NOTE 3 – segment reporting

We report our results in two reportable segments: residential and commercial properties. Our residential properties include multifamily properties. Our commercial properties include retail, office, industrial, restaurant and medical properties. We assess and measure operating results based on net operating income (“NOI”), which we define as total real estate segment revenues less real estate expenses (which consist of real estate taxes, property management fees, utilities, repairs and maintenance, insurance and property administrative and management fees). We believe NOI is an important measure of operating performance even though it should not be considered an alternative to net income or cash flow from operating activities. NOI is unaffected by financing, depreciation, amortization, legal and professional fees and certain general and administrative expenses. The accounting policies of each segment are consistent with those described in Note 2 of this report.

Segment Revenues and Net Operating Income

The revenues and net operating income for the reportable segments (residential and commercial) are summarized as follows for the three months ended March 31, 2020 and 2019, along with reconciliations to the consolidated financial statements. Segment assets are also reconciled to Total Assets as reported in the consolidated financial statements.


	Three months ended March 31, 2020						Three months ended March 31, 2019
	Residential		Commercial		Total		Residential		Commercial		Total
	(in thousands)						(in thousands)
Income from rental operations	$	23,995	$	5,911	$	29,906	$	23,434	$	6,397	$	29,831
Expenses from rental operations		13,912		1,787		15,699		13,389		1,819		15,208
Net operating income	$	10,083	$	4,124	$	14,207	$	10,045	$	4,578	$	14,623
Depreciation and amortization						5,252						5,538
Interest						4,350						4,715
Administration of REIT						1,162						1,111
Other (income)/expense						(1,784)						(531)
Net income					$	5,227					$	3,790

Segment Assets and Accumulated Depreciation


As of March 31, 2020	Residential		Commercial		Total
	(in thousands)
Real estate investments	$	622,753	$	196,554	$	819,307
Accumulated depreciation		(107,785)		(43,037)		(150,822)
	$	514,968	$	153,517		668,485
Cash and cash equivalents						4,295
Restricted deposits and funded reserves						11,398
Investment in unconsolidated affiliates						7,848
Other assets						6,218
Note receivable						1,300
Intangible assets, less accumulated amortization						8,395
Total Assets					$	707,939


As of December 31, 2019	Residential		Commercial		Total
	(in thousands)
Real estate investments	$	605,813	$	196,215	$	802,028
Accumulated depreciation		(104,170)		(42,146)		(146,316)
	$	501,643	$	154,069		655,712
Cash and cash equivalents						9,002
Restricted deposits and funded reserves						8,380
Investment in unconsolidated affiliates						7,915
Other assets						8,244
Note receivable						1,300
Intangible assets, less accumulated amortization						9,133
Total Assets					$	699,686