BHM 8-K/A
Bluerock Homes Trust, Inc. (BHM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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EXPLANATORY NOTE
On May 1, 2025, Bluerock Homes Trust, Inc. (the “Company”) filed, with the U.S. Securities and Exchange Commission (the “SEC”), a Current Report on Form 8-K dated April 25, 2025 (the “Form 8-K”) in conjunction with the acquisition of a limited partnership interest (the “Marble Investment”) in Marble Capital Income and Impact Fund, LP (the “Marble Fund”).
This Current Report on Form 8-K/A (the “Form 8-K/A”) amends Item 9.01 of the Form 8-K to present certain financial statements of the Marble Fund, and to include the required financial statements and pro forma financial information not previously included in the Form 8-K. This Form 8-K/A should be read in conjunction with the Form 8-K.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
| (a) | Financial Statements of Business Acquired | |
| Marble Capital Income and Impact Fund, LP and Subsidiaries | ||
| (i) | Audited consolidated financial statements as of and for the year ended December 31, 2024, and the notes related thereto, and the Report of Deloitte & Touche LLP, Independent Auditors, dated April 25, 2025, which are attached to this Form 8-K/A as Exhibit 99.1 and incorporated herein by reference. | |
| (ii) | Audited consolidated financial statements as of and for the year ended December 31, 2023, and the notes related thereto, and the Report of Deloitte & Touche LLP, Independent Auditors, dated April 26, 2024, which are attached to this Form 8-K/A as Exhibit 99.2 and incorporated herein by reference. | |
| (iii) | Unaudited consolidated financial statements as of March 31, 2025 and December 31, 2024, and for the three months ended March 31, 2025 and 2024, and the notes related thereto, which are attached to this Form 8-K/A as Exhibit 99.3 and incorporated herein by reference. | |
| (b) | Pro Forma Financial Information | |
| Bluerock Homes Trust, Inc. | ||
| (i) | Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2025 (unaudited), and the notes thereto. | |
| (ii) | Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income for the three months ended March 31, 2025 (unaudited), and the notes thereto. | |
| (iii) | Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income for the year ended December 31, 2024 (unaudited), and the notes thereto. |
Statements in this Current Report on Form 8-K/A, including intentions, beliefs, expectations or projections relating to items such as the long-term performance of the Company’s portfolio are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and assumptions with respect to, among other things, future economic, competitive and market conditions, and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the risks described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on March 20, 2025 and its other filings with the SEC.
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INFORMATION
The following unaudited pro forma condensed consolidated financial statements of Bluerock Homes Trust, Inc. (together with its consolidated subsidiaries, the “Company,” “we,” “our” or “us”) should be read in conjunction with our historical audited consolidated financial statements as of and for the year ended December 31, 2024, and as of and for the three months ended March 31, 2025 (unaudited), and the related notes thereto.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2025, and the unaudited pro forma condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2025 and the year ended December 31, 2024, have been prepared to provide pro forma financial information with regard to the Company’s acquisition of a limited partnership interest (the “Marble Investment”) in Marble Capital Income and Impact Fund, LP (the “Marble Fund”) on April 25, 2025.
The pro forma condensed consolidated balance sheet at March 31, 2025 assumes that the Marble Investment occurred on March 31, 2025.
The pro forma condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2025 and the year ended December 31, 2024 assume the transaction referred to above occurred on January 1, 2024.
Our pro forma financial information is not necessarily indicative of what our actual financial position and results of operations would have been as of the date and for the periods indicated, nor does it purport to represent our future financial position or results of operations.
These unaudited pro forma condensed consolidated financial statements are prepared for informational purposes only. In management’s opinion, all material adjustments necessary to reflect the effects of the transactions referred to above have been made. Our unaudited pro forma condensed consolidated financial statements are based on assumptions and estimates considered appropriate by the Company’s management. However, they are not necessarily indicative of what our consolidated financial condition or results of operations would have been assuming the transactions referred to above had occurred as of the dates indicated, nor do they purport to represent our consolidated financial position or results of operations for future periods.
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2025
(In thousands, except share and per share amounts)
| Pro Forma Adjustments | ||||||||||||
Bluerock Homes (a) | Marble Investment (b) | Pro Forma Total | ||||||||||
| ASSETS | ||||||||||||
| Net real estate investments | ||||||||||||
| Land | $ | 103,299 | $ | — | $ | 103,299 | ||||||
| Buildings and improvements | 579,817 | — | 579,817 | |||||||||
| Furniture, fixtures and equipment | 20,310 | — | 20,310 | |||||||||
| Construction in process | 2,919 | — | 2,919 | |||||||||
| Total gross operating real estate investments | 706,345 | — | 706,345 | |||||||||
| Accumulated depreciation | (47,812 | ) | — | (47,812 | ) | |||||||
| Total net operating real estate investments | 658,533 | — | 658,533 | |||||||||
| Operating real estate held for sale, net | 18,386 | — | 18,386 | |||||||||
| Total net real estate investments | 676,919 | — | 676,919 | |||||||||
| Cash and cash equivalents | 134,748 | (25,000 | ) | 109,748 | ||||||||
| Restricted cash | 15,939 | — | 15,939 | |||||||||
| Notes and accrued interest receivable, net | 9,449 | — | 9,449 | |||||||||
| Investment in unconsolidated real estate joint ventures | — | 25,000 | 25,000 | |||||||||
| Accounts receivable, prepaids and other assets, net | 36,133 | — | 36,133 | |||||||||
| Preferred equity investments, net | 88,953 | — | 88,953 | |||||||||
| In-place lease intangible assets, net | 849 | — | 849 | |||||||||
| Due from affiliates | 1,256 | — | 1,256 | |||||||||
| Non-real estate assets associated with operating real estate held for sale | 125 | — | 125 | |||||||||
| TOTAL ASSETS | $ | 964,371 | $ | — | $ | 964,371 | ||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Mortgages payable | $ | 251,457 | $ | — | $ | 251,457 | ||||||
| Revolving credit facilities | 85,000 | — | 85,000 | |||||||||
| Accounts payable | 824 | — | 824 | |||||||||
| Other accrued liabilities | 18,739 | — | 18,739 | |||||||||
| Due to affiliates | 5,916 | — | 5,916 | |||||||||
| Distributions payable | 2,331 | — | 2,331 | |||||||||
| Liabilities associated with operating real estate held for sale | 137 | — | 137 | |||||||||
| Total Liabilities | 364,404 | — | 364,404 | |||||||||
| 6.0% Series A Redeemable Preferred Stock, liquidation preference $25.00 per share, 30,000,000 shares authorized; 5,278,493 shares issued and outstanding at March 31, 2025 | 116,746 | — | 116,746 | |||||||||
| Equity | ||||||||||||
| Stockholders’ Equity | ||||||||||||
| Preferred stock, $0.01 par value, 220,000,000 shares authorized; no shares issued and outstanding at March 31, 2025 | — | — | — | |||||||||
| Common stock - Class A, $0.01 par value, 562,500,000 shares authorized; 3,953,219 shares issued and outstanding at March 31, 2025, historical and pro forma | 40 | — | 40 | |||||||||
| Common stock - Class C, $0.01 par value, 187,500,000 shares authorized; 8,489 shares issued and outstanding at March 31, 2025, historical and pro forma | — | — | — | |||||||||
| Additional paid-in-capital | 119,083 | — | 119,083 | |||||||||
| Cumulative earnings in excess of distributions | 17,684 | — | 17,684 | |||||||||
| Accumulated other comprehensive gain | 307 | — | 307 | |||||||||
| Total Stockholders’ Equity | 137,114 | — | 137,114 | |||||||||
| Noncontrolling Interests | ||||||||||||
| Operating partnership units | 307,411 | — | 307,411 | |||||||||
| Partially owned properties | 38,696 | — | 38,696 | |||||||||
| Total Noncontrolling Interests | 346,107 | — | 346,107 | |||||||||
| Total Equity | 483,221 | — | 483,221 | |||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 964,371 | $ | — | $ | 964,371 | ||||||
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
BLUEROCK HOMES TRUST, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2025
| (a) | Historical consolidated financial information derived from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. |
| (b) | The acquisition of a limited partnership interest (the “Marble Investment”) in Marble Capital Income and Impact Fund, LP (the “Marble Fund”) for a purchase price of $25 million. |
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2025
(In thousands, except share and per share amounts)
| Pro Forma Adjustments | |||||||||||||
| Bluerock Homes Trust, Inc. Historical (a) | Marble Investment (b) | Pro Forma Total | |||||||||||
| Revenues | |||||||||||||
