INVESTMENTS |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVESTMENTS | INVESTMENTS The Company has interests in 183 partnership or joint venture entities. The limited liability companies and limited partnerships in which the Company is the general partner are generally engaged directly or indirectly in the acquisition, development, operation, and ownership of real estate. The accounting principles of these entities are substantially the same as those of the Company. Additionally, the Company has direct investments in several funds, including certain Bridge-sponsored funds. The Company’s investments are summarized below (in thousands):
(1)Represents various investment accounts held by the Bridge GPs for carried interest in Bridge-sponsored funds. There is a disproportionate allocation of returns to the Company as general partner or equivalent based on the extent to which cumulative performance of the fund exceeds minimum return hurdles. Investment is valued using NAV of the respective vehicle, which are based on asset valuations one quarter in arrears.
(2)Partnership interests in Company-sponsored funds are valued using NAV of the respective vehicle.
(3)Investments in limited partnership interest in third-party private property technology venture capital firms are valued using NAV of the respective vehicle.
(4)Other investments are accounted for using the measurement alternative to measure at cost adjusted for any impairment and observable price changes.
On July 3, 2023, the Company redeemed a $20.0 million investment in Bridge Agency MBS Fund and recognized a realized loss of approximately $1.9 million. On August 1, 2023, the Company reinvested $20.0 million in Bridge Agency MBS Fund.
On July 31, 2023, Bridge Multifamily Fund III agreed to sell a portfolio of real estate assets to Bridge Multifamily CV LP (the “Continuation Fund”) in a transaction valued at $550 million, including equity raised by the Continuation Fund to support further investment in the portfolio of real estate assets. The Continuation Fund provides additional time and capital to further invest in the portfolio of real estate assets, while also offering liquidity to the limited partners of Bridge Multifamily Fund III, who were provided a choice to receive liquidity or continue their investment in the Continuation Fund. This transaction included a liquidity discount. As a result of the transaction, during the three and nine months ended September 30, 2023, the Company recognized realized performance allocation income of $14.7 million, with a corresponding reversal of unrealized performance allocation income of $41.0 million and realized performance allocation compensation of $0.9 million, with a corresponding reversal of unrealized performance allocation compensation of $1.5 million.
The Company recognized a loss related to its accrued performance allocations and other investments of $31.2 million for the three months ended September 30, 2023 and income of $6.3 million for the three months ended September 30, 2022, of which a loss of $30.7 million and income of $5.9 million for three months ended September 30, 2023 and 2022, respectively, related to accrued performance allocations recognized under the equity method. The Company recognized a loss related to its accrued performance allocations and other investments of $145.8 million for the nine months ended September 30, 2023 and income of $188.8 million for the nine months ended September 30, 2022, of which a loss of $145.4 million and income of $184.4 million for three months ended September 30, 2023 and 2022, respectively, related to accrued performance allocations recognized under the equity method.
Of the total accrued performance allocations balance as of September 30, 2023 and December 31, 2022, $49.3 million and $66.8 million, respectively, were payable to affiliates and are included in accrued performance allocations compensation in the condensed consolidated balance sheets as of the periods then ended.
Fair value of the accrued performance allocations is reported on a three-month lag from the fund financial statements due to timing of the information provided by the funds and third-party entities unless information is available on a more timely basis. As a result, any changes in the markets in which our managed funds operate, and the impact market conditions have on underlying asset valuations, may not yet be reflected in reported amounts. The Company evaluates each of its equity method investments, excluding accrued performance allocations, to determine if any were significant as defined by the SEC. As of September 30, 2023 and December 31, 2022, no individual equity method investment held by the Company met the significance criteria. As a result, the Company is not required to provide separate financial statements for any of its equity method investments.
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