable lease revenues include payments based on (i) tenant reimbursements, (ii) changes in the index or market-based indices after the inception of the lease, (iii) percentage rents, or (iv) the operating performance of the property. Variable lease revenues are not recognized until the specific events that trigger the variable payments have occurred. The following table summarizes the components of lease revenues (amounts in thousands): Schedule of Components of Lease Revenues 2023 2022 Three Months Ended March 31, 2023 2022 Fixed lease revenues $ 266 $ 212 Variable lease revenues (1) 81 70 Lease revenues (2) (3) $ 347 $ 282 (1) Includes reimbursements for property taxes, insurance, and common area maintenance services. (2) Excludes lease intangible amortization of $ 0.1 (3) Excludes straight-line rent of less than $ 0.1 In certain of our leases, the tenant is obligated to pay the real estate taxes, insurance, and certain other expenses directly to the vendor. These obligations, which have been assumed by the tenants, are not reflected in our unaudited consolidated financial statements. To the extent any such tenant defaults on its lease or if it is deemed probable that the tenant will fail to pay for such obligations, a liability for such obligations would be recorded. We assess the collectability of substantially all lease payments due by reviewing a tenant’s payment history or financial condition. Changes to collectability are recognized as a current period adjustment to rental revenue. We have assessed the collectability of all recorded lease revenues as probable as of March 31, 2023. Lessee Accounting Ground Lease We are a lessee under a ground lease in Sarasota, Florida, which is classified as a financing lease. As of March 31, 2023, we have exercised an option to acquire the underlying property, and the acquisition is expected to close in the third quarter of 2023. Accordingly, finance lease liabilities of $ 5.1 5.0 0.1 There are no operating leases for which we are the lessee, therefore there are no related ROU assets or lease liabilities as of March 31, 2023 and December 31, 2022. |
Related Party Arrangements
Related Party Arrangements | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Note 4 – Related Party Arrangements Our Relationship with Our Manager and Sponsor Our Manager and its affiliates, including our Sponsor, will receive fees or reimbursements in connection with our Public Offerings and the management of our investments. The following table presents a summary of fees incurred on our behalf by, and expenses reimbursable to, our Manager and its affiliates, including our Sponsor, in accordance with the terms of the relevant agreements (amounts in thousands): Schedule of Non-Cash Activity to Related Party 2023 2022 Three Months Ended March 31, 2023 2022 (unaudited) (unaudited) Amounts included in the Consolidated Statements of Operations Costs incurred by our Manager and its affiliates (1) $ 670 $ 534 Management fees 661 634 Insurance 106 107 Director compensation 20 20 Costs incurred by the manager and its affiliates $ 1,457 $ 1,295 Capitalized costs included in the Consolidated Balance Sheets Development fee and reimbursements $ 977 $ 1,853 Insurance (2) 517 41 Other capitalized costs $ 1,494 $ 1,894 (1) Includes wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor, which are included in General and administrative expenses on the unaudited consolidated statements of operations. (2) During the three months ended March 31, 2023 and 2022, we incurred insurance premiums of $ 0.1 4.5 0.5 0.1 The following table presents a summary of amounts included in Due to affiliates in the consolidated balance sheets (amounts in thousands): Schedule of Due to Related Party March 31, 2023 December 31, 2022 (unaudited) Due to affiliates Development fees $ 3,347 $ 4,256 Employee cost sharing and reimbursements (1) 1,641 866 Management fees 661 661 Director compensation 40 20 Due to affiliates $ 5,689 $ 5,803 (1) Includes wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor. Public Offering Expenses Our Manager and its affiliates, including our Sponsor, will be reimbursed, for offering expenses incurred in connection with our Public Offerings. We became liable to reimburse our Manager and its affiliates, including our Sponsor, when the first closing was held in connection with our Primary Offering, which occurred in October 2021. There were no Primary Offering expenses incurred by our Manager and its affiliates during the three months ended March 31, 2023 and 2022. Other Operating Expenses Pursuant to the Management Agreement, we reimburse our Manager, Sponsor and their respective affiliates for actual expenses incurred on our behalf in connection with the selection, acquisition or origination of investments, whether or not we ultimately acquire or originate an investment. We also reimburse our Manager, Sponsor and their respective affiliates for out-of-pocket expenses paid to third parties in connection with providing services to us. Pursuant to the Employee and Cost Sharing Agreement, we reimburse our Sponsor and our Manager for expenses incurred for our allocable share of the salaries, benefits and