Investment in Unconsolidated Real Estate Partnership

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Real Estate Partnership

Investment in Unconsolidated Real Estate Partnerships

As of March 31, 2024, AIR has equity investments in three significant unconsolidated joint ventures: the joint venture with a global institutional investor (the “Core JV”), the joint venture with a global asset manager (“Value-Add JV”), and the “Virginia JV” (collectively, the “Joint Venture Entities”). We account for these joint ventures utilizing the equity method of accounting and our ownership interests meet the definition of a VIE. However, we are not the primary beneficiary and do not consolidate these entities.

	Virginia JV	Value-Add JV (1)	Core JV
Initial formation date	October 2021	June 2023	July 2023
AIR Ownership	20%	30%	53%
Outside Entities Ownership	80%	70%	47%
Number of Apartment Communities	3	1	11
Apartment Units	1,748	443	3,549

(1)A global asset manager acquired a 70% legal ownership in the Huntington Gateway property, but AIR is entitled to 50% of the net cash flows from operations, and various fees for providing property management, construction, and corporate services to the joint venture.

The carrying value of AIR's investment in each joint venture is included in investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets. AIR's exposure to the obligations of the VIEs is limited to the carrying value of the limited partnership interests and AIR's interest of the joint ventures' guarantor non-recourse liabilities. The following table summarizes certain relevant information with respect to our investments in unconsolidated real estate partnerships (in thousands):

	March 31, 2024
	Virginia JV		Value-Add JV		Core JV
Third-party debt	$	395,000	$	89,053	$	793,874
AIR's investment in balance (1)	$	16,539	$	28,482	$	258,590

(1)AIR's investment in balance includes certain basis differences that are subject to amortization. AIR's investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets also includes $21.3 million related to two immaterial unconsolidated investments.

	December 31, 2023
	Virginia JV		Value-Add JV		Core JV
Third-party debt	$	395,000	$	88,741	$	793,910
AIR's investment in balance (1)	$	17,212	$	28,606	$	268,931

(1)AIR's investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets includes $21.3 million related to two immaterial unconsolidated investments.

The Company recognizes earnings or losses from our investments in unconsolidated real estate partnerships consisting of our proportionate share of the net earnings or losses of the joint ventures. In addition, we earn various fees for providing property management, construction, and corporate services to the Joint Venture Entities. The table below presents earnings or losses attributable to our investments in unconsolidated real estate partnerships, which is included in loss from unconsolidated real estate partnerships in our combined condensed consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2024		2023
Virginia JV	$	(73)	$	(1,035)
Value-Add JV	(239)		—
Core JV	(6,538)		—
Total	$	(6,850)	$	(1,035)