Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 10, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Apollo Realty Income Solutions, Inc. | |
Entity Central Index Key | 0001882850 | |
Current Fiscal Year End Date | --12-31 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Securities Act File Number | 000-56656 | |
Entity Tax Identification Number | 87-2557571 | |
Entity Incorporation, State or Country Code | MD | |
Entity Address, Address Line One | 9 West 57th Street | |
Entity Address, Address Line Two | 42nd Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | 212 | |
Local Phone Number | 515-3200 | |
Common Stock - Class A-II Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,560,691 | |
Common Stock - Class A-I Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,622,236 | |
Common stock - Class F-I Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,641,359 | |
Common Stock - Class I Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 288,717 | |
Common Stock - Class E Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 207,115 | |
Common Stock - Class S Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,795 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
Assets | |||
Investments in real estate, net | $ 153,614 | $ 154,513 | |
Investments in real estate debt, at fair value | 474,240 | 328,189 | |
Cash and cash equivalents | 46,466 | 95,205 | |
Restricted cash | 11 | ||
Other assets | 31,563 | 31,764 | |
Total assets | [1] | 705,894 | 609,671 |
Liabilities and Equity | |||
Mortgage notes, net | 35,612 | 35,591 | |
Other liabilities | 16,498 | 14,406 | |
Total liabilities | [1] | 67,823 | 65,828 |
Commitments and contingencies (See Note 16) | |||
Redeemable non-controlling interest | 1,824 | 967 | |
Equity | |||
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized at March 31, 2024 and December 31, 2023, and none issued and outstanding | |||
Common stock, $0.01 par value per share (See Note 14 - Equity) | 264 | 220 | |
Additional paid-in capital | 528,416 | 438,432 | |
Retained earnings (accumulated deficit) | 4,337 | 2,681 | |
Total stockholders' equity | 533,017 | 441,333 | |
Non-controlling interest attributable to the Operating Partnership | 103,105 | 101,543 | |
Non-controlling interest attributable to preferred stockholders | 125 | ||
Total equity | 636,247 | 542,876 | |
Total liabilities and equity | 705,894 | 609,671 | |
Due to Affiliates | |||
Liabilities and Equity | |||
Due to affiliates | $ 15,713 | $ 15,831 | |
[1] Represents the consolidated assets and liabilities of ARIS Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership"). The Operating Partnership is a consolidated variable interest entity ("VIE"), of which the Company is the sole general partner and owns approximately 83 % and 81 % as of March 31, 2024 and December 31, 2023, respectively. See "Note 2 - Summary of Significant Accounting Policies " for additional information. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares outstanding | 0 | 0 |
VIE ownership percentage | 83% | 81% |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | ||
Rental revenue | $ 3,663 | $ 993 |
Total revenues | 3,663 | 993 |
Expenses | ||
Rental property operating | 573 | 92 |
General and administrative | 1,537 | 1,105 |
Management fee | 1,511 | 399 |
Performance participation allocation | 203 | |
Depreciation and amortization | 1,455 | 283 |
Total expenses | 5,279 | 1,879 |
Other income | ||
Income from investments in real estate debt | 11,114 | 735 |
Other income | 908 | 834 |
Interest expense | (770) | |
Total other income | 11,252 | 1,569 |
Net income (loss) | 9,636 | 683 |
Net income (loss) attributable to non-controlling interests in the ARIS Operating Partnership | 1,697 | 348 |
Net income (loss) attributable to ARIS stockholders | $ 7,939 | $ 335 |
Net income (loss) per share of common stock, basic | $ 0.32 | $ 0.1 |
Net income (loss) per share of common stock, diluted | $ 0.32 | $ 0.1 |
Weighted-average shares of common stock outstanding, basic | 24,902,305 | 3,248,791 |
Weighted-average shares of common stock outstanding, diluted | 24,902,305 | 3,248,791 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Total | Preferred Equity | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total Stockholders' Equity | Non-Controlling Interest | Non-Controlling Interest Preferred Equity | Redeemable non-controlling interest |
Beginning Balance at Dec. 31, 2022 | $ 128,291 | $ 18 | $ 31,367 | $ (815) | $ 30,570 | $ 97,721 | |||
Beginning Balance, Shares at Dec. 31, 2022 | 1,824 | ||||||||
Shares issued, value | 60,227 | $ 30 | 60,197 | 60,227 | |||||
Shares issued, shares | 3,006 | ||||||||
Offering costs | (83) | (83) | (83) | ||||||
Contributions from non-controlling interests | 156 | 156 | |||||||
Net income | 683 | 335 | 335 | 348 | |||||
Ending Balance at Mar. 31, 2023 | 189,274 | $ 48 | 91,481 | (480) | 91,049 | 98,225 | |||
Ending Balance, Shares at Mar. 31, 2023 | 4,830 | ||||||||
Beginning Balance at Dec. 31, 2023 | 542,876 | $ 220 | 438,432 | 2,681 | 441,333 | 101,543 | $ 967 | ||
Beginning Balance, Shares at Dec. 31, 2023 | 21,943 | ||||||||
Shares issued, value | 89,566 | $ 125 | $ 43 | 89,523 | 89,566 | $ 125 | 831 | ||
Shares issued, shares | 4,328 | ||||||||
Amortization of restricted stock grants | 25 | 25 | 25 | ||||||
Offering costs | (355) | (355) | (355) | ||||||
Distribution reinvestments, value | 2,124 | 944 | 944 | 1,180 | 20 | ||||
Distribution reinvestments, shares | 45 | ||||||||
Net income | 9,636 | 31 | |||||||
Net Income | 9,605 | 7,939 | 7,939 | 1,666 | |||||
Share class transfer, shares | 25 | ||||||||
Repurchase of common stock | (154) | (154) | (154) | ||||||
Repurchase of common stock, shares | (7) | ||||||||
Distributions to non-controlling interest | (1,284) | (1,284) | (25) | ||||||
Distributions declared on common stock | (6,281) | (6,281) | (6,281) | ||||||
Ending Balance at Mar. 31, 2024 | $ 636,247 | $ 263 | $ 528,415 | $ 4,339 | $ 533,017 | $ 103,230 | $ 1,824 | ||
Ending Balance, Shares at Mar. 31, 2024 | 26,334 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net income | $ 9,636 | $ 683 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Management fee | 1,511 | 234 |
Performance participation allocation | 203 | |
Depreciation and amortization | 1,455 | 283 |
Straight line rent amortization | (388) | (651) |
Above- and below- market lease amortization, net | (190) | |
Amortization of discount/premium | (67) | |
Amortization of deferred financing costs | 21 | 0 |
Amortization of restricted stock awards | 25 | |
Unrealized gain on fair value of investments in real estate debt and real estate related securities | (152) | |
Realized gain on repayments of real-estate related securities | (20) | |
Changes in assets and liabilities: | ||
Other assets | 25 | (266) |
Due to affiliate | 169 | 1,270 |
Other liabilities | 1,095 | 102 |
Net cash provided by operating activities | 13,323 | 1,655 |
Cash flows from investing activities: | ||
Acquisitions of real estate | (44,214) | |
Origination and acquisition of real estate debt | (65,397) | (58,675) |
Add-on fundings of commercial mortgage loans | (81,646) | |
Repayments from real-estate related securities | 1,230 | |
Net cash used in investing activities | (145,813) | (102,889) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 88,385 | 60,150 |
Contributions from non-controlling preferred shareholders | 125 | |
Distributions paid | (4,500) | |
Repurchase of common stock | (154) | |
Offering costs paid | (94) | (18) |
Net cash provided by financing activities | 83,762 | 60,132 |
Net change in cash, cash equivalents and restricted cash | (48,728) | (41,102) |
Cash, cash equivalents and restricted cash, beginning of period | 95,205 | 131,589 |
Cash, cash equivalents and restricted cash, end of period | 46,477 | 90,487 |
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets: | ||
Cash and cash equivalents | 46,466 | 90,487 |
Restricted cash | 11 | |
Total cash, cash equivalents and restricted cash | 46,477 | 90,487 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 363 | |
Non-cash investing and financing activities | ||
Accrued offering costs due to affiliate | 261 | $ (65) |
Distribution reinvestments | 2,144 | |
Distributions accrued and not paid | 2,846 | |
Issuance of Class E shares for payment of management fee | 1,181 | |
Redeemable non-controlling interest issuance as Class E units of the Operating Partnership for payment of management fee | 269 | |
Redeemable non-controlling interest issuance as Class E units of the Operating Partnership for payment of performance participation allocation | 562 | |
Allocation to redeemable non-controlling interests | $ 31 |
Organization and Business Purpo
Organization and Business Purpose | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Purpose | Note 1 - Organization and Business Purpose Apollo Realty Income Solutions, Inc. (the "Company") was formed on September 8, 2021 as a Maryland corporation. The Company is the sole general partner of ARIS Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership"). ARIS Special Limited Partner, LLC (the "Special Limited Partner"), a subsidiary of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo"), owns a special limited partner interest in the Operating Partnership. The Company was organized to invest primarily in a portfolio of diversified income-oriented commercial real estate in the United States. Substantially all of the Company's business is conducted through the Operating Partnership. The Company commenced its operations on December 22, 2022 and the Company and the Operating Partnership are both externally managed by ARIS Management, LLC (the "Adviser"), an indirect subsidiary of Apollo. The Company has registered with the Securities and Exchange Commission (the "SEC") an offering of up to $ 5.0 billion in shares of common stock, consisting of up to $ 4.0 billion in shares in its primary offering and up to $ 1.0 billion in shares pursuant to its distribution reinvestment plan (the "Offering"). In the Offering, the Company intends to sell any combination of nine classes of shares of its common stock, Class S shares, Class D shares, Class I shares, Class F-S shares, Class F-D shares, Class F-I shares, Class A-I shares, Class A-II shares, and Class A-III shares with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions, ongoing stockholder servicing fees, management fees, and performance participation allocations. The purchase price per share for each class of common stock will vary and will generally equal the Company's prior month's net asset value ("NAV") per share, as calculated monthly, plus applicable upfront selling commissions and dealer manager fees. The Company also may issue Class E shares to certain of Apollo's affiliates and employees in one or more private placements; however, Class E shares are not being offered to the public pursuant to the Offering. The Company intends to elect to be taxed as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), commencing with the taxable year ended December 31, 2023. To maintain its tax qualification as a REIT, the Company will be required to distribute at least 90 % of its taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests. As of March 31, 2024 , the Company owned three properties, had fourteen investments in commercial real estate debt, and held fourteen real estate-related securities. The Company currently operates in two reportable segments: Real Estate and Real Estate Debt. See " Note 17 - Segment Reporting " for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's financial position, results of operations and cash flows have been included. The Company's results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any other future period. Principles of Consolidation The Company consolidates all entities that it controls through either majority ownership or voting rights. In addition, the Company consolidates all variable interest entities ("VIEs") of which it is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as the primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE's economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. The Operating Partnership is considered to be a VIE. The Company consolidates this entity as it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans. The accompanying condensed consolidated financial statements include the accounts of the Company and the Company's subsidiary partnerships. Third party unitholders of Operating Partnership's share of the assets, liabilities and operations of the Operating Partnership is included in non-controlling interest as equity of the Company. The noncontrolling interest is generally computed based on third party unit-holders ownership percentage. Non-controlling interests in the Operating Partnership represent Operating Partnership units that are held by third parties, including the Adviser,and Operating Partnership units issued to the Adviser under an advisory agreement by and among the Company, the Operating Partnership and the Adviser (as amended, restated or otherwise modified from time to time, the "Advisory Agreement"). Operating Partnership units may be redeemed for cash, or at the Company's option, for shares of common stock of the Company on a one-for-one basis, unless those units are held by the Adviser or Special Limited Partner, in which case such Operating Partnership units shall be redeemed for shares of common stock of the Company or cash, at the holder's election. Since the number of shares of common stock outstanding is equal to the number of Operating Partnership units owned by the Company, the redemption value of each common unit of the Operating Partnership is equal to the market value of each share of common stock and distributions paid to each unitholder is equivalent to dividends paid to common stockholders, per respective share class. 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. As of March 31, 2024 and December 31, 2023 , the Company held $ 46.5 million and $ 95.2 million of cash and cash equivalents, respectively. Restricted Cash Restricted cash represents cash held in a deposit account controlled by a third party. As of March 31, 2024 , the Company held $ 11 thousand in restricted cash. The Company did no t have any restricted cash as of December 31, 2023 . Fair Value Measurements 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). The Company uses 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 actively 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. As of March 31, 2024, the Company's investments in real estate debt consisted of commercial mortgage loans secured by real estate assets and real estate-related securities. The Company has elected the fair value option ("FVO") for investments in commercial mortgage loans secured by real estate assets as the Company believes fair value provides a more accurate depiction of the value of these assets. During the three months ended March 31, 2024, real-estate related securities met the criteria to be classified as trading securities under ASC 320, "Investments". The Company generally determines the fair value of its investments in real estate debt by utilizing third-party pricing service providers whenever available. The Company's investments in commercial mortgage loans are unlikely to have readily available market quotations. In such cases, the Company will generally determine the initial value based on the acquisition price of such investment if acquired by the Company or the par value of such investment if originated by the Company. Following the initial measurement, the Company will determine fair value by utilizing or reviewing certain of the following (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield or loan-to-value ratios, and (vii) borrower financial condition and performance. The inputs used in determining the fair value of the Company's investments in commercial mortgage loans are considered Level 3. The fair value of real estate-related securities may be determined by using third-party pricing service providers or broker-dealer quotes, reported trades or valuation estimates from their internal pricing models to determine the reported price. The inputs used in determining the fair value of the Company's investments in real estate-related securities are considered Level 2. The following table details the Company's assets measured at fair value on a recurring basis ($ in thousands): March 31, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Investments in real estate debt $ — $ 24,329 $ 449,911 $ 474,240 $ — $ 25,321 $ 302,868 $ 328,189 Total $ — $ 24,329 $ 449,911 $ 474,240 $ — $ 25,321 $ 302,868 $ 328,189 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 Debt Balance as of December 31, 2023 $ 302,868 Originations, acquisitions, and add on fundings 147,043 Amortization of discount/premium 67 Included in net income: Unrealized gain/(loss) from investments in real estate debt ( 67 ) Balance as of March 31, 2024 $ 449,911 The following table contains the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands): March 31, 2024 Fair Value Valuation Technique Unobservable Inputs Rate Range Impact to Valuation from an Increase in Input Assets: Investments in real estate debt $ 449,911 Discounted cash flow Discount rate 8.00 %- 12.75 % Decrease December 31, 2023 Fair Value Valuation Technique Unobservable Inputs Rate Range Impact to Valuation from an Increase in Input Assets: Investments in real estate debt $ 302,868 Discounted cash flow Discount rate 8.41 %- 10.00 % Decrease Investment Property and Lease Intangibles Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the operations of acquired properties will be included in the Company's results of operations from their respective dates of acquisition. The Company will utilize a report from an independent appraiser to record the purchase of identifiable assets acquired and liabilities assumed such as land, buildings and improvements, equipment and identifiable intangible assets and liabilities such as amounts related to in-place leases, acquired above- and below-market leases, tenant relationships, asset retirement obligations and mortgage loans payable. