SEGMENT DISCLOSURE

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

SEGMENT DISCLOSURE

17. SEGMENT DISCLOSURE

The Company’s reportable segments during the three months ended March 31, 2024 and March 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. 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 the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2023 included in the 2023 Form 10-K.

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 three months ended March 31, 2024 and 2023 is as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Office:
Revenues	$	14,611	$	13,487
Property expenses:
Operating	6,859		6,523
General and administrative	4		100
Total property expenses	6,863		6,623
Income (loss) from unconsolidated entities	117		(64)
Segment net operating income—office	7,865		6,800
Hotel:
Revenues	11,854		11,492
Property expenses:
Operating	7,785		7,339
General and administrative	7		8
Total property expenses	7,792		7,347
Segment net operating income—hotel	4,062		4,145
Multifamily:
Revenues	4,749		1,223
Property expenses:
Operating	3,337		1,363
General and administrative	52		17
Total property expenses	3,389		1,380
(Loss) income from unconsolidated entity	(443)		832
Segment net operating income—multifamily	917		675
Lending:
Revenues	2,640		2,710
Lending expenses:
Interest expense	920		245
Expense reimbursements to related parties—lending segment	563		608
General and administrative	368		499
Total lending expenses	1,851		1,352
Segment net operating income—lending	789		1,358
Total segment net operating income	$	13,633	$	12,978

A reconciliation of segment net operating income to net income attributable to the Company for the three months ended March 31, 2024 and 2023 is as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Total segment net operating income	$	13,633	$	12,978
Interest and other income	144		—
Asset management and other fees to related parties	(394)		(720)
Expense reimbursements to related parties—corporate	(605)		(528)
Interest expense	(8,057)		(5,991)
General and administrative	(1,188)		(1,301)
Transaction-related costs	(690)		(3,360)
Depreciation and amortization	(6,478)		(9,502)
Gain on sale of real estate	—		1,104
Loss before provision for income taxes	(3,635)		(7,320)
Provision for income taxes	(270)		(256)
Net loss	(3,905)		(7,576)
Net loss attributable to non-controlling interests	175		625
Net loss attributable to the Company	$	(3,730)	$	(6,951)

The condensed assets for each of the segments as of March 31, 2024 and December 31, 2023, along with capital expenditures and loan originations for the three months ended March 31, 2024 and 2023, are as follows (in thousands):

	March 31, 2024		December 31, 2023
Condensed assets:
Office	$	420,628	$	419,443
Hotel	98,023		95,998
Multifamily	277,516		278,492
Lending	73,954		76,374
Non-segment assets	17,382		20,893
Total assets	$	887,503	$	891,200

	Three Months Ended March 31,
	2024		2023
Capital expenditures(1) and loan originations:
Office	$	8,582	$	2,156
Hotel	2,360		1,629
Multifamily	2,598		5,327
Total capital expenditures	13,540		9,112
Loan originations	7,733		10,781
Total capital expenditures and loan originations	$	21,273	$	19,893

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