Financial Performance - Total assets increased to $556,845,000 as of June 30, 2025, up from $517,591,000 at December 31, 2024, representing a growth of 7.4%[15] - Rental revenue for the three months ended June 30, 2025, was $2,002,000, a significant increase from $384,000 in the same period of 2024, marking a growth of 421.9%[18] - Total expenses for the six months ended June 30, 2025, were $20,475,000, compared to $9,566,000 for the same period in 2024, reflecting an increase of 114.5%[18] - Net loss attributable to Belpointe PREP, LLC for the six months ended June 30, 2025, was $16,246,000, compared to a net loss of $8,701,000 for the same period in 2024, indicating a 86.5% increase in losses[18] - The company reported a net loss of $(16,256) thousand for the six months ended June 30, 2025, compared to a net loss of $(8,697) thousand for the same period in 2024, indicating an increase in losses of 86.5%[124] Cash and Liquidity - Cash and cash equivalents at the end of the period increased to $29,727,000 from $35,170,000 at the end of June 30, 2024, showing a decrease of 15.5%[24] - The company reported a net cash used in operating activities of $9,030,000 for the six months ended June 30, 2025, compared to $5,383,000 for the same period in 2024, an increase of 67.5%[24] - Cash and cash equivalents totaled $24.96 million as of June 30, 2025, with restricted cash of $4.77 million[44] - The company is required to maintain liquid assets of no less than $20,000,000 and a net worth of no less than $130,000,000, and it was in compliance with these covenants as of June 30, 2025[89] Debt and Liabilities - Total liabilities rose to $265,030,000 as of June 30, 2025, up from $213,534,000 at December 31, 2024, representing a 24.1% increase[15] - The company’s debt, net, stood at $228.44 million as of June 30, 2025, an increase from $177.02 million as of December 31, 2024[39] - The total debt as of June 30, 2025, is $228,442,000, an increase from $177,017,000 as of December 31, 2024, representing a 29% increase[81] - Interest paid, net of capitalized interest for the six months ended June 30, 2025, was $7,500,000, compared to $1,800,000 for the same period in 2024, indicating a significant increase in interest expenses[86] Revenue and Expenses - The company incurred property expenses of $6,675,000 for the six months ended June 30, 2025, compared to $2,692,000 for the same period in 2024, an increase of 147.5%[18] - For the three months ended June 30, 2025, fixed lease revenues amounted to $1.88 million, while variable lease revenues were $0.10 million, leading to total lease revenues of $1.99 million[49] - For the three months ended June 30, 2025, the company incurred management fees of $827,000, an increase from $678,000 in the same period of 2024[59] - Development fees incurred during the three months ended June 30, 2025, were $800,000, compared to $700,000 for the same period in 2024[66] - The company reported depreciation expense of $1.8 million for the three months ended June 30, 2025, up from $600,000 in 2024[75] Investments and Development - As of June 30, 2025, the company had $10.6 million in non-cash investing activity related to real estate development included in Real estate under construction[74] - The company has entered into a non-exclusive dealer manager agreement with Emerson Equity LLC for the sale of Class A units, with commissions ranging from 0.25% to 4.50%[30] - The company has assessed the collectability of lease revenues as probable as of June 30, 2025, indicating a positive outlook on rental income[51] - The company is currently involved in litigation related to a mortgage note of $3.0 million, which is in default, and is vigorously defending against claims[117] - The company anticipates a minimum funding of $180.2 million for the construction and soft costs associated with the Aster & Links development, aiming for an estimated unlevered yield of greater than 6%[145] Market Conditions and Outlook - Market conditions for commercial and mixed-use properties remain uncertain due to various economic factors, including higher interest rates and inflation[137] - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA) on its operations and investments[138] - Sarasota is ranked as the 4th best place to retire in the U.S. for 2025-2026, indicating a favorable market for residential developments[172] Segment Performance - The total Segment NOI for the three months ended June 30, 2025, was $(1.142) million, compared to $(0.367) million for the same period in 2024, reflecting a decline in performance[121] - The Commercial Segment NOI decreased by $0.5 million for the three months ended June 30, 2025, primarily due to higher real estate taxes[186] - The Mixed-use Segment NOI decreased by $0.3 million for the same period, influenced by the recent placement of Aster & Links into service[187] Capital Raising and Offerings - As of June 30, 2025, the company has raised aggregate gross offering proceeds of $361.4 million from its Public Offerings, which include the Primary Offering and Follow-on Offering[31] - The company issued 56,073 Class A units during the three months ended June 30, 2025, compared to zero in the same period of 2024, indicating a significant increase in capital raising efforts[103] - The company has authorized the issuance of an unlimited number of Class A units and 100,000 Class B units, which may be used for future capital raising and acquisitions[102]
BELPOINTE PREP(OZ) - 2025 Q2 - Quarterly Report