overhead of personnel providing services to us. During the three months ended March 31, 2023 and 2022, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $ 0.6 0.5 Management Fee Subject to the limitations set forth in our Amended and Restated Limited Liability Company Operating Agreement (our “Operating Agreement”) and the oversight of our Board, our Manager is responsible for managing our affairs on a day-to-day basis and for the origination, selection, evaluation, structuring, acquisition, financing and development of our commercial real estate properties, real estate-related assets, including but not limited to commercial real estate loans, and debt and equity securities issued by other real estate-related companies, as well as private equity acquisitions and investments, and opportunistic acquisitions of other qualified opportunity funds and qualified opportunity zone businesses. Pursuant to the Management Agreement, we pay our Manager a quarterly management fee in arrears of one-fourth of 0.75 100.00 0.7 0.6 Development Fees and Reimbursements Affiliates of our Sponsor are entitled to receive (i) development fees on each project in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project, and (ii) reimbursements for their expenses, such as employee compensation and other overhead expenses incurred in connection with the project. During the three months ended March 31, 2023 and 2022, we incurred development fees earned during the construction phase of $ 0.7 1.6 3.3 4.3 due and payable During the three months ended March 31, 2023 and 2022, we incurred employee reimbursement expenditures to our affiliates acting as development managers of $ 0.4 0.3 0.3 0.2 0.1 0.1 0.6 0.3 due and payable Acquisition Fees We will pay our Manager, Sponsor, or an affiliate of our Manager or Sponsor, an acquisition fee equal to 1.5 Insurance Certain immediate family members of our Chief Executive Officer have a passive indirect minority beneficial ownership interest in Belpointe Specialty Insurance, LLC (“Belpointe Specialty Insurance”). Belpointe Specialty Insurance has acted as our broker in connection with the placement of insurance coverage for certain of our properties and operations. Belpointe Specialty Insurance earns brokerage commissions related to the brokerage services that it provides to us, which commissions vary, are based on a percentage of the premiums that we pay and are set by the insurer. We have also engaged Belpointe Specialty Insurance to provide us with contract insurance consulting services related to owner-controlled insurance programs, for which we pay an administration fee. During the three months ended March 31, 2023 and 2022, we obtained insurance premiums in the aggregate amount of $ 0.1 4.5 0.1 0.4 0.1 0.5 0.1 0.1 0.1 Economic Dependency Under various agreements we have engaged our Manager and its affiliates, including in certain cases our Sponsor, to provide certain services that are essential to the Company, including asset management services, asset acquisition and disposition services, supervision of our Primary Offering and any other offerings we conduct, as well as other administrative responsibilities for the Company, including, without limitation, accounting services and investor relations services. As a result of these relationships, we are dependent upon our Manager and its affiliates, including our Sponsor. In the event that these companies are unable to provide us with the services we have engaged them to provide, we would be required to find alternative service providers. |
Real Estate, Net
Real Estate, Net | 3 Months Ended |
Mar. 31, 2023 | |
Real Estate [Abstract] | |
Real Estate, Net | Note 5 – Real Estate, Net Acquisitions of Real Estate During 2023 On June 28, 2022, through an indirect majority-owned subsidiary of our Operating Company, we acquired a 70.2 60 1.0 29.8 100 Depreciation expense was $ 0.2 Real Estate Under Construction The following table provides the activity of our Real estate under construction in the consolidated balance sheets (amounts in thousands): Schedule of Real Estate Under Construction March 31, 2023 December 31, 2022 (unaudited) Beginning balance $ 133,898 $ 76,882 Capitalized costs (1) (2) 23,102 45,907 Land held for development (3) 91 10,958 Capitalized interest 103 151 Ending balance $ 157,194 $ 133,898 (1) Includes development fees and employee reimbursement expenditures of $ 1.0 5.6 (2) Includes direct and indirect project costs to the construction and development of real estate projects, including but not limited to loan fees, property taxes and insurance, incurred of $ 0.6 2.2 (3) Includes ground lease payments and straight-line rent adjustments incurred of zero and $ 0.8 Real estate under construction includes non-cash investing activity of $ 9.7 0.7 0.3 13.9 |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets And Liabilities | |
