SEGMENT DISCLOSURE

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENT DISCLOSURE

18. SEGMENT DISCLOSURE

The Company’s reportable segments during the year ended December 31, 2023 consist of three types of commercial real estate properties, namely office, hotel and multifamily, as well as a segment for the Company’s lending business. The Company’s reportable segments during the year ended December 31, 2022 consist of two types of commercial real estate properties, namely office and hotel, as well as a segment for the Company’s lending business. Management internally evaluates the operating performance and financial results of the segments based on net operating income. The Company also has certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments. The reportable segments are accounted for on the same basis of accounting as described in Note 2.

For the Company’s real estate segments, the Company defines net operating income (loss) as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes. For the Company’s lending segment, the Company defines net operating income as interest income net of interest expense and general overhead expenses.

The net operating income (loss) of the Company’s segments for the years ended December 31, 2023 and 2022 is as follows:

	Year Ended December 31,
	2023		2022
	(in thousands)
Office:
Revenues	$	55,033	$	55,928
Property expenses:
Operating	25,731		26,537
General and administrative	344		225
Total property expenses	26,075		26,762
(Loss) income from unconsolidated entities	(582)		164
Segment net operating income—office	28,376		29,330
Hotel:
Revenues	41,096		35,213
Property expenses:
Operating	27,959		23,989
General and administrative	33		110
Total property expenses	27,992		24,099
Segment net operating income—hotel	13,104		11,114
Multifamily:
Revenues	11,224		—
Property expenses:
Operating	8,803		—
General and administrative	661		—
Total property expenses	9,464		—
Income from unconsolidated entity	155
Segment net operating income—multifamily	1,915		—
Lending:
Revenues	11,458		10,765
Lending expenses:
Interest expense	3,692		552
Expense reimbursements to related parties—lending segment	2,579		1,929
General and administrative	1,628		1,904
Total lending expenses	7,899		4,385
Segment net operating income—lending	3,559		6,380
Total segment net operating income	$	46,954	$	46,824

A reconciliation of the Company’s segment net operating income to net income attributable to the Company for the years ended December 31, 2023 and 2022 is as follows: 

	Year Ended December 31,
	2023		2022
	(in thousands)
Total segment net operating income	$	46,954	$	46,824
Interest and other income	447		—
Asset management and other fees to related parties	(2,627)		(3,570)
Expense reimbursements to related parties—corporate	(2,342)		(1,925)
Interest expense	(31,406)		(9,052)
General and administrative	(5,453)		(4,630)
Transaction costs	(4,421)		(223)
Depreciation and amortization	(52,484)		(20,348)
Gain on sale of real estate	1,104		—
(Loss) income before provision for income taxes	(50,228)		7,076
Provision for income taxes	(1,228)		(1,131)
Net (loss) income	(51,456)		5,945
Net loss (income) attributable to noncontrolling interests	2,971		(27)
Net (loss) income attributable to the Company	$	(48,485)	$	5,918

The condensed assets for each of the segments as of December 31, 2023 and 2022, along with capital expenditures and loan originations for the years ended December 31, 2023 and 2022 are as follows:

	December 31,
	2023		2022
	(in thousands)
Condensed assets:
Office	$	419,443	$	471,677
Hotel	95,998		99,082
Multifamily	278,492		—
Lending	76,374		76,148
Non-segment assets	20,893		43,341
Total assets	$	891,200	$	690,248

	Year Ended December 31,
	2023		2022
	(in thousands)
Capital expenditures (1) and loan originations:
Office	$	7,395	$	9,094
Hotel	2,098		414
Multifamily	1,476		—
Total capital expenditures	10,969		9,508
Loan originations	45,188		40,619
Total capital expenditures and loan originations	$	56,157	$	50,127

(1)Represents additions and improvements to real estate investments, excluding acquisitions. Includes the activity for dispositions through their respective disposition dates.