Joint Ventures

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Joint Ventures

Joint Ventures

On a limited basis, we obtain finished lots using joint venture limited liability corporations (“JVs”). The JVs are typically structured such that we are a non-controlling member and at risk only for the amount we have invested, or committed to invest, in addition to any deposits placed under LPAs with the joint venture. We are not a borrower, guarantor or obligor on any debt of the JVs, as applicable. We enter into a standard LPA to purchase lots from these JVs, and as a result have a variable interest in these JVs.

At December 31, 2021, we had an aggregate investment totaling approximately $20,300 in four JVs that are expected to produce approximately 2,300 finished lots, of which approximately 1,900 lots were controlled by us and the remaining approximately 400 lots were either under contract with unrelated parties or not currently under contract. We had additional funding commitments totaling approximately $2,500 in one of the JVs at December 31, 2021.

During the fourth quarter of 2021, we recognized an impairment of approximately $1,300 related to one of the JVs. The charge was recorded to homebuilding "Cost of sales" on the accompanying consolidated statements of income. None of the other JVs had any indicators of impairment during 2021.

We determined that we are not the primary beneficiary in three of the JVs because we and the other JV partner either share power or the other JV partner has the controlling financial interest. The aggregate investment in unconsolidated JVs was approximately $20,300 and $23,600 at December 31, 2021 and December 31, 2020, respectively, and is reported in the “Other assets” line item on the accompanying consolidated balance sheets. For the remaining JV, we concluded that we are the primary beneficiary because we have the controlling financial interest in the JV. All activities under the consolidated JV had been completed and as of December 31, 2021, we had no remaining investment in the JV. The JV had remaining balances of $268 in cash and $248 in accrued expenses, which are included in homebuilding "Other assets" and "Accrued expenses and other liabilities," respectively, in the accompanying consolidated balance sheets.

At December 31, 2020, we had an aggregate investment totaling approximately $23,600 in four JVs that were expected to produce approximately 5,200 finished lots, of which approximately 2,200 lots were controlled by us and the remaining approximately 3,000 lots were either under contract with unrelated parties or not currently under contract. In addition, at December 31, 2020, we had additional funding commitments in the aggregate totaling $3,100 to one of the JVs. During the fourth quarter of 2020, one of the JVs sold a portion of its owned land. As a result of the sale, we received a distribution from the JV of approximately $13,100 and recognized a net gain on the sale of approximately $5,000.