Intangible Assets and Liabilities | Note 6 – Intangible Assets and Liabilities Intangible assets and liabilities are summarized as follows (amounts in thousands): Schedule of Intangible Assets And Liabilities March 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (unaudited) (unaudited) (unaudited) Finite-Lived Intangible Assets In-place leases $ 3,836 $ (1,094 ) $ 2,742 $ 3,836 $ (791 ) $ 3,045 Indefinite-Lived Intangible Assets Development rights 5,659 — 5,659 5,659 — 5,659 Total intangible assets $ 9,495 $ (1,094 ) $ 8,401 $ 9,495 $ (791 ) $ 8,704 Finite-Lived Intangible Liabilities Below-market leases $ (2,517 ) $ 552 $ (1,965 ) $ (2,517 ) $ 411 $ (2,106 ) Total intangible liabilities $ (2,517 ) $ 552 $ (1,965 ) $ (2,517 ) $ 411 $ (2,106 ) In-place lease and development right intangible assets, noted above, are included in Intangible assets on the consolidated balance sheets. Below-market lease liabilities, noted above, are included in Lease liabilities on the consolidated balance sheets. Amortization of in-place lease intangible assets was $ 0.3 0.1 Amortization of below-market lease liabilities was $ 0.1 0.1 |
Loans Receivable
Loans Receivable | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Loans Receivable | Note 7 – Loans Receivable On September 30, 2021, we lent approximately $ 3.5 12.0 0.3 On January 3, 2022, we provided a $ 30.0 5.0 December 31, 2022 5.0 June 28, 2023 0.1 On February 23, 2022, we provided an approximately $ 5.0 6.0 February 18, 2023 0.2 Interest income from loans receivable was zero 0.5 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 8 – Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date under current market conditions ( i.e. We categorize our financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows: Level 1 – Quoted market prices in active markets for identical assets or liabilities. Level 2 – Significant other observable inputs ( e.g. Level 3 – Valuation generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow methodologies or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. We estimated that our financial assets and liabilities had fair values that approximated their carrying values as of March 31, 2023 and December 31, 2022. |
Members_ Capital
Members’ Capital | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Members’ Capital | Note 9 – Members’ Capital Our Operating Agreement generally authorizes our Board to issue an unlimited number of units and options, rights, warrants and appreciation rights relating to such units for consideration or for no consideration and on the terms and conditions as determined by our Board, in its sole discretion, in most cases without the approval of our members. These additional securities may be used for a variety of purposes, including in future offerings to raise additional capital and acquisitions. Our Operating Agreement currently authorizes the issuance of an unlimited 100,000 one There were no units issued during the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, there were 3,523,449 100,000 one Class A units Upon payment in full of any consideration payable with respect to the initial issuance of our Class A units, the holder thereof will not be liable for any additional capital contributions to the Company. Holders of Class A units are not entitled to preemptive, redemption or conversion rights. Holders of our Class A units are entitled to one vote per unit on all matters submitted to a vote of our members. Matters must generally be approved by a majority (or, in the case of the election of directors, by a plurality) of the votes entitled to be cast. Holders of our Class A units share ratably in any distributions we make, subject to any statutory or contractual restrictions on distributions and to any restrictions on distributions imposed by the terms of any preferred units we issue. Upon our dissolution, liquidation or winding up, after payment of all amounts required to be paid to creditors and holders of preferred units, if any, holders of our Class A units are entitled to receive our remaining assets available for distribution. Class B units All of our Class B units are currently held by our Manager and were issued on September 14, 2021. Holders of our Class B units are not entitled to preemptive, redemption or conversion rights. Holders of our Class B units are entitled to one vote per unit on all matters submitted to a vote of our members. Matters must generally be approved by a majority (or, in the case of the election of directors, by a plurality) of the votes entitled to be cast. Holders of our Class B units are entitled to share ratably as a class in 5 Upon our dissolution, liquidation or winding up, after payment of all amounts required to be paid to creditors and holders of preferred units, if any, holders of Class B units will be entitled to receive any accrual of gains or distributions otherwise distributable pursuant to the terms of the Class B units, regardless of whether the holders of our Class A units have received a return of their capital. Class M unit The Class M unit is currently held by our Manager and was issued on September 14, 2021. The holder of our Class M unit is not entitled to preemptive, redemption or conversion rights. The holder of our Class M unit is entitled to that number of votes equal to the product obtained by multiplying (i) the sum of the aggregate number of outstanding Class A units plus Class B units, by (ii) 10, on matters on which the Class M unit