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Investments in Unconsolidated Entities (Tables)

9 Months Ended

Jul. 31, 2024

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

The table below provides information as of July 31, 2024, regarding active joint ventures that we were 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	15		2		42		2		61
Investment in unconsolidated entities (1)	$	373,025	$	59,259	$	539,587	$	11,721	$	983,592
Number of unconsolidated entities with funding commitments by the Company	6		—		24		1		31
Company’s remaining funding commitment to unconsolidated entities (2)	$	157,809	$	—	$	85,678	$	4,132	$	247,619

(1) Our total investment includes $147.9 million related to nine unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $366.7 million as of July 31, 2024, inclusive of our investment in these joint ventures. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25% to 50%.

(2) Our remaining funding commitment includes approximately $116.5 million related to our unconsolidated joint venture-related variable interests in VIEs.

The table below provides information as of October 31, 2023, regarding active joint ventures that we were 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	16		2		43		3		64
Investment in unconsolidated entities (1)	$	351,154	$	65,285	$	531,823	$	10,779	$	959,041
Number of unconsolidated entities with funding commitments by the Company	9		—		19		1		29
Company’s remaining funding commitment to unconsolidated entities (2)	$	204,438	$	—	$	184,266	$	12,066	$	400,770

(1) Our total investment includes $121.6 million related to 11 unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $329.3 million as of October 31, 2023, inclusive of our investment in joint ventures. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25% to 50%.

(2) Our remaining funding commitment includes approximately $105.4 million related to our unconsolidated joint venture-related variable interests in VIEs.

Summary of Joint Ventures Borrowing information

Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities. The table below provides information at July 31, 2024, 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	9		1		39		49
Aggregate loan commitments	$	539,589	$	98,150	$	3,603,148	$	4,240,887
Amounts borrowed under loan commitments	$	384,172	$	77,141	$	2,655,333	$	3,116,646

The table below provides information at October 31, 2023, 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	12		2		42		56
Aggregate loan commitments	$	610,758	$	219,650	$	3,731,847	$	4,562,255
Amounts borrowed under loan commitments	$	445,506	$	135,723	$	2,152,872	$	2,734,101

New joint venture formations

There were no new joint ventures entered into during the nine-months ended July 31, 2024. The table below provides information on joint ventures entered into during the nine-months ended July 31, 2023 ($ amounts in thousands):


	Land Development Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures
Number of unconsolidated joint ventures entered into during the period	1		$	—	3
Investment balance at July 31, 2023	$	12,808	$	—	$	7,096
Number of consolidated joint ventures entered into during the period	—		1		1
Carrying value of consolidated joint ventures’ assets at July 31, 2023	$	—	$	5,000	$	10,604
Noncontrolling interests in consolidated joint ventures at July 31, 2023	$	—	$	835	$	2,651

Summary of Unconsolidated Entities Debt Obligations, Loan Commitments and Guarantees

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):


	July 31, 2024		October 31, 2023
Loan commitments in the aggregate	$	3,099,500	$	3,341,700
Our maximum estimated exposure under repayment and carry cost guarantees if the full amount of the debt obligations were borrowed (1)	$	665,500	$	688,000

Debt obligations borrowed in the aggregate	$	2,118,100	$	1,643,600
Our maximum estimated exposure under repayment and carry cost guarantees of the debt obligations borrowed	$	569,500	$	544,100

Estimated fair value of guarantees provided by us related to debt and other obligations	$	18,000	$	19,500
Terms of guarantees	1 month - 3.3 years		1 month - 4.0 years

(1) At July 31, 2024 and October 31, 2023, our maximum estimated exposure under repayment and carry cost guarantees includes approximately $102.3 million related to our unconsolidated joint venture VIEs.

Consolidated Joint Venture Related Variable Interest Entities

The table below provides information as of July 31, 2024 and October 31, 2023, regarding our consolidated joint venture-related variable interests in VIEs ($ amounts in thousands):


	Balance Sheet Classification	July 31, 2024		October 31, 2023
Number of Joint Venture VIEs that the Company is the primary beneficiary and consolidates		5		5
Carrying value of consolidated VIEs assets	Receivables, prepaid expenses and other assets and Investments in unconsolidated entities	$	104,600	$	89,600
Our partners’ interests in consolidated VIEs	Noncontrolling interest	$	10,200	$	10,200

Our ownership interest in the above consolidated Joint Venture VIEs ranges from 75% to 98%.

Condensed balance sheet

Condensed Combined Balance Sheets:


	July 31, 2024		October 31, 2023
Cash and cash equivalents	$	217,515	$	161,274
Inventory	1,266,323		1,425,145
Loans receivable – net	26,355		17,024
Rental properties	2,827,765		1,907,604
Rental properties under development	1,565,392		1,804,664
Other assets	473,781		385,197
Total assets	$	6,377,131	$	5,700,908
Debt – net of deferred financing costs	$	3,120,781	$	2,711,986
Other liabilities	480,102		498,866
Partners’ equity	2,776,248		2,490,056
Total liabilities and equity	$	6,377,131	$	5,700,908
Company’s net investment in unconsolidated entities (1)	$	983,592	$	959,041

(1) Our underlying equity in the net assets of the unconsolidated entities was less than our net investment in unconsolidated entities by $9.7 million and $40.9 million as of July 31, 2024 and October 31, 2023, respectively, and these differences are primarily a result of interest capitalized on our investments; the estimated fair value of the guarantees provided to the joint ventures; distributions from entities in excess of the carrying amount of our net investment; unrealized gains on our retained joint venture interests; other than temporary impairments we have recognized; and gains recognized from the sale of our ownership interests.

Condensed statements of operations and comprehensive income

Condensed Combined Statements of Operations:


	Three months ended July 31,				Nine months ended July 31,
	2024		2023		2024		2023
Revenues	$	286,981	$	186,669	$	571,512	$	429,647
Cost of revenues	199,012		124,414		365,813		266,593
Other expenses	71,271		67,195		210,670		187,336
Total expenses	270,283		191,609		576,483		453,929

Income (loss) from operations	16,698		(4,940)		(4,971)		(24,282)
Other income (2)	45,543		79,857		155,452		76,251
Income before income taxes	62,241		74,917		150,481		51,969
Income tax expense	4,468		1,195		2,119		1,030
Net income	57,773		73,722		148,362		50,939




Company’s (loss) income from unconsolidated entities (3)	$	(10,514)	$	30,548	$	(13,799)	$	20,813

(2) The nine months ended July 31, 2024 includes $112.7 million related to the gain on the sale of assets by one of our Rental Property Joint Ventures. The three and nine months ended July 31, 2023 includes gains of $78.8 million related to the sale of assets by one of our Rental Property Joint Ventures.

(3) Differences between our loss from unconsolidated entities and our percentage interest in the underlying net income (loss) of the entities are generally a result of distributions from entities in excess of the carrying amount of our investment; promote earned on the gains recognized by joint ventures and those promoted cash flows being distributed; other than temporary impairments we have recognized; 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; our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired; and amortization of other basis differences.