Based on the provided financial report articles, I generated the title for the article: **"Common Stock and Noncontrolling Interest Disclosure for [Company Name] for the Fiscal Year Ended December 31, 2024"** Please note that the title may not be exact, as the provided text is a financial report and may contain technical terms and jargon.
Unfortunately, the provided text appears to be a financial report in a machine-readable format, but it lacks a clear and concise summary of the report’s essential information. However, I can try to extract some key financial figures and main events from the report:
- The report appears to be for a fiscal year (FY) ending December 31, 2024, with a balance sheet date of December 31, 2024.
- The company has unlimited authorized shares of common stock, with no par value.
- The report includes information on the company’s common stock, including the number of shares outstanding, the par value, and the book value per share.
- The report also includes information on the company’s parent company, non-controlling interest, and related party transactions.
- There is a mention of a follow-on offering of common stock, which took place on May 8-9, 2023.
- The report includes various tables and schedules that provide detailed information on the company’s financial position, results of operations, and cash flows.
If you would like me to extract more specific financial information or provide a summary of the report’s main events, please let me know.
Overview
Belpointe PREP, LLC is the only publicly traded qualified opportunity fund listed on a national securities exchange. The company is a Delaware limited liability company formed to invest in and manage a portfolio of commercial real estate properties, real estate-related assets, and private equity acquisitions and investments. Belpointe PREP focuses on identifying, acquiring, developing or redeveloping, and managing commercial real estate located within qualified opportunity zones, with at least 90% of its assets consisting of qualified opportunity zone property.
History and Development of the Company
Belpointe PREP is the successor in interest to Belpointe REIT, Inc., a Maryland corporation incorporated in 2018. In 2021, Belpointe PREP acquired all of the outstanding shares of Belpointe REIT in an exchange offer and related conversion and merger transaction.
In May 2023, the SEC declared effective Belpointe PREP’s follow-on registration statement, registering the offer and sale of up to $750 million of its Class A units on a continuous “best efforts” basis. Belpointe PREP entered into a non-exclusive dealer manager agreement with Emerson Equity LLC for the sale of its Class A units through the Dealer Manager and other selling group members.
As of December 31, 2024, Belpointe PREP has raised aggregate gross offering cash proceeds of $357.3 million through its public offerings, including the prior offerings of Belpointe REIT. The purchase price for Class A units is the lesser of the NAV of the units or the average of the high and low sale prices on the NYSE American.
Our Business Outlook
Despite expectations of a U.S. recession, market conditions for multifamily and mixed-use rental properties in Belpointe PREP’s geographic regions have remained strong. However, future economic conditions and real estate industry performance are subject to uncertainty due to factors such as rent growth, new construction, unemployment, interest rates, inflation, banking system instability, credit availability, and supply chain and labor issues. These factors present material risk and uncertainty for Belpointe PREP’s future performance and financial results.
Results of Operations
The table below details Belpointe PREP’s segment net operating income (NOI) for the commercial and mixed-use property segments for the years ended December 31, 2024 and 2023:
| Segment NOI | 2024 | 2023 |
|---|---|---|
| Commercial Segment | $(46,000) | $1,039,000 |
| Mixed-use Segment | $(1,413,000) | $(271,000) |
| Total Segment NOI | $(1,459,000) | $768,000 |
The decrease in Segment NOI for both the commercial and mixed-use segments in 2024 compared to 2023 was primarily due to lower rental revenue and higher property expenses.
General and administrative expenses decreased by $1.2 million in 2024 compared to 2023, mainly due to lower marketing expenses, dead deal costs, and cost allocations from the Manager.
Interest expense increased to $10.0 million in 2024 from zero in 2023, due to interest on new debt financing. Depreciation and amortization also increased by $2.1 million in 2024 due to the placement of Aster & Links in service.
Belpointe PREP recorded impairment charges of $0.8 million and $4.1 million in 2024 and 2023, respectively, related to one of its real estate assets.
Liquidity and Capital Resources
Belpointe PREP’s primary liquidity and capital needs are to fund its investments, including construction and development costs, pay offering and operating fees and expenses, make distributions to unitholders, and pay interest on outstanding debt.
The company believes its cash on-hand, anticipated net proceeds from public offerings, projected cash flows from real estate assets, and current and anticipated financing activities will be sufficient to meet its liquidity and capital requirements for the next 12 months.
Belpointe PREP employs leverage, with a targeted aggregate property-level leverage of 50-70% of the greater of cost or fair market value of its assets. The company has entered into various construction loans and a mezzanine loan to fund the development of its Aster & Links and Viv properties.
As of December 31, 2024, Belpointe PREP had $28.8 million in cash and cash equivalents and restricted cash, compared to $23.6 million as of December 31, 2023. Cash flows used in operating and investing activities were $13.7 million and $138.1 million, respectively, in 2024, while cash flows provided by financing activities were $157.0 million.