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals. The estimated fair value of acquired in-place leases is the costs the Company would have incurred to lease the properties to the occupancy level of the properties 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. Additionally, the Company evaluates the time period over which such occupancy levels would be achieved. 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 as of the date of acquisition are amortized over the remaining lease terms. The amortization of in-place lease intangibles is recorded in depreciation and amortization expense on the Company’s condensed consolidated statements of operations. Acquired above- and below-market lease values are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the in-place leases and the Company's estimate of fair market value lease rates for the corresponding in-place leases. The capitalized above- and below-market lease values are amortized as adjustments to rental revenue over the remaining terms of the respective leases, which include periods covered by bargain renewal options, if applicable. Should a tenant terminate its lease, the unamortized portion of the in-place lease value will be charged to amortization expense and the unamortized portion of out-of-market lease value will be charged to rental revenue. 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 Buildings 39 - 50 years Buildings and land improvements 10 - 15 years Lease intangibles and leasehold improvements Lease term Significant improvements to properties are capitalized, whereas, repairs and maintenance expenses at the Company's properties are expensed as incurred and included in real estate operating expense on the Company’s condensed consolidated statements of operations. When an asset is sold, the cost and related accumulated depreciation are removed from the accounts with the resulting gain or loss reflected in the Company's results of operations for the period. Real estate assets will be evaluated for impairment on a quarterly basis. The Company will consider the following factors when performing its impairment analysis: (1) management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) its ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon its estimate of a capitalization rate and discount rate. As of March 31, 2024 , the Company had not recorded any impairments on its investments in real estate. Investments in Real Estate Debt The Company's investments in real estate debt consist of commercial mortgage loans secured by real estate and real estate-related securities. The Company has elected the FVO for its commercial mortgage loans secured by real estate. During the three months ended March 31, 2024, real-estate related securities met the criteria to be classified as trading securities under ASC 320, "Investments". The unrealized gain or loss associated with holding real estate debt investments at fair value are recorded as a component of income from investments in real estate debt on the Company's condensed consolidated statement of operations. For the three months ended March 31, 2024 the Company recorded $ 0.2 million of unrealized gain on its investments in real estate debt. Interest income from the Company’s investments in real estate debt is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of premiums and discounts associated with these investments is deferred and recorded over the term of the investment as an adjustment to yield. Upfront costs and fees related to items for which the FVO is elected are recognized in earnings as incurred and are not deferred. Interest income, upfront costs and fees are recorded as components of income from investments in real estate debt on the Company’s condensed consolidated statements of operations. Deferred Financing Costs Costs incurred in connection with financings are capitalized and amortized over the respective financing terms and are reflected on the accompanying condensed consolidated statement of operations as a component of interest expense. Revenue Recognition The Company's rental revenue consists of base rent and tenant reimbursement income arising from tenant leases at the Company's properties under operating leases. Base rent is recognized on a straight-line basis over the life of the lease, including any rent step ups or abatements. The Company accounts for base rental revenue (lease component) and common area expense reimbursement (non-lease component) as one lease component under Accounting Standards Codification ("ASC") 842, "Leases". Additionally, the Company also includes the non-components of its leases, such as the reimbursement of utilities, insurance and real estate taxes, within this lease component. The Company evaluates the collectability of receivables related to rental revenue on an individual lease basis. Management exercises judgment in assessing collectability and 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. However any future cash receipt on leases that are deemed uncollectible will be recorded as income on a cash basis. Commercial mortgage loans that are significantly past due may be placed on non-accrual status if we determine it is probable that we will not collect all payments which are contractually due. When a loan is placed on non-accrual status, interest is only recorded as interest income when it is received. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due. Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Code commencing with its taxable year ended December 31, 2023 . If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 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 U.S. federal income and excise taxes on its undistributed income. Earnings per Share of Common Stock Basic earnings per share of common stock is computed by dividing net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss for the period by the weighted average number of shares of common stock and common stock equivalents outstanding (unless their effect is anti-dilutive) for the period. As there were no common stock equivalents outstanding during the three months ended March 31, 2024 and 2023, the calculation of basic and diluted earnings per share are equal. Organization and Offering Expenses The Adviser has agreed that it and/or its affiliates will advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the Company's organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) through December 22, 2023, the first anniversary of the escrow break for the Offering. The Company will reimburse the Adviser and its affiliates for all such advanced expenses ratably over a 60-month period beginning on December 22, 2024. Organization costs are expensed as incurred and recorded as expenses on the Company's condensed consolidated statement of operations and offering costs are charged to equity as such amounts are incurred. As of March 31, 2024 and December 31, 2023, the Adviser and its affiliates had incurred organization and offering costs on the Company's behalf of $ 7.9 million , consisting of offering costs of $ 6.4 million and organization costs of $ 1.5 million . Such costs became the Company's liability on December 22, 2022, the date on which the proceeds from the Offering were released from escrow. These organization and offering costs are recorded as a component of due to affiliates on the Company's condensed consolidated balance sheet. Apollo Global Securities, LLC (the "Dealer Manager"), a registered broker-dealer affiliated with the Adviser, serves as the dealer manager for the Offering. The Dealer Manager is entitled to receive selling commissions and dealer manager fees based on the transaction price of each applicable class of shares sold in the primary offering. The Dealer Manager is also entitled to receive a stockholder servicing fee based on the aggregate NAV of the Company’s outstanding Class S shares, Class D shares, Class F-S shares and Class F-D shares. The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2024: Class S Shares Class D Shares Class I Shares Class F-S Shares Class F-D Shares Class F-I Shares Class A-I Shares Class A-II Shares Class A-III Shares Selling commissions and dealer manager fees (% of transaction price) up to 3.5 % up to 1.5 % — up to 3.5 % up to 1.5 % — — — — Stockholder servicing fee (% of NAV) 0.85 % 0.25 % — 0.85 % 0.25 % — — — — For Class S shares and Class F-S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3 % and dealer manager fees of up to 0.5 % of the transaction price; however, such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5 % of the transaction price. For Class D shares and Class F-D shares sold in the primary offering, investors will pay upfront selling commissions of up to 1.5 % of the transaction price. The Dealer Manager, as the dealer manager for the Offering, is entitled to receive stockholder servicing fees of 0.85 % per annum of the aggregate NAV for Class S shares and Class F-S shares. For Class D shares and Class F-D shares, a charge of 0.25 % per annum of the aggregate NAV will be charged for stockholder servicing fees. The Dealer Manager has entered into agreements with selected dealers that agree to distribute the Company's shares in the Offering, which will provide, among other things, for the reallowance of the full amount of the selling commissions and stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class S share, Class D share, Class F-S share, or Class F-D share held in a stockholder's account at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such shares would exceed, in the aggregate, 8.75 % of the gross proceeds from the sale of such share. There will not be a stockholder servicing fee, upfront selling commission or dealer manager fee with respect to Class I shares, Class F-I shares, Class A-I shares, Class A-II shares, and Class A-III shares. The Company will accrue the cost of the stockholder servicing fee as an offering cost at the time of each Class S share, Class D share, Class F-S share, and Class F-D share is sold during the primary offering. As of March 31, 2024 , the Company had not sold any of those share classes and as such has not accrued for any stockholder servicing fees. Share Based Payments The Company accounts for share-based compensation to its independent directors, to the Adviser and to employees of the Adviser and its affiliates using the fair value-based methodology prescribed by GAAP. Compensation cost related to restricted common stock issued is measured at its fair value at the grant date and amortized into expense over the vesting period on a straight-line basis. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provide new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods with fiscal years beginning after December 15, 2024. ASU 2023-07 is to be adopted retrospectively to all prior periods presented. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company is currently assessing the impact of this guidance, however, it does not expect a material impact to its consolidated financial statements. |
Investments in Real Estate
Investments in Real Estate | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate Investments, Net [Abstract] | |
Investments in Real Estate | Note 3 - Investments in Real Estate Investments in real estate, net consisted of the following ($ in thousands): March 31, 2024 December 31, 2023 Building and building improvements $ 132,792 $ 132,792 Land and land improvements 22,707 22,707 Tenant improvements 621 621 Total 156,120 156,120 Accumulated depreciation ( 2,506 ) ( 1,607 ) Investment in real estate, net $ 153,614 $ 154,513 During the three months ended March 31, 2024 , the Company did no t acquire any properties. Intangible assets are recorded in other assets on the accompanying condensed consolidated balance sheet. The intangibles of the properties are amortized over the remaining lease terms that they were derived from. As a result, the Company's intangibles have a weighted average amortization period of approximately 13 years . As of March 31, 2024 and December 31, 2023 , the Company did no t recognize any impairment on its real estate investments. |
Investments in Real Estate Debt
Investments in Real Estate Debt | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate Investments, Net [Abstract] | |
Investments in Real Estate Debt | Note 4 - Investments in Real Estate Debt The following table details the Company's investments in real estate debt as of March 31, 2024 ($ in thousands): March 31, 2024 Type of Investment in Real Estate Debt Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value Commercial real estate loan 13 9.0 % March 2028 $ 399,911 $ 399,777 $ 399,911 Mezzanine loan 1 10.0 % September 2026 50,000 50,000 50,000 Real estate-related securities 14 7.0 % May 2037 24,457 24,104 24,329 Total investments in real estate debt 28 9.0 % July 2028 $ 474,368 $ 473,881 $ 474,240 December 31, 2023 Type of Investment in Real Estate Debt Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value Commercial real estate loan 11 9.1 % September 2027 $ 252,868 $ 252,668 $ 252,868 Mezzanine loan 1 10.0 % September 2026 50,000 50,000 50,000 Real estate-related securities 14 7.0 % May 2037 25,811 25,314 25,321 Total investments in real estate debt 26 9.3 % April 2028 $ 328,679 $ 327,983 $ 328,189 ____________ (1) Based on applicable benchmark rates as of March 31, 2024. (2) Weighted average maturity date is based on fully extended maturity. All of the Company's real estate-related securities have maturity dates greater t han ten years fro m March 31, 2024. The table below details the type of properties securing the loans in the Company's portfolio at the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Property Type Fair Value % of Portfolio Fair Value % of Portfolio Multifamily $ 176,624 39.3 % $ 110,670 36.6 % Industrial 96,056 21.3 % 91,292 30.1 % Hotel 93,865 20.9 % 48,795 16.1 % Data Center 63,131 14.0 % 40,651 13.4 % Self-Storage 17,659 3.9 % 8,884 2.9 % Other (1) 2,576 0.6 % 2,576 0.9 % Total $ 449,911 100.0 % $ 302,868 100.0 % (1) Other property types represents productions studio. The table below details the geographic distribution of the properties securing the loans in the Company's portfolio at the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Geographic Location Fair Value % of Portfolio Fair Value % of Portfolio Northeast $ 190,998 42.5 % $ 169,829 56.1 % Mid-Atlantic 66,647 14.8 % 44,166 14.6 % West 132,680 29.5 % 32,841 10.8 % Southeast 27,582 6.1 % 27,582 9.1 % Southwest 18,400 4.1 % 18,400 6.1 % Midwest 13,604 3.0 % 10,050 3.3 % Total $ 449,911 100.0 % $ 302,868 100.0 % The total income from investments in real estate debt disclosed on the Company's condensed consolidated statement of operations relates to interest income, upfront fees recognized, and unrealized gain on these investments in real estate debt. For the three months ended March 31, 2024, the Company recorded $ 0.2 million unrealized gains on its investments in real estate debt. The Company did no t have any unrealized gains or losses on its investments in real estate debt for the three months ended March 31, 2023. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2024 | |
