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Investments in Unconsolidated Entities
 3 Months Ended
Jan. 31, 2021
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]  
Equity Method Investments and Joint Ventures Disclosure Investments in Unconsolidated Entities
We have investments in various unconsolidated entities and our ownership interest in these investments ranges from 15.8% to 50%. These entities, which are structured as joint ventures, (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”); (ii) develop for-sale homes (“Home Building Joint Ventures”); (iii) develop luxury for-rent residential apartments, commercial space, and a hotel (“Rental Property Joint Ventures”); and (iv) invest in distressed loans and real estate and provide financing and land banking to residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).
The table below provides information as of January 31, 2021, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
 Land
Development
Joint Ventures		Home Building
Joint Ventures		Rental Property
Joint Ventures		Gibraltar
Joint Ventures		Total
Number of unconsolidated entities
12428751
Investment in unconsolidated entities$264,274 $26,191 $263,280 $17,887 $571,632 
Number of unconsolidated entities with funding commitments by the Company
3—81 12
Company’s remaining funding commitment to unconsolidated entities
$33,518 $— $30,491 $25,649 $89,658 
Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities. The table below provides information at January 31, 2021, regarding the debt financing obtained by category ($ amounts in thousands):
 Land
Development
Joint Ventures		Home Building
Joint Ventures		Rental Property
Joint Ventures		Total
Number of joint ventures with debt financing
412530
Aggregate loan commitments$158,805 $29,786 $2,010,544 $2,199,135 
Amounts borrowed under loan commitments
$107,551 $29,786 $1,312,325 $1,449,662 
More specific and/or recent information regarding our investments in, advances to, and future commitments to these entities is provided below.
New Joint Ventures
The table below provides information on joint ventures entered into during our first quarter of fiscal 2021 ($ amounts in thousands):
Land Development Joint VenturesRental Property Joint Ventures
Number of unconsolidated joint ventures entered into during the period32
Investment balance at January 31, 2021$139,033 $14,932 
The table below provides information on joint ventures entered into during our first quarter of fiscal 2020 ($ amounts in thousands):
Land Development Joint VenturesRental Property Joint Ventures
Number of unconsolidated joint ventures entered into during the period— 2 
Investment balance at January 31, 2020$— $24,900 
Results of Operations and Intra-entity Transactions
In our first quarters of fiscal 2021 and 2020, certain of our land development and rental property joint ventures sold their underlying assets to unrelated parties or to our joint venture partner. In connection with these sales, we recognized gains of $5.9 million and $10.7 million, respectively, which is included in “Income from unconsolidated entities” in our Condensed Consolidated Statements of Operations and Comprehensive Income.
In our first quarter of fiscal 2021, we recognized other-than-temporary impairment charges on certain Home Building Joint Ventures of $2.1 million. No similar charges were incurred in our first quarter of fiscal 2020.
In our first quarters of fiscal 2021 and 2020, purchases from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, were $4.3 million and $3.5 million, respectively. Our share of income from the lots we acquired was insignificant in each period. Sales to unconsolidated entities, which principally involved land sales to our Rental Property Joint Ventures, were $57.3 million and $26.4 million in our first quarters of fiscal 2021 and 2020, respectively. These amounts are included in “Land sales and other revenue” on our Condensed Consolidated Statement of Operations and Comprehensive Income. Gains related to these sales were immaterial in both periods.
Guarantees
The unconsolidated entities in which we have investments generally finance their activities with a combination of partner equity and debt financing. In some instances, we have guaranteed debt of unconsolidated entities. These guarantees may include any or all of the following: (i) project completion guarantees, including any cost overruns; (ii) repayment guarantees, generally covering a percentage of the outstanding loan; (iii) carry cost guarantees, which cover costs such as interest, real estate taxes, and insurance; (iv) an environmental indemnity provided to the lender that holds the lender harmless from and against losses arising from the discharge of hazardous materials from the property and non-compliance with applicable environmental laws; and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity.
In some instances, we and our joint venture partner have provided joint and several guarantees in connection with loans to unconsolidated entities. In these situations, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed upon share of the guarantee; however, we are not always successful. In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate share.
We believe that, as of January 31, 2021, in the event we become legally obligated to perform under a guarantee of an obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the venture.
Information with respect to certain of the Company’s unconsolidated entities’ outstanding debt obligations, loan commitments and our guarantees thereon are as follows ($ amounts in thousands):
January 31, 2021
Loan commitments in the aggregate$1,858,000 
Our maximum estimated exposure under repayment and carry cost guarantees if the full amount of the debt obligations were borrowed$327,500 
Debt obligations borrowed in the aggregate$1,108,500 
Our maximum estimated exposure under repayment and carry cost guarantees of the debt obligations borrowed$236,700 
Estimated fair value of guarantees provided by us related to debt and other obligations$8,800 
Terms of guarantees1 month - 3.8 years
The maximum exposure estimates presented above do not take into account any recoveries from the underlying collateral or any reimbursement from our partners. We have not made payments under any of the outstanding guarantees, nor have we been called upon to do so.
