Investments In And Advances To Unconsolidated Real Estate Joint Ventures

9 Months Ended

Sep. 30, 2022

Investments In And Advances To Unconsolidated Real Estate Joint Ventures [Abstract]

Investments In And Advances To Unconsolidated Real Estate Joint Ventures

6. Investments in and Advances to Unconsolidated Real Estate Joint Ventures

As of September 30, 2022, the Company had equity interests in and advances to unconsolidated real estate joint ventures involved in the development of multifamily rental apartment communities and single-family master planned for sale housing communities. In addition, the Company owns a 50% equity interest in the Altman Companies, a developer and manager of multifamily apartment communities.

Investments in unconsolidated real estate joint ventures are accounted for as unconsolidated VIEs under the equity method of accounting.

The Company’s investments in and advances to unconsolidated real estate joint ventures consisted of the following (in thousands):

	September 30,		December 31,
	2022		2021
Altis Grand Central	$	687	$	730
Altis Ludlam Trail (1)		11,803		10,831
Altis Grand at The Preserve		—		194
Altis Little Havana		300		1,021
Altis Lake Willis Phase 1		728		437
Altra Lake Willis Phase 2		1,066		—
Altis Vineland Pointe		—		2,538
Altis Miramar East/West		434		2,878
Altis Grand at Suncoast		4,483		2,780
Altis Blue Lake		634		260
Altis Santa Barbara		424		—
The Altman Companies		14,648		16,716
ABBX Guaranty		3,750		3,750
Bayview		—		1,308
Marbella		1,444		974
The Main Las Olas		1,604		1,990
Sky Cove		197		1,686
Sky Cove South		4,274		4,708
Other		164		165
Total	$	46,640	$	52,966

(1)The carrying value of BBXRE’s investment at September 30, 2022 and December 31, 2021 includes $11.2 million and $10.3 million, respectively, related to BBXRE’s investment in the preferred equity associated with the Altis Ludlam Trail project, which is accounted for as a loan receivable.

See Note 7 to the Company’s consolidated financial statements for the year ended December 31, 2021 included in the 2021 Annual Report for the Company’s accounting policies relating to its investments in unconsolidated real estate joint ventures, including the Company’s analysis and determination that such entities are VIEs in which the Company is not the primary beneficiary.

In February 2022, BBXRE invested $0.4 million in the managing member of a joint venture sponsored by the Altman Companies that was formed to develop Altis Santa Barbara, a 242-unit multifamily apartment community located in Naples, Florida.

As of September 30, 2022, BBRE had invested $8.1 million in a joint venture with CC Homes to develop Marbella, a residential community expected to be comprised of 158 single-family homes in Miramar, Florida. As of September 30, 2022, the joint venture had executed contracts to sell all of the 158 single-family homes comprising Marbella and had closed on the sale of 126 homes. During the nine months ended September 30, 2022, BBXRE recognized $8.6 million of equity earnings and received $8.1 million of distributions from the joint venture.

In June 2022, the Altis Little Havana joint venture sold Altis Little Havana, its 224-unit multifamily apartment community located in Miami, Florida. As a result of the transaction, BBXRE received a net cash distribution of approximately $9.4 million from the joint venture and recognized $8.4 million of equity earnings from its investment in the joint venture during the nine months ended September 30, 2022.

In June 2022, BBXRE sold its equity interest in the Bayview joint venture to its joint venture partner. As a result of the transaction, BBXRE received net cash proceeds of approximately $8.8 million and recognized a net gain from the sale of its investment in the venture of approximately $7.3 million, which is included in equity in net earnings of unconsolidated real estate joint ventures in the Company’s condensed consolidated statements of operations for the nine months ended September 30, 2022.

In July 2022, the Miramar East/West joint venture sold Altis Miramar, a 320-unit multifamily apartment community located in Miramar, Florida, and Altra Miramar, a 330-unit multifamily apartment community adjacent to Altis Miramar. As a result of the transaction, BBXRE received a net cash distribution of approximately $16.4 million from the joint venture and recognized approximately $14.0 million of equity earnings from its investment in the joint venture during the three and nine months ended September 30, 2022.

BBXRE and Joel Altman had previously invested in the Altis Lake Willis Vineland joint venture, which was sponsored by the Altman Companies to acquire land, obtain entitlements, and fund predevelopment costs for the development of a multifamily apartment community in Orlando, Florida. In 2021, the joint venture decided to develop the project in two phases. Accordingly, in September 2021, the Altis Lake Willis Phase 1 joint venture was formed with an institutional investor to develop the first phase of the project, which is expected to be comprised of a 329-unit multifamily apartment community, and closed on its development financing. In connection with the closing, BBXRE and Joel Altman acquired membership interests in the managing member of the Altis Lake Willis Phase 1 joint venture and retained their respective ownership interests in the land and predevelopment costs related to the anticipated second phase of the project through the existing Altis Lake Willis Vineland joint venture,.