| Rental and other property revenues | $ | 15,910 | $ | — | $ | 15,910 | |||||||
| Interest income from loan investments | 503 | — | 503 | ||||||||||
| Total revenues | 16,413 | — | 16,413 | ||||||||||
| Expenses | |||||||||||||
| Property operating | 7,652 | — | 7,652 | ||||||||||
| Property management and asset management fees | 1,325 | — | 1,325 | ||||||||||
| General and administrative | 3,057 | — | 3,057 | ||||||||||
| Management fees to related party | 2,540 | — | 2,540 | ||||||||||
| Acquisition and other transaction costs | 76 | — | 76 | ||||||||||
| Depreciation and amortization | 7,492 | — | 7,492 | ||||||||||
| Total expenses | 22,142 | — | 22,142 | ||||||||||
| Other (expense) income | |||||||||||||
| Other expense, net | (59 | ) | — | (59 | ) | ||||||||
| Income from preferred equity investments | 3,110 | — | 3,110 | ||||||||||
| Income from unconsolidated real estate joint ventures | — | 300 | (c) | 300 | |||||||||
| Recovery of credit losses, net | 102 | — | 102 | ||||||||||
| Gain on sale and impairment of real estate investments, net | 703 | — | 703 | ||||||||||
| Loss on extinguishment of debt costs | (4 | ) | — | (4 | ) | ||||||||
| Interest expense, net | (6,211 | ) | — | (6,211 | ) | ||||||||
| Interest income | 1,104 | — | 1,104 | ||||||||||
| Total other (expense) income | (1,255 | ) | 300 | (955 | ) | ||||||||
| (Loss) income before income taxes | (6,984 | ) | 300 | (6,684 | ) | ||||||||
| Income tax expense | (346 | ) | — | (346 | ) | ||||||||
| Net (loss) income | (7,330 | ) | 300 | (7,030 | ) | ||||||||
| Preferred stock dividends | (2,010 | ) | — | (2,010 | ) | ||||||||
| Preferred stock accretion | (523 | ) | — | (523 | ) | ||||||||
| Net (loss) income attributable to noncontrolling interests | |||||||||||||
| Operating partnership units | (5,661 | ) | 207 | (5,454 | ) | ||||||||
| Partially owned properties | (1,673 | ) | — | (1,673 | ) | ||||||||
| Net (loss) income attributable to noncontrolling interests | (7,334 | ) | 207 | (7,127 | ) | ||||||||
| Net (loss) income attributable to common stockholders | $ | (2,529 | ) | $ | 93 | $ | (2,436 | ) | |||||
| Loss per common share (d) | |||||||||||||
| Net loss per common share – Basic | $ | (0.67 | ) | $ | (0.65 | ) | |||||||
| Net loss per common share – Diluted | $ | (0.67 | ) | $ | (0.65 | ) | |||||||
| Weighted average basic common shares outstanding | 3,864,622 | 3,864,622 | |||||||||||
| Weighted average diluted common shares outstanding | 3,864,622 | 3,864,622 | |||||||||||
| Other comprehensive income | |||||||||||||
| Unrealized gain on available for sale investments | $ | 1,524 | $ | — | $ | 1,524 | |||||||
| Less unrealized gain attributable to Operating partnership units | (1,053 | ) | — | (1,053 | ) | ||||||||
| Other comprehensive income attributable to common stockholders | 471 | — | 471 | ||||||||||
| Comprehensive (loss) income attributable to noncontrolling interests | (6,281 | ) | 207 | (6,074 | ) | ||||||||
| Comprehensive (loss) income attributable to common stockholders | $ | (2,058 | ) | $ | 93 | $ | (1,965 | ) | |||||
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income
BLUEROCK HOMES TRUST, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2025
| (a) | Historical consolidated financial information derived from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. |
| (b) | Represents adjustments to the Company’s historical operations to give effect to the Marble Investment on April 25, 2025 as if the investment had been made on January 1, 2024. Pro forma adjustments to the Company’s historical results for the three months ended March 31, 2025 include adjustments to the following: income from unconsolidated real estate joint ventures and the operating partnership units’ interest. |
| (c) | Represents income from unconsolidated real estate joint ventures estimated to have been earned on the Marble Investment. Income from unconsolidated real estate joint ventures is calculated at 1.2% of the Company’s total $25 million investment and is based on historical distribution rates for an investor with similar limited partnership interests in the Marble Fund. |
| (d) | Earnings per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per Share.” The historical earnings per share amounts are the amounts reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per share. |
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2024
(In thousands, except share and per share amounts)
Pro Forma Adjustments | |||||||||||||
Bluerock Homes Historical (a) | Marble Investment (b) | Pro Forma Total | |||||||||||
| Revenues | |||||||||||||
| Rental and other property revenues | $ | 48,584 | $ | — | $ | 48,584 | |||||||
| Interest income from loan investments | 1,630 | — | 1,630 | ||||||||||
| Total revenues | 50,214 | — | 50,214 | ||||||||||
| Expenses | |||||||||||||
| Property operating | 24,144 | — | 24,144 | ||||||||||
| Property management and asset management fees | 4,715 | — | 4,715 | ||||||||||
| General and administrative | 10,592 | — | 10,592 | ||||||||||
| Management fees to related party | 9,111 | — | 9,111 | ||||||||||
| Acquisition and other transaction costs | 255 | — | 255 | ||||||||||
| Weather-related losses, net | 170 | — | 170 | ||||||||||
| Depreciation and amortization | 19,940 | — | 19,940 | ||||||||||
| Total expenses | 68,927 | — | 68,927 | ||||||||||
| Other income (expense) | |||||||||||||
| Other income, net | 330 | — | 330 | ||||||||||
| Income from preferred equity investments | 11,937 | — | 11,937 | ||||||||||
| Income from unconsolidated real estate joint ventures | — | 1,225 | (c) | 1,225 | |||||||||
| Recovery of credit losses, net | 93 | — | 93 | ||||||||||
| Gain on sale and impairment of real estate investments, net | 7,081 | — | 7,081 | ||||||||||
| Loss on extinguishment of debt costs | (151 | ) | — | (151 | ) | ||||||||
| Interest expense, net | (18,092 | ) | — | (18,092 | ) | ||||||||
| Interest income | 5,424 | — | 5,424 | ||||||||||
| Total other income | 6,622 | 1,225 | 7,847 | ||||||||||
| Net (loss) income | (12,091 | ) | 1,225 | (10,866 | ) | ||||||||
| Preferred stock dividends | (4,022 | ) | — | (4,022 | ) | ||||||||
| Preferred stock accretion | (244 | ) | — | (244 | ) | ||||||||
| Net (loss) income attributable to noncontrolling interests | |||||||||||||
| Operating partnership units | (9,232 | ) | 839 | (8,393 | ) | ||||||||
| Partially owned properties | (2,891 | ) | — | (2,891 | ) | ||||||||
| Net (loss) income attributable to noncontrolling interests | (12,123 | ) | 839 | (11,284 | ) | ||||||||
| Net (loss) income attributable to common stockholders | $ | (4,234 | ) | $ | 386 | $ | (3,848 | ) | |||||
| Loss per common share (d) | |||||||||||||
| Net loss per common share – Basic | $ | (1.10 | ) | $ | (1.00 | ) | |||||||
| Net loss per common share – Diluted | $ | (1.10 | ) | $ | (1.00 | ) | |||||||
| Weighted average basic common shares outstanding | 3,856,162 | 3,856,162 | |||||||||||
| Weighted average diluted common shares outstanding | 3,856,162 | 3,856,162 | |||||||||||
| Other comprehensive loss | |||||||||||||
| Unrealized loss on available for sale investments | $ | (527 | ) | $ | — | $ | (527 | ) | |||||
| Less unrealized loss attributable to Operating partnership units | 363 | — | 363 | ||||||||||
| Other comprehensive loss attributable to common stockholders | (164 | ) | — | (164 | ) | ||||||||
| Comprehensive (loss) income attributable to noncontrolling interests | (12,486 | ) | 839 | (11,647 | ) | ||||||||
| Comprehensive (loss) income attributable to common stockholders | $ | (4,398 | ) | $ | 386 | $ | (4,012 | ) | |||||
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income
BLUEROCK HOMES TRUST, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2024
| (a) | Historical consolidated financial information derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. |
| (b) | Represents adjustments to the Company’s historical operations to give effect to the Marble Investment on April 25, 2025 as if the investment had been made on January 1, 2024. Pro forma adjustments to the Company’s historical results for the year ended December 31, 2024 include adjustments to the following: income from unconsolidated real estate joint ventures and the operating partnership units’ interest. |
| (c) | Represents income from unconsolidated real estate joint ventures estimated to have been earned on the Marble Investment. Income from unconsolidated real estate joint ventures is calculated at 4.9% of the Company’s total $25 million investment and is based on historical distribution rates for an investor with similar limited partnership interests in the Marble Fund. |
| (d) | Earnings per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per Share.” The historical earnings per share amounts are the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per share. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BLUEROCK HOMES TRUST, INC. | |||
| DATE: | July 8, 2025 | By: | /s/ Christopher J. Vohs |
| Christopher J. Vohs | |||
| Chief Financial Officer and Treasurer | |||
Exhibit Index
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements on Form S-8 (File No. 333-267764) and Form S-11 (File No. 333-269415) of Bluerock Homes Trust, Inc. (each, a “Registration Statement”), and the accompanying prospectuses to each Registration Statement, of our reports dated April 26, 2024, and April 25, 2025, relating to the 2023 and 2024 financial statements, respectively, of Marble Capital Income and Impact Fund, LP and Subsidiaries appearing in this Current Report on Form 8-K/A dated July 8, 2025.