Other Assets [Abstract] | |
Other Assets | Note 5 - Other Assets The following table details the components of the Company's other assets at the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Real estate intangibles, net $ 25,172 $ 25,734 Straight-line rent receivable 1,812 1,425 Interest receivable 2,794 1,727 Deferred financing costs, net 853 1,057 Other 932 1,821 Total $ 31,563 $ 31,764 |
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles | Note 6 - Intangibles The gross carrying amount and accumulated amortization of the Company's intangible assets consisted of the following as of the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Intangible assets: In-place lease intangibles $ 26,363 $ 26,363 Above-market lease intangibles 325 325 Total intangible assets 26,688 26,688 Accumulated amortization: In-place lease amortization ( 1,492 ) ( 937 ) Above-market lease amortization ( 24 ) ( 17 ) Total real estate intangible assets, net $ 25,172 $ 25,734 Intangible liabilities Below-market lease intangibles $ ( 10,855 ) $ ( 10,855 ) Total intangible liabilities ( 10,855 ) ( 10,855 ) Accumulated amortization: Below-market lease amortization 423 226 Total real estate intangible liabilities, net $ ( 10,432 ) $ ( 10,629 ) The estimated future amortization on the Company's intangibles for each of the next five years and thereafter as of March 31, 2024, is as follows ($ in thousands): In-Place Lease Intangibles Above-Market Intangibles Below-Market Intangibles 2024 (remaining) 1,599 22 ( 578 ) 2025 2,126 29 ( 775 ) 2026 2,126 29 ( 775 ) 2027 2,126 29 ( 775 ) 2028 2,093 29 ( 756 ) Thereafter 14,801 163 ( 6,773 ) $ 24,871 $ 301 $ ( 10,432 ) |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Note 7 - Leases Lessor The Company’s rental revenue consists of rent earned from the operating leases at the Company’s industrial and retail properties. The leases at the Company’s industrial and retail properties generally includes a fixed base rent, subject to annual step-ups, and a variable component. The variable component of the Company’s operating leases primarily consists of the reimbursement of operating expenses such as real estate taxes, insurance, and common area maintenance costs. The following table summarizes the fixed and variable components of the Company's operating leases ($ in thousands): Three Months Ended March 31, 2024 2023 Fixed lease payments $ 3,070 $ 904 Variable lease payments 403 91 Lease Revenue $ 3,473 $ 995 Above- and below-market lease amortization 190 ( 2 ) Rental Revenue $ 3,663 $ 993 The following table presents the undiscounted future minimum rents the Company expects to receive for its industrial and retail properties as of March 31, 2024 ($ in thousands): Year Future Minimum Rents 2024 $ 8,117 2025 10,951 2026 11,214 2027 11,531 2028 11,802 Thereafter 84,314 Total $ 137,929 |
Mortgage Notes
Mortgage Notes | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Mortgage Notes | Note 8 - Mortgage Notes As of March 31, 2024 and December 31, 2023 the Company held a $ 36.0 million, non-amortizing, mortgage loan secured by one of its real estate equity properties, net of unamortized deferred financing costs of $ 0.4 million and $ 0.5 million, respectively. The loan has a fixed interest rate of 6.05 % and a five year term with a maturity date in November 2028 . There have been no repayments on this mortgage loan during the three months ended March 31, 2024. During the three months ended March 31, 2024 , the Company recorded $ 21 thousand of deferred financing cost amortization, which is included within interest expense in the condensed consolidated statement of operations. The Company did no t have any deferred financing cost amortization for the three months ended March 31, 2023. The Company is in compliance with all covenants as of March 31, 2024 . |
Secured Financings on Investmen
Secured Financings on Investments in Real Estate Debt | 3 Months Ended |
Mar. 31, 2024 | |
Disclosure of Repurchase Agreements [Abstract] | |
Secured Financings on Investments in Real Estate Debt | Note 9 - Secured Financings on Investments in Real Estate Debt During October 2023, certain indirect subsidiaries (the "Sellers") of the Company entered into a Master Repurchase Agreement (the "JPM Repurchase Agreement") with JPMorgan Chase Bank, National Association (the "Buyer"). The JPM Repurchase Agreement provides for a maximum aggregate purchase price of $ 250.0 million and has a three-year term plus two one-year extension options (the "JPM Repurchase Facility"). Subject to the terms and conditions thereof, the JPM Repurchase Agreement provides for the purchase, sale and repurchase of senior mortgage loans and participation interests in performing senior mortgage loans satisfying certain conditions set forth in the JPM Repurchase Agreement. The Operating Partnership has agreed to provide a limited guarantee of the obligations of the Sellers under the JPM Repurchase Agreement. As of March 31, 2024 , there are no outstanding borrowings under the JPM Repurchase Agreement and the Company is in compliance with all associated covenants. The Company incurred $ 1.2 million in costs associated with the JPM Repurchase Facility that are recorded in other assets in the consolidated balance sheet net of $ 0.3 million of amortization. |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Other Liabilities [Abstract] | |
Other Liabilities | Note 10 - Other Liabilities The following table details the components of the Company's other liabilities at the date indicated ($ in thousands): March 31, 2024 December 31, 2023 Below market lease intangibles, net $ 10,432 $ 10,629 Distribution payable 2,846 1,900 Accounts payable and accrued expenses 2,935 1,816 Real estate taxes payable 285 61 Total $ 16,498 $ 14,406 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11 - Related Party Transactions Pursuant to the Advisory Agreement the Adviser is responsible for sourcing, evaluating and monitoring the Company's investment opportunities and making decisions related to the acquisition, management, financing and disposition of the Company's assets, in accordance with the Company's investment objectives, guidelines, policies and limitations, subject to oversight by the Company's board of directors. The Special Limited Partner holds a performance participation interest in the Operating Partnership that entitles it to receive an allocation from the Operating Partnership on Class S shares, Class D shares, and Class I shares equal to 12.5 % of the annual Total Return, subject to a 5 % annual Hurdle Amount and a High Water Mark, with a Catch-Up (each term as defined in the limited partnership agreement of the Operating Partnership, by and among the Company, as general partner, the Special Limited Partner and the limited partners party thereto from time to time (as amended, restated or otherwise modified from time to time, the "Limited Partnership Agreement")). On Class F-S shares, Class F-D shares, and Class F-I shares, the Special Limited Partner is entitled to receive an allocation equal to 9.0 % of the annual Total Return, subject to a 5 % annual Hurdle Amount and a High Water Mark, with a Catch-Up (each term as defined in the Limited Partnership Agreement). Such allocation will accrue monthly and be paid annually. There will not be a performance participation interest with respect to Class A-I shares, Class A-II shares, Class A-III shares, and Class E shares. The performance participation interest will be paid, at the Adviser's election, in cash, Class E shares, Class E units of the Operating Partnership or any combination thereof. During the three months ended March 31, 2024, the Company accrued $ 0.2 million of performance participation allocation. There was no performance participation allocation during the three months ended March 31, 2023. The Company may retain certain of the Adviser's affiliates for necessary services relating to the Company's investments or its operations, including but not limited to any accounting and audit services (including valuation support services), account management services, administrative services, data management services, information technology services, finance/budget services, legal services, operational services, risk management services, tax services, treasury services, construction, special servicing, leasing, development, coordinating closing and post-closing procedures, property oversight, statutory services, and other property management services, as well as services related to mortgage servicing, group purchasing, healthcare, consulting/brokerage, capital markets/credit origination, broker-dealer services, underwriting, placing, syndicating, structuring, arranging, debt advisory services and other similar services, loan servicing, property, title and/or other types of insurance, title agency services, management consulting and other similar operational matters. Any fees paid to the Adviser's affiliates for any such services will not reduce the management fee or performance participation allocation. Any such arrangements will be at market terms and rates. The Company has engaged Nations Land Services, L.P. ("Nations"), a title agent company in which Apollo has a majority ownership. Nations acts as a title agent in facilitating and issuing title insurance in connection with investments by the Company, affiliates, and related parties, and third parties. Apollo receives distributions from Nations in connection with investments by the Company based on its equity interest in Nations. In each case, there will be no related offset to the Company. During the three months ended March 31, 2024, the Company did not incur any expenses related to Nations. The Dealer Manager serves as the dealer manager for the Offering. The Dealer Manager is a registered broker-dealer affiliated with the Adviser. The Company entered into an agreement (the "Dealer Manager Agreement") with the Dealer Manager in connection with the Offering. Subject to the terms of the Dealer Manager Agreement, the Company's obligations to pay stockholder servicing fees with respect to the Class S shares, Class D shares, Class F-S shares, and Class F-D shares sold in the Offering shall survive until such shares are no longer outstanding (including because such shares have converted into Class I shares or Class F-I shares). The Dealer Manager is entitled to receive selling commissions of up to 3.0 %, and dealer manager fees of up to 0.5 %, of the transaction price of each Class S share and Class F-S share sold in the primary offering; however, such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5 % of the transaction price. Participating broker-dealers are third-party broker-dealers engaged by the Dealer Manager to participate in the distribution of shares of the Company's common stock. The Dealer Manager is also entitled to receive selling commissions of up to 1.5 % of the transaction price of each Class D share and Class F-D share sold in the primary offering. The Dealer Manager also receives a stockholder servicing fee of 0.85 % and 0.25 % per annum of the aggregate NAV of the Company's outstanding Class S and F-S shares and Class D and F-D shares, respectively. The Dealer Manager has entered into agreements with selected dealers that agree to distribute the Company's shares in the Offering, which will provide, among other things, for the reallowance of the full amount of the selling commissions and stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class S share, Class D share, Class F-S share, or Class F-D share held in a stockholder's account at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such shares would exceed, in the aggregate, 8.75 % of the gross proceeds from the sale of such share. The Company will accrue the cost of the stockholder servicing fee as an offering cost at the time each Class S share, Class F-S share, Class D share, and Class F-D share is sold during the primary offering. There will no t be a stockholder servicing fee, upfront selling commission or dealer manager fee with respect to Class I shares, Class F-I shares, Class A-I shares, Class A-II shares, and Class A-III shares. From time to time, the Company makes co-investments in commercial mortgage loans alongside Apollo affiliates. As of March 31, 2024, all of the Company's investments in commercial mortgage loans were pari-passu co-investments with Apollo affiliates. The Company may also offer Class E shares, which will only be available to certain of Apollo's affiliates and employees, in one or more private placements. These shares are not being offered to the public pursuant to the Offering and will no t incur any upfront selling costs, ongoing servicing costs, management fee or performance participation allocation. On February 18, 2022, the Company was capitalized with a $ 0.2 million investment by Apollo ARIS Holdings LLC, an indirect wholly-owned subsidiary of Apollo, in exchange for 10,000 shares of Class I common stock. On November 11, 2022, 10,000 shares of Class I common stock held by Apollo ARIS Holdings LLC were exchanged for 10,000 shares of Class F-I common stock. Apollo ARIS Holdings LLC has elected to reinvest the dividends declared on its shares, which has corresponded to the issuance of 115 additional Class F-I shares in lieu of cash for the dividends paid during the three months ended March 31, 2024. On November 29, 2022, the Company and the Operating Partnership entered into a subscription agreement with an affiliate of Apollo to issue 5,000,000 Class A-I units of the Operating Partnership for the aggregate consideration of $ 100.0 million . In May 2023 such affiliate of Apollo elected to reinvest its dividends. In connection with such dividend reinvestment, the Company issued 56,702 Class A-I units of the Operating Partnership in lieu of cash for the dividends paid during the three months ended March 31, 2024. Due to Affiliates The following table details the Company's expenses that are due to its Adviser: March 31, 2024 December 31, 2023 Organization and offering $ 7,917 $ 7,906 General and administrative 7,064 6,895 Management fee payable 529 468 Accrued performance participation allocation 203 562 Total $ 15,713 $ 15,831 Organization and Offering Expenses The Adviser has advanced $ 7.9 million of organization and offering expenses (including legal, accounting, and other expenses attributable to the Company's organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) on behalf of the Company through March 31, 2024. The Adviser advanced the Company's organization and offering expenses on behalf of the Company through December 22, 2023, the first anniversary of the escrow break for the Offering. The Company will reimburse the Adviser for all such advanced costs ratably over a 60 month period beginning on December 22, 2024. General and Administrative Expenses The Adviser has agreed that it and/or its affiliates will advance certain general and administrative expenses on behalf of the Company through December 22, 2023, the first anniversary of the escrow break for the Offering. The Adviser has advanced $ 7.1 million of general and administrative expenses on the Company's behalf as of March 31, 2024. The Company will reimburse the Adviser for all such advanced costs ratably over a 60 month period beginning on December 22, 2024. Management Fee Payable The Adviser is entitled to a management fee equal to 1.25 % of NAV per annum, payable monthly on Class S shares, Class D shares, and Class I shares. The Adviser will be paid a management fee equal to 1.0 % of NAV per annum, payable monthly on Class F-S shares, Class F-D shares, Class F-I shares, and Class A-I shares. The Adviser will be paid a management fee equal to 1.0 % of NAV for Class A-II shares per annum payable monthly; and provided that, for the period of April 1, 2023 through September 1, 2026, this management fee will be reduced to 0.92 % of NAV for Class A-II shares per annum payable monthly. The Adviser will be paid a management fee equal to 1.0 % of NAV for Class A-III shares per annum payable monthly; and provided that, for the period of April 1, 2023 through January 2, 2027, this management fee will be reduced to 0.85 % of NAV for Class A-III shares per annum payable monthly. The management fee will be paid, at the Adviser's election, in cash, Class E shares, Class E units of the Operating Partnership or any combination thereof. During the three months ended March 31, 2024, the Company incurred $ 1.5 million of management fees. During the three months ended March 31, 2024, the Company issued 56,577 Class E shares and 12,885 Class E units to the Adviser as payment for its management fee. The shares and units issued to the Adviser for payment of the management fee were issued at the applicable NAV per share/unit at the end of each month for which the fee was earned, in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Adviser did not submit any repurchase requests for any shares or units of the Operating Partnership previously issued as payment for the management fee during the three months ended March 31, 2024. The Adviser has elected to reinvest the dividends declared on the shares and units of the Operating Partnership issued for its management fee. In connection with such dividend reinvestment, the Company issued (i) 1,621 Class E shares and (ii) 690 Class E units to the Adviser in lieu of cash for the dividends paid during the three months ended March 31, 2024 . There were no dividends declared during the three months ended March 31, 2023. |
