Segments (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of Net Operating Income of Reportable Segments

The following table presents NOI for the Company's five reportable segments for the three and six months ended June 30, 2023 and 2022 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Office real estate
Rental revenues	$	20,505	$	18,314	$	40,079	$	35,337
Rental expenses	5,254		4,600		10,357		8,740
Real estate taxes	2,167		2,035		4,262		3,539
Segment net operating income	13,084		11,679		25,460		23,058
Retail real estate
Rental revenues	24,708		21,544		47,146		42,974
Rental expenses	4,026		3,333		7,590		6,834
Real estate taxes	2,270		2,271		4,477		4,509
Segment net operating income	18,412		15,940		35,079		31,631
Multifamily real estate
Rental revenues	14,738		15,366		28,944		31,548
Rental expenses	4,396		4,752		8,689		9,780
Real estate taxes	1,194		1,531		2,304		3,193
Segment net operating income	9,148		9,083		17,951		18,575
General contracting and real estate services
General contracting and real estate services revenues	102,574		45,273		186,812		69,923
General contracting and real estate services expenses	99,071		43,418		180,241		67,239
Segment gross profit	3,503		1,855		6,571		2,684
Real estate financing
Interest income	3,225		3,239		6,761		6,698
Interest expense(a)	809		817		1,906		1,642
Segment gross profit	2,416		2,422		4,855		5,056
Net operating income	$	46,563	$	40,979	$	89,916	$	81,004

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(a) Interest expense within the real estate financing segment is allocated based on the average outstanding principal of notes receivable in the real estate financing portfolio, and the effective interest rate on the credit facility, as defined in Note 8.

Reconciliation of Net Income

The following table reconciles NOI to net income, the most directly comparable GAAP measure, for the three and six months ended June 30, 2023 and 2022 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net operating income	$	46,563	$	40,979	$	89,916	$	81,004
Interest income(a)	189		113		372		222
Depreciation and amortization	(19,878)		(18,781)		(38,346)		(37,338)
Amortization of right-of-use assets - finance leases	(347)		(277)		(624)		(555)
General and administrative expenses	(4,052)		(3,617)		(9,500)		(8,325)
Acquisition, development and other pursuit costs	(18)		(26)		(18)		(37)
Impairment charges	—		(286)		(102)		(333)
Gain on real estate dispositions, net	511		19,493		511		19,493
Interest expense(b)	(12,820)		(8,554)		(24,025)		(16,760)

Loss on extinguishment of debt	—		(618)		—		(776)
Change in fair value of derivatives and other	5,005		2,548		2,558		6,730
Unrealized credit loss provision	(100)		(295)		(177)		(900)
Other income (expense), net	168		68		261		297
Income tax (provision) benefit	(336)		20		(524)		321
Net income	$	14,885	$	30,767	$	20,302	$	43,043

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(a) Excludes real estate financing segment interest income of $3.2 million for each of the three months ended June 30, 2023 and 2022 and

$6.8 million and $6.7 million for the six months ended June 30, 2023 and 2022, respectively.

(b) Excludes real estate financing segment interest expense of $0.8 million for each of the three months ended June 30, 2023 and 2022 and $1.9 million and $1.6 million for the six months ended June 30, 2023 and 2022, respectively.