has a vote. Our Manager will continue to hold the Class M unit for so long as it remains our manager. The holder of our Class M unit does not have any right to receive ordinary, special or liquidating distributions. Preferred units Under our Operating Agreement, our Board may from time to time establish and cause us to issue one or more classes or series of preferred units and set the designations, preferences, rights, powers and duties of such classes or series. Basic and Diluted Loss Per Class A Unit For the three months ended March 31, 2023, the basic and diluted weighted-average units outstanding were 3,523,449 2.8 0.80 For the three months ended March 31, 2022, the basic and diluted weighted-average units outstanding were 3,382,149 2.0 0.60 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies As of March 31, 2023, we were not subject to any material litigation nor were we aware of any material litigation threatened against us. During the three months ended March 31, 2022, we entered into a construction management agreement in connection with the development of one of our commercial real estate properties. As of March 31, 2023, we had an unfunded capital commitment of $ 128.8 8.8 3.3 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events Management has evaluated subsequent events to determine if events or transactions occurring after the balance sheet date through the date the unaudited consolidated financial statements were available for issuance require potential adjustment to or disclosure in the unaudited consolidated financial statements and has concluded that, except as set forth below, all such events or transactions that would require recognition or disclosure have been recognized or disclosed. In April 2023, we entered into a construction management agreement in connection with the development of one of our commercial real estate properties. The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to a guaranteed maximum price of $ 48.6 In May 2023, BPOZ 1991 Main, LLC, an indirect wholly-owned subsidiary of our Operating Company, entered into a variable-rate construction loan agreement for $ 130.0 8.51 5.07 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and Article 8 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission. In the opinion of management, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, are unaudited and may not include year-end adjustments necessary to make them comparable to audited results. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022, included in our Annual Report on Form 10-K. The operating results for interim periods are not necessarily indicative of operating results for any other interim period or for the entire year. |
Basis of Consolidation | Basis of Consolidation The accompanying unaudited consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portion of members’ capital in controlled subsidiaries that are not attributable, directly or indirectly, to us are presented in noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. We have evaluated our economic interest in entities to determine if they are deemed to be variable interest entities (“VIEs”) and whether the entities should be consolidated. An entity is a VIE if it has any one of the following characteristics: (i) the entity does not have enough equity at risk to finance its activities without additional subordinated financial support; (ii) the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. The distinction between a VIE and other entities is based on the nature and amount of the equity investment and the rights and obligations of the equity investors. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered VIEs unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review all agreements and contractual arrangements to determine whether (i) we or another party have any variable interests in an entity, (ii) the entity is considered a VIE, and (iii) which variable interest holder, if any, is the primary beneficiary of the VIE. Determination of the primary beneficiary is based on whether a party (a) has the power to direct the activities that most significantly impact the economic performance of the VIE, and (b) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The following table presents the financial data of the consolidated VIEs included in the consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively (amounts in thousands): Schedule of Carrying Value Net Assets March 31, 2023 December 31, 2022 (unaudited) Assets Real estate Land $ 24,967 $ 24,967 Building and improvements 11,383 11,297 Intangible assets 6,725 6,725 Real estate under construction 157,045 133,773 Total real estate 200,120 176,762 Accumulated depreciation and amortization (1,045 ) (672 ) Real estate, net 199,075 176,090 Cash and cash equivalents 99,424 124,159 Other assets 15,424 11,773 Total assets $ 313,923 $ 312,022 Liabilities Due to affiliates $ 4,029 $ 4,399 Lease liabilities 5,316 5,350 Accounts payable 2,875 1,679 Accrued expenses and other liabilities 7,401 6,064 Total liabilities $ 19,621 $ 17,492 An interest in a VIE requires reconsideration when an event occurs that was not originally contemplated. At each reporting period we will reassess whether there are any events that require us to reconsider our determination of whether an entity is a VIE and whether it should be consolidated. |
