Investment in Real Estate, Net

12 Months Ended

Dec. 31, 2023

Investment in Real Estate, Net

Investment in Real Estate, Net

3. Investment in Real Estate, Net

Investment in real estate, net, excluding unconsolidated JVs, by property type and segment includes the following:

	December 31,		December 31,
	2023		2022
Development property:
Residential	$	141,145	$	166,304
Hospitality		23,633		205,409
Commercial		99,719		131,133
Other		2,924		3,618
Total development property		267,421		506,464
Operating property:
Residential		10,905		7,854
Hospitality		419,095		221,542
Commercial		439,671		356,242
Other		—		127
Total operating property		869,671		585,765
Less: Accumulated depreciation		118,474		95,968
Total operating property, net		751,197		489,797
Investment in real estate, net	$	1,018,618	$	996,261

Investment in real estate, net is carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable.

Development property consists of land the Company is developing or intends to develop for sale, lease or future operations and includes direct costs associated with the land, as well as development, construction and indirect costs. Residential development property includes existing and planned residential homesites and related infrastructure. Hospitality development property consists of land, as well as development costs related to additional club amenities and improvements to existing properties. Commercial development property primarily consists of land and construction and development costs for planned commercial, multi-family and industrial uses. Development property in the hospitality and commercial segments will be reclassified as operating property as it is placed into service.

Operating property includes the following components:

		December 31,		December 31,
		2023		2022
Land and land improvements	$	206,089	$	146,257
Buildings and building improvements		648,655		425,347
Timber		14,927		14,161
		869,671		585,765
Less: Accumulated depreciation		118,474		95,968
Total operating property, net	$	751,197	$	489,797

Operating property includes property that the Company uses for operations and activities. Residential operating property consists primarily of residential utility assets and certain rental properties. Hospitality operating property primarily consists of existing hotels, resorts, clubs, vacation rental homes, marinas and other operations. Commercial operating property includes property used for retail, office, self-storage, light industrial, multi-family, senior living, commercial rental and timber purposes. Operating property may be sold in the future as part of the Company’s principal real estate business. As of December 31, 2023 and 2022, operating property, net related to operating leases was $367.3 million and $285.1 million, respectively.

In December 2022, the Company acquired The Pearl Hotel property for a purchase price of $52.0 million. The Pearl Hotel acquisition was accounted for as an asset acquisition in accordance with ASC Topic 805 Business Combinations. The Company allocated the purchase price based on the relative fair value of each acquired component. Costs related to the acquisition were capitalized and included in the cost basis of the asset. The allocation of the purchase price and costs primarily consisted of $49.3 million for the building and land included within operating property, net and $3.0 million included within property and equipment, net. There were no in-place leases at the acquisition date. See Note 10. Debt, Net for additional information regarding financing related to the asset acquisition.

Depreciation, depletion and amortization expense related to real estate investments was $23.0 million, $14.3 million and $12.0 million in 2023, 2022 and 2021, respectively.