SEGMENT FINANCIAL INFORMATION

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SEGMENT FINANCIAL INFORMATION

14. SEGMENT FINANCIAL INFORMATION

Our four reportable segments are office, retail, residential and industrial. Factors used to determine our reportable segments include the physical and economic characteristics of our properties and the related operating activities. Our chief operating decision makers rely on net operating income, among other factors, to make decisions about allocating resources and assessing segment performance. Net operating income is the key performance metric that captures the unique operating characteristics of each segment. Net investment in real estate properties, restricted cash, tenant receivables, straight-line rent receivables, and other assets directly assignable to a property are allocated to the segment groupings. Corporate items that are not directly assignable to a property, such as investment in unconsolidated joint venture partnerships, debt-related investments and DST Program Loans, are not allocated to segment groupings, but are reflected as reconciling items.

The following table reflects our total consolidated assets by business segment as of June 30, 2022 and December 31, 2021:

	As of
(in thousands)	June 30, 2022		December 31, 2021 (1)
Assets:
Office properties	$	365,378	$	335,811
Retail properties		558,072		639,584
Residential properties		1,514,570		837,491
Industrial properties		1,277,062		826,353
Corporate		326,981		351,732
Total assets	$	4,042,063	$	2,990,971

(1) As of December 31, 2021, amounts held for sale are included in the corporate grouping. Refer to “Note 3” for further detail.

The following table sets forth consolidated financial results by segment for the three and six months ended June 30, 2022 and 2021:

(in thousands)	Office		Retail		Residential		Industrial		Consolidated
For the Three Months Ended June 30, 2022
Rental revenues	$	13,148	$	16,509	$	25,824	$	18,013	$	73,494
Rental expenses		(5,772)		(3,776)		(11,059)		(4,289)		(24,896)
Net operating income	$	7,376	$	12,733	$	14,765	$	13,724	$	48,598
Real estate-related depreciation and amortization	$	4,243	$	4,474	$	16,038	$	12,148	$	36,903
For the Three Months Ended June 30, 2021
Rental revenues	$	15,953	$	17,010	$	7,008	$	8,658	$	48,629
Rental expenses		(7,496)		(4,292)		(3,167)		(1,959)		(16,914)
Net operating income	$	8,457	$	12,718	$	3,841	$	6,699	$	31,715
Real estate-related depreciation and amortization	$	5,000	$	4,482	$	2,589	$	5,103	$	17,174
For the Six Months Ended June 30, 2022
Rental revenues	$	26,780	$	33,576	$	42,178	$	33,465	$	135,999
Rental expenses		(11,963)		(8,405)		(18,004)		(7,838)		(46,210)
Net operating income	$	14,817	$	25,171	$	24,174	$	25,627	$	89,789
Real estate-related depreciation and amortization	$	8,240	$	9,128	$	24,392	$	22,594	$	64,354
For the Six Months Ended June 30, 2021
Rental revenues	$	32,776	$	34,921	$	13,648	$	17,716	$	99,061
Rental expenses		(15,005)		(9,194)		(6,409)		(3,868)		(34,476)
Net operating income	$	17,771	$	25,727	$	7,239	$	13,848	$	64,585
Real estate-related depreciation and amortization	$	9,869	$	9,109	$	5,329	$	9,600	$	33,907

We consider net operating income to be an appropriate supplemental performance measure and believe net operating income provides useful information to our investors regarding our financial condition and results of operations because net operating income reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of the properties, such as real estate-related depreciation and amortization, general and administrative expenses, advisory fees, impairment charges, interest expense, gains on sale of properties, other income and expense, gains and losses on the extinguishment of debt and noncontrolling interests. However, net operating income should not be viewed as an alternative measure of our financial performance since it excludes such items, which could materially impact our results of operations. Further, our net operating income may not be comparable to that of other real estate companies, as they may use different methodologies for calculating net operating income. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

The following table is a reconciliation of our reported net income (loss) attributable to common stockholders to our net operating income for the three and six months ended June 30, 2022 and 2021:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Net (loss) income attributable to common stockholders	$	(5,588)	$	(8,583)	$	15,423	$	8,982
Debt-related income		(846)		(2,319)		(4,314)		(4,443)
Real estate-related depreciation and amortization		36,903		17,174		64,354		33,907
General and administrative expenses		2,594		2,181		4,631		4,399
Advisory fees, related party		8,227		5,085		15,370		9,909
Performance participation allocation		6,186		2,246		18,379		3,995
Acquisition costs and reimbursements		1,093		346		2,722		713
Impairment of real estate property		—		—		—		758
Equity in income from unconsolidated joint venture partnerships		(1,718)		—		(708)		—
Other income		(1,413)		(476)		(3,540)		(750)
Interest expense		33,774		17,048		58,184		33,611
Gain on sale of real estate property		(29,643)		—		(83,524)		(27,342)
Gain on extinguishment of debt and financing commitments, net		8		—		8		—
Net (loss) income attributable to redeemable noncontrolling interests		(60)		(64)		186		70
Net (loss) income attributable to noncontrolling interests		(919)		(923)		2,618		776
Net operating income	$	48,598	$	31,715	$	89,789	$	64,585