Escrow Deposits, Prepaid Expenses and Other Assets

12 Months Ended

Dec. 31, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Escrow Deposits, Prepaid Expenses and Other Assets

The following table summarizes the components of escrow deposits, prepaid expenses and other assets as of December 31, 2019 and 2018 (in thousands):



	December 31, 2019		December 31, 2018
Escrow deposits, prepaid expenses and other	$	54,545	$	38,642
Investments in joint ventures	67,935		56,789
Notes receivable	36,834		6,012
Commercial real estate, software, vehicles and FF&E, net	42,742		44,591
Total	$	202,056	$	146,034

Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $7.6 million, $7.0 million and $6.9 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Investments in Joint Ventures

During the third quarter of 2018, the Operating Partnership entered into a joint venture with a leading institutional investor for the purpose of developing, leasing and operating newly constructed single-family rental homes located in select submarkets, which was subsequently amended and upsized to $312.5 million in July 2019. The initial term of the joint venture is five years from the effective date of the amended agreement, during which neither member may unilaterally market properties for sale. The Company is entitled to a proportionate share of the joint venture’s cash flows based on its 20% ownership interest along with an opportunity for a promoted interest. The Company also receives fees for services it provides to the joint venture. In evaluating the Company’s 20% ownership interest in the joint venture, we concluded that the joint venture is not a variable interest entity after applying the variable interest model and, therefore, we account for our interest in the joint venture as an investment in an unconsolidated subsidiary after applying the voting interest model using the equity method of accounting. During the years ended December 31, 2019 and 2018, the Company contributed $20.4 million and $40.9 million, respectively, of single-family properties and single-family properties under development and development land, as well as $13.1 million and $8.4 million, respectively, of cash to the joint venture and received $17.5 million and $32.8 million, respectively, in distributions from the joint venture in respect of its contributions. The balance of the Company’s investment in the joint venture as of December 31, 2019 and 2018 was $33.8 million and $18.0 million, respectively, which are included in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets.

The Company provides property management and development services to certain unconsolidated joint ventures that are related parties. Management fee income from these joint ventures was $3.6 million, $1.9 million and $2.4 million for the years ended December 31, 2019, 2018 and 2017, respectively, which are included in other revenues within the consolidated statements of operations.

Notes Receivable

During the second quarter of 2019, as part of a bulk portfolio disposition of 215 homes, the Company issued a $30.7 million secured promissory note, which is secured by a first priority mortgage on the disposed homes, guaranteed by a parent of the borrower, matures on June 20, 2025, bears interest at 2.70% through October 31, 2019 and 4.50% thereafter to maturity, and contains certain required covenants. The secured promissory note requires quarterly interest payments with the full principal due at maturity. As of December 31, 2019, the secured note receivable, net of a $0.9 million discount, had a balance of $29.8 million included in escrow deposits, prepaid expenses and other assets on the consolidated balance sheet.