v3.26.1
Business Segments
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Business Segments

Note 11 — Business Segments

Prior to the adoption of the Plan of Sale and Liquidation, we had three segments: (i) Development; (ii) Operating; and (iii) Other. Subsequent to the adoption of the Plan of Sale and Liquidation, we no longer make operating decisions or assess performance in separate segments as all assets are considered held for sale.

Our Development segment consisted of rental communities that were under construction or had not achieved stabilization, as well as land held for development. As of January 31, 2026, our Development segment consisted of 9 properties, including one under construction, two completed and in lease-up, one that had completed lease-up and was stabilizing operations, and five undeveloped land parcels.

Our Operating segment included 8 residential apartment communities with 1,029 apartment homes that had achieved a stabilized level of operations as of January 1, 2025 and maintained it throughout the current year and comparable period. Two of the communities, Hillmeade and Plantation Gardens, met the held for sale criteria in accordance with GAAP as described in Note 3. We aggregated all our apartment communities that had reached stabilization into our Operating segment.

Our Other segment consisted of owned properties that were not included in our Development or Operating segments. Our Other segment included The Benson Hotel, our only hotel.

Prior period segment information has been recast based upon our current segment population, and is consistent with how our President and Chief Executive Officer, the chief operating decision maker (“CODM”) evaluated the business prior to adoption of the Plan of Sale and Liquidation. During the month ended January 31, 2026, we reclassified and recast as discontinued operations the seven properties within our Chicago Portfolio, which was previously reported within the Operating segment. Refer to Note 10 for the operating results of our discontinued operations, which consists of both the Chicago Portfolio and Boston Portfolio.

Prior to the adoption of the Plan of Sale and Liquidation, our CODM evaluated performance and allocated resources for all of our segments using historical and projected property net operating income (“PNOI”), which was our measure of segment profit or loss. PNOI is defined as rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, including utility reimbursements, for the consolidated communities; but excluding

•
the results of four apartment communities with an aggregate 142 apartment homes that we neither manage nor consolidate, our investment in IQHQ, the Mezzanine Investment, and investments in real estate technology funds; and
•
property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance.

Prior to the adoption of the Plan of Sale and Liquidation, our CODM used historical and projected PNOI to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget process. PNOI was used to review operating trends, perform analytical comparisons between periods, and to monitor budget-to-actual variances on at least a quarterly basis in order to assess performance and allocate resources. The corporate goals, which impacted

short term incentive compensation for employees, also previously included consideration of PNOI.

The accounting policies of segments were the same as those under the going concern basis of accounting described in the summary of significant accounting policies in Note 3.

The following tables present the results of operations of consolidated properties within our segments for the month ended January 31, 2026, and three months ended March 31, 2025 (in thousands):

 

Development

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Month Ended January 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

2,838

 

 

$

2,476

 

 

$

428

 

 

$

417

 

 

$

—

 

 

$

6,159

 

Controllable operating expenses(3)

 

604

 

 

 

472

 

 

 

512

 

 

 

—

 

 

 

—

 

 

 

1,588

 

Real estate taxes, net of capitalized amounts

 

491

 

 

 

411

 

 

 

64

 

 

 

—

 

 

 

—

 

 

 

966

 

Utilities expense, net of utility reimbursements

 

130

 

 

 

80

 

 

 

29

 

 

 

417

 

 

 

—

 

 

 

656

 

Property insurance expense, net of capitalized amounts

 

45

 

 

 

78

 

 

 

9

 

 

 

—

 

 

 

—

 

 

 

132

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

790

 

 

 

790

 

Property operating expenses

 

1,270

 

 

 

1,041

 

 

 

614

 

 

 

417

 

 

 

790

 

 

 

4,132

 

Property net operating income (loss)

 

1,568

 

 

 

1,435

 

 

 

(186

)

 

 

—

 

 

 

(790

)

 

 

2,027

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,567

)

 

 

(6,567

)

Other items included in income (loss) from continuing operations before income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,998

)

 

 

(1,998

)

Income (loss) from continuing operations before income tax

$

1,568

 

 

$

1,435

 

 

$

(186

)

 

$

—

 

 

$

(9,355

)

 

$

(6,538

)

 

 

Development

 

 

Operating

 

 

Other

 

 

Adjustments(1)

 

 

Corporate and Amounts Not Allocated to Segments(2)

 

 

Consolidated

 

Three Months Ended March 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental and other property revenues

$

5,209

 

 

$

7,540

 

 

$

1,446

 