Emerging Growth Company Status | Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jump Start Our Business Startups Act of 2012 (“JOBS Act”). Under Section 107 of the JOBS Act, emerging growth companies are permitted to use an extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards that have different effective dates for public and private companies. We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company, or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B). By electing to extend the transition period for complying with new or revised accounting standards, these consolidated financial statements may not be comparable to the consolidated financial statements of companies that comply with public company effective dates. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and the accompanying notes. Actual results could materially differ from those estimates. |
Restricted Cash | Restricted Cash Restricted cash consists of amounts required to be reserved pursuant to contractual obligations and amounts held in escrow on behalf of the company. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the unaudited consolidated statements of cash flows (amounts in thousands): Schedule of Restricted Cash and Cash Equivalents March 31, 2023 December 31, 2022 (unaudited) Cash and cash equivalents $ 115,676 $ 143,467 Restricted cash (1) 6,595 1,500 Total cash and cash equivalents and restricted cash $ 122,271 $ 144,967 (1) Restricted cash is included within Other assets on our consolidated balance sheets. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , Leases (Topic 842). We adopted ASU 2016-13 on January 1, 2023 using the modified retrospective method. The adoption of this standard did not have a material impact on our unaudited consolidated financial statements, and no cumulative-effect adjustment was recorded to retained earnings. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Carrying Value Net Assets | The following table presents the financial data of the consolidated VIEs included in the consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively (amounts in thousands): Schedule of Carrying Value Net Assets March 31, 2023 December 31, 2022 (unaudited) Assets Real estate Land $ 24,967 $ 24,967 Building and improvements 11,383 11,297 Intangible assets 6,725 6,725 Real estate under construction 157,045 133,773 Total real estate 200,120 176,762 Accumulated depreciation and amortization (1,045 ) (672 ) Real estate, net 199,075 176,090 Cash and cash equivalents 99,424 124,159 Other assets 15,424 11,773 Total assets $ 313,923 $ 312,022 Liabilities Due to affiliates $ 4,029 $ 4,399 Lease liabilities 5,316 5,350 Accounts payable 2,875 1,679 Accrued expenses and other liabilities 7,401 6,064 Total liabilities $ 19,621 $ 17,492 |
Schedule of Restricted Cash and Cash Equivalents | Restricted cash consists of amounts required to be reserved pursuant to contractual obligations and amounts held in escrow on behalf of the company. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the unaudited consolidated statements of cash flows (amounts in thousands): Schedule of Restricted Cash and Cash Equivalents March 31, 2023 December 31, 2022 (unaudited) Cash and cash equivalents $ 115,676 $ 143,467 Restricted cash (1) 6,595 1,500 Total cash and cash equivalents and restricted cash $ 122,271 $ 144,967 (1) Restricted cash is included within Other assets on our consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Schedule of Components of Lease Revenues | The following table summarizes the components of lease revenues (amounts in thousands): Schedule of Components of Lease Revenues 2023 2022 Three Months Ended March 31, 2023 2022 Fixed lease revenues $ 266 $ 212 Variable lease revenues (1) 81 70 Lease revenues (2) (3) $ 347 $ 282 (1) Includes reimbursements for property taxes, insurance, and common area maintenance services. (2) Excludes lease intangible amortization of $ 0.1 (3) Excludes straight-line rent of less than $ 0.1 |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Non-Cash Activity to Related Party | The following table presents a summary of fees incurred on our behalf by, and expenses reimbursable to, our Manager and its affiliates, including our Sponsor, in accordance with the terms of the relevant agreements (amounts in thousands): Schedule of Non-Cash Activity to Related Party 2023 2022 Three Months Ended March 31, 2023 2022 (unaudited) (unaudited) Amounts included in the Consolidated Statements of Operations Costs incurred by our Manager and its affiliates (1) $ 670 $ 534 Management fees 661 634 Insurance 106 107 Director compensation 20 20 Costs incurred by the manager and its affiliates $ 1,457 $ 1,295 Capitalized costs included in the Consolidated Balance Sheets Development fee and reimbursements $ 977 $ 1,853 Insurance (2) 517 41 Other capitalized costs $ 1,494 $ 1,894 (1) Includes wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor, which are included in General and administrative expenses on the unaudited consolidated statements of operations. (2) During the three months ended March 31, 2023 and 2022, we incurred insurance premiums of $ 0.1 4.5 0.5 0.1 |
