Belpointe PREP Reports $23.9 Million Net Loss for Fiscal Year 2024 Amid Revenue Growth

Belpointe PREP, LLC reported a net loss of $23.9 million for the fiscal year ending December 31, 2024, compared to a net loss of $14.4 million in the previous year. The company's total revenue increased to $2.7 million from $2.3 million, driven primarily by rental income from its properties. However, the increase in revenue was offset by a significant rise in expenses, which totaled $26.9 million, up from $16.6 million in 2023. This increase was largely attributed to higher property expenses, interest expenses of $10 million, and depreciation and amortization costs, which rose due to the placement of new assets into service.

In terms of operational developments, Belpointe PREP has made significant strides in its real estate portfolio, particularly with the completion of its mixed-use development project, Aster & Links, in Sarasota, Florida. This project, which includes 424 luxury residential units and approximately 51,000 square feet of retail space, began leasing in 2024. The company also reported that its mixed-use segment experienced a decrease in net operating income (NOI) due to the initial lease-up phase of Aster & Links, which has not yet stabilized to offset property expenses. The commercial segment also saw a decline in NOI, primarily due to lower rental revenue from amortization of below-market rent intangibles.

Belpointe PREP's financial position has changed significantly over the past year, with total assets increasing to $517.6 million from $382.1 million in 2023. This growth was fueled by the acquisition of new properties and the development of existing ones, with real estate under construction valued at $191.3 million as of December 31, 2024. The company has also raised a total of $357.3 million in gross offering cash proceeds since its inception, with $3.1 million raised in 2024 alone through its public offerings.

Looking ahead, Belpointe PREP anticipates continued challenges due to economic uncertainties, including rising interest rates and inflation, which could impact its operations and financial performance. The company is focused on optimizing its investment and financing strategies to mitigate risks associated with these factors. Management has expressed confidence in the strength of the multifamily and mixed-use rental markets in its operational regions, despite broader economic concerns. The company plans to maintain its status as a qualified opportunity fund, which offers tax benefits to investors, and aims to continue its growth trajectory through strategic acquisitions and developments in qualified opportunity zones.