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Investment in Unconsolidated Entities (Tables)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2021

USD ($)

$ / shares

Dec. 31, 2020

USD ($)

Dec. 31, 2019

USD ($)

Aug. 15, 2017

officer

board_seat

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

5. INVESTMENTS IN UNCONSOLIDATED ENTITIES

A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):


	December 31, 2021		December 31, 2020
GB Challenger, LLC	$	37,737	$	29,488
GBTM Sendera, LLC	9,854		9,846
EJB River Holdings, LLC	6,130		5,296
Green Brick Mortgage, LLC	715		1,207
BHome Mortgage, LLC	1,180		606
Total investment in unconsolidated entities	$	55,616	$	46,443

Challenger

The Company holds two of the five board of managers (the “Managers”) seats of GB Challenger, LLC (“Challenger”). Challenger’s six officers, who are employees of the Challenger entities, were designated by the Managers for the purpose of managing the day to day operations. The Company does not have a controlling financial interest in Challenger as the Company has less than 50% of the voting interests in Challenger. The Company’s investment in Challenger is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s consolidated balance sheets.

The Company’s investment in Challenger is carried at cost, as adjusted for the Company’s share of income or losses and distributions received, as well as for adjustments related to basis differences between the Company’s cost and the Company’s underlying equity in net assets recorded in Challenger’s financial statements as of the date of acquisition.

As of December 31, 2021, the carrying value of the investment in Challenger was $37.7 million, whereas the underlying 49.9% equity in net assets of Challenger was $35.1 million. The $2.6 million difference represents the premium paid for the Company’s equity interest in excess of Challenger’s carrying value. This basis difference primarily relates to the estimated fair value of inventory, as well as the Challenger Homes trade name and capitalized acquisition costs. The amortization of the basis differences related to inventory is recorded as a reduction of equity in income of unconsolidated entities as homes are closed on and delivered to homebuyers. The basis difference related to the trade name is amortized over ten years as a reduction of equity in income of unconsolidated entities.

The Company recognized $14.8 million, $11.9 million, and $8.3 million, related to Challenger in equity in income of unconsolidated entities during the years ended December 31, 2021, 2020, and 2019, respectively.

Providence Title

In March 2018, the Company formed a joint venture with a title company in Georgia to provide title closing and settlement services to our Atlanta-based builder. The Company, through its controlled builder, The Providence Group of Georgia, L.L.C. (“TPG”), owned a 49% equity interest in Providence Group Title, LLC (“Providence Title”). The Company’s investment in Providence Title was treated as an unconsolidated investment under the equity method of accounting and included in investments in unconsolidated entities in the Company’s consolidated balance sheets. In December 2020, this joint venture was terminated and the Company incurred a de minimis loss upon dissolution.

Green Brick Mortgage

In June 2018, the Company formed a joint venture with PrimeLending to provide mortgage loan origination services to our builders. The Company owns a 49% equity interest in Green Brick Mortgage, LLC (“Green Brick Mortgage”) which initiated mortgage loan origination activities in September 2018. The Company determined that the investment in Green Brick Mortgage

should be treated as an unconsolidated investment under the equity method of accounting and included in investments in unconsolidated entities in the Company’s consolidated balance sheets. On September 1, 2020, the Company increased its ownership interest in GRBK Mortgage, LLC from 49.00% to 49.99%.

EJB River Holdings

In December 2018, EJB River Holdings joint venture was formed by TPG with the purpose to acquire and develop a tract of land in Gwinnett County, Georgia. In May 2019, East Jones Bridge, LLC (“EJB”) was admitted as a member of EJB River Holdings, which resulted in TPG and EJB each having a 50% ownership interest in EJB River Holdings. The Company determined that the investment in EJB River Holdings should be treated as an unconsolidated investment under the equity method of accounting and included in investments in unconsolidated entities in the Company’s consolidated balance sheets.