/s/ Deloitte & Touche LLP
Houston, Texas
July 8, 2025
Exhibit 99.1
MARBLE CAPITAL INCOME AND IMPACT FUND, LP
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2024
| MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES | |||||||
| Table of Contents | |||||||
| December 31, 2024 |
| Independent Auditor's Report | 1 – 2 |
| Consolidated Financial Statements | |
| Consolidated Statement of Assets and Liabilities | 3 |
| Consolidated Schedule of Investments | 4 – 5 |
| Consolidated Statement of Operations | 6 |
| Consolidated Statement of Changes in Partners' Capital | 7 |
| Consolidated Statement of Cash Flows | 8 |
| Notes to Consolidated Financial Statements | 9 – 17 |
 |
 |
INDEPENDENT AUDITOR'S REPORT
To the General Partner of Marble Capital Income and Impact Fund, L.P.:
Opinion
We have audited the financial statements of Marble Capital Income and Impact Fund, L.P. and subsidiaries (the "Fund”) , which comprise the consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of December 31, 2024, and the related consolidated statements of operations, changes in partners’ capital, and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2024, and the results of its operations, changes in its partners’ capital, and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Fund and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Fund’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
| · | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| · | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
| · | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control. Accordingly, no such opinion is expressed. |
| · | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
| · | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Fund’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ Deloitte & Touche LLP
Houston, Texas
April 25, 2025
| MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES |
| Consolidated Statement of Assets and Liabilities |
| December 31, 2024 | ||||
| ASSETS | ||||
| Investments in private operating companies, at fair value (cost $109,568,391) | $ | 113,261,454 | ||
| Investment in affiliated private investment company, at fair value (cost $40,407,720) | 41,864,340 | |||
| Cash and cash equivalents | 5,233,740 | |||
| Other assets | 612,979 | |||
| Distributions receivable from investments in private operating companies | 1,446,344 | |||
| Distribution receivable from investment in affiliated private investment company | 834,011 | |||
| Dividends receivable | 8,162 | |||
| Total Assets | $ | 163,261,030 | ||
| LIABILITIES AND PARTNERS' CAPITAL | ||||
| LIABILITIES | ||||
| Due to related party | $ | 292,289 | ||
| Distributions payable | 2,125,325 | |||
| Capital contributions received in advance | 2,758,227 | |||
| Management fee payable | 13,085 | |||
| Accrued expenses | 108,957 | |||
| Total Liabilities | 5,297,883 | |||
| PARTNERS' CAPITAL | 157,963,147 | |||
| Total Liabilities and Partners' Capital | $ | 163,261,030 | ||
The accompanying footnotes are an integral part of the consolidated financial statements.
3
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Schedule of Investments
December 31, 2024
| Percentage | ||||||||
| Fair | of Partners' | |||||||
| Investments in private operating companies, at fair value | Value | Capital | ||||||
| United States | ||||||||
| Real Estate, Common Member | ||||||||
| Marble Palms at Cinco Ranch Investor, LLC (1) | $ | 16,952,027 | 10.73 | % | ||||
| Marble Vida Health Village Investor, LLC (2) | 6,929,387 | 4.39 | ||||||
| Marble Timbercreek Investor, LLC (3) | 2,361,127 | 1.49 | ||||||
| Marble Aspire Lenox Park Investor (4) | 23,695,915 | 15.00 | ||||||
| Marble Metropole Investor, LLC (5) | 12,925,000 | 8.18 | ||||||
| Marble Shadow Creek Investor, LLC (6) | 21,134,897 | 13.38 | ||||||
| Marble Trailside Investor, LLC (7) | 15,539,525 | 9.84 | ||||||
| Total Real Estate, Common Member | 99,537,878 | 63.01 | ||||||
| Real Estate, Preferred Member | ||||||||
| Marble Trailside Investor, LLC (7) | 13,723,576 | 8.69 | ||||||
| Total Real Estate, Preferred Member | 13,723,576 | 8.69 | ||||||
| Total investments in private operating companies, at fair value (cost $109,568,391) | $ | 113,261,454 | 71.70 | % | ||||
| Percentage | ||||||||
| Fair | of Partners' | |||||||
| Investment in affiliated private investment company, at fair value | Value | Capital | ||||||
| MC I&I Pref Opco, LP (8) (cost $40,407,720) | 41,864,340 | 26.50 | ||||||
| Total investment in affiliated private investment company, at fair value (cost $40,407,720) | $ | 41,864,340 | 26.50 | % |
| (1) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Palms at Cinco Ranch Investor, LLC. Marble Palms at Cinco Ranch Investor, LLC has a 89.9% ownership interest in Palms at Cinco Ranch JV, LLC, which in turn owns 100% of Palms at Cinco Ranch Owner, LLC. Palms at Cinco Ranch Owner, LLC owns and operates Palms at Cinco Ranch, a 200-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $887,206. |
| (2) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Vida Health Village Investor, LLC. Marble Vida Health Village Investor, LLC has a 66% ownership interest in RPMI 2680 N Orange Ave Venture, LLC which in turn owns 30% in Health Village Apartments Venture, LLC. Health Village Apartments Venture, LLC owns and operates Vida Health Village, a 285-unit multifamily development. |
| (3) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Timbercreek Investor, LLC. Marble Timbercreek Investor, LLC has 19.13% ownership interest in 614 S 1st Street Investor, LLC, which in turn owns and operates Timbercreek Apartments, a 198-unit multifamily development. |
| (4) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Aspire Lenox Park Investor, LLC, which in turn owns 78.18% of 1050 Lenox Park Blvd Owner, LLC, which in turn owns and operates Aspire Lenox Park Apartments, a 407-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $2,104,085. |
| (5) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Metropole Investor, LLC. Marble Metropole Investor, LLC has a 90% ownership interest in Post RPMO JC LLC, which in turn owns 99.50% in RPMI Metropole Holdings LLC. Post RPMI Metropole Holdings LLC has 100% ownership in Post RPMI Metropole LP. Post RPMI Metropole LP owns and operates Metropole Apartments, a 289-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $1,339,315. |
| (6) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Shadow Creek Investor, LLC, which in turn owns 79.99% in KV Shadow Creek Holdings, LLC, which in turn owns and operates Shadow Creek Apartments, a 347-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $2,630,633. |
| (7) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Trailside Investor, LLC. Marble Trailside Investor, LLC has a 85% ownership interest in Trailside JV, LLC, which in turn owns 100% of Trailside Townhomes, LLC. Trailside Townhomes owns and operates a 149-unit multifamily development. |
| (8) | Marble Capital Income and Impact Fund, L.P. and Subsidiaries have a 84.87% ownership interest in MC I&I Pref Opco, LP, an affiliated entity with the primary purpose to invest in preferred interests of privately held companies engaged in the acquisition and/or development and operation of various real estate projects. As of December 31, 2024, the Fund's uncalled capital commitment is $0. Redemptions are not permitted. Proceeds will be distributed as they become available, the timing of which is currently unknown. The fund does not have a fixed term. |
The accompanying footnotes are an integral part of the consolidated financial statements.
4
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
| Consolidated Schedule of Investments (continued) | |||||
| December 31, 2024 |
The following table represents security positions that are indirectly held by the Fund through MC I&I Pref Opco, LP. The cost and value represent the Fund's proportionate share of investments held by MC I&I Pref Opco, LP.
| Fund's | Percentage | |||||||
| Proportionate | of Partners' | |||||||
| Investment in MC I&I Pref Opco, LP, at fair value | Share | Capital | ||||||
| United States | ||||||||
| Real Estate, Preferred Member | ||||||||
| Marble Legacy Park Investor, LLC | $ | 11,882,131 | 7.5 | % | ||||
| Marble Patten East Investor, LLC | 5,754,242 | 3.6 | ||||||
| Marble Rainbow Mezz Lender, LLC | 18,007,486 | 11.4 | ||||||
| Marble Discovery Park Investor, LLC | $ | 6,136,170 | 3.9 | % | ||||
The accompanying footnotes are an integral part of the consolidated financial statements.
5
| MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES |
| Consolidated Statement of Operations |
| For the Year Ended December 31, 2024 | ||||
| Investment income allocated from affiliated private investment company | ||||
| Interest | $ | 1,370,795 | ||
| Distributions from private operating companies | 1,671,956 | |||
| Total investment income allocated from affiliated private investment company | 3,042,751 | |||
| Expenses allocated from affiliated private investment company | ||||
| Professional fees | 179,024 | |||
| Organizational expenses | 27,803 | |||
| Other expenses | 20,061 | |||
| Total expenses allocated from affiliated private investment company | 226,888 | |||
| Investment Income | ||||
| Dividend income | 141,843 | |||
| Distributions from private operating companies | 4,942,285 | |||
| Total investment income | 5,084,128 | |||
| Expenses | ||||
| Professional fees | 707,351 | |||
| Organization costs | 179,686 | |||
| Other expenses | 118,353 | |||
| Management fee | 358,133 | |||
| Total expenses | 1,363,523 | |||
| Net investment income | $ | 6,536,468 | ||
| Realized and unrealized gain on investments | ||||
| Net change in unrealized appreciation on investments in private operating companies | $ | 3,693,063 | ||
| Net change in unrealized appreciation allocated from investments in affiliated private investment company | 1,368,886 | |||
| Net gain on investments | 5,061,949 | |||
| Net increase in partners' capital resulting from operations | $ | 11,598,417 | ||
The accompanying footnotes are an integral part of the consolidated financial statements.
