| Summary of Significant Accounting Policies | Note
2 – Summary of Significant Accounting Policies Basis
of Presentation The
accompanying 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 SEC. 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 September 30,
2024, and for the three and nine months ended September 30, 2024 and 2023, are unaudited and may not include year-end adjustments necessary
to make them comparable to audited results. These consolidated financial statements should be read in conjunction with the audited consolidated
financial statements as of and for the year ended December 31, 2023 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 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 interests 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 September 30,
2024 and December 31, 2023, respectively (amounts in thousands): Schedule of Carrying Value Net Assets
September 30, 2024 December 31, 2023
(unaudited)
Assets
Real estate
Land $ 38,357 $ 26,059
Building and improvements 229,945 12,953
Furniture, fixtures and equipment 2,093 —
Intangible assets 6,174 6,816
Real estate under construction 172,083 290,627
Total real estate 448,652 336,455
Accumulated depreciation and amortization (3,546 ) (2,161 )
Real estate, net 445,106 334,294
Cash and cash equivalents 2,598 8,204
Other assets 7,594 7,841
Total assets $ 455,298 $ 350,339
Liabilities
Debt, net $ 144,135 $ 19,678
Due to affiliates 2,637 7,292
Lease liabilities 22 25
Accounts payable 17,345 12,374
Accrued expenses and other liabilities 11,813 8,595
Total liabilities $ 175,952 $ 47,964 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, our
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 consolidated financial statements and the accompanying notes. Actual results could materially differ
from those estimates. Impairment
of Long-Lived Assets We
evaluate our tangible and identifiable intangible real estate assets for impairment when events such as delays or changes in development,
declines in a property’s operating performance, deteriorating market conditions, or environmental or legal concerns bring recoverability
of the carrying value of one or more assets into question. When qualitative factors indicate the possibility of impairment, the total
undiscounted cash flows of the property, including proceeds from disposition, are compared to the net book value of the property. If
the carrying value of the asset exceeds the undiscounted cash flows of the asset, an impairment loss is recorded in earnings to reduce
the carrying value of the asset to fair value, calculated as the discounted net cash flows of the property. In circumstances where the
highest and best use of a property is the fee simple value of vacant land, we compare book value of the property to the appraised value
of the land. If the carrying value of the asset exceeds the appraised value of the land, an impairment loss is recorded to reduce the
carrying value to the appraised value. Restricted
Cash Restricted
cash consists of amounts required to be reserved pursuant to contractual obligations and lender agreements for debt service. The following
table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the
consolidated statements of cash flows (amounts in thousands): Schedule
of Restricted Cash and Cash Equivalents
September
30, 2024 December
31, 2023 September 30, 2023
(unaudited) (unaudited)
Cash and cash equivalents $ 23,990 $ 20,125 $ 15,743
Restricted cash (1) 3,525 3,460 23,939
Total cash and cash equivalents and restricted cash $ 27,515 $ 23,585 $ 39,682
(1) Restricted
cash is included within Other assets on our consolidated balance sheets. Liquidity Our
future needs for liquidity will depend on a variety of factors, including, without limitation, our ability to generate cash flows
from operations, the timing and availability of net proceeds from our Public Offerings and any future offerings that we may conduct,
the timing and extent of our real estate acquisition and disposition activities, and the timing and extent of our construction and
development costs. Economic
uncertainty, fluctuating interest rates, volatility in the real estate markets, slowdowns in transaction volume, delays in financings
from banks and other lenders and other negative trends may, in the future, adversely impact our ability to timely access potential sources
of liquidity. If we are unable to raise additional capital when desired, or on terms that are acceptable to us, our business, financial
condition and results of operations could be adversely affected. We
believe that our cash on-hand, the anticipated net proceeds from our Public Offerings, the projected cash flows from our real estate
assets and our current and anticipated financing activities will be sufficient to meet our liquidity and capital resource requirements
for the next 12 months from the date of issuance of this Form 10-Q. Recent
Accounting Pronouncements In
November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07,
S gment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In
March 2024, the SEC adopted final rules under Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures
for Investors |