Economic Dependency
Economic Dependency | 3 Months Ended |
Mar. 31, 2024 | |
Economic Dependency [Abstract] | |
Economic Dependency | Note 12 - Economic Dependency The Company will be dependent on the Adviser and its affiliates for certain services that are essential to it, including the sale of the Company's shares of common stock, acquisition and disposition decisions, and certain other responsibilities. In the event that the Adviser and its affiliates are unable or unwilling to provide such services, the Company would be required to find alternative service providers. The Company may retain third parties, including certain of the Adviser's affiliates, for necessary services relating to its investments or operations. |
Share Based Payments
Share Based Payments | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share Based Payments | Note 13 - Share Based Payments The Company's board of directors approved the Apollo Realty Income Solutions, Inc. Amended and Restated 2022 Equity Incentive Plan (the "2022 Equity Incentive Plan"), pursuant to which, shares of the Company's common stock may be granted from time to time to directors and officers of the Company and employees of the Adviser. The 2022 Equity Incentive Plan allows for up to 10,000,000 shares of the Company's common stock to be issued. The following table summarizes the grants, vesting and forfeitures of restricted common stock during the three months ended March 31, 2024: Type Restricted Stock Grant Date Fair Value ($ in thousands) Outstanding as of December 31, 2023 4,948 $ 100 Granted — — Vested — — Forfeiture — — Outstanding as of March 31, 2024 4,948 100 Restricted Stock Grants No shares were issued pursuant to the 2022 Equity Incentive Plan during the three months ended March 31, 2024. During the three months ended March 31, 2024, the Company recorded $ 25 thousand of restricted stock amortization as general and administrative expenses in the condensed consolidated statement of operations. There is no unrecognized compensation cost as of March 31, 2024 . |
Equity
Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Equity | Note 14 - Equity Authorized Capital The Company is authorized to issue preferred stock and ten classes of common stock consisting of Class S shares, Class D shares, Class I shares, Class F-S shares, Class F-D shares, Class F-I shares, Class A-I shares, Class A-II shares, Class A-III shares, and Class E shares. The differences among the classes of common stock relate to upfront selling commissions, dealer manager fees, and ongoing stockholder servicing fees, as well as varying management and performance participation allocations. See "Note 11 - Related Party Transactions" for additional information. As of March 31, 2024 and December 31, 2023, the Company had the following classes of common stock authorized, issued and outstanding: March 31, 2024 December 31, 2023 Classification Shares Authorized Shares Issued and Outstanding Shares Authorized Shares Issued and Outstanding Preferred Stock, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class S Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class D Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class I Shares, $ 0.01 par value per share 100,000,000 201,777 100,000,000 — Class F-S Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class F-D Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class F-I Shares, $ 0.01 par value per share 100,000,000 5,415,954 100,000,000 4,820,377 Class A-I Shares, $ 0.01 par value per share 100,000,000 6,363,747 100,000,000 17,016,652 Class A-II Shares, $ 0.01 par value per share 100,000,000 14,171,864 100,000,000 — Class A-III Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class E Shares, $ 0.01 par value per share 100,000,000 180,693 100,000,000 105,707 Total 1,100,000,000 26,334,035 1,100,000,000 21,942,736 Common Stock The following table details the movement in the Company's outstanding shares of common stock: Class I Class F-I Class A-I Class A-II Class E Beginning balance, December 31, 2023 — 4,820,377 17,016,652 — 105,707 Common stock issued 201,505 594,229 1,787,026 1,671,686 73,366 Repurchase of common stock — ( 2,476 ) — ( 5,000 ) — Dividend reinvestment 272 3,824 37,473 2,189 1,620 Share class transfer — — ( 12,477,404 ) 12,502,989 — Ending balance, March 31, 2024 201,777 5,415,954 6,363,747 14,171,864 180,693 On January 3, 2024 (the "Exchange Date"), approximately 12,477,404 Class A-I shares were exchanged for 12,502,989 Class A-II shares at an exchange rate based on the NAV per share for the Company's Class A-I shares and the Company's total NAV per share as of the Exchange Date. Distributions The Company generally intends to distribute substantially all of its taxable income to its stockholders each year to comply with the REIT provisions of the Code, as amended. Taxable income does not necessarily equal net income calculated in accordance with GAAP. Each class of common stock receives the same gross distribution per share. The net distribution per share varies for each share class based on differing fee structures. Additionally net distributions will vary based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor. The following table details the aggregate distributions declared for each applicable class of common stock: Three Months Ended March 31, 2024 Class I Class F-I Class A-I Class A-II Class E Aggregate gross distribution declared per share of common stock $ 0.2041 $ 0.3013 $ 0.3013 $ 0.3013 $ 0.3013 Management fee per share of common stock ( 0.0436 ) ( 0.0518 ) ( 0.0524 ) ( 0.0482 ) — Net distribution declared per share of common stock $ 0.1605 $ 0.2495 $ 0.2489 $ 0.2531 $ 0.3013 There were no distributions for the three months ended March 31, 2023. Repurchases During the three months ended March 31, 2024 the Company repurchased 5,000 Class A-II shares and 2,476 Class F-I shares pursuant to the Company's share repurchase plan for an aggregate amount of $ 0.2 million . The Company had no unfulfilled repurchase requests as of March 31, 2024. Redeemable Non-Controlling Interest In connection with its management fee, the Adviser has elected to receive Class E units. See Note 11 - Related Party Transactions for additional information on the Advisers interest. In November 2023, the Limited Partnership Agreement was updated to enable the Adviser to redeem their Class E units for Class E shares or cash at its election. As of that date the Company has classified these Class E units as redeemable non-controlling interest in mezzanine equity on the Company's consolidated balance sheet. 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 Operating Partnership units at the end of each measurement period. The following table details the redeemable non-controlling interest activity related to the Adviser for the three months ended March 31, 2024 ($ in thousands): Adviser Balance at December 31, 2023 $ 967 Settlement of management fees 269 Settlement of performance participation allocation 562 GAAP income allocation 31 Distributions ( 25 ) Reinvestment of distributions 20 Fair value allocation - Balance at March 31, 2024 $ 1,824 As of March 31, 2024 the carrying value of the redeemable non-controlling interest approximated the fair value. Non-Controlling Interests - Operating Partnership Unitholders Operating Partnership units are subject to the same fees as the corresponding classes of common stock and do not have any preferential rights relative to the Company's interest in the Operating Partnership. On December 22, 2022, the Company issued 5,000,000 Class A-I units of the Operating Partnership to an affiliate of Apollo for the aggregate consideration of $ 100.0 million in a private placement. During the three months ended March 31, 2024 , the Company issued 12,885 Class E units to the Adviser for the management fee earned on the Operating Partnership units issued to an affiliate of Apollo, mentioned above. During the three months ended March 31, 2024, the Company issued 26,977 Class E units to the Special Limited Partner for performance participation allocation earned in 2023. Currently all Operating Partnership unitholders have elected to reinvest their dividends. In connection with such dividend reinvestment, the Company issued 56,702 Class A-I and 942 Class E units of the Operating Partnership in lieu of cash for the dividends paid during the three months ended March 31, 2024. Non-Controlling Interests Attributable to Preferred Shareholders A subsidiary of the Company intends to elect to be taxed as a REIT for U.S. federal income tax purposes. This subsidiary has 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 face amount of $ 1,000 and carry a 12.0 % annual dividend payable annually. As of March 31, 2024 , this subsidiary had $ 125,000 of preferred non-voting shares outstanding. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 15 - Earnings per Share The Company's net income (loss) and weighted average number of shares outstanding for the three months ended March 31, 2024, and the three months ended March 31, 2023, consists of the following (in thousands except per share information): Basic and Diluted Net Loss per Share Attributable to ARIS Stockholders Three Months Ended March 31, 2024 2023 Numerator: Net income (loss) attributable to ARIS stockholders $ 7,939 $ 335 Denominator: Basic and diluted weighted average shares of common stock outstanding 24,902 3,249 Basic and diluted net income (loss) per share of common stock $ 0.32 $ 0.10 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16 - 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 March 31, 2024 and December 31, 2023, the Company was not subject to any material litigation nor is the Company aware of any material litigation threatened against it. As of March 31, 2024, the Company had $ 246.1 million of unfunded commitments related to its investments in real estate debt. The timing and amounts of fundings are uncertain as these commitments relate to loans for construction costs, capital expenditures, leasing costs, interest and carry costs, among others. As such, the timing and amounts of future fundings depend on the progress and performance of the underlying assets of the Company's investments in real estate debt. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 17 - Segment Reporting The Company operates in two reportable segments: Real Estate and Real Estate Debt. The Company allocates resources and evaluates results based off of 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 total assets by segment as of March 31, 2024 and December 31, 2023 ($ in thousands): March 31, 2024 December 31, 2023 Real Estate $ 182,382 $ 183,492 Real Estate Debt 477,035 330,974 Other Corporate 46,477 95,205 Total Assets $ 705,894 $ 609,671 The following table sets forth the financial results by segment for the three months ended March 31, 2024 ($ in thousands): Real Estate Real Estate Debt Other Corporate Total Revenue — Rental revenue $ 3,663 $ — $ — $ 3,663 Total revenues 3,663 — — 3,663 Expenses Rental property operating ( 573 ) — — ( 573 ) Interest expense, net ( 567 ) ( 203 ) — ( 770 ) Total segment expenses ( 1,140 ) ( 203 ) — ( 1,343 ) Income from investments in real estate debt — 11,114 — 11,114 Segment net operating income $ 2,523 $ 10,911 $ — $ 13,434 Depreciation and amortization $ ( 1,455 ) $ — $ — $ ( 1,455 ) General and administrative ( 1,537 ) Management fee ( 1,511 ) Performance participation allocation ( 203 ) Other income 908 Net income $ 9,636 Net income attributable to non-controlling interests in the Operating Partnership $ 1,697 Net income attributable to ARIS stockholders $ 7,939 The following table sets forth the financial results by segment for the three months ended March 31, 2023 ($ in thousands): Real Estate Real Estate Debt Other Corporate Total Revenue — Rental revenue $ 993 $ — $ — $ 993 Total revenues 993 — — 993 Expenses Rental property operating ( 92 ) — — ( 92 ) Total segment expenses ( 92 ) — — ( 92 ) Income from investments in real estate debt — 735 — 735 Segment net operating income $ 901 $ 735 $ — $ 1,636 Depreciation and amortization $ ( 283 ) $ — $ — $ ( 283 ) General and administrative ( 1,105 ) Management fee ( 399 ) Other income, net 834 Net income $ 683 Net income attributable to non-controlling interests in the Operating Partnership $ 348 Net income attributable to ARIS stockholders $ 335 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 - Subsequent Events Subsequent to the three months ended March 31, 2024, the following events took place: Investment Activity: The Company funded approximately $19.5 million for previously closed commercial mortgage loans. Financing Activity: The Company drew approximately $ 35.0 million pursuant to the JPMorgan Repurchase Agreement. Equity Activity: The Company issued Class F-I shares to clients of a certain financial intermediary in excess of $ 100.0 million, the minimum Class A-I subscription requirement. On April 2, 2024 (the "Second Exchange Date"), the Company exchanged approximately 5,225,608 Class F-I shares for approximately 5,155,772 Class A-I shares at an exchange rate based on the NAV per share for its Class F-I shares and Class A-I shares as of the Second Exchange Date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's financial position, results of operations and cash flows have been included. The Company's results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any other future period. |
Principles of Consolidation | Principles of Consolidation The Company consolidates all entities that it controls through either majority ownership or voting rights. In addition, the Company consolidates all variable interest entities ("VIEs") of which it is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as the primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE's economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. The Operating Partnership is considered to be a VIE. The Company consolidates this entity as it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans. The accompanying condensed consolidated financial statements include the accounts of the Company and the Company's subsidiary partnerships. Third party unitholders of Operating Partnership's share of the assets, liabilities and operations of the Operating Partnership is included in non-controlling interest as equity of the Company. The noncontrolling interest is generally computed based on third party unit-holders ownership percentage. Non-controlling interests in the Operating Partnership represent Operating Partnership units that are held by third parties, including the Adviser,and Operating Partnership units issued to the Adviser under an advisory agreement by and among the Company, the Operating Partnership and the Adviser (as amended, restated or otherwise modified from time to time, the "Advisory Agreement"). Operating Partnership units may be redeemed for cash, or at the Company's option, for shares of common stock of the Company on a one-for-one basis, unless those units are held by the Adviser or Special Limited Partner, in which case such Operating Partnership units shall be redeemed for shares of common stock of the Company or cash, at the holder's election. Since the number of shares of common stock outstanding is equal to the number of Operating Partnership units owned by the Company, the redemption value of each common unit of the Operating Partnership is equal to the market value of each share of common stock and distributions paid to each unitholder is equivalent to dividends paid to common stockholders, per respective share class. |