In September 2022, the Altra Lake Willis Phase 2 joint venture was formed with an institutional investor to develop the second phase of the project, which is expected to be comprised of a 230-unit multifamily apartment community, and the remaining land held by the Altis Lake Willis Vineland joint venture was transferred to the Altis Lake Willis Phase 2 joint venture in exchange for cash. In connection with the transfer of the land, BBXRE and Joel Altman also acquired membership interests in the managing member of the Altis Lake Willis Phase 2 joint venture. As a result of the transaction, BBXRE received a cash distribution of approximately $2.3 million from the Altis Lake Willis Vineland joint venture and recognized approximately $0.4 million of equity earnings from its investment in the venture during the three and nine months ended September 30, 2022. As of September 30, 2022, predevelopment activities related to the development of Altis Lake Willis Phase 2 remained ongoing, and the joint venture was continuing to seek debt financing for the project.

Summarized Financial Information of Certain Unconsolidated Real Estate Joint Ventures

The tables below set forth financial information, including condensed statements of financial condition and operations, related to the Company’s current 50% interest in the Altman Companies joint venture (in thousands):

	September 30,		December 31,
	2022		2021
Assets
Cash	$	1,728		995
Properties and equipment		426		387
Investment in unconsolidated subsidiaries		6,223		7,153
Goodwill		16,683		16,683
Due from related parties		3,932		4,462
Predevelopment costs		8,156		6,036
Other assets		2,696		2,626
Total assets	$	39,844		38,342
Liabilities and Equity
Notes payable	$	3,600		3,250
Other liabilities		10,396		5,213
Total liabilities		13,996		8,463
Total equity		25,848		29,879
Total liabilities and equity	$	39,844		38,342

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Total revenues	$	1,747	$	2,156	$	6,125	$	5,600
Other expenses		(3,999)		(2,586)		(10,055)		(8,314)
Operating loss		(2,252)		(430)		(3,930)		(2,714)
Equity in (losses) earnings from unconsolidated investment in Altman Glenewinkel Construction, LLC		(952)		—		(1,884)		608
Net losses		(3,204)		(430)		(5,814)		(2,106)
Equity in net (losses) earnings of unconsolidated real estate joint venture - The Altman Companies	$	(1,602)	$	(215)	$	(2,907)	$	(1,053)

The tables below set forth financial information, including condensed statements of financial condition and operations, related to the Marbella joint venture (in thousands):

	September 30,		December 31,
	2022		2021
Assets
Cash	$	1,651		4,371
Real estate inventory		17,510		49,928
Other assets		759		1,673
Total assets	$	19,920		55,972
Liabilities and Equity
Notes payable	$	8,134		30,987
Customer deposits		7,769		21,255
Other liabilities		1,260		2,698
Total liabilities		17,163		54,940
Total equity		2,757		1,032
Total liabilities and equity	$	19,920		55,972

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Total revenues	$	32,571		3,982	$	80,591		3,982
Cost of real estate inventory sold		(24,702)		(3,201)		(60,351)		(3,201)
Other expenses		(994)		(385)		(2,710)		(1,094)
Net earnings (losses)		6,875		396		17,530		(313)
Equity in net earnings (losses) of unconsolidated real estate joint venture - Marbella	$	3,363		198	$	8,574		(157)

The tables below set forth financial information, including condensed statements of financial condition and operations, related to the Altis Little Havana joint venture (in thousands):

	September 30,		December 31,
	2022		2021
Assets
Cash	$	1,287		40
Real estate		—		58,254
Other assets		614		610
Total assets	$	1,901		58,904
Liabilities and Equity
Notes payable	$	—		32,536
Other liabilities		1,901		3,116
Total liabilities		1,901		35,652
Total equity		—		23,252
Total liabilities and equity	$	1,901		58,904

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Total revenues	$	55		—	$	255		—
Gain on sale of real estate		711		—		56,547		—
Other expenses		(683)		—		(1,044)		(1)
Net earnings (losses)		83		—		55,758		(1)
Equity in net earnings of unconsolidated real estate joint venture - Altis Little Havana	$	—		—	$	8,398		—

The tables below set forth financial information, including condensed statements of financial condition and operations, related to the Altis Miramar East/West joint ventures (in thousands):

	September 30,		December 31,
	2022		2021
Assets
Cash	$	3,073		138
Real estate		—		42,613
Construction in progress		—		103,413
Other assets		1,881		1,773
Total assets	$	4,954		147,937
Liabilities and Equity
Notes payable	$	—		88,077
Other liabilities		217		6,785
Total liabilities		217		94,862
Total equity		4,737		53,075
Total liabilities and equity	$	4,954		147,937

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Total revenues	$	1,905		73	$	5,049		139
Gain on sale of real estate		142,673		—		143,310		—
Other expenses		(2,305)		(281)		(6,890)		(532)
Net earnings (losses)		142,273		(208)		141,469		(393)
Equity in net earnings of unconsolidated real estate joint venture - Altis Miramar East/West	$	14,012		(10)	$	13,954		(20)