6
| MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES |
| Consolidated Statement of Changes in Partners' Capital |
| For the Year Ended December 31, 2024 |
| General | Limited | |||||||||||
| Partner | Partner | Total | ||||||||||
| Partners' capital, beginning of year | $ | - | $ | 63,716,223 | $ | 63,716,223 | ||||||
| Capital contributions | - | 89,937,087 | 89,937,087 | |||||||||
| Capital distributions | - | (7,288,580 | ) | (7,288,580 | ) | |||||||
| Net increase in partners' capital resulting from operations | ||||||||||||
| Net investment income | - | 6,536,468 | 6,536,468 | |||||||||
| Net gain on investment | - | 5,061,949 | 5,061,949 | |||||||||
| Carried interest allocation to General Partner | 341,129 | (341,129 | ) | - | ||||||||
| Net increase in partners' capital resulting from operations | 341,129 | 11,257,288 | 11,598,417 | |||||||||
| Partners' capital, end of year | $ | 341,129 | $ | 157,622,018 | $ | 157,963,147 | ||||||
The accompanying footnotes are an integral part of the consolidated financial statements.
7
| MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES |
| Consolidated Statement of Cash Flows |
| For the Year Ended December 31, 2024 |
| Cash flows from operating activities | ||||
| Net increase in partners' capital resulting from operations | $ | 11,598,417 | ||
| Adjustments to reconcile net increase (decrease) in partners' capital from operations to net cash provided by (used in) operating activities: | ||||
| Interest income allocated from investment in affiliated private investment company | (1,370,795 | ) | ||
| Distributions from private operating company, allocated from affiliated private investment company | (1,671,956 | ) | ||
| Expenses allocated from investment in affiliated private investment company | 226,888 | |||
| Net change in unrealized appreciation (depreciation) allocated from investments in affiliated private investment company | (1,368,886 | ) | ||
| Net change in unrealized appreciation (depreciation) on investments in private operating companies | (3,693,063 | ) | ||
| Purchases of investment in affiliated private investment company | (13,090,270 | ) | ||
| Proceeds from investment in affiliated private investment company | 2,883,307 | |||
| Purchases of investments in private operating companies | (56,360,269 | ) | ||
| Changes in assets and liabilities: | ||||
| Distributions receivable from investments in private operating companies | (899,068 | ) | ||
| Distribution receivable from investment in affiliated private investment company | 10,583 | |||
| Prepaid management fee | 13,497 | |||
| Dividends receivable | (8,162 | ) | ||
| Other assets | 134,188 | |||
| Due from related party | 20,591 | |||
| Due to related party | (17,504,066 | ) | ||
| Accrued expenses | 28,931 | |||
| Management fee payable | 13,085 | |||
| Net cash used in operating activities | (81,037,048 | ) | ||
| Cash flows from financing activities | ||||
| Capital contributions, net of contributions received in advance | 92,695,314 | |||
| Capital distributions, net of distributions payable | (6,499,082 | ) | ||
| Net cash provided by financing activities | 86,196,232 | |||
| Net change in cash and cash equivalents | $ | 5,159,184 | ||
| Cash and cash equivalents, beginning of year | 74,556 | |||
| Cash and cash equivalents, end of year | $ | 5,233,740 | ||
The accompanying footnotes are an integral part of the consolidated financial statements.
8
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
1. Nature of operations
Marble Capital Income and Impact Fund, LP (“Marble Capital Income and Impact”), a Delaware limited partnership, and its wholly owned subsidiaries MC Income and Impact REIT, LLC (“REIT”), a Delaware limited liability company and MC I&I Common Opco, LP (Common Opco), a Delaware limited partnership, together (the “Fund”), commenced operations on July 26, 2023. The primary purpose of the Fund is to invest in privately held entities engaged in the acquisition and/or development and operation of real estate projects.
The Fund is managed by Marble Capital Income and Impact Fund GP, LLC (the “General Partner”), which serves as the general partner. The Partnership has perpetual existence but shall be dissolved and the affairs of the Fund wound up upon the occurrence of a disabling event with respect to the General Partner, a vote by limited partners representing at least 66.67% of the Fund’s interests to dissolve the Fund, or the election of General Partner to terminate and dissolve the Fund provided written notice of such election to the limited partners with no majority of limited partners objecting to such dissolution.
2. Summary of significant accounting policies
Basis of Presentation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Fund is an investment company and follows the accounting and reporting guidance in FASB Topic 946 of the Codification, entitled Financial Services – Investment Companies.
Consolidation
The accompanying consolidated financial statements reflect consolidated accounts of Marble Capital Income and Impact and its wholly owned subsidiaries REIT and Common Opco, formed for the sole purpose of facilitating the Fund's investments. All intercompany balances were eliminated in the accompanying consolidated financial statements.
Cash
Cash represents cash deposits held at financial institutions. Cash is held at major financial institutions and is subject to credit risk to the extent those balances exceed applicable Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation (“SIPC”) limitations. As of December 31, 2024, the Fund had cash equivalents of $2,363,647 in money market funds, which are stated at net asset value, and are classified as Level 1 in the fair value hierarchy.
In the normal course of business, substantially all of the Fund’s cash balances and transactions are transacted with Bank of America. The Fund is subject to credit risk to the extent any institution with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Fund’s management monitors the financial condition of such institutions and does not anticipate losses from these counterparties.
Fair Value - Definition and Hierarchy
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Fund uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
9
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
2. Summary of significant accounting policies (continued)
Fair Value - Definition and Hierarchy (continued)
The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly. These inputs may include: (a) quoted prices for similar assets in active markets; (b) quoted prices for identical or similar assets in markets that are not active; (c) inputs other than quoted prices that are observable for the asset; or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are unobservable and significant to the entire fair value measurement.
Private investment companies measured using net asset value as the practical expedient are not categorized within the fair value hierarchy.
The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, determining fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for investments categorized in Level 3. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is generally categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Fair Value – Valuation Techniques and Inputs
Investments in Private Operating Companies
The Fund establishes valuation processes and procedures to ensure that the valuation methodologies for investments that are categorized within Level 3 of the fair value hierarchy are fair, consistent, and verifiable.
The General Partner oversees the entire valuation process of the Fund’s Level 3 investments and is responsible for developing the Fund’s written valuation processes and procedures, conducting periodic reviews of the valuation policies, and evaluating the overall fairness and consistent application of the valuation policies. The valuations of the Fund’s Level 3 investments are evaluated quarterly if information or events leads the General Partner to adjust the valuation on an interim basis. Valuations determined by the General Partner are required to be supported by market data, internal cash flow models, or other methods the General Partner deems to be appropriate.
These assessments typically incorporate an income approach reflecting a discounted cash flow analysis. The net cash flow is forecast over the expected remaining economic life and discounted to present value using a discount rate. Inputs relied upon by the income approach include annual projected cash flows for each investment through their respective investment horizons. These cash flow assumptions may be probability-weighted to reflect the risks associated with achieving expected levels across various scenarios. Investments in private operating companies are included in Level 3 of the fair value hierarchy.
10
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
2. Summary of significant accounting policies (continued)
Investment in Affiliated Private Investment Company
The Fund values its investment in MC I&I Pref Opco, LP utilizing the net asset value provided by the underlying private investment fund as a practical expedient. If it is probable the Fund will sell the investment at an amount different from the net asset valuation, the committee considers other factors in addition to the net asset valuation in its determination of fair value. As of December 31, 2024, the Fund valued its investment in MC I&I Pref Opco, LP entirely based on the net asset valuation provided by the underlying investment company as a practical expedient.
MC I&I Pref Opco, LP shares a valuation policy with the Fund and values its investments consistent with what is described in this Note 2.
Investment Transactions and Related Investment Income
Investment transactions are accounted for on a trade-date basis. Realized gains and losses on investment transactions are determined using cost calculated on a specific identification basis. Interest is recognized on the accrual basis and the collectability of interest receivable is evaluated when making accruals. Distributions that represent returns of capital in excess of cumulative profits and losses are credited to investment cost rather than investment income.
Income Taxes
The Fund does not record a provision for U.S. federal, state, or local income taxes because the partners report their share of the Fund’s income or loss on their income tax returns. The Fund files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. Generally, the Fund is subject to income tax examinations by major taxing authorities during the three-year period prior to the period covered by these consolidated financial statements.
MC Income and Impact REIT, LLC, a consolidated subsidiary of the Fund, has elected to be treated as a REIT under Sections 856 through 860 of the Code beginning with the tax year ended December 31, 2024. In general, a company which elects REIT status, distributes at least 90% of its REIT taxable income to its shareholders in any taxable year, and complies with certain other requirements. It is not subject to federal income taxation to the extent of the income which it distributes. If it fails to qualify as a REIT in any taxable year, it will be subject to federal income tax at regular corporate rates on its taxable income. Even if it qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed income. In order to maintain its qualifications as a REIT, MC Income and Impact REIT, LLC intends to make regular dividend payments to its shareholders that, will represent at least 90% of its taxable income, which may not necessarily equal net investment income as determined in accordance with GAAP, determined without regard to the deductions for dividends paid and excluding any net capital gains. For the year ended December 31, 2024, MC Income and Impact REIT, LLC has complied with all REIT requirements, as amended, and promulgated regulations thereunder.
The Fund is required to determine whether its tax positions are more likely than not to be sustained upon examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a “more-likely-than-not” threshold would be recorded as a tax expense in the current period. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2024, and expects no changes to that conclusion within the next twelve months.
11
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
2. Summary of significant accounting policies (continued)
Use of Estimates
Preparing consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, including the fair value of investments, and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
Organization Costs
The Fund shall pay or reimburse the General Partner or its affiliates organizational expenses of the Fund. Organization costs in excess of the greater of (i) $2,000,000 or (ii) .75% of the Total Commitments shall be offset against management fees or be borne by the General Partner. Organization costs are expensed as incurred, and the amount incurred by the Fund is reflected on the Consolidated Statement of Operations. There were no excess organization costs incurred during the year ended December 31, 2024.