 

$

630

 

 

$

8,057

 

 

$

22,882

 

Controllable operating expenses(3)

 

1,428

 

 

 

1,166

 

 

 

1,716

 

 

 

—

 

 

 

730

 

 

 

5,040

 

Real estate taxes, net of capitalized amounts

 

1,099

 

 

 

1,158

 

 

 

269

 

 

 

—

 

 

 

2,066

 

 

 

4,592

 

Utilities expense, net of utility reimbursements

 

600

 

 

 

265

 

 

 

72

 

 

 

630

 

 

 

256

 

 

 

1,823

 

Property insurance expense, net of capitalized amounts

 

359

 

 

 

215

 

 

 

33

 

 

 

—

 

 

 

380

 

 

 

987

 

Other property operating expenses(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

696

 

 

 

696

 

Property operating expenses

 

3,486

 

 

 

2,804

 

 

 

2,090

 

 

 

630

 

 

 

4,128

 

 

 

13,138

 

Property net operating income (loss)

 

1,723

 

 

 

4,736

 

 

 

(644

)

 

 

—

 

 

 

3,929

 

 

 

9,744

 

Other operating expenses not allocated to segments(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(20,235

)

 

 

(20,235

)

Other items included in income (loss) from continuing operations before income tax(6)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(10,747

)

 

 

(10,747

)

Income (loss) from continuing operations before income tax

$

1,723

 

 

$

4,736

 

 

$

(644

)

 

$

—

 

 

$

(27,053

)

 

$

(21,238

)
(1)
Represents the reclassification of utility reimbursements, which were included in Rental and other property revenues in our Condensed Consolidated Statements of Operations, in accordance with GAAP, from revenues to property operating expenses for the purpose of evaluating segment results.
(2)
Includes the operating results of apartment communities sold during or subsequent to the period. Also includes property management expenses and casualty gains and losses, which were included in consolidated property operating expenses and were not part of our segment performance measure.
(3)
Controllable operating expenses primarily consisted of property personnel costs, marketing, repairs and maintenance, and contract services.
(4)
Other property operating expenses included property management costs and casualty gains or losses, which were included in consolidated property operating expenses and were not part of our segment performance measure.
(5)
Other operating expenses not allocated to segments consisted of depreciation and amortization, and general and administrative expenses.
(6)
Other items included in Income (loss) before income tax consisted primarily of interest income, interest expense, realized and unrealized gains (losses) on interest rate contracts, realized and unrealized gains (losses) on equity investments, other income (expense), and gain on dispositions of real estate, if any.

Net real estate and non-recourse property debt and construction loans, net, of our segments as of December 31, 2025, were as follows (in thousands):

 

Development

 

 

Operating

 

 

Other

 

 

Total

 

As of December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

Buildings and improvements

$

626,929

 

 

$

93,144

 

 

$

24,868

 

 

$

744,941

 

Land

 

148,850

 

 

 

49,973

 

 

 

364

 

 

 

199,187

 

Total real estate

 

775,779

 

 

 

143,117

 

 

 

25,232

 

 

 

944,128

 

Accumulated depreciation

 

(48,719

)

 

 

(55,531

)

 

 

(7,335

)

 

 

(111,585

)

Net real estate

$

727,060

 

 

$

87,586

 

 

$

17,897

 

 

$

832,543

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse property debt and construction loans, net

$

399,142

 

 

$

58,180

 

 

$

—

 

 

$

457,322

 

 

Capital additions within our segments for the month ended January 31, 2026, and three months ended March 31, 2025, were as follows (in thousands):

 

Month Ended
January 31,

 

 

Three Months Ended
March 31,

 

 

2026

 

 

2025

 

Development

$

6,378

 

 

$

20,259

 

Operating

 

115

 

 

 

947

 

Other

 

—

 

 

 

160

 

Corporate and Amounts Not Allocated to Segments (1)

 

—

 

 

 

126

 

Total capital additions

$

6,493

 

 

$

21,492

 
(1)
During the month ended January 31, 2026, and three months ended March 31, 2025, certain capital additions pertained to properties that were sold or reclassified as held for sale and therefore are not included in our segments as capital additions at those respective period ends. We added a row to the table above for presentation purposes to display these capital additions for the month ended January 31, 2026, and three months ended March 31, 2025.

In addition to the amounts disclosed in the tables above, as of December 31, 2025, the Development segment right-of-use lease assets and lease liabilities aggregated to $106.4 million and $124.8 million, respectively. Right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.