Notes And Other Receivables

9 Months Ended

Sep. 30, 2023

Notes and Loans Payable, by Type, Current and Noncurrent [Abstract]

4. Notes and Other Receivables

The following table sets forth certain information regarding notes and other receivables (in millions):


	September 30, 2023		December 31, 2022
Installment notes receivable on manufactured homes, net	$	56.0	$	65.9
Notes receivable from real estate developers and operators	477.5		305.2
Other receivables, net	298.7		246.2
Total Notes and Other Receivables, net	$	832.2	$	617.3

Installment Notes Receivable on Manufactured Homes

Installment notes receivable are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820, "Fair Value Measurements and Disclosures." The balances of installment notes receivable of $56.0 million (gross installment notes receivable of $60.5 million less fair value adjustment of $4.5 million) and $65.9 million (gross installment notes receivable of $67.3 million less fair value adjustment of $1.4 million) as of September 30, 2023 and December 31, 2022, respectively, are secured by manufactured homes. The notes represent financing to purchasers of manufactured homes located in our communities and require monthly principal and interest payments. The notes had a net weighted average interest rate (net of servicing costs) and maturity of 7.5% and 13.1 years as of September 30, 2023, and 7.6% and 13.8 years as of December 31, 2022, respectively. Refer to Note 15, "Fair Value of Financial Instruments," for additional details.

Notes Receivable from Real Estate Developers and Operators

Notes receivable from real estate developers and operators are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820, "Fair Value Measurements and Disclosures."

As of September 30, 2023 and December 31, 2022, the notes receivable balances include a fully drawn loan provided to Royale Holdings Group HoldCo Limited, a real estate development owner and operator in the UK, and certain other parties, to fund investing and financing activities totaling $361.1 million and $217.6 million, respectively (the "Note"). At December 31, 2022, the Note had a net weighted average interest rate of 15.3% and maturity of 0.1 years. At September 30, 2023, the Note had a net weighted average interest rate of 12.4%. The Note matured on July 31, 2023, and remained due at September 30, 2023.

At September 30, 2023, the Note was collateralized by a first-priority security interest in three real estate properties and three MH manufacturers in the UK. The real estate collateral consists of MH development properties that comprised a significant majority of the total appraised value of all collateral securing the Note at September 30, 2023. Since inception of the Note in December 2021, and on a periodic basis thereafter, we have engaged third party valuation specialists to appraise the collateral in order to assess the fair value of the Note.

On September 29, 2023, we appointed receivers over the real estate collateral and are assessing courses of action with respect to the other collateral. We expect the receivers to start to market the real estate collateral for sale during the fourth quarter of 2023. Upon completion of the marketing process, we may elect to credit bid certain amounts due under the Note for the real estate collateral. If that were to occur and no third-party bid is received that exceeds our credit bid, we may elect to receive the real estate collateral in satisfaction of related amounts due under the Note. If a third-party bid is received that exceeds our bid, we will receive the cash proceeds of that bid up to the outstanding loan amount including interest, fees and penalties, as applicable.

Other acquisition and construction loans provided to real estate developers total $116.4 million with a net weighted average interest rate and maturity of 9.2% and 2.6 years as of September 30, 2023, and total $87.6 million with a net weighted average interest rate and maturity of 7.8% and 2.3 years as of December 31, 2022. As of September 30, 2023, the additional acquisition and construction loans provided to real estate developers have $44.5 million of undrawn funds.

There were no adjustments to the fair value of notes receivable from real estate developers and operators during the nine months ended September 30, 2023 and year ended December 31, 2022. Refer to Note 15, "Fair Value of Financial Instruments," for additional information.

Other Receivables, net

Other receivables, net were comprised of amounts due from the following categories (in millions):


	September 30, 2023		December 31, 2022
MH and annual RV residents for rent, utility charges, fees and other pass-through charges, net(1)	$	102.9	$	61.5
Insurance receivables	63.4		78.0
Marina customers for storage, service and lease payments, net(2)	49.3		41.8
Home sale proceeds	32.7		28.9
Other receivables(3)	50.4		36.0
Total Other Receivables, net	$	298.7	$	246.2

(1)Net of allowance of $5.1 million and $5.9 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Net of allowance of $2.6 million and $2.2 million as of September 30, 2023 and December 31, 2022, respectively.

(3)Includes receivable from Rezplot Systems LLC, a nonconsolidated affiliate, in which we had 49.0% and 48.9% ownership interest as of September 30, 2023 and December 31, 2022, respectively. In June 2020, we made a convertible secured loan to Rezplot Systems LLC. The note allows for a principal amount of up to $10.0 million to be drawn down over a period of three years, bears an interest rate of 3.0%, matures in June 2024, and is secured by all the assets of Rezplot Systems LLC. In January 2022, we made an additional loan to Rezplot Systems LLC that allows for a principal amount of up to $5.0 million to be drawn over a period of three years, bears an interest rate of 3.0% and matures in January 2025. The outstanding balances were $12.4 million and $12.7 million as of September 30, 2023 and December 31, 2022, respectively. Refer to Note 6, "Investments in Nonconsolidated Affiliates," for additional information on Rezplot Systems LLC.