Schedule of Due to Related Party | The following table presents a summary of amounts included in Due to affiliates in the consolidated balance sheets (amounts in thousands): Schedule of Due to Related Party March 31, 2023 December 31, 2022 (unaudited) Due to affiliates Development fees $ 3,347 $ 4,256 Employee cost sharing and reimbursements (1) 1,641 866 Management fees 661 661 Director compensation 40 20 Due to affiliates $ 5,689 $ 5,803 (1) Includes wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor. |
Real Estate, Net (Tables)
Real Estate, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Real Estate [Abstract] | |
Schedule of Real Estate Under Construction | The following table provides the activity of our Real estate under construction in the consolidated balance sheets (amounts in thousands): Schedule of Real Estate Under Construction March 31, 2023 December 31, 2022 (unaudited) Beginning balance $ 133,898 $ 76,882 Capitalized costs (1) (2) 23,102 45,907 Land held for development (3) 91 10,958 Capitalized interest 103 151 Ending balance $ 157,194 $ 133,898 (1) Includes development fees and employee reimbursement expenditures of $ 1.0 5.6 (2) Includes direct and indirect project costs to the construction and development of real estate projects, including but not limited to loan fees, property taxes and insurance, incurred of $ 0.6 2.2 (3) Includes ground lease payments and straight-line rent adjustments incurred of zero and $ 0.8 |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets And Liabilities | |
Schedule of Intangible Assets And Liabilities | Intangible assets and liabilities are summarized as follows (amounts in thousands): Schedule of Intangible Assets And Liabilities March 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (unaudited) (unaudited) (unaudited) Finite-Lived Intangible Assets In-place leases $ 3,836 $ (1,094 ) $ 2,742 $ 3,836 $ (791 ) $ 3,045 Indefinite-Lived Intangible Assets Development rights 5,659 — 5,659 5,659 — 5,659 Total intangible assets $ 9,495 $ (1,094 ) $ 8,401 $ 9,495 $ (791 ) $ 8,704 Finite-Lived Intangible Liabilities Below-market leases $ (2,517 ) $ 552 $ (1,965 ) $ (2,517 ) $ 411 $ (2,106 ) Total intangible liabilities $ (2,517 ) $ 552 $ (1,965 ) $ (2,517 ) $ 411 $ (2,106 ) |
Organization, Business Purpos_2
Organization, Business Purpose and Capitalization (Details Narrative) - USD ($) | May 09, 2023 | Sep. 30, 2021 |
Common Class A [Member] | Primary Offering [Member] | ||
Initial public offering | $ 750,000,000 | |
Subsequent Event [Member] | ||
Initial public offering, remained unsold | $ 522,656,100 | |
Subsequent Event [Member] | Dealer Manager [Member] | Maximum [Member] | ||
Payments for commissions percentage | 0.25% | |
Subsequent Event [Member] | Selling Group Members [Member] | Maximum [Member] | ||
Payments for commissions percentage | 4.50% | |
Subsequent Event [Member] | Selling Group Members [Member] | Minimum [Member] | ||
Payments for commissions percentage | 0.25% | |
Subsequent Event [Member] | Common Class A [Member] | ||
Offering price per share | $ 100 | |
Subsequent Event [Member] | Common Class A [Member] | Follow On Offering [Member] | ||
Initial public offering | $ 750,000,000 |
Schedule of Carrying Value Net
Schedule of Carrying Value Net Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate | ||
Land | $ 38,741 | $ 38,741 |
Building and improvements | 17,929 | 17,843 |
Intangible assets | 9,495 | 9,495 |
Total real estate | 223,359 | 199,977 |
Accumulated depreciation and amortization | (2,225) | (1,719) |
Real estate, net | 221,134 | 198,258 |
Cash and cash equivalents | 115,676 | 143,467 |
Other assets | 15,959 | 12,270 |
Total assets | 352,769 | 353,995 |
Liabilities | ||
Due to affiliates | $ 5,689 | $ 5,803 |
Other Liability, Related and Nonrelated Party Status [Extensible Enumeration] | srt:AffiliatedEntityMember | srt:AffiliatedEntityMember |
Lease liabilities | $ 7,041 | $ 7,126 |
Accounts payable | 2,880 | 1,686 |
Total liabilities | 24,006 | 21,343 |
Variable Interest Entity [Member] | ||
Real estate | ||
Land | 24,967 | 24,967 |
Building and improvements | 11,383 | 11,297 |
Intangible assets | 6,725 | 6,725 |
Real estate under construction | 157,045 | 133,773 |
Total real estate | 200,120 | 176,762 |
Accumulated depreciation and amortization | (1,045) | (672) |
Real estate, net | 199,075 | 176,090 |
Cash and cash equivalents | 99,424 | 124,159 |
Other assets | 15,424 | 11,773 |
Total assets | 313,923 | 312,022 |
Liabilities | ||
Due to affiliates | $ 4,029 | $ 4,399 |
Other Liability, Related and Nonrelated Party Status [Extensible Enumeration] | srt:AffiliatedEntityMember | srt:AffiliatedEntityMember |
Lease liabilities | $ 5,316 | $ 5,350 |
Accounts payable | 2,875 | 1,679 |
Accrued expenses and other liabilities | 7,401 | 6,064 |
Total liabilities | $ 19,621 | $ 17,492 |
Schedule of Restricted Cash and
Schedule of Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 115,676 | $ 143,467 | |
Restricted cash | [1] | 6,595 | 1,500 |
