Investments in Unconsolidated Entities

6 Months Ended

Jun. 30, 2025

Equity Method Investments and Joint Ventures [Abstract]

7. Investments in Unconsolidated Entities

The Partnership has non-controlling investments in unconsolidated entities. The Partnership applies the equity method of accounting by initially recording these investments at cost, subsequently adjusted for accrued preferred returns, the Partnership’s share of earnings (losses) of the unconsolidated entities, cash contributions, and distributions. The carrying value of the equity investments represents the Partnership’s maximum exposure to loss. The Partnership is entitled to a preferred return on invested capital in each unconsolidated entity. The Partnership’s preferred return is reported as “Investment income” on the Partnership’s condensed consolidated statements of operations.

An affiliate of the Vantage Properties guarantees a preferred return on the Partnership’s invested capital through a date approximately five years after commencement of construction in connection with each Vantage Property.

The following table provides the details of the investments in unconsolidated entities as of June 30, 2025 and December 31, 2024:


Property Name	Location	Units			Construction Commencement Date	Construction Completion Date	Carrying Value as of June 30, 2025		Carrying Value as of December 31, 2024
Market Rate Development Investments
Vantage at Hutto	Hutto, TX		288		December 2021	December 2023	$	14,988,329	$	14,573,715
Vantage at Loveland	Loveland, CO		288		April 2021	October 2024		21,098,736		26,560,347
Vantage at Fair Oaks	Boerne, TX		288		September 2021	May 2023		14,346,224		13,535,176
Vantage at McKinney Falls	McKinney Falls, TX		288		December 2021	July 2024		16,076,440		15,633,593
Freestone Greeley	Greeley, CO		296		N/A	N/A		6,230,785		6,230,785
Freestone Cresta Bella	San Antonio, TX		296		February 2023	November 2024		17,891,332		16,759,593
Valage Senior Living Carson Valley	Minden, NV		102	(1)	February 2023	April 2025		7,569,162		8,471,445
The Jessam at Hays Farm	Huntsville, AL		318		July 2023	N/A		17,981,599		17,696,609
Freestone Greenville	Greenville, TX		300		April 2024	N/A		19,370,521		20,853,691
Freestone Ladera	Ladera, TX		288		August 2024	N/A		18,101,105		9,804,364
Subtotal								153,654,233		150,119,318

Other Investments
Construction Lending JV (2)	N/A	N/A			N/A	N/A		240,865		-


Previously Sold Investments
Vantage at Tomball	Tomball, TX		288		August 2020	April 2022	$	-	$	14,199,870
Vantage at Helotes	Helotes, TX		288		May 2021	November 2022		-		15,090,681
Subtotal								-		29,290,551

							$	153,895,098	$	179,409,869

(1)

Valage Senior Living Carson Valley is a seniors housing property with 102 beds in 88 units.

(2)

The Construction Lending JV invests in loans to finance the construction and/or rehabilitation of affordable multifamily housing properties across the United States, similar to the Partnership’s current GIL, taxable GIL and property loan investments

In October 2024, the Partnership entered into the Construction Lending JV to invest in loans to finance the construction and/or rehabilitation of affordable multifamily housing properties across the United States, similar to the Partnership’s current GIL, taxable GIL and property loan investments. The Partnership has committed to provide 10% of the total capital for the Construction Lending JV with the remainder funded by a third-party investor with each party contributing their respective proportionate capital contributions upon funding of future investments. The Partnership’s initial maximum capital contribution to the Construction Lending JV is approximately $8.3 million. A wholly owned subsidiary of the Partnership is the Construction Lending JV’s managing member responsible for identifying, evaluating, underwriting, and closing investments, subject to the conditions of the joint venture and third-party investor evaluation and approval. The Partnership earns proportionate returns on its invested capital plus promote income if the joint venture meets certain earnings thresholds. The Partnership accounts for its investment in the Construction Lending JV using the equity method. The Partnership made its first capital contribution to the Construction Lending JV in April 2025.

The Partnership has remaining commitments to provide additional equity funding for certain unconsolidated entities as of June 30, 2025. See Note 16 for further details regarding the Partnership’s remaining funding commitments.

Activity in the First Six Months of 2025

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the six months ended June 30, 2025:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership		Investment Income		Gain on Sale
Vantage at Tomball	Tomball, TX		288	January 2025	$	14,199,870	$	-	$	-
Vantage at Coventry	Omaha, NE		294	(1)		5,220		-		5,220
Vantage at Helotes (2)	Helotes, TX		288	May 2025		17,083,556		1,829,525		163,350
Vantage at O'Connor	San Antonio, TX		288	(3)		32,166		-		32,166
					$	31,320,812	$	1,829,525	$	200,736

(1)

In February 2025, the Partnership received sales proceeds of approximately $5,000 associated with final settlements of the Vantage at Coventry sale in January 2023. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s condensed consolidated statement of operations.

(2)

Vantage at Helotes, at the direction of its managing member, sold substantially all its assets to a non-profit entity that financed the purchase by issuing tax-exempt and taxable bonds. The Partnership acquired two MRBs issued by the buyer to finance the purchase of the property (see Note 4).

(3)

In June 2025, the Partnership received sales proceeds of approximately $32,000 associated with final settlements of the Vantage at O'Connor sale in July 2022. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s condensed consolidated statement of operations.

During the first six months of 2025, the Partnership advanced funds beyond its original commitments to four Vantage Properties and Freestone at Cresta Bella totaling approximately $3.1 million to cover additional interest costs.

Activity in the First Six Months of 2024

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the six months ended June 30, 2024:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership		Investment Income		Gain (Loss) on Sale
Vantage at Coventry	Omaha, NE		294	(1)	$	50,000	$	-	$	50,000
Vantage at Westover Hills	San Antonio, TX		288	(2)		6,986		-		6,986
					$	56,986	$	-	$	56,986

(1)

In January 2024, the Partnership received sales proceeds of approximately $50,000 associated with final settlements of the Vantage at Coventry sale in January 2023. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s condensed consolidated statement of operations.

(2)

In May 2024, the Partnership received sales proceeds of approximately $7,000 associated with final settlements of the Vantage at Westover Hills sale in May 2022. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s condensed consolidated statement of operations.

During the first six months of 2024, the Partnership advanced funds beyond its original commitments to five Vantage Properties totaling approximately $5.8 million to cover additional construction and interest costs.

Summarized Unconsolidated Entity Level Financial Data

The following table provides summary combined financial information for the properties underlying the Partnership’s investments in unconsolidated entities for the three and six months ended June 30, 2025 and 2024:


	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2025		2024			2025		2024
Property revenues	$	4,830,476	$	4,411,360		$	10,175,479	$	8,196,677
Interest income	$	126,988	$	-		$	126,988	$	-
Gain on sale	$	9,591,652	$	-		$	17,272,325	$	-
Net income (loss)	$	5,825,925	$	(3,025,880	)	$	10,987,787	$	(4,150,053	)