3. Fair value measurements
The following table presents the classification of the Fund’s fair value measurements as of December 31, 2024:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets (at fair value) | ||||||||||||||||
| Investments in private operating companies | ||||||||||||||||
| Real Estate, Common Member | $ | - | $ | - | $ | 99,537,878 | $ | 99,537,878 | ||||||||
| Real Estate, Preferred Member | - | - | 13,723,576 | 13,723,576 | ||||||||||||
| Total Investments, at fair value | $ | - | $ | - | $ | 113,261,454 | $ | 113,261,454 | ||||||||
The Fund’s investment in MC I&I Pref Opco, LP is valued as permitted by the practical expedient and therefore, does not need to be categorized within the fair value hierarchy.
The following table summarizes the valuation techniques and significant unobservable inputs used for the Fund’s investments that are categorized in Level 3 of the fair value hierarchy as of December 31, 2024:
| Fair Value at December 31, 2024 | Valuation Technique | Unobservable Inputs | Range of Inputs | |||||||||
| Assets | ||||||||||||
| Investments in private operating companies | ||||||||||||
| Real Estate, Common Member | $ | 47,377,438 | Discounted cash flow model | Discount rate Months to exit | 11% 40 - 58 | |||||||
| Real Estate, Preferred Member | $ | 13,723,576 | Discounted cash flow model | Discount rate Months to exit | 12% 45 | |||||||
| Real Estate, Common Member | $ | 52,160,440 | Recent Transaction | N/A | N/A | |||||||
12
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
3. Fair value measurements (continued)
During the year ended December 31, 2024, investments fair valued at $47,377,438 changed valuation techniques from recent transaction methodology to the discounted cash flow model as the recent transactions no longer reflect current market conditions for those investments.
During the year ended December 31, 2024, there were no transfers in or out of level 3 and the Fund purchased $56,360,269 of level 3 assets.
4. Committed capital
As of December 31, 2024, the Fund has total capital commitments from its partners with respect to their partnership interests in the aggregate of $179,331,000. The General Partner may make capital calls up to the amount of unfunded capital commitments to enable the Fund to make investments, pay fees and expenses, or to provide reserves. No partner is required to fund an amount in excess of their unfunded capital commitments. As of December 31, 2024, the Fund’s uncalled capital commitments amounted to $25,533,227. As of December 31, 2024, the ratio of total contributed capital to total committed capital is 85.76%.
5. Related party transactions
The Fund considers the General Partner, their principal owners, members of management, members of their immediate families, and entities under common control to be related parties to the Fund. Amounts due from and due to related parties are generally settled in the normal course of business without formal payment terms.
The Fund pays the General Partner a management fee, initially calculated at a rate of 1.25% per annum, based on the limited partners’ Net Asset Value, payable quarterly in advance. Management fees for the year ended December 31, 2024, are recorded in the Consolidated Statement of Operations.
Due to related party on the Consolidated Statement of Assets and Liabilities represents amounts owed by Marble Capital LP, an affiliate of the Fund, for expense reimbursements.
6. Partners’ capital
Allocation of Partners’ Net Profits and Losses
At the end of each fiscal year of the Fund, the net profits and losses are allocated to the capital accounts of the partners as follows:
| (a) | Net profits and losses are generally allocated to the limited partners in proportion to their capital contributions. |
| (b) | Net profits related to the Fund’s investments, are allocated on the same basis as the partners’ distributions (as described below). |
Net profits and net losses included in (a) and (b) above include both realized and unrealized profits and losses.
13
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
6. Partners’ capital (continued)
Partners’ Distributions
The General Partner expects to cause the Fund to make distributions of distributable cash on a quarterly basis that the amount, timing and frequency of any distributions will be in the sole discretion of the General Partner. All distributions of distributable cash shall be distributed to the limited partners in amounts proportionate to the aggregate Fund Net Asset Value attributable to the partnership units held by the respective limited partners on the record date for such distribution.
The proceeds attributable to the Fund’s investments (which shall include all proceeds attributable to the disposition of such investments, net of expenses, as well as any dividends or interest income earned on such investments) are distributed to the partners in amounts proportionate to the aggregate partnership net asset value attributable to the partnership units held. The amount shall be distributed as follows:
| (a) | first, if the total return for the applicable period exceeds the sum of (1) the amount that results in a six percent (6.0%) annualized internal rate of return on the partnership net asset value of the partnership units excluding any partnership units held by the General Partner, “Hurdle Amount” and (2) the loss carryforward amount (if any) (any such excess, “Excess Profits”), one hundred percent (100%) of such annual Excess Profits until the total amount allocated to the General Partner equals fifteen percent (15%) of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to the General Partner (which is commonly referred to as the “catch-up”); and |
| (b) | second, to the extent there are remaining excess profits, fifteen percent (15%) of such remaining excess profits. |
Carried Interest Allocation
The capital accounts reflect the carried interest to the General Partner as if the Fund had realized all assets and settled all liabilities at the fair value reported in the consolidated financial statements, and allocated all gains and losses and distributed the net assets to the partners at the reporting date consistent with the provisions of the Fund’s governing documents. During the year ended December 31, 2024, the amount of the carried interest that was allocated to the General Partner is shown on the Consolidated Statement of Changes in Partners’ capital, if any.
The General Partner, in its sole discretion, may waive or reduce the applicable carried interest with respect to any limited partners in proportion to their respective capital account balances.
Redemptions
Each limited partner shall have the right to request that the Fund redeem any partnership units held by such limited partner that have been outstanding for at least twelve (12) months (the “Lock-Out Period”) by providing the General Partner with a written request in a form acceptable to the General Partner at least one hundred and twenty (120) calendar days prior to the desired redemption date, limited to a semi-annual basis effective June 30th and December 31st of each calendar year. The Lock-Out Period shall not apply to (A) the General Partner, (B) The Special Limited Partner, and (3) participants of the Fund’s distribution reinvestment program (“DRP”). Unless waived by the General Partner in its sole discretion, the redemption request must be for partnership units with an aggregate partnership net asset value of at least $125,000. In no event will the General Partner, the Fund, or their respective affiliates be obligated to sell or finance, or cause to be sold or financed, or otherwise transfer, any assets (including assets owned directly or indirectly by the Fund), contribute additional capital or assets to the Fund, or take any other action (including incurring indebtedness) in order to redeem any partnership units. Redemption units will be redeemed on a pro rata basis based upon the relative number of redemption units submitted by each limited partner.
14
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
6. Partners’ capital (continued)
Redemptions (continued)
The redemption price of each redemption unit redeemed by a limited partner shall be equal to:
| (i) | with respect to the redemption units that may have been outstanding for at least twelve (12) months but fewer than twenty-four (24) months, ninety-five percent (95%) of the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date; |
| (ii) | with respect to redemption units that may have been outstanding for at least twenty-four (24) months but fewer than thirty-six (36) months (as of the applicable redemption date), ninety-seven and one-half percent (97.5%) of the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date; and |
| (iii) | with respect to redemption units that may have been outstanding for at least thirty-six (36) months (as of the applicable redemption date), the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date. Notwithstanding the foregoing, the redemption price of each redemption unit issued pursuant to the DRP, and each redemption unit issued to the General Partner or the Special Limited Partner shall be equal to one hundred percent (100%) of the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date. |
The aggregate Fund’s Net Asset Value of total redemptions of partnership units as of each redemption date will be limited to no more than ten percent (10.0%) of the average aggregate Fund’s Net Asset Value over the preceding six-month period.
7. Unfunded investment commitments
As of December 31, 2024, the Fund had committed $40,407,719 to MC I&I Pref Opco, LP of which $0 remains unfunded. The Fund also has committed $116,529,630 to investments in private operating companies of which $6,961,239 remains unfunded at December 31, 2024. As of December 31, 2024, there were no recallable distributions.
8. Indemnifications
The Fund has provided general indemnification to the General Partner, any affiliate of the General Partner and any person acting on behalf of the General Partner or such affiliate when they act, in good faith, in the best interest of the Fund. The Fund is unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but expects the risk of having to make any payments under these general business indemnifications to be remote.
15
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
9. Financial highlights
Financial highlights for the year ended December 31, 2024, are as follows:
| Internal Rate of Return | ||||
| Internal rate of return, since inception | ||||
| Through December 31, 2024 | 7.08 | % | ||
| Through December 31, 2023 | 6.70 | % | ||
| Ratios to Average Partners' Capital | ||||
| Total Expenses before carried interest to General Partner | 1.26 | % | ||
| Carried interest to General Partner | 0.30 | % | ||
| Total Expenses and carried interest to General Partner | 1.56 | % | ||
| Net investment income ratio | 5.17 | % |
Financial highlights are calculated for the limited partner class taken as a whole. An individual limited partner’s return and ratios may vary based on different management fees and carried interest arrangements and the timing of capital transactions. The ratios include allocated income & expenses from the affiliated private investment companies.
The Internal Rate of Return (“IRR”) of the limited partners since inception of the Fund is net of carried interest allocation to the General Partner, if any, and was computed based on the actual dates of capital contributions and distributions, and the ending aggregate limited partners’ capital at the end of the year.
The net investment income (loss) ratio does not reflect the effects of net realized and unrealized gain (loss) on investments or carried interest allocation to or from the General Partner, if any.
