SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2024

SIGNIFICANT ACCOUNTING POLICIES

Summary of notes receivable, net

The following table summarizes our Notes receivable, net as of March 31, 2024 and December 31, 2023 (dollars in thousands):

	Interest rate at		Balance Outstanding (a)
	March 31,		March 31,		December 31,
	2024		2024		2023
Notes due October 2024 (b)	10.50	%	$	100,859	$	98,271
Note due December 2024 (c)	12.00	%		38,411		37,022
Note due December 2026 (d)	11.00	%		66,317		64,608
Note due December 2026 (e)	11.00	%		26,872		26,164
Notes due June 2027 (f)	18.00	%		3,907		3,737
Notes receivable				236,366		229,802
Allowance for credit losses				(984)		(977)
Total notes receivable, net			$	235,382	$	228,825

(a) Outstanding note amounts include any accrued and unpaid interest, as applicable.

(b) The Company has two loans (the “Notes”) with a joint venture that owns a 478 apartment home operating community located in Philadelphia, Pennsylvania with an aggregate commitment of $93.5 million (exclusive of accrued interest), all of which has been funded. The Notes are subordinate to the senior construction loan, but senior to the equity in the borrower. Currently, the Notes have a scheduled maturity date in October 2024, with two remaining one-year extension options. In April 2024, the joint venture refinanced the senior construction loan with a new loan that matures in April 2026, with a one year extension option subject to certain conditions.

(c) The Company has a secured note with an unaffiliated third party with an aggregate commitment of $32.5 million, of which $31.8 million was funded as of March 31, 2024. Interest payments are due monthly, with the exception of payments from June 2022 to December 2024, which are accrued and added to the principal balance and will be due at maturity of the note. The note is secured by substantially all of the borrower’s assets and matures at the earliest of the following: (a) the closing of any private or public capital raising in the amount of $5.0 million or greater; (b) an acquisition; (c) acceleration in the event of default; or (d) December 2024.

(d) The Company has a secured mezzanine loan with a third party developer of a 482 apartment home community located in Riverside, California, which is expected to be completed in 2025, with an aggregate commitment of $59.7 million (exclusive of accrued interest), all of which has been funded. Interest payments accrue for 36 months and are due monthly after the loan has been outstanding for 36 months. The secured mezzanine loan has a scheduled maturity date in December 2026, with two one-year extension options.

(e) The Company has a secured mezzanine loan with a third party developer of a 237 apartment home community located in Menifee, California, which is expected to be completed in 2025, with an aggregate commitment of $24.4 million (exclusive of accrued interest), all of which has been funded. Interest payments accrue for 36 months and are due monthly after the loan has been outstanding for 36 months. The secured mezzanine loan has a scheduled maturity date in December 2026, with two one-year extension options.

(f) The Company and a syndicate of lenders previously entered into a $16.0 million secured credit facility with an unaffiliated third party. In 2023, the secured credit facility was amended to provide a new term loan in the amount of $19.0 million, and the Company’s commitment was increased from $1.5 million to $3.0 million (exclusive of accrued interest), all of which has been funded. Interest payments accrue and are due at maturity of the facility. The facility is secured by substantially all of the borrower’s assets and matures at the earliest of the following: (a) acceleration in the event of default; or (b) June 2027.