Other Assets

9 Months Ended

Sep. 30, 2022

Other Assets

Other Assets

9. Other Assets

Other assets consist of the following:

	September 30,		December 31,
	2022		2021
Investments - equity securities	$	334	$	450
Accounts receivable, net		9,763		13,813
Homesite sales receivable		9,089		7,651
Notes receivable, net		2,908		12,377
Income tax receivable		1,558		—
Inventory		3,692		2,797
Prepaid expenses		9,209		7,175
Straight-line rent		2,625		2,489
Operating lease right-of-use assets		761		732
Other assets		13,484		5,987
Retained interest investments		7,832		13,826
Accrued interest receivable for Senior Notes held by SPE		935		2,938
Total other assets	$	62,190	$	70,235

Investments - Equity Securities

As of September 30, 2022 and December 31, 2021, investments - equity securities included $0.3 million and $0.5 million, respectively, of preferred stock investments recorded at fair value. During each the three and nine months ended September 30, 2022, the Company recognized unrealized gain of less than $0.1 million on investments related to equity securities still held as of September 30, 2022. During the three and nine months ended September 30, 2021, the Company recognized unrealized gain of $0.1 million and unrealized loss of $0.9 million, respectively, on investments related to equity securities still held as of September 30, 2021. These amounts were included within investment income, net on the condensed consolidated statements of income.

Accounts Receivable, Net

The Company’s accounts receivable, net primarily includes leasing receivables, membership initiation fees, hospitality receivables and other receivables. At each reporting period, accounts receivable in the scope of Topic 326 are pooled by type and judgements are made based on historical losses and expected credit losses based on economic trends to determine the allowance for credit losses primarily using the aging method. Actual losses could differ from those estimates. Write-offs are recorded when the Company concludes that all or a portion of the receivable is no longer collectible and recoveries on receivables previously charged-off are credited to the allowance. As of September 30, 2022 and December 31, 2021, accounts receivable were presented net of allowance for credit losses of $0.3 million and $0.4 million, respectively, and net of allowance for lease related receivables of $0.1 million as of each period. During the nine months ended September 30, 2022, allowance for credit losses related to accounts receivable, net decreased $0.1 million.

Homesite Sales Receivable

Homesite sales receivable from contracts with customers include estimated homesite residuals and certain estimated fees that are recognized as revenue at the time of sale to homebuilders, subject to constraints. Any change in circumstances from the estimated amounts will be updated at each reporting period. The receivable will be collected as the homebuilders build the homes and sell to retail consumers, which can occur over multiple years.

The following table presents the changes in homesite sales receivable:

	September 30, 2022		September 30, 2021
Balance at beginning of period	$	7,651	$	5,675
Increases due to revenue recognized for homesites sold		4,678		3,670
Decreases due to amounts received		(3,240)		(3,376)
Balance at end of period	$	9,089	$	5,969

Notes Receivable, Net

Notes receivable, net consists of the following:

	September 30,		December 31,
	2022		2021
Interest bearing revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV, secured by the JV's real property — bearing interest at a rate of 5.0%, matures June 2025	$	—	$	7,075
Various interest bearing homebuilder notes, secured by the real estate sold — bearing interest at a rate of 5.5%, due November 2022 through May 2023		2,455		4,824
Interest bearing notes with JV partner, secured by the partner's membership interest in the JV — bearing interest at a rate of 8.0%, due May 2039		359		359
Non-interest bearing note with a tenant for tenant improvements, due October 2025		70		76
Mortgage note, secured by certain real estate, bearing interest at a rate of 4.8% due November 2023		24		43
Total notes receivable, net	$	2,908	$	12,377

In June 2020, the Company entered into a $10.0 million secured revolving promissory note with the unconsolidated Latitude Margaritaville Watersound JV. The Latitude JV Note was provided to finance the development of the pod-level, non-spine infrastructure. Future advances, if any, will be repaid by the JV as each home is sold by the JV, with the aggregate unpaid principal and all accrued and unpaid interest due at maturity in June 2025. The note is secured by a mortgage and security interest in and on the real property and improvements located on the real property of the JV. See Note 4. Joint Ventures for additional information.

The Company may allow homebuilders to pay for homesites during the home construction period in the form of homebuilder notes. The Company evaluates the carrying value of all notes receivable and the need for an allowance for credit losses at each reporting period. As of both September 30, 2022 and December 31, 2021, notes receivable were presented net of allowance for credit losses of $0.1 million. As of September 30, 2022 and December 31, 2021, accrued interest receivable related to notes receivable was $0.2 million and $0.1 million, which is included within other assets on the condensed consolidated balance sheets.

Other Assets

Other assets as of September 30, 2022 and December 31, 2021, include $7.7 million and $3.9 million, respectively, of escrow deposits primarily related to financing and development requirements for certain of the Company’s projects. Other assets as of September 30, 2022 and December 31, 2021, also include $4.5 million and $0.6 million, respectively, for the fair value of derivative assets. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

Retained Interest Investments

The Company has a beneficial interest in certain bankruptcy-remote qualified SPEs used in the installment sale monetization of certain sales of timberlands in 2008. The SPEs’ assets are not available to satisfy the Company’s liabilities or obligations and the liabilities of the SPEs are not the Company’s liabilities or obligations. Therefore, the SPEs’ assets and liabilities are not consolidated in the Company’s condensed consolidated financial statements as of

September 30, 2022 and December 31, 2021. The Company’s continuing involvement with the SPEs is the receipt of the net interest payments and the remaining principal of approximately $10.1 million to be received at the end of the installment notes’ fifteen-year maturity period, in 2023 through 2024. During the nine months ended September 30, 2022, two installment notes matured and the Company received $6.9 million of remaining principal. The Company has a beneficial or retained interest investment related to these SPEs of $7.8 million and $13.8 million as of September 30, 2022 and December 31, 2021, respectively, recorded in other assets on the Company’s condensed consolidated balance sheets.