10. Market risk and other risk factors
The General Partner of the Fund seeks investment opportunities in multi-family development projects and investments in securities that offer the possibility of attaining capital appreciation obtained primarily through preferred and common equity investments. Certain events particular to the industry in which the Fund invests, as well as general economic and political conditions, may have a significant negative impact on the underlying investees' operations and profitability. In addition, the Fund is subject to changing regulatory and tax environments. Such events are beyond the Fund’s control, and the likelihood that they may occur cannot be predicted. Furthermore, most of the Fund’s underlying investments are made in private operating companies whose shares do not trade on established exchanges. While it is expected that these private operating companies may pursue initial public offerings, trade sales, or other liquidation events, there are generally no public markets for these investments at the current time. The Fund’s ability to liquidate its underlying investments in private operating companies and publicly traded investments and realized value is subject to significant limitations and uncertainties.
16
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2024
10. Market risk and other risk factors (continued)
In the normal course of business, the Fund maintains its cash balances in financial institutions, which at times may exceed federally insured limits. The Fund is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. Management monitors the financial condition of such financial institutions and does not anticipate any losses from these counterparties.
The value of the Fund's investments will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities and investments owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the Fund's investments. Natural disasters, public health emergencies, terrorism, conflicts, and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
11. Subsequent events
The General Partner has evaluated subsequent events through April 25, 2025, the date these consolidated financial statements were available to be issued, and has determined that no subsequent events warrant adjustment to or disclosure in these consolidated financial statements.
17
Exhibit 99.2
| MARBLE CAPITAL INCOME AND IMPACT FUND, LP | ||||||
| AND SUBSIDIARIES | ||||||
| CONSOLIDATED FINANCIAL STATEMENTS | ||||||
| AND | ||||||
| INDEPENDENT AUDITOR'S REPORT | ||||||
| AS OF DECEMBER 31, 2023 | ||||||
| AND | ||||||
| FOR THE PERIOD FROM JULY 26, 2023 | ||||||
| (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2023 | ||||||
| Marble Capital Income & Impact Fund, LP | |
| TABLE OF CONTENTS | |
| As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023 | |
| Independent Auditor's Report | 1-2 |
| Financial Statements | |
| Consolidated Statement of Assets and Liabilities | 3 |
| Consolidated Statement of Operations | 4 |
| Consolidated Statement of Changes in Partners' Capital | 5 |
| Consolidated Statement of Cash Flows | 6 |
| Consolidated Schedule of Investments | 7-8 |
| Notes to Consolidated Financial Statements | 9-15 |
 |
 |
INDEPENDENT AUDITOR'S REPORT
To the General Partner of Marble Capital Income and Impact Fund, L.P.:
Opinion
We have audited the financial statements of Marble Capital Income and Impact Fund, L.P. and subsidiaries (the "Fund”) , which comprise the consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of December 31, 2023, and the related consolidated statements of operations, changes in partners’ capital, and cash flows for the period July 26, 2023 (commencement of operations) through December 31, 2023, and the related notes to the consolidated financial statements (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2023, and the results of its operations, changes in its partners’ capital, and its cash flows for the period July 26, 2023 (commencement of operations) through December 31, 2023 in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Fund and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Fund’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
| · | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| · | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
| · | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control. Accordingly, no such opinion is expressed. |
| · | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
| · | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Fund’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ Deloitte & Touche LLP
Houston, Texas
April 26, 2024
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
| December 31, 2023 | ||||
| Assets | ||||
| Investments in private operating companies, at fair value (cost $53,208,122) | $ | 53,208,122 | ||
| Investment in affiliated private investment company, at fair value (cost $27,317,449) | 27,472,628 | |||
| Cash | 74,556 | |||
| Other assets | 747,167 | |||
| Distributions receivable from investments in private operating companies | 547,276 | |||
| Distribution receivable from investment in affiliated private investment company | 844,594 | |||
| Due from related party | 20,591 | |||
| Prepaid management fee | 13,497 | |||
| $ | 82,928,431 | |||
| Liabilities and partners' capital | ||||
| Liabilities | ||||
| Due to related parties | $ | 17,796,355 | ||
| Distributions payable | 1,335,827 | |||
| Accrued expenses | 80,026 | |||
| Total liabilities | 19,212,208 | |||
| Partners' capital | 63,716,223 | |||
| $ | 82,928,431 |
See accompanying notes to financial statements.
3
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
| For the period July 26, 2023 (commencement of operations) through December 31, 2023 | ||||
| Investment income allocated from affiliated private investment company | ||||
| Interest income | $ | 355,842 | ||
| Distributions from private operating company | 1,041,644 | |||
| Total investment income allocated from affiliated private investment company | 1,397,486 | |||
| Expenses allocated from affiliated private investment company | ||||
| Professional fees | 65,784 | |||
| Organizational expenses | 13,604 | |||
| Other expenses | 978 | |||
| Total expenses allocated from affiliated private investment company | 80,366 | |||
| Expenses | ||||
| Professional fees | 129,215 | |||
| Organization costs | 83,019 | |||
| Other expenses | 114,564 | |||
| Management fee | 28,886 | |||
| Total Fund expenses | 355,684 | |||
| Net investment income (loss) | 961,436 | |||
| Net gain (loss) on investment allocated from affiliated private investment company | ||||
| Net change in unrealized appreciation (depreciation) on investments | 229,929 | |||
| Net gain (loss) on investments allocated from affiliated private investment company | 229,929 | |||
| Net increase (decrease) in partners' capital resulting from operations | $ | 1,191,365 |
See accompanying notes to financial statements.
4
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
For the period July 26, 2023 (commencement of operations) through December 31, 2023
| General | Limited | |||||||||||
| Partner | Partners | Total | ||||||||||
| Partners' capital, beginning of period | $ | - | $ | - | $ | - | ||||||
| Capital contributions | 22,838,995 | 41,021,691 | 63,860,686 | |||||||||
| Capital distributions | (488,291 | ) | (847,537 | ) | (1,335,828 | ) | ||||||
| Net increase (decrease) in partners' capital resulting from operations | ||||||||||||
| Net investment income (loss) | 352,214 | 609,222 | 961,436 | |||||||||
| Net gain (loss) on investment allocated from affiliated private investment company | 84,233 | 145,696 | 229,929 | |||||||||
| Net increase (decrease) in partners' capital resulting from operations | 436,447 | 754,918 | 1,191,365 | |||||||||
| Partners' capital, end of period | $ | 22,787,151 | $ | 40,929,072 | $ | 63,716,223 | ||||||
See accompanying notes to financial statements.
5
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period July 26, 2023 (commencement of operations) through December 31, 2023
| Cash flows from operating activities | ||||
| Net increase (decrease) in partners' capital resulting from operations | $ | 1,191,365 | ||
| Adjustments to reconcile net increase (decrease) in partners' capital from operations to net cash provided by (used in) operating activities: | ||||
| Interest income allocated from investment in affiliated private investment company | (355,842 | ) | ||
| Distributions from private operating company, allocated from affiliated private investment company | (1,041,644 | ) | ||
| Expenses allocated from investment in affiliated private investment company | 80,366 | |||
| Net change in unrealized appreciation (depreciation) allocated from investments in affiliated private investment company | (229,929 | ) | ||
| Purchases of investment in affiliated private investment company | (27,317,450 | ) | ||
| Proceeds from investment in affiliated private investment company | 844,594 | |||
| Purchases of investments in private operating companies | (53,208,122 | ) | ||
| Proceeds from investments in private operating companies | 547,276 | |||
| Changes in assets and liabilities: | ||||
| Distributions receivable from investments in private operating companies | (547,276 | ) | ||
| Distribution receivable from investment in affiliated private investment company | (844,594 | ) | ||
| Prepaid management fee | (13,497 | ) | ||
| Other assets | (747,167 | ) | ||
| Due from related party | (20,591 | ) | ||
| Due to related parties | 17,796,355 | |||
| Accrued expenses | 80,026 | |||
| Net cash provided by (used in) operating activities | (63,786,130 | ) | ||
| Cash flows from financing activities | ||||
| Capital contributions | 63,860,686 | |||
| Net cash provided by (used in) financing activities | 63,860,686 | |||
| Net change in cash | 74,556 | |||
| Cash, beginning of period | - | |||
| Cash, end of period | $ | 74,556 |
See accompanying notes to financial statements.