Total cash and cash equivalents and restricted cash | $ 122,271 | $ 144,967 | |
[1]Restricted cash is included within Other assets on our consolidated balance sheets. |
Schedule of Components of Lease
Schedule of Components of Lease Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Leases | |||
Fixed lease revenues | $ 266 | $ 212 | |
Variable lease revenues | [1] | 81 | 70 |
Lease revenues | [2],[3] | $ 347 | $ 282 |
[1]Includes reimbursements for property taxes, insurance, and common area maintenance services.[2]Excludes lease intangible amortization of $ 0.1 0.1 |
Schedule of Components of Lea_2
Schedule of Components of Lease Revenues (Details) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Lease intangible amortization | $ 0.1 | $ 0.1 |
Maximum [Member] | Straight Line Rent [Member] | ||
Lease rent expenses | $ 0.1 | $ 0.1 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Finance lease liability | $ 5.1 | $ 5 |
Ground expense | $ 0.1 |
Schedule of Non-Cash Activity t
Schedule of Non-Cash Activity to Related Party (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Costs incurred by the manager and its affiliates | $ 1,457 | $ 1,295 | |
Other capitalized costs | 1,494 | 1,894 | |
Manager and Affliates [Member] | |||
Costs incurred by the manager and its affiliates | [1] | 670 | 534 |
Management Fees [Member] | |||
Costs incurred by the manager and its affiliates | 661 | 634 | |
Insurance [Member] | |||
Costs incurred by the manager and its affiliates | 106 | 107 | |
Other capitalized costs | [2] | 517 | 41 |
Director Compensation [Member] | |||
Costs incurred by the manager and its affiliates | 20 | 20 | |
Development Fee and Reimbursements [Member] | |||
Other capitalized costs | $ 977 | $ 1,853 | |
[1]Includes wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor, which are included in General and administrative expenses on the unaudited consolidated statements of operations.[2]During the three months ended March 31, 2023 and 2022, we incurred insurance premiums of $ 0.1 4.5 0.5 0.1 |
Schedule of Non-Cash Activity_2
Schedule of Non-Cash Activity to Related Party (Details) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Insurance premium | $ 0.1 | $ 4.5 |
Amortization of insurance to real estate | $ 0.5 | $ 0.1 |
Schedule of Due to Related Part
Schedule of Due to Related Party (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Due to affiliates | $ 5,689 | $ 5,803 | |
Development Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 3,300 | 4,300 | |
Development Fees [Member] | Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 3,347 | 4,256 | |
Employee Cost Sharing And Reimbursements [Member] | Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | [1] | 1,641 | 866 |
Management Fees [Member] | Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 661 | 661 | |
Director Compensation [Member] | Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | $ 40 | $ 20 | |
[1]Includes wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor. |
Related Party Arrangements (Det
Related Party Arrangements (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Operating expenses | $ 3,301 | $ 2,832 | |
Asset management fee | 700 | 600 | |
Development costs | 700 | 1,600 | |
Due to affiliates | $ 5,689 | $ 5,803 | |
Other Liability, Related Party, Type [Extensible Enumeration] | srt:AffiliatedEntityMember | ||
General and administrative expense | $ 1,771 | 1,641 | |
Acquisition fee percentage | 1.50% | ||
Real estate insurance | $ 100 | 4,500 | |
Insurance commission | 100 | 400 | |
Administration fees | 100 | 100 | |
Amortization of insurance to real estate | 500 | 100 | |
Amortization of insurance to property expenses | 100 | 100 | |
General and Administrative Expense [Member] | |||
Related Party Transaction [Line Items] | |||
General and administrative expense | 100 | 100 | |
Development Manager [Member] | |||
Related Party Transaction [Line Items] | |||
Development costs | 300 | 200 | |
Reimbursement expense | 400 | 300 | |
Development Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | 3,300 | 4,300 | |
Employee Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Due to affiliates | $ 600 | $ 300 | |
Common Class A [Member] | |||
Related Party Transaction [Line Items] | |||
Net asset value per share | $ 100 | ||
Management Agreement [Member] | |||
Related Party Transaction [Line Items] | |||
Property management fee percentage fee | 0.75% | ||
Manager and Affliates [Member] | |||
Related Party Transaction [Line Items] | |||
Operating expenses | $ 600 | $ 500 |
Schedule of Real Estate Under C
Schedule of Real Estate Under Construction (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Real Estate [Abstract] | |||
Beginning balance | $ 133,898 | $ 76,882 | |
Capitalized costs | [1],[2] | 23,102 | 45,907 |
Land held for development | [3] | 91 | 10,958 |
Capitalized interest | 103 | 151 | |
Ending balance | $ 157,194 | $ 133,898 | |
[1]Includes development fees and employee reimbursement expenditures of $ 1.0 5.6 0.6 2.2 0.8 |
Schedule of Real Estate Under_2
Schedule of Real Estate Under Construction (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Development fees and employee reimbursement expenditures | $ 1,000 | $ 5,600 | |