Cash and Cash Equivalents | 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. As of March 31, 2024 and December 31, 2023 , the Company held $ 46.5 million and $ 95.2 million of cash and cash equivalents, respectively. |
Restricted Cash | Restricted Cash Restricted cash represents cash held in a deposit account controlled by a third party. As of March 31, 2024 , the Company held $ 11 thousand in restricted cash. The Company did no t have any restricted cash as of December 31, 2023 . |
Fair Value Measurements | Fair Value Measurements 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). The Company uses 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 actively 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. As of March 31, 2024, the Company's investments in real estate debt consisted of commercial mortgage loans secured by real estate assets and real estate-related securities. The Company has elected the fair value option ("FVO") for investments in commercial mortgage loans secured by real estate assets as the Company believes fair value provides a more accurate depiction of the value of these assets. During the three months ended March 31, 2024, real-estate related securities met the criteria to be classified as trading securities under ASC 320, "Investments". The Company generally determines the fair value of its investments in real estate debt by utilizing third-party pricing service providers whenever available. The Company's investments in commercial mortgage loans are unlikely to have readily available market quotations. In such cases, the Company will generally determine the initial value based on the acquisition price of such investment if acquired by the Company or the par value of such investment if originated by the Company. Following the initial measurement, the Company will determine fair value by utilizing or reviewing certain of the following (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield or loan-to-value ratios, and (vii) borrower financial condition and performance. The inputs used in determining the fair value of the Company's investments in commercial mortgage loans are considered Level 3. The fair value of real estate-related securities may be determined by using third-party pricing service providers or broker-dealer quotes, reported trades or valuation estimates from their internal pricing models to determine the reported price. The inputs used in determining the fair value of the Company's investments in real estate-related securities are considered Level 2. The following table details the Company's assets measured at fair value on a recurring basis ($ in thousands): March 31, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Investments in real estate debt $ — $ 24,329 $ 449,911 $ 474,240 $ — $ 25,321 $ 302,868 $ 328,189 Total $ — $ 24,329 $ 449,911 $ 474,240 $ — $ 25,321 $ 302,868 $ 328,189 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 Debt Balance as of December 31, 2023 $ 302,868 Originations, acquisitions, and add on fundings 147,043 Amortization of discount/premium 67 Included in net income: Unrealized gain/(loss) from investments in real estate debt ( 67 ) Balance as of March 31, 2024 $ 449,911 The following table contains the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands): March 31, 2024 Fair Value Valuation Technique Unobservable Inputs Rate Range Impact to Valuation from an Increase in Input Assets: Investments in real estate debt $ 449,911 Discounted cash flow Discount rate 8.00 %- 12.75 % Decrease December 31, 2023 Fair Value Valuation Technique Unobservable Inputs Rate Range Impact to Valuation from an Increase in Input Assets: Investments in real estate debt $ 302,868 Discounted cash flow Discount rate 8.41 %- 10.00 % Decrease |
Investment Property and Lease Intangibles | Investment Property and Lease Intangibles Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the operations of acquired properties will be included in the Company's results of operations from their respective dates of acquisition. The Company will utilize a report from an independent appraiser to record the purchase of identifiable assets acquired and liabilities assumed such as land, buildings and improvements, equipment and identifiable intangible assets and liabilities such as amounts related to in-place leases, acquired above- and below-market leases, tenant relationships, asset retirement obligations and mortgage loans payable. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals. The estimated fair value of acquired in-place leases is the costs the Company would have incurred to lease the properties to the occupancy level of the properties 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. Additionally, the Company evaluates the time period over which such occupancy levels would be achieved. 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 as of the date of acquisition are amortized over the remaining lease terms. The amortization of in-place lease intangibles is recorded in depreciation and amortization expense on the Company’s condensed consolidated statements of operations. Acquired above- and below-market lease values are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the in-place leases and the Company's estimate of fair market value lease rates for the corresponding in-place leases. The capitalized above- and below-market lease values are amortized as adjustments to rental revenue over the remaining terms of the respective leases, which include periods covered by bargain renewal options, if applicable. Should a tenant terminate its lease, the unamortized portion of the in-place lease value will be charged to amortization expense and the unamortized portion of out-of-market lease value will be charged to rental revenue. 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 Buildings 39 - 50 years Buildings and land improvements 10 - 15 years Lease intangibles and leasehold improvements Lease term Significant improvements to properties are capitalized, whereas, repairs and maintenance expenses at the Company's properties are expensed as incurred and included in real estate operating expense on the Company’s condensed consolidated statements of operations. When an asset is sold, the cost and related accumulated depreciation are removed from the accounts with the resulting gain or loss reflected in the Company's results of operations for the period. Real estate assets will be evaluated for impairment on a quarterly basis. The Company will consider the following factors when performing its impairment analysis: (1) management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) its ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon its estimate of a capitalization rate and discount rate. As of March 31, 2024 , the Company had not recorded any impairments on its investments in real estate. |
Investments in Real Estate Debt | Investments in Real Estate Debt The Company's investments in real estate debt consist of commercial mortgage loans secured by real estate and real estate-related securities. The Company has elected the FVO for its commercial mortgage loans secured by real estate. During the three months ended March 31, 2024, real-estate related securities met the criteria to be classified as trading securities under ASC 320, "Investments". The unrealized gain or loss associated with holding real estate debt investments at fair value are recorded as a component of income from investments in real estate debt on the Company's condensed consolidated statement of operations. For the three months ended March 31, 2024 the Company recorded $ 0.2 million of unrealized gain on its investments in real estate debt. Interest income from the Company’s investments in real estate debt is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of premiums and discounts associated with these investments is deferred and recorded over the term of the investment as an adjustment to yield. Upfront costs and fees related to items for which the FVO is elected are recognized in earnings as incurred and are not deferred. Interest income, upfront costs and fees are recorded as components of income from investments in real estate debt on the Company’s condensed consolidated statements of operations. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred in connection with financings are capitalized and amortized over the respective financing terms and are reflected on the accompanying condensed consolidated statement of operations as a component of interest expense. |
Revenue Recognition | Revenue Recognition The Company's rental revenue consists of base rent and tenant reimbursement income arising from tenant leases at the Company's properties under operating leases. Base rent is recognized on a straight-line basis over the life of the lease, including any rent step ups or abatements. The Company accounts for base rental revenue (lease component) and common area expense reimbursement (non-lease component) as one lease component under Accounting Standards Codification ("ASC") 842, "Leases". Additionally, the Company also includes the non-components of its leases, such as the reimbursement of utilities, insurance and real estate taxes, within this lease component. The Company evaluates the collectability of receivables related to rental revenue on an individual lease basis. Management exercises judgment in assessing collectability and 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. However any future cash receipt on leases that are deemed uncollectible will be recorded as income on a cash basis. Commercial mortgage loans that are significantly past due may be placed on non-accrual status if we determine it is probable that we will not collect all payments which are contractually due. When a loan is placed on non-accrual status, interest is only recorded as interest income when it is received. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due. |
Income Taxes | Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Code commencing with its taxable year ended December 31, 2023 . If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 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 U.S. federal income and excise taxes on its undistributed income. |
Earnings per Share of Common Stock | Earnings per Share of Common Stock Basic earnings per share of common stock is computed by dividing net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss for the period by the weighted average number of shares of common stock and common stock equivalents outstanding (unless their effect is anti-dilutive) for the period. As there were no common stock equivalents outstanding during the three months ended March 31, 2024 and 2023, the calculation of basic and diluted earnings per share are equal. |
Organization and Offering Expenses | Organization and Offering Expenses The Adviser has agreed that it and/or its affiliates will advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the Company's organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) through December 22, 2023, the first anniversary of the escrow break for the Offering. The Company will reimburse the Adviser and its affiliates for all such advanced expenses ratably over a 60-month period beginning on December 22, 2024. Organization costs are expensed as incurred and recorded as expenses on the Company's condensed consolidated statement of operations and offering costs are charged to equity as such amounts are incurred. As of March 31, 2024 and December 31, 2023, the Adviser and its affiliates had incurred organization and offering costs on the Company's behalf of $ 7.9 million , consisting of offering costs of $ 6.4 million and organization costs of $ 1.5 million . Such costs became the Company's liability on December 22, 2022, the date on which the proceeds from the Offering were released from escrow. These organization and offering costs are recorded as a component of due to affiliates on the Company's condensed consolidated balance sheet. Apollo Global Securities, LLC (the "Dealer Manager"), a registered broker-dealer affiliated with the Adviser, serves as the dealer manager for the Offering. The Dealer Manager is entitled to receive selling commissions and dealer manager fees based on the transaction price of each applicable class of shares sold in the primary offering. The Dealer Manager is also entitled to receive a stockholder servicing fee based on the aggregate NAV of the Company’s outstanding Class S shares, Class D shares, Class F-S shares and Class F-D shares. The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2024: Class S Shares Class D Shares Class I Shares Class F-S Shares Class F-D Shares Class F-I Shares Class A-I Shares Class A-II Shares Class A-III Shares Selling commissions and dealer manager fees (% of transaction price) up to 3.5 % up to 1.5 % — up to 3.5 % up to 1.5 % — — — — Stockholder servicing fee (% of NAV) 0.85 % 0.25 % — 0.85 % 0.25 % — — — — For Class S shares and Class F-S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3 % and dealer manager fees of up to 0.5 % of the transaction price; however, such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5 % of the transaction price. For Class D shares and Class F-D shares sold in the primary offering, investors will pay upfront selling commissions of up to 1.5 % of the transaction price. The Dealer Manager, as the dealer manager for the Offering, is entitled to receive stockholder servicing fees of 0.85 % per annum of the aggregate NAV for Class S shares and Class F-S shares. For Class D shares and Class F-D shares, a charge of 0.25 % per annum of the aggregate NAV will be charged for stockholder servicing fees. The Dealer Manager has entered into agreements with selected dealers that agree to distribute the Company's shares in the Offering, which will provide, among other things, for the reallowance of the full amount of the selling commissions and stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class S share, Class D share, Class F-S share, or Class F-D share held in a stockholder's account at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such shares would exceed, in the aggregate, 8.75 % of the gross proceeds from the sale of such share. There will not be a stockholder servicing fee, upfront selling commission or dealer manager fee with respect to Class I shares, Class F-I shares, Class A-I shares, Class A-II shares, and Class A-III shares. The Company will accrue the cost of the stockholder servicing fee as an offering cost at the time of each Class S share, Class D share, Class F-S share, and Class F-D share is sold during the primary offering. As of March 31, 2024 , the Company had not sold any of those share classes and as such has not accrued for any stockholder servicing fees. |