6
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2023
| Percentage | ||||||||
| of Partners' | Fair | |||||||
| Capital | Value | |||||||
| Investments in private operating companies, at fair value | ||||||||
| United States | ||||||||
| Real Estate, Common Member | ||||||||
| Marble Palms at Cinco Ranch Investor, LLC (1) | 24.38 | % | $ | 15,535,021 | ||||
| Marble Vida Health Village Investor, LLC (2) | 9.75 | 6,210,000 | ||||||
| Marble Timbercreek Investor, LLC (3) | 3.45 | 2,200,000 | ||||||
| Marble Trailside Investor, LLC (4) | 24.39 | 15,539,525 | ||||||
| Real Estate, Preferred Member | ||||||||
| Marble Trailside Investor, LLC (4) | 21.54 | 13,723,576 | ||||||
| Total investments in private operating companies, at fair value (cost $53,208,122) | 83.51 | 53,208,122 | ||||||
| Investment in affiliated private investment company, at fair value | ||||||||
| Real Estate, Preferred Equity | ||||||||
| MC I&I Pref Opco, LP (5) (cost $27,317,449) | 43.12 | 27,472,628 | ||||||
| Total investment in affiliated private investment company at fair value (cost $27,317,449) | 43.12 | % | $ | 27,472,628 | ||||
| (1) Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Palms at Cinco Ranch Investor, LLC. Marble Palms at Cinco Ranch Investor, LLC has a 89.9% ownership interest in Palms at Cinco Ranch JV, LLC, which in turn owns 100% of Palms at Cinco Ranch Owner, LLC. Palms at Cinco Ranch Owner, LLC owns and operates Palms at Cinco Ranch, a 200-unit multifamily development. |
| (2) Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Vida Health Village Investor, LLC. Marble Vida Health Village Investor, LLC has a 20% ownership interest in RPMI 2680 N Orange Ave Venture, LLC which in turn owns 100% in Health Village Apartments Venture, LLC. Health Village Apartments Venture, LLC owns and operates Vida Health Village, a 285-unit multifamily development. |
| (3) Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Timbercreek Investor, LLC. Marble Timbercreek Investor, LLC has 19.13% ownership interest in 614 S 1st Street Investor, LLC, which in turn owns and operates Timbercreek Apartments, a 198-unit multifamily development. |
| (4) Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Trailside Investor, LLC. Marble Trailside Investor, LLC has a 85% ownership interest in Trailside JV, LLC, which in turn owns 100% of Trailside Townhomes, LLC. Trailside Townhomes owns and operates a 149-unit multifamily development. |
| (5) Marble Capital Income and Impact Fund, L.P. and Subsidiaries have a 94.05% ownership interest in MC I&I Pref Opco, LP, an affiliated entity with the primary purpose to invest in preferred interests of privately held companies engaged in the acquisition and/or development and operation of various real estate projects. Redemptions are not permitted. Proceeds will be distributed as they become available, the timing of which is currently unknown. The fund does not have a fixed term. |
See accompanying notes to financial statements.
7
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
December 31, 2023
The following table represents security positions that are indirectly held by the Fund through MC I&I Pref Opco, LP. The cost and value represent the Fund's proportionate share of investments held by MC I&I Pref Opco, LP.
| Fund's | Percentage | |||||||
| Proportionate | of Partners' | |||||||
| Share | Capital | |||||||
| Investment in MC I&I Pref Opco, LP, at fair value | ||||||||
| United States | ||||||||
| Real Estate, Preferred Member | ||||||||
| Marble Legacy Park Investor, LLC | $ | 11,882,260 | 18.6 | % | ||||
| Marble Patten East Investor, LLC | 5,880,069 | 9.2 | ||||||
| Marble Rainbow Mezz Lender, LLC | 9,073,984 | 14.2 | ||||||
See accompanying notes to financial statements.
8
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 1. | Nature of operations |
Marble Capital Income and Impact Fund, LP (“Marble Capital Income and Impact”), a Delaware limited partnership, and its wholly owned subsidiaries MC Income and Impact REIT, LLC (“REIT”), a Delaware limited liability company and MC I&I Common Opco, LP (Common Opco), a Delaware limited partnership, together (the “Fund”), commenced operations on July 26, 2023. The primary purpose of the Fund is to invest in privately held entities engaged in the acquisition and/or development and operation of real estate projects.
The Fund is managed by Marble Capital Income and Impact Fund GP, LLC (the “General Partner”), which serves as the general partner. The Partnership has perpetual existence but shall be dissolved and the affairs of the Fund wound up upon the occurrence of a disabling event with respect to the General Partner, a vote by limited partners representing at least 66.67% of the Fund’s interests to dissolve the Fund, or the election of General Partner to terminate and dissolve the Fund provided written notice of such election to the limited partners with no majority of limited partners objecting to such dissolution.
| 2. | Summary of significant accounting policies |
Basis of Presentation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Fund is an investment company and follows the accounting and reporting guidance in FASB Topic 946 of the Codification, entitled Financial Services – Investment Companies.
Consolidation
The accompanying consolidated financial statements reflect consolidated accounts of Marble Capital Income and Impact and its wholly owned subsidiaries REIT and Common Opco, formed for the sole purpose of facilitating the Fund's investments. All intercompany balances were eliminated in the accompanying consolidated financial statements.
Cash
Cash represents cash deposits held at financial institutions. Cash is held at major financial institutions and is subject to credit risk to the extent those balances exceed applicable Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation (“SIPC”) limitations.
In the normal course of business, substantially all of the Fund’s cash balances and transactions are transacted with Bank of America. The Fund is subject to credit risk to the extent any institution with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Fund’s management monitors the financial condition of such institutions and does not anticipate losses from these counterparties.
Fair Value - Definition and Hierarchy
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Fund uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
9
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 2. | Summary of significant accounting policies (continued) |
Fair Value - Definition and Hierarchy (continued)
The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly. These inputs may include: (a) quoted prices for similar assets in active markets; (b) quoted prices for identical or similar assets in markets that are not active; (c) inputs other than quoted prices that are observable for the asset; or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are unobservable and significant to the entire fair value measurement.
Private investment companies measured using net asset value as the practical expedient are not categorized within the fair value hierarchy.
The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, determining fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for investments categorized in Level 3. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is generally categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Fair Value – Valuation Techniques and Inputs
Investments in Private Operating Companies
The Fund establishes valuation processes and procedures to ensure that the valuation methodologies for investments that are categorized within Level 3 of the fair value hierarchy are fair, consistent, and verifiable.
The General Partner oversees the entire valuation process of the Fund’s Level 3 investments and is responsible for developing the Fund’s written valuation processes and procedures, conducting periodic reviews of the valuation policies, and evaluating the overall fairness and consistent application of the valuation policies. The valuations of the Fund’s Level 3 investments are evaluated quarterly if information or events leads the General Partner to adjust the valuation on an interim basis. Valuations determined by the General Partner are required to be supported by market data, internal cash flow models, or other methods the General Partner deems to be appropriate.
These assessments typically incorporate an income approach reflecting a discounted cash flow analysis. The net cash flow is forecast over the expected remaining economic life and discounted to present value using a discount rate. Inputs relied upon by the income approach include annual projected cash flows for each investment through their respective investment horizons. These cash flow assumptions may be probability-weighted to reflect the risks associated with achieving expected levels across various scenarios. Investments in private operating companies are included in Level 3 of the fair value hierarchy.
10
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 2. | Summary of significant accounting policies (continued) |
Investment in Affiliated Private Investment Company
The Fund values its investment in MC I&I Pref Opco, LP utilizing the net asset value provided by the underlying private investment fund as a practical expedient. If it is probable the Fund will sell the investment at an amount different from the net asset valuation, the committee considers other factors in addition to the net asset valuation in its determination of fair value. As of December 31, 2023, the Fund valued its investment in MC I&I Pref Opco, LP entirely based on the net asset valuation provided by the underlying investment company as a practical expedient.
MC I&I Pref Opco, LP shares a valuation policy with the Fund and values its investments consistent with what is described in this Note 2.
Investment Transactions and Related Investment Income
Investment transactions are accounted for on a trade-date basis. Realized gains and losses on investment transactions are determined using cost calculated on a specific identification basis. Interest is recognized on the accrual basis and the collectability of interest receivable is evaluated when making accruals. Distributions that represent returns of capital in excess of cumulative profits and losses are credited to investment cost rather than investment income.
Income Taxes
The Fund does not record a provision for U.S. federal, state, or local income taxes because the partners report their share of the Fund’s income or loss on their income tax returns. The Fund files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. Generally, the Fund is subject to income tax examinations by major taxing authorities during the three-year period prior to the period covered by these consolidated financial statements.
The Fund is required to determine whether its tax positions are more likely than not to be sustained upon examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a “more-likely-than-not” threshold would be recorded as a tax expense in the current period. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2023 and expects no changes to that conclusion within the next twelve months.
Use of Estimates
Preparing consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, including the fair value of investments, and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
Organization Costs
The Fund shall pay or reimburse the General Partner or its affiliates organizational expenses of the Fund. Organization costs in excess of the greater of (i) $2,000,000 or (ii) .75% of the Total Commitments shall be offset against management fees or be borne by the General Partner. The amount of organization costs incurred by the Fund is reflected on the statement of operations. There was no excess organization costs incurred during the year ended December 31, 2023.
11
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 3. | Fair value measurements |
The following table presents the classification of the Fund’s fair value measurements as of December 31, 2023:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets (at fair value) | ||||||||||||||||
| Investments in private operating companies | ||||||||||||||||
| Real Estate, Common Member | $ | - | $ | - | $ | 39,484,546 | $ | 39,484,546 | ||||||||
| Real Estate, Preferred Member | - | - | 13,723,576 | 13,723,576 | ||||||||||||
| Total Investments, at fair value | $ | - | $ | - | $ | 53,208,122 | $ | 53,208,122 | ||||||||
The Fund’s investment in MC I&I Pref Opco, LP is valued as permitted by the practical expedient and therefore, does not need to be categorized within the fair value hierarchy.
The fair value of all of the Fund’s investments categorized in level 3 of the fair value hierarchy at December 31, 2023 are based on quantitative unobservable inputs not internally developed. Fair value for these investments are based on the cost of recent transactions.
