Segment Information

6 Months Ended

Jun. 30, 2023

Segment Information

Segment Information

16.Segment Information

We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We define our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into three reportable segments (multifamily, commercial, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services.

The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the net operating income ("NOI") of properties within each segment. NOI includes property rental revenue and parking revenue, and deducts property operating expenses and real estate taxes.

With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative: third-party real estate services"), which are both disclosed separately in our statements of operations. The following represents the components of revenue from our third-party asset management and real estate services business:

	Three Months Ended June 30,					Six Months Ended June 30,
	2023		2022		X	2023		2022
	(In thousands)
Property management fees	$	5,017	$	4,976		$	9,969	$	9,784
Asset management fees		1,255		1,513			2,358		3,284
Development fees		2,756		2,148			4,742		5,687
Leasing fees		1,256		1,038			2,612		2,877
Construction management fees		303		37			643		187
Other service revenue		1,422		1,499			2,646		2,315
Third-party real estate services revenue, excluding reimbursements		12,009		11,211			22,970		24,134
Reimbursement revenue (1)		10,853		10,946			22,676		21,993
Third-party real estate services revenue, including reimbursements		22,862		22,157			45,646		46,127
Third-party real estate services expenses		22,105		24,143			45,928		51,192
Third-party real estate services revenue less expenses	$	757	$	(1,986)		$	(282)	$	(5,065)

(1) Represents reimbursement of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects.

Management company assets primarily consist of management and leasing contracts with a net book value of $10.9 million and $13.7 million as of June 30, 2023 and December 31, 2022, which were included in "Intangible assets, net" in our balance sheets. Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below.

The following is the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI:

	Three Months Ended June 30,					Six Months Ended June 30,
	2023		2022		X	2023		2022
	(in thousands)
Net income (loss) attributable to common shareholders	$	(10,545)	$	123,275		$	10,626	$	123,243
Add:
Depreciation and amortization expense		49,218		49,479			102,649		107,541
General and administrative expense:
Corporate and other		15,093		14,782			31,216		30,597
Third-party real estate services		22,105		24,143			45,928		51,192
Share-based compensation related to Formation Transaction and special equity awards		—		1,577			351		3,821
Transaction and other costs		3,492		1,987			5,964		2,886
Interest expense		25,835		16,041			52,677		32,319
Loss on the extinguishment of debt		450		1,038			450		1,629
Income tax expense		611		2,905			595		2,434
Net income (loss) attributable to redeemable noncontrolling interests		(1,398)		18,248			1,965		18,258
Net loss attributable to noncontrolling interests		(311)		(29)			(535)		(84)
Less:
Third-party real estate services, including reimbursements revenue		22,862		22,157			45,646		46,127
Other revenue		3,846		1,798			5,572		3,994
Income (loss) from unconsolidated real estate ventures, net		510		(2,107)			943		1,038
Interest and other income, net		2,281		1,672			6,358		15,918
Gain on the sale of real estate, net		—		158,767			40,700		158,631
Consolidated NOI	$	75,051	$	71,159		$	152,667	$	148,128

The following is a summary of NOI by segment. Items classified in the Other column include development assets, corporate entities, land assets for which we are the ground lessor and the elimination of inter-segment activity.

	Three Months Ended June 30, 2023
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	64,321	$	52,443	$	3,828	$	120,592
Parking revenue		4,426		295		74		4,795
Total property revenue		68,747		52,738		3,902		125,387
Property expense:
Property operating		18,252		18,394		(734)		35,912
Real estate taxes		8,195		5,648		581		14,424
Total property expense		26,447		24,042		(153)		50,336
Consolidated NOI	$	42,300	$	28,696	$	4,055	$	75,051
	Three Months Ended June 30, 2022
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	71,903	$	42,939	$	2,194	$	117,036
Parking revenue		4,187		250		77		4,514
Total property revenue		76,090		43,189		2,271		121,550
Property expense:
Property operating		19,624		14,870		951		35,445
Real estate taxes		9,018		5,054		874		14,946
Total property expense		28,642		19,924		1,825		50,391
Consolidated NOI	$	47,448	$	23,265	$	446	$	71,159

	Six Months Ended June 30, 2023
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	136,238	$	102,353	$	6,034	$	244,625
Parking revenue		8,564		519		131		9,214
Total property revenue		144,802		102,872		6,165		253,839
Property expense:
Property operating		37,623		35,849		(1,948)		71,524
Real estate taxes		17,196		11,256		1,196		29,648
Total property expense		54,819		47,105		(752)		101,172
Consolidated NOI	$	89,983	$	55,767	$	6,917	$	152,667
	Six Months Ended June 30, 2022
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	159,524	$	85,047	$	4,063	$	248,634
Parking revenue		8,199		384		132		8,715
Total property revenue		167,723		85,431		4,195		257,349
Property expense:
Property operating		45,826		28,625		1,638		76,089
Real estate taxes		20,795		10,275		2,062		33,132
Total property expense		66,621		38,900		3,700		109,221
Consolidated NOI	$	101,102	$	46,531	$	495	$	148,128

The following is a summary of certain balance sheet data by segment:

	Commercial		Multifamily		Other		Total
	(In thousands)
June 30, 2023
Real estate, at cost	$	2,585,492	$	3,126,375	$	425,793	$	6,137,660
Investments in unconsolidated real estate ventures		224,620		—		84,599		309,219
Total assets		2,787,056		2,508,503		488,043		5,783,602
December 31, 2022
Real estate, at cost	$	2,754,832	$	2,986,907	$	416,343	$	6,158,082
Investments in unconsolidated real estate ventures		218,723		304		80,854		299,881
Total assets		2,829,576		2,483,902		589,960		5,903,438