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REAL ESTATE (Tables)

12 Months Ended

Dec. 31, 2019

The following table summarizes the Company’s real estate as of December 31, 2019 and 2018, respectively (in thousands):


	December 31, 2019		December 31, 2018
Land	$	102,288	$	104,138
Buildings and improvements	427,696		425,989
Tenant origination and absorption costs	15,422		17,183
Total real estate, cost and net of impairment charges ⁽¹⁾	545,406		547,310
Accumulated depreciation and amortization	(51,723)		(35,704)
Total real estate, net	$	493,683	$	511,606

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⁽¹⁾ See “ – Impairment of Real Estate” below.

The following table provides summary information regarding the Company’s real estate as of December 31, 2019 (in thousands):


Property	Date Acquired	City	State	Property Type	Land		Building and Improvements ⁽¹⁾		Tenant Origination and Absorption		Total Real Estate, at Cost and Net of Impairment Charges		Accumulated Depreciation and Amortization		Total Real Estate, Net		Ownership %
Springmaid Beach Resort	12/30/2014	Myrtle Beach	SC	Hotel	$	27,438	$	37,822	$	—	$	65,260	$	(10,314)	$	54,946	90.0%
Q&C Hotel	12/17/2015	New Orleans	LA	Hotel	1,232		53,233		—		54,465		(8,315)		46,150		90.0%
Lincoln Court	05/20/2016	Campbell	CA	Office	14,706		35,978		2,126		52,810		(5,641)		47,169		100.0%
Lofts at NoHo Commons	11/16/2016	North Hollywood	CA	Apartment	26,222		81,307		—		107,529		(6,576)		100,953		90.0%
210 West 31st Street⁽²⁾	12/01/2016	New York	NY	Retail	—		55,244		—		55,244		—		55,244		80.0%
Oakland City Center	08/18/2017	Oakland	CA	Office	22,150		142,102		10,496		174,748		(17,493)		157,255		100.0%
Madison Square ⁽³⁾	10/03/2017	Phoenix	AZ	Office	10,540		22,010		2,800		35,350		(3,384)		31,966		90.0%
					$	102,288	$	427,696	$	15,422	$	545,406	$	(51,723)	$	493,683

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⁽¹⁾ Building and improvements includes construction costs for the Company’s project that was under development.

⁽²⁾ The Company acquired the rights to a leasehold interest with respect to this property, which was accounted for as a finance lease. The Company applied a 6.1% discount rate to the finance lease and the lease expires on January 31, 2114. As of December 31, 2019, the finance lease right-of-use asset had a carrying value of $6.8 million included in building and improvements. No depreciation or amortization was recorded to this property as of December 31, 2019.

⁽³⁾ The Company acquired the rights to a leasehold interest with respect to the land at this property, which was accounted for as a finance lease. The Company applied a 5.4% discount rate to the finance lease and as of December 31, 2019, the finance lease had a weighted average remaining lease term of 2.6 years. As of December 31, 2019, the capital lease asset had a carrying value of $1.9 million included in land. This property was formerly known as Grace Court and was re-named Madison Square in connection with the Company’s re-branding strategy for this property.

Schedule of Hotel Revenue and Expense

The following table provides detailed information regarding the Company’s hotel revenues and expenses for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	For the Years Ended December 31,
	2019		2018		2017
Hotel revenues:
Room	$	23,513	$	24,620	$	17,216
Food, beverage and convention services	5,030		5,263		3,761
Campground	1,105		1,176		1,127
Other⁽¹⁾	1,733		1,607		6,890
Hotel revenues	$	31,381	$	32,666	$	28,994

Hotel expenses:
Room	$	5,984	$	6,157	$	4,759
Food, beverage and convention services	4,023		4,077		3,179
General and administrative	2,917		2,919		2,357
Sales and marketing	3,260		3,069		2,642
Repairs and maintenance	2,099		2,362		1,815
Utilities	1,173		1,207		1,033
Property taxes and insurance	1,743		1,749		1,799
Other	1,571		1,367		1,603
Hotel expenses	$	22,770	$	22,907	$	19,187

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⁽¹⁾ Hotel revenues - other includes $5.8 million of business interruption insurance recovery for the year ended December 31, 2017 related to the impact of Hurricane Matthew in October 2016, the result of which placed certain rooms at Springmaid Beach Resort out of service during the year ended December 31, 2017.