In October 2019, EJB River Holdings issued two loans with the total maximum amount of borrowings of $21.9 million to finance its land acquisition and development. Subsequently, a wholly owned subsidiary of the Company provided a limited $2.0 million guarantee in connection with these loans. The approximate term of the guarantee is 35 months. In the event EJB River Holdings defaults on one of the loans, the maximum potential amount of future payments that the Company could be required to make under its limited guarantee is $2.0 million. As of December 31, 2021, the Company has no current liability related to the guarantee obligation as the payment risk of the guarantee has been assessed to be very low.

As of December 31, 2021, the carrying amounts of assets and liabilities of EJB River Holdings were $29.1 million and $16.9 million, respectively. Assets were comprised of real estate inventory and cash, whereas the liabilities were comprised of loans and interest payable. As of December 31, 2021, the Company’s maximum exposure to loss as a result of its involvement with EJB River Holdings was $8.1 million, represented by the sum of the Company’s investment in EJB River Holdings of $6.1 million and the $2.0 million limited guarantee described above.

BHome Mortgage

In May 2020, we established a joint venture, BHome Mortgage, LLC (“BHome Mortgage”) with First Continental Mortgage, Ltd., to provide mortgage related services to homebuyers. The Company owns 49% in BHome Mortgage. In May 2020, BHome Mortgage received initial capital contributions of approximately $0.5 million from its two members in accordance with their membership interest.

The Company determined that the investment in BHome Mortgage should be treated as an unconsolidated investment under the equity method of accounting and included in investments in unconsolidated entities in the Company’s consolidated balance sheets.

GBTM Sendera, LLC

In August 2020, GBTM Sendera, LLC joint venture (“GBTM Sendera”) was formed by GRBK Edgewood, LLC (“GRBK Edgewood”) and TM Sendera, LLC (“TM Sendera”) with the purpose to acquire and develop a tract of land in Fort Worth,Texas. Each party holds a 50% ownership interest in GBTM Sendera.

In August 2020, GBTM Sendera received two $9.0 million initial contributions from each of its two members, GBRK Edgewood and TM Sendera. Per the GBTM Sendera company agreement, GRBK Edgewood and TM Sendera share equally in the profits and losses of GBTM Sendera, with the exception of certain customary fees. In September 2020, an additional $0.8 million contribution was made each by GRBK Edgewood and TM Sendera. GBTM Sendera began land development during 2021 and is expected to complete its first phase of development in the first quarter of 2022.

Following the analysis of the above facts and provisions of the GBTM Sendera company agreement, the Company has determined that GBTM Sendera is a joint venture to be evaluated under the voting interest model. Therefore, the investment in GBTM Sendera is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s consolidated balance sheets.

As of December 31, 2021, the carrying amount of GBTM Sendera net assets was $19.7 million. Assets were comprised of real estate inventory and cash, whereas the liabilities were comprised of accounts payable and notes payable. As of December 31, 2021, the Company’s maximum exposure to loss as a result of its involvement with GBTM Sendera was $9.9 million, represented by the Company’s investment in GBTM Sendera.

Equity Method Investments [Table Text Block]

A summary of the financial information of the unconsolidated entities that are accounted for by the equity method, as described above, is as follows (in thousands):


			December 31, 2021		December 31, 2020
Assets:
Cash			$	15,903	$	12,765
Accounts receivable			4,787		1,815
Bonds and notes receivable			5,772		5,942
Loans held for sale, at fair value			20,734		14,530
Inventory			166,861		122,819
Other assets			7,220		8,377
Total assets			$	221,277	$	166,248
Liabilities:
Accounts payable			$	7,701	$	7,171
Accrued expenses and other liabilities			13,992		11,148
Notes payable			95,816		60,642
Total liabilities			$	117,509	$	78,961
Owners’ equity:
Green Brick			$	52,983	$	43,451
Others			50,785		43,836
Total owners’ equity			$	103,768	$	87,287
Total liabilities and owners’ equity			$	221,277	$	166,248

	Years Ended December 31,
	2021		2020		2019
Revenues	$	221,190	$	181,724	$	166,368
Costs and expenses	181,429		145,525		144,097
Net earnings of unconsolidated entities	$	39,761	$	36,199	$	22,271
Company’s share in net earnings of unconsolidated entities	$	19,713	$	16,654	$	9,809