Share Based Payments | Share Based Payments The Company accounts for share-based compensation to its independent directors, to the Adviser and to employees of the Adviser and its affiliates using the fair value-based methodology prescribed by GAAP. Compensation cost related to restricted common stock issued is measured at its fair value at the grant date and amortized into expense over the vesting period on a straight-line basis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provide new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods with fiscal years beginning after December 15, 2024. ASU 2023-07 is to be adopted retrospectively to all prior periods presented. The Company is currently assessing the impact this guidance will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company is currently assessing the impact of this guidance, however, it does not expect a material impact to its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Assets Measured at Fair Value on a Recurring Basis | The following table details the Company's assets measured at fair value on a recurring basis ($ in thousands): March 31, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Investments in real estate debt $ — $ 24,329 $ 449,911 $ 474,240 $ — $ 25,321 $ 302,868 $ 328,189 Total $ — $ 24,329 $ 449,911 $ 474,240 $ — $ 25,321 $ 302,868 $ 328,189 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 Debt Balance as of December 31, 2023 $ 302,868 Originations, acquisitions, and add on fundings 147,043 Amortization of discount/premium 67 Included in net income: Unrealized gain/(loss) from investments in real estate debt ( 67 ) Balance as of March 31, 2024 $ 449,911 |
Summary of Quantitative Inputs and Assumptions Used for items Categorized in Level 3 of Fair Value Hierarchy | The following table contains the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands): March 31, 2024 Fair Value Valuation Technique Unobservable Inputs Rate Range Impact to Valuation from an Increase in Input Assets: Investments in real estate debt $ 449,911 Discounted cash flow Discount rate 8.00 %- 12.75 % Decrease December 31, 2023 Fair Value Valuation Technique Unobservable Inputs Rate Range Impact to Valuation from an Increase in Input Assets: Investments in real estate debt $ 302,868 Discounted cash flow Discount rate 8.41 %- 10.00 % Decrease |
Summary of Investments in Real estate Stated at Cost and Generally Depreciated on Straight-Line Basis over Estimated Useful Lives of Assets | 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 Buildings 39 - 50 years Buildings and land improvements 10 - 15 years Lease intangibles and leasehold improvements Lease term |
Summary of Selling Commissions, Dealer Manager Fees, and Stockholder Servicing Fees for each Applicable Share Class | The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2024: Class S Shares Class D Shares Class I Shares Class F-S Shares Class F-D Shares Class F-I Shares Class A-I Shares Class A-II Shares Class A-III Shares Selling commissions and dealer manager fees (% of transaction price) up to 3.5 % up to 1.5 % — up to 3.5 % up to 1.5 % — — — — Stockholder servicing fee (% of NAV) 0.85 % 0.25 % — 0.85 % 0.25 % — — — — |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate Investments, Net [Abstract] | |
Summary of Investments in Real Estate, Net | Investments in real estate, net consisted of the following ($ in thousands): March 31, 2024 December 31, 2023 Building and building improvements $ 132,792 $ 132,792 Land and land improvements 22,707 22,707 Tenant improvements 621 621 Total 156,120 156,120 Accumulated depreciation ( 2,506 ) ( 1,607 ) Investment in real estate, net $ 153,614 $ 154,513 |
Investments in Real Estate De_2
Investments in Real Estate Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate Investments, Net [Abstract] | |
Summary of Companys Investments in Real Estate Debt | The following table details the Company's investments in real estate debt as of March 31, 2024 ($ in thousands): March 31, 2024 Type of Investment in Real Estate Debt Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value Commercial real estate loan 13 9.0 % March 2028 $ 399,911 $ 399,777 $ 399,911 Mezzanine loan 1 10.0 % September 2026 50,000 50,000 50,000 Real estate-related securities 14 7.0 % May 2037 24,457 24,104 24,329 Total investments in real estate debt 28 9.0 % July 2028 $ 474,368 $ 473,881 $ 474,240 December 31, 2023 Type of Investment in Real Estate Debt Number of Positions Weighted Average Coupon (1) Weighted Average Maturity Date (2) Face Amount Cost Basis Fair Value Commercial real estate loan 11 9.1 % September 2027 $ 252,868 $ 252,668 $ 252,868 Mezzanine loan 1 10.0 % September 2026 50,000 50,000 50,000 Real estate-related securities 14 7.0 % May 2037 25,811 25,314 25,321 Total investments in real estate debt 26 9.3 % April 2028 $ 328,679 $ 327,983 $ 328,189 ____________ (1) Based on applicable benchmark rates as of March 31, 2024. (2) Weighted average maturity date is based on fully extended maturity. |
Schedule of Mortgage Loans on Real Estate | The table below details the type of properties securing the loans in the Company's portfolio at the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Property Type Fair Value % of Portfolio Fair Value % of Portfolio Multifamily $ 176,624 39.3 % $ 110,670 36.6 % Industrial 96,056 21.3 % 91,292 30.1 % Hotel 93,865 20.9 % 48,795 16.1 % Data Center 63,131 14.0 % 40,651 13.4 % Self-Storage 17,659 3.9 % 8,884 2.9 % Other (1) 2,576 0.6 % 2,576 0.9 % Total $ 449,911 100.0 % $ 302,868 100.0 % (1) Other property types represents productions studio. The table below details the geographic distribution of the properties securing the loans in the Company's portfolio at the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Geographic Location Fair Value % of Portfolio Fair Value % of Portfolio Northeast $ 190,998 42.5 % $ 169,829 56.1 % Mid-Atlantic 66,647 14.8 % 44,166 14.6 % West 132,680 29.5 % 32,841 10.8 % Southeast 27,582 6.1 % 27,582 9.1 % Southwest 18,400 4.1 % 18,400 6.1 % Midwest 13,604 3.0 % 10,050 3.3 % Total $ 449,911 100.0 % $ 302,868 100.0 % |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Assets [Abstract] | |
Summary of Components of Other Assets | The following table details the components of the Company's other assets at the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Real estate intangibles, net $ 25,172 $ 25,734 Straight-line rent receivable 1,812 1,425 Interest receivable 2,794 1,727 Deferred financing costs, net 853 1,057 Other 932 1,821 Total $ 31,563 $ 31,764 |
Intangibles (Tables)
Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Gross Carrying Amount and Accumulated Amortization | The gross carrying amount and accumulated amortization of the Company's intangible assets consisted of the following as of the dates indicated ($ in thousands): March 31, 2024 December 31, 2023 Intangible assets: In-place lease intangibles $ 26,363 $ 26,363 Above-market lease intangibles 325 325 Total intangible assets 26,688 26,688 Accumulated amortization: In-place lease amortization ( 1,492 ) ( 937 ) Above-market lease amortization ( 24 ) ( 17 ) Total real estate intangible assets, net $ 25,172 $ 25,734 Intangible liabilities Below-market lease intangibles $ ( 10,855 ) $ ( 10,855 ) Total intangible liabilities ( 10,855 ) ( 10,855 ) Accumulated amortization: Below-market lease amortization 423 226 Total real estate intangible liabilities, net $ ( 10,432 ) $ ( 10,629 ) |
Summary of Estimated Future Amortization | The estimated future amortization on the Company's intangibles for each of the next five years and thereafter as of March 31, 2024, is as follows ($ in thousands): In-Place Lease Intangibles Above-Market Intangibles Below-Market Intangibles 2024 (remaining) 1,599 22 ( 578 ) 2025 2,126 29 ( 775 ) 2026 2,126 29 ( 775 ) 2027 2,126 29 ( 775 ) 2028 2,093 29 ( 756 ) Thereafter 14,801 163 ( 6,773 ) $ 24,871 $ 301 $ ( 10,432 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Summary of Fixed and Variable Components of Company's Operating Leases | The following table summarizes the fixed and variable components of the Company's operating leases ($ in thousands): Three Months Ended March 31, 2024 2023 Fixed lease payments $ 3,070 $ 904 Variable lease payments 403 91 Lease Revenue $ 3,473 $ 995 Above- and below-market lease amortization 190 ( 2 ) Rental Revenue $ 3,663 $ 993 |
Summary of Undiscounted Future Minimum Rents Company Expects to Receive for its Industrial Property | The following table presents the undiscounted future minimum rents the Company expects to receive for its industrial and retail properties as of March 31, 2024 ($ in thousands): Year Future Minimum Rents 2024 $ 8,117 2025 10,951 2026 11,214 2027 11,531 2028 11,802 Thereafter 84,314 Total $ 137,929 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Liabilities [Abstract] | |
Shedule Of Company's Other Liabilities | The following table details the components of the Company's other liabilities at the date indicated ($ in thousands): March 31, 2024 December 31, 2023 Below market lease intangibles, net $ 10,432 $ 10,629 Distribution payable 2,846 1,900 Accounts payable and accrued expenses 2,935 1,816 Real estate taxes payable 285 61 Total $ 16,498 $ 14,406 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Summary of Expenses | The following table details the Company's expenses that are due to its Adviser: March 31, 2024 December 31, 2023 Organization and offering $ 7,917 $ 7,906 General and administrative 7,064 6,895 Management fee payable 529 468 Accrued performance participation allocation 203 562 Total $ 15,713 $ 15,831 |
Share Based Payments (Tables)
Share Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Grants, Vesting and Forfeitures of Restricted Common Stock | The following table summarizes the grants, vesting and forfeitures of restricted common stock during the three months ended March 31, 2024: Type Restricted Stock Grant Date Fair Value ($ in thousands) Outstanding as of December 31, 2023 4,948 $ 100 Granted — — Vested — — Forfeiture — — Outstanding as of March 31, 2024 4,948 100 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Company's Authorized, Issued and Outstanding Shares | As of March 31, 2024 and December 31, 2023, the Company had the following classes of common stock authorized, issued and outstanding: March 31, 2024 December 31, 2023 Classification Shares Authorized Shares Issued and Outstanding Shares Authorized Shares Issued and Outstanding Preferred Stock, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class S Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class D Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class I Shares, $ 0.01 par value per share 100,000,000 201,777 100,000,000 — Class F-S Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class F-D Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class F-I Shares, $ 0.01 par value per share 100,000,000 5,415,954 100,000,000 4,820,377 Class A-I Shares, $ 0.01 par value per share 100,000,000 6,363,747 100,000,000 17,016,652 Class A-II Shares, $ 0.01 par value per share 100,000,000 14,171,864 100,000,000 — Class A-III Shares, $ 0.01 par value per share 100,000,000 — 100,000,000 — Class E Shares, $ 0.01 par value per share 100,000,000 180,693 100,000,000 105,707 Total 1,100,000,000 26,334,035 1,100,000,000 21,942,736 |
Schedule of Movement In The Company's Outstanding Shares of Common Stock | The following table details the movement in the Company's outstanding shares of common stock: Class I Class F-I Class A-I Class A-II Class E Beginning balance, December 31, 2023 — 4,820,377 17,016,652 — 105,707 Common stock issued 201,505 594,229 1,787,026 1,671,686 73,366 Repurchase of common stock — ( 2,476 ) — ( 5,000 ) — Dividend reinvestment 272 3,824 37,473 2,189 1,620 Share class transfer — — ( 12,477,404 ) 12,502,989 — Ending balance, March 31, 2024 201,777 5,415,954 6,363,747 14,171,864 180,693 |
Schedule of Aggregate Distributions Declared For Each Applicable Class of Common Stock | The following table details the aggregate distributions declared for each applicable class of common stock: Three Months Ended March 31, 2024 Class I Class F-I Class A-I Class A-II Class E Aggregate gross distribution declared per share of common stock $ 0.2041 $ 0.3013 $ 0.3013 $ 0.3013 $ 0.3013 Management fee per share of common stock ( 0.0436 ) ( 0.0518 ) ( 0.0524 ) ( 0.0482 ) — Net distribution declared per share of common stock $ 0.1605 $ 0.2495 $ 0.2489 $ 0.2531 $ 0.3013 There were no distributions for the three months ended March 31, 2023. |
Redeemable Non-controlling Interest Activity Related to Adviser | The following table details the redeemable non-controlling interest activity related to the Adviser for the three months ended March 31, 2024 ($ in thousands): Adviser Balance at December 31, 2023 $ 967 Settlement of management fees 269 Settlement of performance participation allocation 562 GAAP income allocation 31 Distributions ( 25 ) Reinvestment of distributions 20 Fair value allocation - Balance at March 31, 2024 $ 1,824 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Total Assets and Financial Results by Segment | The following table sets forth the total assets by segment as of March 31, 2024 and December 31, 2023 ($ in thousands): March 31, 2024 December 31, 2023 Real Estate $ 182,382 $ 183,492 Real Estate Debt 477,035 330,974 Other Corporate 46,477 95,205 Total Assets $ 705,894 $ 609,671 The following table sets forth the financial results by segment for the three months ended March 31, 2024 ($ in thousands): Real Estate Real Estate Debt Other Corporate Total Revenue — Rental revenue $ 3,663 $ — $ — $ 3,663 Total revenues 3,663 — — 3,663 Expenses Rental property operating ( 573 ) — — ( 573 ) Interest expense, net ( 567 ) ( 203 ) — ( 770 ) Total segment expenses ( 1,140 ) ( 203 ) — ( 1,343 ) Income from investments in real estate debt — 11,114 — 11,114 Segment net operating income $ 2,523 $ 10,911 $ — $ 13,434 Depreciation and amortization $ ( 1,455 ) $ — $ — $ ( 1,455 ) General and administrative ( 1,537 ) Management fee ( 1,511 ) Performance participation allocation ( 203 ) Other income 908 Net income $ 9,636 Net income attributable to non-controlling interests in the Operating Partnership $ 1,697 Net income attributable to ARIS stockholders $ 7,939 The following table sets forth the financial results by segment for the three months ended March 31, 2023 ($ in thousands): Real Estate Real Estate Debt Other Corporate Total Revenue — Rental revenue $ 993 $ — $ — $ 993 Total revenues 993 — — 993 Expenses Rental property operating ( 92 ) — — ( 92 ) Total segment expenses ( 92 ) — — ( 92 ) Income from investments in real estate debt — 735 — 735 Segment net operating income $ 901 $ 735 $ — $ 1,636 Depreciation and amortization $ ( 283 ) $ — $ — $ ( 283 ) General and administrative ( 1,105 ) Management fee ( 399 ) Other income, net 834 Net income $ 683 Net income attributable to non-controlling interests in the Operating Partnership $ 348 Net income attributable to ARIS stockholders $ 335 |
Organization and Business Pur_2
Organization and Business Purpose - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2024 Segments shares | Dec. 31, 2023 shares | |
Subsidiary, Sale of Stock [Line Items] | ||
Offering of common stock shares | 1,100,000,000 | 1,100,000,000 |
Taxable income distributed to qualify as REIT | 90% | |
Number of reportable segments in which the company operates | Segments | 2 | |
Maximum | ||
Subsidiary, Sale of Stock [Line Items] | ||
Offering of common stock shares | 5,000,000,000 | |
Maximum | IPO | ||
Subsidiary, Sale of Stock [Line Items] | ||
Offering of common stock shares | 4,000,000,000 | |
Maximum | Distribution Reinvestment Plan | ||
Subsidiary, Sale of Stock [Line Items] | ||
Offering of common stock shares | 1,000,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash and cash equivalents | $ 46,466,000 | $ 90,487,000 | $ 95,205,000 |
Restricted Cash | 11,000 | 0 | |
Unrealized gain (loss) on investments | 200,000 | $ 0 | |
Organization and offering cost | 7,900,000 | 7,900,000 | |
Offering costs | 6,400,000 | 6,400,000 | |
Organization Costs | $ 1,500,000 | $ 1,500,000 | |
Maximum selling commissions, dealer manager fees and stockholder servicing fees as percentage of gross proceeds from sale of shares | 8.75% | ||
Class S and F-S Shares | |||
Maximum upfront selling commissions percentage | 3% | ||
Maximum dealer manager fees as percentage of transaction price | 0.50% | ||
Maximum selling commissions and dealer manager fees as percentage of transaction price | 3.50% | ||
Stockholder servicing fees percentage per annum of aggregate NAV | 0.85% | ||
Class D and F-D Shares | |||
Maximum upfront selling commissions percentage | 1.50% | ||
Stockholder servicing fees percentage per annum of aggregate NAV | 0.25% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets: | ||
Investments in real estate debt | $ 474,240 | $ 328,189 |
Fair Value, Recurring | Commercial Real Estate Loans | ||
Assets: | ||
Investments in real estate debt | 474,240 | 328,189 |
Total | 474,240 | 328,189 |
Fair Value, Recurring | Level 2 | Commercial Real Estate Loans | ||
Assets: | ||
Investments in real estate debt | 24,329 | 25,321 |