Schedule of Contract with Customer, Asset and Liability

The following table summarizes the Company’s contract liabilities, which are included in other liabilities in the accompanying consolidated balance sheets, as of December 31, 2019 and December 31, 2018 (in thousands):


	December 31, 2019		December 31, 2018
Contract liability	$	500	$	324
Revenue recognized in the period from:
Amounts included in contract liability at the beginning of the period	$	281	$	304

Schedule of Office Property Revenue and Expense

The following table provides detailed information regarding the Company’s office revenues and expenses for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	For the Years Ended December 31,
	2019		2018		2017
Office revenues:
Rental income	$	27,978	$	29,104	$	15,204
Other income ⁽¹⁾	852		837		403
Office revenues	$	28,830	$	29,941	$	15,607

Office expenses:
Operating, maintenance, and management ⁽²⁾	$	9,349	$	8,362	$	3,636
Real estate taxes and insurance ⁽²⁾	4,356		3,960		1,736
Office expenses	$	13,705	$	12,322	$	5,372

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⁽¹⁾ For the years ended December 31, 2018 and 2017, the Company reclassified $2.5 million, and $0.9 million of tenant reimbursement revenue for property taxes, insurance, and common area maintenance to rental income. See note 2, “Summary of Significant Accounting Policies” for a further discussion on this reclassification.

⁽²⁾On October 1, 2018, the Company placed the development of 210 West 31st Street on hold and began expensing certain costs that were previously capitalized. Included in office expenses for the year ended December 31, 2019 is $0.7 million of operating, maintenance and management and $0.5 million of real estate taxes and insurance for 210 West 31st Street.

Lessor, Operating Lease, Payments to be Received, Maturity

As of December 31, 2019, the future minimum rental income from the Company’s office properties under its non-cancelable operating leases was as follows (in thousands):


2020	$	21,600
2021	19,985
2022	16,287
2023	13,245
2024	10,802
Thereafter	33,323
	$	115,242

Schedules of Concentration of Risk, by Risk Factor

As of December 31, 2019, the highest tenant industry concentrations (greater than 10% of annualized base rent) in the Company’s portfolio were as follows:


Industry	Number of Tenants	Annualized Base Rent ⁽¹⁾ (in thousands)		Percentage of Annualized Base Rent
Legal Services	13	$	4,547	20.7	%
Public Administration	6	3,589		16.3	%
Professional, Scientific, and Technical Services	12	3,123		14.2	%
		$	11,259	51.2	%

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⁽¹⁾Annualized base rent represents annualized contractual base rental income as of December 31, 2019, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

Schedule of Apartment Property Revenue and Expense

The following table provides detailed information regarding the Company’s apartment revenues and expenses for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	For the Years Ended December 31,
	2019		2018		2017
Apartment revenues:
Rental income ⁽¹⁾	$	7,503	$	6,861	$	6,539
Other income	609		608		441
Apartment revenues	$	8,112	$	7,469	$	6,980

Apartment expenses:
Operating, maintenance, and management	$	2,177	$	2,423	$	2,278
Real estate taxes and insurance	1,377		1,356		1,346
Apartment expenses	$	3,554	$	3,779	$	3,624

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⁽¹⁾ For the years ended December 31, 2018 and 2017, the Company reclassified $22,000 and $24,000, respectively, of tenant reimbursement revenue for property taxes, insurance, and common area maintenance to rental income. See note 2, “Summary of Significant Accounting Policies” for a further discussion on this reclassification.

Schedule of Assets and Liabilities of Real Estate Held-for-Sale

The following summary presents the major components of assets and liabilities related to real estate held for sale as December 31, 2019 and 2018 (in thousands):


	December 31, 2019		December 31, 2018
Assets related to disposition
Real estate, cost	$	—	$	14,119
Accumulated depreciation and amortization	—		(1,455)
Real estate, net	—		12,664
Other assets	—		738
Total assets related to disposition	$	—	$	13,402
Liabilities related to disposition
Notes payable, net	—		7,914

Total liabilities related to disposition	$	—	$	7,914

Schedule of Revenue and Expenses of Real Estate Held-for-Sale

The following table summarizes certain revenue and expenses related to this property for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	For the Years Ended December 31,
	2019		2018		2017
Revenues
Rental income	$	1,315	$	1,534	$	1,206
Other operating income	32		27		35
Total revenues	$	1,347	$	1,561	$	1,241
Expenses
Operating, maintenance, and management	$	313	$	261	$	312
Real estate taxes and insurance	69		78		76
Asset management fees to affiliate	97		133		127
Depreciation and amortization	562		671		608
Interest expense	352		363		343
Total expenses	$	1,393	$	1,506	$	1,466