Direct and indirect projectCosts | 600 | 2,200 | |
Ground lease payments | 800 | $ 800 | |
Real Estate [Member] | |||
Non cash investing activity | 9,700 | $ 13,900 | |
Unpaid development fees | 700 | ||
Unpaid employee cost sharing and reimbursements | $ 300 |
Real Estate, Net (Details Narra
Real Estate, Net (Details Narrative) $ in Thousands | 3 Months Ended | ||
Jun. 28, 2022 USD ($) a | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Variable interest entity, ownership percentage | 70.20% | ||
Area of real estate property | a | 60 | ||
Forfeiture of amount | $ 1,000 | ||
Noncontrolling interest percentage | 29.80% | ||
Controlling interest | 100% | ||
Depreciation expense | $ 512 | $ 284 | |
Real Estate [Member] | |||
Depreciation expense | $ 200 | $ 200 |
Schedule of Intangible Assets A
Schedule of Intangible Assets And Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, Gross | $ 9,495 | $ 9,495 |
Total intangible assets, Accumulated amortization | (1,094) | (791) |
Total intangible assets, Net | 8,401 | 8,704 |
Gross carrying amount, finite lived intangible liabilities | (2,517) | (2,517) |
Accumulated amortization, finite lived intangible liabilities | 552 | 411 |
Net carrying amount, finite lived intangible liabilities | (1,965) | (2,106) |
Development Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount, indefinite lived intangible assets | 5,659 | 5,659 |
Accumulated amortization, indefinite lived intangible assets | ||
Net carrying amount, indefinite lived intangible assets | 5,659 | 5,659 |
In Place Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount, finite lived intangible assets | 3,836 | 3,836 |
Accumulated amortization, finite lived intangible assets | (1,094) | (791) |
Net carrying amount, finite lived intangible assets | 2,742 | 3,045 |
Below Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount, finite lived intangible liabilities | (2,517) | (2,517) |
Accumulated amortization, finite lived intangible liabilities | 552 | 411 |
Net carrying amount, finite lived intangible liabilities | $ (1,965) | $ (2,106) |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
In Place Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 0.3 | $ 0.1 |
Below Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 0.1 | $ 0.1 |
Loans Receivable (Details Narra
Loans Receivable (Details Narrative) - USD ($) | 3 Months Ended | |||||||
Dec. 13, 2022 | Dec. 02, 2022 | Jun. 28, 2022 | Feb. 23, 2022 | Jan. 03, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2021 | |
Interest income on loans receivables | $ 0 | $ 500,000 | ||||||
Visco Loan [Member] | ||||||||
Principal loan amount | $ 5,000,000 | |||||||
Interest rate | 6% | |||||||
Increase/decrease in accrued interest receivable, net | $ 200,000 | |||||||
Maturity date | Feb. 18, 2023 | |||||||
Norpointe Loan [Member] | ||||||||
Interest rate | 5% | |||||||
Principal loan amount | $ 30,000,000 | |||||||
Maturity date | Dec. 31, 2022 | |||||||
Restructured Norpointe Loan [Member] | ||||||||
Interest rate | 5% | |||||||
Increase/decrease in accrued interest receivable, net | $ 100,000 | |||||||
Maturity date | Jun. 28, 2023 | |||||||
CMC Loan [Member] | ||||||||
Principal loan amount | $ 3,500,000 | |||||||
Interest rate | 12% | |||||||
Increase/decrease in accrued interest receivable, net | $ 300,000 |
Members_ Capital (Details Narra
Members’ Capital (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||
Weighted Average Number of Shares Outstanding, Basic | 3,523,449 | 3,382,149 | |
Net Income (Loss) Attributable to Parent | $ (2,810) | $ (2,016) | |
Earnings Per Share, Basic | $ 0.80 | $ 0.60 | |
Common Class A [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized unlimited | Unlimited | Unlimited | |
Common stock shares, issued | 3,523,449 | 3,523,449 | |
Common stock shares, outstanding | 3,523,449 | 3,523,449 | |
Weighted Average Number of Shares Outstanding, Basic | 3,523,449 | 3,382,149 | |
Common Class B [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 100,000 | 100,000 | |
Common stock shares, issued | 100,000 | 100,000 | |
Common stock shares, outstanding | 100,000 | 100,000 | |
Dividends rate percentage | 5% | ||
Class M Units [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 1 | 1 | |
Common stock shares, issued | 1 | 1 | |
Common stock shares, outstanding | 1 | 1 | |
Class A Units [Member] | |||
Class of Stock [Line Items] | |||
Net Income (Loss) Attributable to Parent | $ 2,800 | $ 2,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Construction Management Agreement [Member] $ in Millions | Mar. 31, 2023 USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Other commitment | $ 128.8 |
Accounts payable | 8.8 |
Retainage payable | $ 3.3 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) $ in Millions | 1 Months Ended | |
Apr. 30, 2023 | May 31, 2023 | |
Subsequent Event [Line Items] | ||
Guaranteed maximum price | $ 48.6 | |
Construction loan | $ 130 | |
Interest Rate Cap [Member] | ||
Subsequent Event [Line Items] | ||
Variable rate interest exposure | 5.07% | |
Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Variable rate interest exposure | 8.51% |