Discontinued Operations

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3. Discontinued Operations

On June 7, 2024, the Company executed an agreement of purchase and sale with an unaffiliated third party for the sale of our sole remaining student property located in Fayetteville, Arkansas (“Fayetteville property”). The Fayetteville property was sold on July 31, 2024.

In June 2024, we concluded that the Fayetteville property qualified as discontinued operations as the property met the criteria of held for sale, and the disposal represents a strategic shift in our business as we no longer own or operate student housing communities. As a result, certain items were reclassified as part of discontinued operations for comparative purposes. The amounts in the statement of operations that are included in discontinued operations are summarized in the following table:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Revenues:
Leasing and related revenues – student	$	511,339		$	1,233,249		$	3,382,068		$	3,636,439
Operating expenses:
Property operating expenses – student		409,713			730,252			1,656,302			1,976,462
Property operating expenses – affiliates		41,752			126,617			294,463			374,306
Depreciation		—			355,550			660,286			1,044,531
Total operating expenses		451,465			1,212,419			2,611,051			3,395,299
Other expenses:
Interest expense (1)		426,318			933,517			2,502,015			2,722,194
Derivative fair value adjustment (2)		—			—			147,284			—
Interest expense - debt issuance costs (3)		11,847			44,688			469,901			134,063
Total other expenses		438,165			978,205			3,119,200			2,856,257
Loss from discontinued operations		(378,291	)		(957,375	)		(2,348,183	)		(2,615,117	)
Loss on extinguishment of debt (4)		(286,719	)		—			(286,719	)		—
Gain on sale of real estate, net (5)		27,587,961			—			27,587,961			—
Net income (loss) from discontinued operations		26,922,951			(957,375	)		24,953,059			(2,615,117	)

(1)Includes interest expense related to the Fayetteville JPM Mortgage Loan, which was repaid in April 2024 in connection with the Fayetteville Mortgage Loan refinance, the Fayetteville Mortgage Loan and the KeyBank Bridge Loan that were required to be repaid according to the terms of such loans, in conjunction with the sale of the Fayetteville property.

(2)On April 10, 2024, in conjunction with the Fayetteville Mortgage Loan refinance, the Company entered into an interest rate cap agreement with a notional amount of $34.5 million, whereby SOFR was capped at 4.25% through the maturity of the Fayetteville Mortgage Loan, that capped the all-in rate at 6.5%. We elected not to designate the interest cap as a hedge for GAAP purposes, and changes in the fair value are recorded in the statement of discontinued operations. The interest rate cap was settled on July 31, 2024, in conjunction with the sale of the Fayetteville property.

(3)Includes interest expense - debt issuance costs related to the Fayetteville JPM Mortgage Loan, which was repaid in April 2024 in connection with the Fayetteville Mortgage Loan refinance, the Fayetteville Mortgage Loan and the KeyBank Bridge Loan that were required to be repaid according to the terms of such loans, in conjunction with the sale of the Fayetteville property.

(4)Includes the write off of the net debt issuance costs associated with the $34.5 million Fayetteville JPM Loan and the $25.4 million KeyBank Bridge Loan in conjunction with the sale of the Fayetteville property in July 2024, along with the loss on the settlement of the interest rate cap.

(5)Relates to the net gain on the sale of the Fayetteville property, which was sold on July 31, 2024.

The amounts in the statement of cash flows that are included in discontinued operations are summarized in the following table:

	Nine Months Ended September 30,
	2024			2023
Adjustments to reconcile discontinued operating activities:
Depreciation	$	660,286		$	1,044,531
Amortization of debt issuance costs		180,794			134,063
Derivative fair value adjustment		147,284			—
Adjustments to reconcile discontinued operating activities		988,364			1,178,594
Loss on extinguishment of debt		286,719			—
Gain on sale of real estate, net		(27,587,961	)		—
Increase (decrease) in cash, cash equivalents, and restricted cash from changes in assets and liabilities:
Purchase of interest rate cap		(366,000	)		—
Settlement of interest rate cap		181,500			—
Other assets		142,242			35,643
Accounts payable and accrued liabilities		(971,798	)		367,392
Due to affiliates		294,463			374,706
Net cash (used in) provided by changes in assets and liabilities related to discontinued operating activities		(719,593	)		777,741
Cash flows from discontinued investing activities:
Additions to real estate		(213,275	)		(475,902	)
Net proceeds from sale of real estate		70,863,051			—
Net cash provided by (used in) discontinued investing activities		70,649,776			(475,902	)
Cash flows from discontinued financing activities:
Principal payments of KeyBank Bridge Loan		(350,000	)		(450,000	)
Repayment of Fayetteville JPM Mortgage Loan		(29,500,000	)		—
Proceeds from Fayetteville Mortgage Loan		34,500,000			—
Repayment of Fayetteville Mortgage Loan		(34,500,000	)		—
Repayment of KeyBank Bridge Loan		(25,366,550	)		—
Debt issuance costs		(362,439	)		—
Net cash used in discontinued financing activities		(55,578,989	)		(450,000	)