Total | 24,329 | 25,321 |
Fair Value, Recurring | Level 3 | Commercial Real Estate Loans | ||
Assets: | ||
Investments in real estate debt | 449,911 | 302,868 |
Total | $ 449,911 | $ 302,868 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Input (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Assets: | |
Amortization of discount/premium | $ (67) |
Fair Value, Recurring [Member] | Commercial Real Estate Loans | |
Assets: | |
Beginning Balance | 328,189 |
Ending Balance | 474,240 |
Fair Value, Recurring [Member] | Level 3 | Commercial Real Estate Loans | |
Assets: | |
Beginning Balance | 302,868 |
Ending Balance | 449,911 |
Fair Value, Recurring [Member] | Level 3 | Investments In Real Estates Debt | |
Assets: | |
Beginning Balance | 302,868 |
Originations, acquisitions, and add on fundings | 147,043 |
Amortization of discount/premium | 67 |
Unrealized gain/(loss) from investments in real estate debt | (67) |
Ending Balance | $ 449,911 |
Summary of Quantitative Inputs
Summary of Quantitative Inputs and Assumptions Used for items Categorized in Level 3 of Fair Value Hierarchy (Details) - Discounted Cash Flow - Investments in Real Estate Debt - Level 3 - Discount Rate $ in Thousands | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Alternative Investment | $ 449,911 | $ 302,868 |
Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Rate Range | 8 | 8.41 |
Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Rate Range | 12.75 | 10 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Investments in Real Estate Stated at Cost and Generally Depreciated on Straight-Line Basis over Estimated Useful Lives of Assets (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Buildings | Maximum | |
Real Estate Properties [Line Items] | |
Depreciable Life | 50 years |
Buildings | Minimum | |
Real Estate Properties [Line Items] | |
Depreciable Life | 39 years |
Buildings and land Improvements | Maximum | |
Real Estate Properties [Line Items] | |
Depreciable Life | 15 years |
Buildings and land Improvements | Minimum | |
Real Estate Properties [Line Items] | |
Depreciable Life | 10 years |
Lease intangibles and Leasehold Improvements | |
Real Estate Properties [Line Items] | |
Lease term, Depreciable Life | Lease term |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Selling Commissions, Dealer Manager Fees, and Stockholder Servicing Fees for each Applicable Share Class (Details) | Mar. 31, 2024 |
Common Class S [Member] | |
Stockholder servicing fee (Percentage of NAV) | 0.85% |
Common Class S [Member] | Maximum | |
Selling commissions and dealer manager fees (% of transaction price) | 3.50% |
Common Class D [Member] | |
Stockholder servicing fee (Percentage of NAV) | 0.25% |
Common Class D [Member] | Maximum | |
Selling commissions and dealer manager fees (% of transaction price) | 1.50% |
Common Class F-S [Member] | |
Stockholder servicing fee (Percentage of NAV) | 0.85% |
Common Class F-S [Member] | Maximum | |
Selling commissions and dealer manager fees (% of transaction price) | 3.50% |
Common Class F-D [Member] | |
Stockholder servicing fee (Percentage of NAV) | 0.25% |
Common Class F-D [Member] | Maximum | |
Selling commissions and dealer manager fees (% of transaction price) | 1.50% |
Investments in Real Estate - Su
Investments in Real Estate - Summary of Investments in Real Estate, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Real Estate Investments, Net [Abstract] | ||
Building and building improvements | $ 132,792 | $ 132,792 |
Land and land improvements | 22,707 | 22,707 |
Tenant improvements | 621 | 621 |
Total | 156,120 | 156,120 |
Accumulated depreciation | (2,506) | (1,607) |
Investment in real estate, net | $ 153,614 | $ 154,513 |
Investments in Real Estate - Ad
Investments in Real Estate - Additional Information (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) Property | Dec. 31, 2023 USD ($) | |
Real Estate Properties [Line Items] | ||
Number of properties acquired | Property | 0 | |
Amortization period for intangibles of property | 13 years | |
Impairment on real estate investments | $ | $ 0 | $ 0 |
Investments in Real Estate De_3
Investments in Real Estate Debt - Summary of Company's Investments in Real Estate Debt (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) Positions | Dec. 31, 2023 USD ($) Positions | |
Real Estate [Line Items] | ||
Number of Position | Positions | 28 | 26 |
Weighted Average Coupon | 9% | 9.30% |
Weighted Average Maturity Date | 2028-07 | 2028-04 |
Face Amount | $ 474,368 | $ 328,679 |
Cost Basis | 473,881 | 327,983 |
Fair Value | $ 474,240 | $ 328,189 |
Commercial Real Estate Loan | ||
Real Estate [Line Items] | ||
Number of Position | Positions | 13 | 11 |
Weighted Average Coupon | 9% | 9.10% |
Weighted Average Maturity Date | 2028-03 | 2027-09 |
Face Amount | $ 399,911 | $ 252,868 |
Cost Basis | 399,777 | 252,668 |
Fair Value | $ 399,911 | $ 252,868 |
Mezzanine Loans | ||
Real Estate [Line Items] | ||
Number of Position | Positions | 1 | 1 |
Weighted Average Coupon | 10% | 10% |
Weighted Average Maturity Date | 2026-09 | 2026-09 |
Face Amount | $ 50,000 | $ 50,000 |
Cost Basis | 50,000 | 50,000 |
Fair Value | $ 50,000 | $ 50,000 |
Real Estate-related Securities | ||
Real Estate [Line Items] | ||
Number of Position | Positions | 14 | 14 |
Weighted Average Coupon | 7% | 7% |
Weighted Average Maturity Date | 2037-05 | 2037-05 |
Face Amount | $ 24,457 | $ 25,811 |
Cost Basis | 24,104 | 25,314 |
Fair Value | $ 24,329 | $ 25,321 |
Investments in Real Estate De_4
Investments in Real Estate Debt (Additional Information) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Real Estate [Line Items] | ||
Unrealized gain (loss) on investments | $ 200,000 | $ 0 |
Minimum | ||
Real Estate [Line Items] | ||
Real estate related securities maturity period | 10 years |
Investments in Real Estate De_5
Investments in Real Estate Debt - Schedule of Mortgage Loans by Property Type and Geographic Distribution (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 449,911 | $ 302,868 |
Percentage of portfolio | 100% | 100% |
Multifamily | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 176,624 | $ 110,670 |
Percentage of portfolio | 39.30% | 36.60% |
Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 96,056 | $ 91,292 |
Percentage of portfolio | 21.30% | 30.10% |
Hotel | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 93,865 | $ 48,795 |
Percentage of portfolio | 20.90% | 16.10% |
Data Center | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 63,131 | $ 40,651 |
Percentage of portfolio | 14% | 13.40% |
Self-Storage | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 17,659 | $ 8,884 |
Percentage of portfolio | 3.90% | 2.90% |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 2,576 | $ 2,576 |
Percentage of portfolio | 0.60% | 0.90% |
Northeast | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 190,998 | $ 169,829 |
Percentage of portfolio | 42.50% | 56.10% |
Mid-Atlantic | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 66,647 | $ 44,166 |
Percentage of portfolio | 14.80% | 14.60% |
West | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 132,680 | $ 32,841 |
Percentage of portfolio | 29.50% | 10.80% |
Southeast | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 27,582 | $ 27,582 |
Percentage of portfolio | 6.10% | 9.10% |
Southwest | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 18,400 | $ 18,400 |
Percentage of portfolio | 4.10% | 6.10% |
Midwest | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Fair Value | $ 13,604 | $ 10,050 |
Percentage of portfolio | 3% | 3.30% |
Other Assets - Summary of Compo
Other Assets - Summary of Components of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Total | $ 31,563 | $ 31,764 |
Real Estate Intangibles, Net | ||
Total | 25,172 | 25,734 |
Straight-Line Rent Receivable | ||
Total | 1,812 | 1,425 |
Interest Receivable | ||
Total | 2,794 | 1,727 |
Deferred Financing Costs, Net | ||
Total | 853 | 1,057 |
Other | ||
Total | $ 932 | $ 1,821 |
Intangibles - Summary of Gross
Intangibles - Summary of Gross Carrying Amount and Accumulated Amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross | $ 26,688 | $ 26,688 |
Total real estate intangible assets, net | 25,172 | 25,734 |
Intangible liabilities gross | (10,855) | (10,855) |
Total real estate intangible liabilities, net | (10,432) | (10,629) |
In-Place Lease Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross | 26,363 | 26,363 |
Accumulated amortization | (1,492) | (937) |
Total real estate intangible assets, net | 24,871 | |
Above-Market Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross | 325 | 325 |
Accumulated amortization | (24) | (17) |
Total real estate intangible assets, net | 301 | |
Below-Market Lease Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total real estate intangible assets, net | (10,432) | |
Intangible liabilities gross | (10,855) | (10,855) |
Accumulated amortization | $ 423 | $ 226 |
Intangibles - Summary of Estima
Intangibles - Summary of Estimated Future Amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Total real estate intangible assets, net | $ 25,172 | $ 25,734 |
Above-Market Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
2024 (remaining) | 22 | |
2025 | 29 | |
2026 | 29 | |
2027 | 29 | |
2028 | 29 | |
Thereafter | 163 | |
Total real estate intangible assets, net | 301 | |
In-Place Lease Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
2024 (remaining) | 1,599 | |
2025 | 2,126 | |
2026 | 2,126 | |
2027 | 2,126 | |
2028 | 2,093 | |
Thereafter | 14,801 | |
Total real estate intangible assets, net | 24,871 | |
Below-Market Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
2024 (remaining) | (578) | |
2025 | (775) | |
2026 | (775) | |
2027 | (775) | |
2028 | (756) | |
Thereafter | (6,773) | |
Total real estate intangible assets, net | $ (10,432) |
Leases - Summary of Fixed and V
Leases - Summary of Fixed and Variable Components of Company's Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Fixed lease payments | $ 3,070 | $ 904 |
Variable lease payments | 403 | 91 |
Lease Revenue | $ 3,473 | $ 995 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Rental Revenue | Rental Revenue |
Above- and below-market lease amortization | $ 190 | $ (2) |
Rental Revenue | $ 3,663 | $ 993 |
Leases - Summary of Undiscounte
Leases - Summary of Undiscounted Future Minimum Rents Company Expects to Receive for its Industrial Property (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases [Abstract] | |
2024 | $ 8,117 |
2025 | 10,951 |
2026 | 11,214 |
2027 | 11,531 |
2028 | 11,802 |
Thereafter | 84,314 |
Total | $ 137,929 |
Mortgage Notes - Additional Inf
Mortgage Notes - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |||
Non-amortizing, mortgage loan | $ 36,000,000 | $ 36,000,000 | |
Unamortized deferred financing costs | $ 400,000 | $ 500,000 | |
Mortgage loan, fixed interest rate | 6.05% | ||
Mortgage loan, term | five year | ||
Mortgage loan, maturity date | November 2028 | ||
Repayments on mortgage loan | $ 0 | ||
Deferred financing cost amortization | $ 21,000 | $ 0 |
Secured Financings on Investm_2
Secured Financings on Investments in Real Estate Debt - Additional Information (Details) - Master Repurchase Agreement - USD ($) | 1 Months Ended | 3 Months Ended |
Oct. 31, 2023 | Mar. 31, 2024 | |
Assets Sold under Agreements to Repurchase [Line Items] | ||
Aggregate purchase price under repurchase agreement | $ 250,000,000 | |
Repurchase agreement term | 3 years | |
Repurchase agreement term extension options | two one-year extension options | |
Outstanding borrowings under repurchase agreement | $ 0 | |
Cost incurred under repurchase agreement | $ 1,200,000 | |
Amortization under repurchase agreement | $ 300,000 |
Other Liabilities - Summary of
Other Liabilities - Summary of Company's Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other Liabilities [Abstract] | ||
Below market lease intangibles, net | $ 10,432 | $ 10,629 |
Dividends Payable | 2,846 | 1,900 |
Accounts payable and accrued expenses | 2,935 | 1,816 |
Real estate taxes payable | 285 | 61 |
Total | $ 16,498 | $ 14,406 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 41 Months Ended | 45 Months Ended | ||||||
Dec. 22, 2022 | Nov. 29, 2022 | Feb. 18, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Sep. 01, 2026 | Jan. 02, 2027 | Dec. 31, 2023 | Nov. 11, 2022 | |
Related Party Transaction [Line Items] | |||||||||
Performance participation allocation accrued | $ 200,000 | $ 0 | |||||||
Maximum selling commissions, dealer manager fees and stockholder servicing fees as percentage of gross proceeds from sale of shares | 8.75% | ||||||||
Exchange of shares | 26,334,035 | 21,942,736 | |||||||
Aggregate consideration | $ 89,566,000 | 60,227,000 | |||||||
Other liabilities | 16,498,000 | $ 14,406,000 | |||||||
Management fee | $ 1,511,000 | $ 399,000 | |||||||
Apollo ARIS Holdings LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Aggregate consideration | $ 200,000 | ||||||||
Class S, D and I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of total return | 12.50% | ||||||||
Hurdle amount percentage | 5% | ||||||||
Class F-S, F-D and F-I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of total return | 9% | ||||||||
Hurdle amount percentage | 5% | ||||||||
Class S and F-S Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum dealer manager fees as percentage of transaction price | 0.50% | ||||||||
Maximum selling commissions and dealer manager fees as percentage of transaction price | 3.50% | ||||||||
Class E Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Upfront selling costs, ongoing servicing costs, management fee or performance participation allocation | $ 0 | ||||||||
Exchange of shares | 180,693 | 105,707 | |||||||
Distribution reinvestments, shares | 1,620 | ||||||||
Shares issued as payment for management fees | 12,885 | ||||||||
Common Stock - Class I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Exchange of shares | 201,777 | ||||||||
Distribution reinvestments, shares | 272 | ||||||||
Common Stock - Class I Shares | Apollo ARIS Holdings LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Exchange of shares | 10,000 | 10,000 | |||||||
Common stock - Class F-I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Exchange of shares | 5,415,954 | 4,820,377 | |||||||
Distribution reinvestments, shares | 3,824 | ||||||||
Common stock - Class F-I Shares | Apollo ARIS Holdings LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Exchange of shares | 10,000 | ||||||||
Distribution reinvestments, shares | 115 | ||||||||
Class A-I Operating Partnership Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Exchange of shares | 5,000,000 | 5,000,000 | |||||||
Aggregate consideration | $ 100,000,000 | $ 100,000,000 | |||||||
Distribution reinvestments, shares | 56,702 | ||||||||
Class E Operating Partnership Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distribution reinvestments, shares | 942 | ||||||||
Unregistered Class E Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distribution reinvestments, shares | 1,621 | ||||||||
Unregistered Class E Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distribution reinvestments, shares | 690 | ||||||||
Adviser | Class S, D and I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of management fee payment of NAV per annum | 1.25% | ||||||||
Adviser | Class F-S, F-D and F-I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of management fee payment of NAV per annum | 1% | ||||||||
Adviser | Class A-II Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of management fee payment of NAV per annum | 1% | ||||||||
Adviser | Class A-II Shares | Forecast | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of management fee payment of net asset value per annum reduced | 0.92% | ||||||||
Adviser | Class A-III Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of management fee payment of NAV per annum | 1% | ||||||||
Adviser | Class A-III Shares | Forecast | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of management fee payment of net asset value per annum reduced | 0.85% | ||||||||
Adviser | Unregistered Class E Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Shares issued as payment for management fees | 56,577 | ||||||||
Adviser | Unregistered Class E Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Shares issued as payment for management fees | 12,885 | ||||||||