Variable Interest Entities

The table below provide information as of January 31, 2021 and October 31, 2020, regarding our unconsolidated joint venture-related variable interests in VIEs ($ amounts in thousands):
January 31, 2021October 31, 2020
Number of Joint Venture VIEs that the Company is not the Primary Beneficiary (“PB”)
12 12 
Investment balance in unconsolidated Joint Venture VIEs included in Investments in unconsolidated entities in our Consolidated Balance Sheets$55,300 $63,100 
Our maximum exposure to losses related to loan guarantees and additional commitments provided to unconsolidated Joint Venture VIEs$282,700 $122,100 
Our ownership interest in the above unconsolidated Joint Venture VIEs ranges from 20% to 50%.
The table below provide information as of January 31, 2021 and October 31, 2020, regarding our consolidated joint venture-related variable interests in VIEs ($ amounts in thousands):
Balance Sheet ClassificationJanuary 31, 2021October 31, 2020
Number of Joint Venture VIEs that the Company is the PB and consolidates
5 5 
Carrying value of consolidated VIEs assetsReceivables prepaid expenses, and other assets$113,300 $163,000 
Our partners’ interests in consolidated VIEsNoncontrolling interest$41,700 $46,200 
Our ownership interest in the above consolidated Joint Venture VIEs ranges from 50% to 98%.
As shown above, we have concluded we are the PB of certain VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures. The assets of these VIEs can only be used to settle the obligations of the VIEs. In addition, in certain of the joint ventures, in the event additional contributions are required to be funded to the joint ventures prior to the admission of any additional investor at a future date, we will fund 100% of such contributions, including our partner’s pro rata share, which we expect would be funded through an interest-bearing loan. For other VIEs, we have concluded that we are not the PB because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIEs’ other partners or such activities were controlled by our partner. For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all members. Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and other members.
Joint Venture Condensed Financial Information
The Condensed Balance Sheets, as of the dates indicated, and the Condensed Statements of Operations, for the periods indicated, for the unconsolidated entities in which we have an investment are included below (in thousands):
Condensed Balance Sheets:
 January 31,
2021		October 31,
2020
Cash and cash equivalents$98,195 $109,478 
Inventory736,821 511,000 
Loans receivable, net66,974 78,576 
Rental properties1,428,734 1,244,911 
Rental properties under development700,218 666,386 
Real estate owned6,818 6,752 
Other assets170,708 169,368 
Total assets$3,208,468 $2,786,471 
Debt, net of deferred financing costs$1,443,949 $1,368,065 
Other liabilities211,245 186,817 
Members’ equity1,544,803 1,231,173 
Noncontrolling interest8,471 416 
Total liabilities and equity$3,208,468 $2,786,471 
Company’s net investment in unconsolidated entities (1)
$571,632 $430,701 
(1)    Differences between our net investment in unconsolidated entities and our underlying equity in the net assets of the entities amounted to $34.3 million and $29.4 million as of January 31, 2021 and October 31, 2020, respectively, and are primarily a result of the deferred recognition of a sale of assets to a joint venture; other than temporary impairments related to our investments in unconsolidated entities; interest capitalized on our investments; the estimated fair value of the guarantees provided to the joint ventures; unrealized gains on our retained joint venture interests; gains recognized from the sale of our ownership interests; and distributions from entities in excess of the carrying amount of our net investment.
Condensed Statements of Operations:
 Three months ended January 31,
 20212020
Revenues$92,530 $133,170 
Cost of revenues (3)96,723 95,308 
Other expenses (3)35,390 41,183 
Total expenses132,113 136,491 
Loss from operations(39,583)(3,321)
Other income948 612 
Loss before income taxes(38,635)(2,709)
Income tax (benefit) provision(1,506)140 
Net loss including earnings from noncontrolling interests(37,129)(2,849)
Less: loss attributable to noncontrolling interest(174)— 
Net loss attributable to controlling interest$(37,303)$(2,849)
Company’s equity in earnings of unconsolidated entities (2)$1,194 $12,141 
(2)    Differences between our equity in earnings of unconsolidated entities and the underlying net income (loss) of the entities are primarily a result of distributions from entities in excess of the carrying amount of our investment; other than temporary impairments related to our investments in unconsolidated entities; recoveries of previously incurred charges; unrealized gains on our retained joint venture interests; gains recognized from the sale of our investment to our joint venture partner; and our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired.
(3)    Effective October 31, 2020, we reclassified sales commissions paid to third-party brokers from home sales cost of revenues to selling, general and administrative expense. Prior year periods have been reclassified to conform to the 2021 presentation.