7. Investments in Unconsolidated Entities

The Partnership has non-controlling investments in unconsolidated entities. The Partnership applies the equity method of accounting by initially recording these investments at cost, subsequently adjusted for accrued preferred returns, the Partnership’s share of earnings (losses) of the unconsolidated entities, cash contributions, and distributions. The carrying value of the equity investments and the limited guaranties of construction loans disclosed in Note 16, represent the Partnership’s maximum exposure to loss. The Partnership is entitled to a preferred return on invested capital in each unconsolidated entity. The Partnership’s preferred return is reported as “Investment income” on the Partnership’s condensed consolidated statements of operations.

An affiliate of the Vantage Properties guarantees a preferred return on the Partnership’s invested capital through a date approximately five years after commencement of construction in connection with each Vantage Property.

In October 2024, the Partnership entered into the Construction Lending JV to invest in loans to finance the construction and/or rehabilitation of affordable multifamily housing properties across the United States, similar to the Partnership’s current GIL, taxable GIL and property loan investments. The Partnership has committed to contribute 10% of the total capital for the Construction Lending JV with the remainder funded by third-party investors with each party contributing their respective proportionate capital contributions upon funding of future investments. The Partnership’s maximum capital contribution to the Construction Lending JV is approximately $15.1 million as of June 30, 2026. A wholly owned subsidiary of the Partnership is the Construction Lending JV’s managing member responsible for identifying, evaluating, underwriting, and closing investments, subject to the conditions of the joint venture and third-party investor evaluation and approval. The Partnership earns proportionate returns on its invested capital plus promote income if the joint venture meets certain earnings thresholds. The Partnership accounts for its investment in the Construction Lending JV using the equity method. The Partnership made its first capital contribution to the Construction Lending JV in April 2025.

The Partnership has remaining commitments to provide additional equity funding for certain unconsolidated entities as of June 30, 2026. See Note 16 for further details regarding the Partnership’s remaining funding commitments.

Activity in the First Six Months of 2026

In June 2026 , the Partnership received sales proceeds of approximately $17,000 associated with final settlements of the Vantage at Helotes sale in May 2025. The Partnership recognized the amount in “Gain on sale of investment in an unconsolidated entity” on the Partnership’s condensed consolidated statement of operations.

During the first six months of 2026, the Partnership contributed funds beyond its original equity commitments to three Vantage Properties, Freestone at Cresta Bella, and The Jessam at Hays Farm totaling approximately $13.0 million to cover additional interest costs, a required mortgage loan amortization payment, and various operating expenses.

Activity in the First Six Months of 2025

During the first six months of 2025, the Partnership advanced funds beyond its original commitments to four Vantage Properties and Freestone at Cresta Bella totaling approximately $3.1 million to cover additional interest costs.

Summarized Unconsolidated Entity Level Financial Data