Apollo Global Securities, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum selling commissions, dealer manager fees and stockholder servicing fees as percentage of gross proceeds from sale of shares | 8.75% | ||||||||
Apollo Global Securities, LLC | Class S and F-S Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum selling commissions as percentage of transaction price | 3% | ||||||||
Maximum dealer manager fees as percentage of transaction price | 0.50% | ||||||||
Maximum selling commissions and dealer manager fees as percentage of transaction price | 3.50% | ||||||||
Stockholder servicing fee as percentage of NAV | 0.85% | ||||||||
Apollo Global Securities, LLC | Class D and F-D Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum selling commissions as percentage of transaction price | 1.50% | ||||||||
Stockholder servicing fee as percentage of NAV | 0.25% | ||||||||
Apollo Global Securities, LLC | Class I and F-I Shares | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stockholder servicing fee | $ 0 | ||||||||
Upfront selling commission | 0 | ||||||||
Dealer manager fee | 0 | ||||||||
Organization and Offering | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Other liabilities | 7,900,000 | ||||||||
General and Administrative | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Other liabilities | $ 7,100,000 |
Related Party Transactions - Su
Related Party Transactions - Summary of Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Related Party Transaction [Line Items] | ||
Other Liabilities | $ 16,498 | $ 14,406 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Other liabilities | 15,713 | 15,831 |
Organization and Offering | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Other Liabilities | 7,900 | |
Other liabilities | 7,917 | 7,906 |
General and Administrative | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Other Liabilities | 7,100 | |
Other liabilities | 7,064 | 6,895 |
Management Fee Payable | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Other liabilities | 529 | 468 |
Accrued Performance Participation Allocation | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Other liabilities | $ 203 | $ 562 |
Share Based Payments - Addition
Share Based Payments - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Amortization of restricted stock grants | $ 25,000 |
Restricted Stock | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Amortization of restricted stock grants | 25,000 |
Unrecognized compensation cost | $ 0 |
2022 Equity Incentive Plan | Restricted Stock | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of restricted stock issued | shares | 0 |
2022 Equity Incentive Plan | Maximum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of maximum shares of common stock to be issued | shares | 10,000,000 |
Share Based Payments - Summary
Share Based Payments - Summary of Grants, Vesting and Forfeitures of Restricted Common Stock (Details) - Restricted Stock $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding, beginning balance (in shares) | shares | 4,948 |
Outstanding, ending balance (in shares) | shares | 4,948 |
Grant Date Fair Value, beginning balance | $ | $ 100 |
Grant Date Fair Value, ending balance | $ | $ 100 |
Equity - Schedule of Company's
Equity - Schedule of Company's Authorized, Issued and Outstanding Shares (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Subsidiary, Sale of Stock [Line Items] | ||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 26,334,035 | 21,942,736 |
Common stock, shares outstanding | 26,334,035 | 21,942,736 |
Common Stock - Class S Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock - Class D Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock - Class I Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 201,777 | |
Common stock, shares outstanding | 201,777 | |
Common Stock - Class F-S Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock - Class F-D Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock - Class F-I Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 5,415,954 | 4,820,377 |
Common stock, shares outstanding | 5,415,954 | 4,820,377 |
Common Stock - Class A-I Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 6,363,747 | 17,016,652 |
Common stock, shares outstanding | 6,363,747 | 17,016,652 |
Common Stock - Class A-II Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 14,171,864 | |
Common stock, shares outstanding | 14,171,864 | |
Common Stock - Class A-III Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock - Class E Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 180,693 | 105,707 |
Common stock, shares outstanding | 180,693 | 105,707 |
Equity - Schedule of Company'_2
Equity - Schedule of Company's Authorized, Issued and Outstanding Shares (Parenthetical) (Details) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Subsidiary, Sale of Stock [Line Items] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Common stock, par value | 0.01 | $ 0.01 |
Common Stock - Class S Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class D Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class I Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class F-S Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class F-D Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common stock - Class F-I Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class A-I Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class A-II Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class A-III Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | 0.01 | |
Common Stock - Class E Shares | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value | $ 0.01 |
Equity - Schedule of Movement I
Equity - Schedule of Movement In The Company's Outstanding Shares Of Common Stock (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
Class of Stock [Line Items] | |
Beginning balance | 21,942,736 |
Ending balance | 26,334,035 |
Class I | |
Class of Stock [Line Items] | |
Common stock issued | 201,505 |
Dividend reinvestment | 272 |
Ending balance | 201,777 |
Class F-I | |
Class of Stock [Line Items] | |
Beginning balance | 4,820,377 |
Common stock issued | 594,229 |
Repurchase of common stock | (2,476) |
Dividend reinvestment | 3,824 |
Ending balance | 5,415,954 |
Class A-I | |
Class of Stock [Line Items] | |
Beginning balance | 17,016,652 |
Common stock issued | 1,787,026 |
Dividend reinvestment | 37,473 |
Share class transfer | (12,477,404) |
Ending balance | 6,363,747 |
Class A-II | |
Class of Stock [Line Items] | |
Common stock issued | 1,671,686 |
Repurchase of common stock | (5,000) |
Dividend reinvestment | 2,189 |
Share class transfer | 12,502,989 |
Ending balance | 14,171,864 |
Class E | |
Class of Stock [Line Items] | |
Beginning balance | 105,707 |
Common stock issued | 73,366 |
Dividend reinvestment | 1,620 |
Ending balance | 180,693 |
Equity - Additional Information
Equity - Additional Information (Details) | 3 Months Ended | |||||||
Jan. 03, 2024 shares | Dec. 22, 2022 USD ($) shares | Nov. 29, 2022 USD ($) shares | Feb. 18, 2022 USD ($) shares | Mar. 31, 2024 USD ($) Shareholders Request $ / shares shares | Mar. 31, 2023 USD ($) $ / shares | Dec. 31, 2023 shares | Nov. 11, 2022 shares | |
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 26,334,035 | 21,942,736 | ||||||
Aggregate consideration | $ | $ 89,566,000 | $ 60,227,000 | ||||||
Distributions paid | $ / shares | $ 0 | |||||||
Shares repurchased amount | $ | $ 154,000 | |||||||
Number of unfulfilled repurchase requests | Request | 0 | |||||||
Preferred shares face amount | $ / shares | $ 1,000 | |||||||
Preferred shares, dividend rate, percentage | 12% | |||||||
Preferred non-voting shares outstanding | $ | $ 125,000 | |||||||
Number of preferred shareholders | Shareholders | 100 | |||||||
Apollo ARIS Holdings LLC | ||||||||
Class of Stock [Line Items] | ||||||||
Aggregate consideration | $ | $ 200,000 | |||||||
Class A-I Operating Partnership Units | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 5,000,000 | 5,000,000 | ||||||
Aggregate consideration | $ | $ 100,000,000 | $ 100,000,000 | ||||||
Distribution reinvestments, shares | 56,702 | |||||||
Common Stock - Class I Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 201,777 | |||||||
Distributions paid | $ / shares | $ 0.1605 | |||||||
Common stock issued | 201,505 | |||||||
Distribution reinvestments, shares | 272 | |||||||
Common Stock - Class I Shares | Apollo ARIS Holdings LLC | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 10,000 | 10,000 | ||||||
Common Stock - Class A-I Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 6,363,747 | 17,016,652 | ||||||
Distributions paid | $ / shares | $ 0.2489 | |||||||
Common stock issued | 1,787,026 | |||||||
Number of shares exchanged | 12,477,404 | |||||||
Distribution reinvestments, shares | 37,473 | |||||||
Common Stock - Class A-II Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 14,171,864 | |||||||
Distributions paid | $ / shares | $ 0.2531 | |||||||
Common stock issued | 1,671,686 | |||||||
Number of shares exchanged | 12,502,989 | |||||||
Shares repurchased | 5,000 | |||||||
Shares repurchased amount | $ | $ 200,000 | |||||||
Distribution reinvestments, shares | 2,189 | |||||||
Common Stock - Class E Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 180,693 | 105,707 | ||||||
Shares issued as payment for management fees | 12,885 | |||||||
Shares issued as payment for performance participation allocation | 26,977 | |||||||
Distributions paid | $ / shares | $ 0.3013 | |||||||
Common stock issued | 73,366 | |||||||
Distribution reinvestments, shares | 1,620 | |||||||
Common stock - Class F-I Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 5,415,954 | 4,820,377 | ||||||
Distributions paid | $ / shares | $ 0.2495 | |||||||
Common stock issued | 594,229 | |||||||
Shares repurchased | 2,476 | |||||||
Shares repurchased amount | $ | $ 200,000 | |||||||
Distribution reinvestments, shares | 3,824 | |||||||
Common stock - Class F-I Shares | Apollo ARIS Holdings LLC | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued | 10,000 | |||||||
Distribution reinvestments, shares | 115 | |||||||
Class E Operating Partnership Units | ||||||||
Class of Stock [Line Items] | ||||||||
Distribution reinvestments, shares | 942 |
Equity - Schedule of Aggregate
Equity - Schedule of Aggregate Distributions Declared For Each Applicable Class of Common Stock (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Dividends Payable [Line Items] | ||
Net distribution declared per share of common stock | $ 0 | |
Class I | ||
Dividends Payable [Line Items] | ||
Aggregate gross distribution declared per share of common stock | $ 0.2041 | |
Management fee per share of common stock | (0.0436) | |
Net distribution declared per share of common stock | 0.1605 | |
Class F-I | ||
Dividends Payable [Line Items] | ||
Aggregate gross distribution declared per share of common stock | 0.3013 | |
Management fee per share of common stock | (0.0518) | |
Net distribution declared per share of common stock | 0.2495 | |
Class A-I | ||
Dividends Payable [Line Items] | ||
Aggregate gross distribution declared per share of common stock | 0.3013 | |
Management fee per share of common stock | (0.0524) | |
Net distribution declared per share of common stock | 0.2489 | |
Class A-II | ||
Dividends Payable [Line Items] | ||
Aggregate gross distribution declared per share of common stock | 0.3013 | |
Management fee per share of common stock | (0.0482) | |
Net distribution declared per share of common stock | 0.2531 | |
Class E | ||
Dividends Payable [Line Items] | ||
Aggregate gross distribution declared per share of common stock | 0.3013 | |
Net distribution declared per share of common stock | $ 0.3013 |
Equity - Redeemable Non-control
Equity - Redeemable Non-controlling Interest Activity Related to Adviser (Details) - Adviser $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Redeemable Noncontrolling Interest [Line Items] | |
Beginning balance | $ 967 |
Settlement of management fees | 269 |
Settlement of performance participation allocation | 562 |
GAAP income allocation | 31 |
Distributions | (25) |
Reinvestment of distributions | 20 |
Ending balance | $ 1,824 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Net Income (Loss) and Weighted Average Number of Shares Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net income (loss) attributable to ARIS stockholders | $ 7,939 | $ 335 |
Denominator: | ||
Weighted-average shares of common stock outstanding, basic | 24,902,305 | 3,248,791 |
Weighted-average shares of common stock outstanding, diluted | 24,902,305 | 3,248,791 |
Net income (loss) per share of common stock, basic | $ 0.32 | $ 0.1 |
Net income (loss) per share of common stock, diluted | $ 0.32 | $ 0.1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Unfunded commitments related to investments | $ 246.1 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 Segments | |
Segment Reporting [Abstract] | |
Number of reportable segments in which the company operates | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Total Assets and Financial Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | ||
Segment Reporting Information [Line Items] | ||||
Total Assets | [1] | $ 705,894 | $ 609,671 | |
Revenues | ||||
Total revenues | 3,663 | $ 993 | ||
Expenses | ||||
Total segment expenses | (1,343) | (92) | ||
Income from investments in real estate debt | 11,114 | 735 | ||
Segment net operating income | 13,434 | 1,636 | ||
Depreciation and amortization | (1,455) | (283) | ||
General and administrative | (1,537) | (1,105) | ||
Management fee | (1,511) | (399) | ||
Performance participation allocation | (203) | |||
Other income, net | 908 | 834 | ||
Net income (loss) | 9,636 | 683 | ||
Net income attributable to non-controlling interests in the Operating Partnership | 1,697 | 348 | ||
Net income (loss) attributable to ARIS stockholders | 7,939 | 335 | ||
Interest Expense, Net | ||||
Expenses | ||||
Total segment expenses | (770) | |||
Rental Property | ||||
Revenues | ||||
Total revenues | 3,663 | 993 | ||
Expenses | ||||
Total segment expenses | (573) | (92) | ||
Operating Segments | Real Estate | ||||
Segment Reporting Information [Line Items] | ||||
Total Assets | 182,382 | 183,492 | ||
Revenues | ||||
Total revenues | 3,663 | 993 | ||
Expenses | ||||
Total segment expenses | (1,140) | (92) | ||
Segment net operating income | 2,523 | 901 | ||
Depreciation and amortization | (1,455) | (283) | ||
Operating Segments | Real Estate | Interest Expense, Net | ||||
Expenses | ||||
Total segment expenses | (567) | |||
Operating Segments | Real Estate | Rental Property | ||||
Revenues | ||||
Total revenues | 3,663 | 993 | ||
Expenses | ||||
Total segment expenses | (573) | (92) | ||
Operating Segments | Real Estate Debt | ||||
Segment Reporting Information [Line Items] | ||||
Total Assets | 477,035 | 330,974 | ||
Expenses | ||||
Total segment expenses | (203) | |||
Income from investments in real estate debt | 11,114 | 735 | ||
Segment net operating income | 10,911 | $ 735 | ||
Operating Segments | Real Estate Debt | Interest Expense, Net | ||||
Expenses | ||||
Total segment expenses | (203) | |||
Other Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Total Assets | $ 46,477 | $ 95,205 | ||
[1] Represents the consolidated assets and liabilities of ARIS Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership"). The Operating Partnership is a consolidated variable interest entity ("VIE"), of which the Company is the sole general partner and owns approximately 83 % and 81 % as of March 31, 2024 and December 31, 2023, respectively. See "Note 2 - Summary of Significant Accounting Policies " for additional information. |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | Apr. 02, 2024 | Apr. 01, 2024 | Jan. 03, 2024 | Mar. 31, 2024 | Dec. 31, 2023 |
Subsequent Event [Line Items] | |||||
Shares issued, Amount | $ 264 | $ 220 | |||
Common Stock - Class A-I Shares | |||||
Subsequent Event [Line Items] | |||||
Number of shares exchanged | 12,477,404 | ||||
Subsequent Event | Common stock - Class F-I Shares | |||||
Subsequent Event [Line Items] | |||||
Shares issued, Amount | $ 100,000 | ||||
Number of shares exchanged | 5,225,608 | ||||
Subsequent Event | Common Stock - Class A-I Shares | |||||
Subsequent Event [Line Items] | |||||
Number of shares exchanged | 5,155,772 | ||||
Subsequent Event | J P Morgan Repurchase Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Proceeds from debt | $ 35,000 |