INVESTMENTS IN REAL ESTATE

12 Months Ended

Dec. 31, 2024

3. INVESTMENTS IN REAL ESTATE

Investments in real estate consist of the following:


	December 31,
	2024		2023
	(in thousands)
Land	$	175,682	$	175,715
Land improvements	5,863		5,862
Buildings and improvements	636,525		633,299
Furniture, fixtures, and equipment	12,844		11,627
Tenant improvements	26,942		26,460
Work in progress	36,929		15,915
Investments in real estate	894,785		868,878
Accumulated depreciation	(185,591)		(164,116)
Net investments in real estate	$	709,194	$	704,762

For the years ended December 31, 2024 and 2023, the Company recorded depreciation expense of $24.9 million and $22.4 million, respectively.

2024 Transactions—There were no acquisitions or dispositions during the year ended December 31, 2024.

2023 Transactions—During the year ended December 31, 2023, the Company acquired an interest in the following properties from subsidiaries indirectly wholly owned by a fund that is managed by affiliates of CIM Group. The acquisitions were accounted for as asset acquisitions.


	Asset	Date of		Interest		Purchase
Property	Type	Acquisition	Units	Acquired (1)		Price
						(in thousands)
Channel House	Multifamily (2)	January 31, 2023	333	89.4	%	$	134,615
F3 Land Site	Multifamily (2)	January 31, 2023	N/A	89.4	%	$	250
466 Water Street Land Site	Multifamily (2)	January 31, 2023	N/A	89.4	%	$	2,500
1150 Clay	Multifamily (3)	March 28, 2023	288	98.1	%	$	145,500

(1)As of December 31, 2024, the Company’s ownership interests in Channel House, F3 Land Site, and 466 Water Street Land Site had changed to 94.0%, 93.4%, and 91.0%, respectively, as result of additional contributions made to the entities by the Company subsequent to the applicable initial acquisition.

(2)Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of these properties totaled $37,000, which are not included in the purchase prices above. The building at Channel House also includes approximately 1,864 square feet of retail space. The F3 Land Site is currently being utilized as a surface parking lot and being evaluated for future development options including hotel development, but there were no formal plans in place to begin development as of December 31, 2024.

(3)Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $149,000, which are not included in the purchase price above. The building also includes approximately 3,968 square feet of retail space.

Please refer to “Investments in Unconsolidated Entities” (Note 4) for information on the Company’s real estate acquisitions through its investments in Unconsolidated Joint Ventures.

The Company sold an interest in the following property during the year ended December 31, 2023.

Asset

Date of

Interest

Sales

Gain on

Property

Type

Sale

Sold

Price

Sale

(in thousands)

4750 Wilshire Boulevard (1)

Multifamily / Office

February 17, 2023

80.0

34,400

1,104

(1)The Company sold 80% of its interest in 4750 Wilshire Boulevard (excluding a vacant land parcel which was not included in the sale) to co-investors with whom the Company formed the 4750 Wilshire JV (defined in Note 4). At the acquisition date, the Company received net proceeds of $16.7 million and recorded a receivable of $17.6 million, all of which has been collected as of December 31, 2024. Additionally, as of December 31, 2024, the Company has a receivable of $396,000 due from the 4750 Wilshire JV included in other assets on the Company’s consolidated balance sheet related to development costs incurred by the Company at 4750 Wilshire Boulevard prior to the sale of 80% of its interest in the property to the 4750 Wilshire JV. The Company owns a 20% interest in the 4750 Wilshire JV and accounts for its investment as an equity method investment.

The results of operations of the properties the Company acquired have been included in the consolidated statements of operations from the date of acquisition. The following table summarizes the purchase price allocation of the aforementioned acquisitions during the years ended December 31, 2023.


	Year Ended December 31,
	2023
	(in thousands)
Land	$	36,613
Land improvements	4,523
Buildings and improvements	206,717

Furniture, fixtures, and equipment	8,140
Acquired in-place leases (1)	27,210
Acquired above-market leases (2)	71
Acquired below-market leases (3)	(223)
Net assets acquired	$	283,051

(1)The amortization period for the in-place leases acquired during the year ended December 31, 2023 was approximately 6 months at the date of acquisition.

(2)The amortization period for the above-market leases acquired during the year ended December 31, 2023 was approximately 7 months at the date of acquisition.

(3)The amortization period for the below-market leases acquired during the year ended December 31, 2023 was approximately 5 months at the date of acquisition.