During the year ended December 31, 2023, there were no transfers in or out of level 3 and the Fund purchased $53,208,122 of level 3 assets.
| 4. | Committed capital |
As of December 31, 2023, the Fund has total capital commitments from its partners with respect to their partnership interests in the aggregate of $129,120,000. The General Partner may make capital calls up to the amount of unfunded capital commitments to enable the Fund to make investments, pay fees and expenses, or to provide reserves. No partner is required to fund an amount in excess of their unfunded capital commitments. As of December 31, 2023, the Fund’s uncalled capital commitments amounted to $65,259,314. As of December 31, 2023, the ratio of total contributed capital to total committed capital is 49.5%.
| 5. | Related party transactions |
The Fund considers the General Partner, their principal owners, members of management, members of their immediate families, and entities under common control to be related parties to the Fund. Amounts due from and due to related parties are generally settled in the normal course of business without formal payment terms.
The Fund pays the General Partner a management fee, initially calculated at a rate of 1.25% per annum, based on the limited partners’ Net Asset Value, payable quarterly in advance. Management fees for the period ended December 31, 2023, are recorded in the consolidated statement of operations.
Due from related party on the consolidated statement of assets and liabilities represents amounts paid by the Fund on behalf of an affiliate.
Due to related parties on the consolidated statement of assets and liabilities represents amounts owed by Common Opco to an affiliate of the Fund to fund investment purchases.
12
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 6. | Partners’ capital |
Allocation of Partners’ Net Profits and Losses
At the end of each fiscal year of the Fund, the net profits and losses are allocated to the capital accounts of the partners as follows:
| (a) | Net profits and losses are generally allocated to the partners in proportion to their capital contributions. |
| (b) | Net profits related to the Fund’s investments, are allocated on the same basis as the partners’ distributions (as described below). |
Net profits and net losses included in (a) and (b) above include both realized and unrealized profits and losses.
Partners’ Distributions
The proceeds attributable to the Fund’s investments (which shall include all proceeds attributable to the disposition of such investments, net of expenses, as well as any dividends or interest income earned on such investments) are distributed to the partners in amounts proportionate to the aggregate partnership net asset value attributable to the partnership units held. The amount shall be distributed as follows:
| (a) | first, if the total return for the applicable period exceeds the sum of (1) the amount that results in a six percent (6.0%) annualized internal rate of return on the partnership net asset value of the partnership units excluding any partnership units held by the General Partner, “Hurdle Amount” and (2) the loss carryforward amount (if any) (any such excess, “Excess Profits”), one hundred percent (100%) of such annual Excess Profits until the total amount allocated to the General Partner equals fifteen percent (15%) of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to the General Partner (which is commonly referred to as the “catch-up”); and |
| (b) | second, to the extent there are remaining excess profits, fifteen percent (15%) of such remaining excess profits. |
Carried Interest Allocation
The capital accounts reflect the carried interest to the General Partner as if the Fund had realized all assets and settled all liabilities at the fair value reported in the consolidated financial statements, and allocated all gains and losses and distributed the net assets to the partners at the reporting date consistent with the provisions of the Fund’s governing documents. During the period ended December 31, 2023, the amount of the carried interest that was allocated to the General Partner is shown on the statement of changes in partners’ capital, if any.
The General Partner, in its sole discretion, may waive or reduce the applicable carried interest with respect to any limited partners.
| 7. | Unfunded investment commitments |
As of December 31, 2023, the Fund had committed $27,317,449 to MC I&I Pref Opco, LP of which $0 remains unfunded. The Fund also has committed $54,095,328 to investments in private operating companies of which $887,206 remains unfunded at December 31, 2023. As of December 31, 2023, there were no recallable distributions.
13
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 8. | Indemnifications |
The Fund has provided general indemnification to the General Partner, any affiliate of the General Partner and any person acting on behalf of the General Partner or such affiliate when they act, in good faith, in the best interest of the Fund. The Fund is unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but expects the risk of having to make any payments under these general business indemnifications to be remote.
| 9. | Financial highlights |
Financial highlights for period ended December 31, 2023, are as follows:
| Internal rate of return, since inception End of period | 6.7 | % | ||
| Ratio to average quarterly limited partners' capital Expenses | 0.9 | % | ||
| Net investment income (loss) | 0.4 | % |
Financial highlights are calculated for the limited partner class taken as a whole. An individual limited partner’s return and ratios may vary based on different management fees and carried interest arrangements and the timing of capital transactions. The ratios include allocated income & expenses from the affiliated private investment companies.
The Internal Rate of Return (“IRR”) of the limited partners since inception of the Fund is net of carried interest allocation to the General Partner, if any, and was computed based on the actual dates of capital contributions and distributions, and the ending aggregate limited partners’ capital at the end of the period.
Financial highlights represent ratios on an annualized calculation basis. Expenses to the Fund related to audit fees, software expense, organizational expense, certain corporation & legal expenses, and tax expense were not annualized.
| 10. | Market risk and other risk factors |
The General Partner of the Partnership seeks investment opportunities in multi-family development projects and investments in securities that offer the possibility of attaining capital appreciation obtained primarily through preferred and common equity investments. Certain events particular to the industry in which the Partnership invests, as well as general economic and political conditions, may have a significant negative impact on the underlying investees' operations and profitability. In addition, the Partnership is subject to changing regulatory and tax environments. Such events are beyond the Partnership’s control, and the likelihood that they may occur cannot be predicted. Furthermore, most of the Partnership’s underlying investments are made in private operating companies whose shares do not trade on established exchanges. While it is expected that these private operating companies may pursue initial public offerings, trade sales, or other liquidation events, there are generally no public markets for these investments at the current time. The Partnership’s ability to liquidate its underlying investments in private operating companies and publicly traded investments and realized value is subject to significant limitations and uncertainties.
14
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and for the period July 26, 2023 (commencement of operations) through December 31, 2023
| 10. | Market risk and other risk factors (continued) |
In the normal course of business, the Partnership maintains its cash balances in financial institutions, which at times may exceed federally insured limits. The Partnership is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. Management monitors the financial condition of such financial institutions and does not anticipate any losses from these counterparties.
The value of the Fund's investments will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities and investments owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the Fund's investments. Natural disasters, public health emergencies, terrorism, conflicts, and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
| 11. | Subsequent events |
The General Partner has evaluated subsequent events through April 26, 2024, the date these financial statements were available to be issued, and has determined that no subsequent events warrant adjustment to or disclosure in these financial statements.
15
Exhibit 99.3
MARBLE CAPITAL INCOME AND IMPACT FUND, LP
AND SUBSIDIARIES
CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
AS OF MARCH 31, 2025
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Statement of Assets and Liabilities (Unaudited)
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Investments in private operating companies, at fair value (cost $129,669,942 and $109,568,391 at March 31, 2025 and December 31, 2024, respectively) | $ | 134,031,258 | $ | 113,261,454 | ||||
| Investment in affiliated private investment company, at fair value (cost $45,155,054 and $40,407,720 at March 31, 2025 and December 31, 2024, respectively) | 46,117,084 | 41,864,340 | ||||||
| Cash and cash equivalents | 3,033,008 | 5,233,740 | ||||||
| Distributions receivable from investments in private operating companies | 1,498,362 | 1,446,344 | ||||||
| Distribution receivable from investment in affiliated private investment company | 980,246 | 834,011 | ||||||
| Dividends receivable | 6,906 | 8,162 | ||||||
| Other assets | 571,444 | 612,979 | ||||||
| Total Assets | $ | 186,238,308 | $ | 163,261,030 | ||||
| LIABILITIES AND PARTNERS' CAPITAL | ||||||||
| LIABILITIES | ||||||||
| Due to related parties | $ | 232,174 | $ | 292,289 | ||||
| Capital contributions received in advance | - | 2,758,227 | ||||||
| Accrued expenses | 78,829 | 108,957 | ||||||
| Distributions payable | 2,345,565 | 2,125,325 | ||||||
| Other liabilities | 5,050 | - | ||||||
| Management fee payable | 13,870 | 13,085 | ||||||
| Total Liabilities | 2,675,488 | 5,297,883 | ||||||
| PARTNERS' CAPITAL | ||||||||
| Non-controlling interest - preferred shares | 125,000 | - | ||||||
| Partners' capital | 183,437,820 | 157,963,147 | ||||||
| Total Partners' Capital | 183,562,820 | 157,963,147 | ||||||
| Total Liabilities and Partners' Capital | $ | 186,238,308 | $ | 163,261,030 | ||||
The accompanying footnotes are an integral part of the financial statements
2
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Schedule of Investments (Unaudited)
| December 31, 2024 | March 31, 2025 | |||||||||||||||
| Percentage | Percentage | |||||||||||||||
| of Partners' | Fair | of Partners' | Fair | |||||||||||||
| Investments in private operating companies, at fair value | Capital | Value | Capital | Value | ||||||||||||
| United States | ||||||||||||||||
| Real Estate, Common Member | ||||||||||||||||
| Marble Palms at Cinco Ranch Investor, LLC (1,10) | 10.73 | % | $ | 16,952,027 | 9.38 | % | $ | 17,198,121 | ||||||||
| Marble Vida Health Village Investor, LLC (2,11) | 4.39 | 6,929,387 | 3.80 | 6,973,702 | ||||||||||||
| Marble Timbercreek Investor, LLC (3,12) | 1.49 | 2,361,127 | 1.29 | 2,361,127 | ||||||||||||
| Marble Aspire Lenox Park Investor (4,13) | 15.00 | 23,695,915 | 13.03 | 23,896,920 | ||||||||||||
| Marble Metropole Investor, LLC (5,14) | 8.18 | 12,925,000 | 7.05 | 12,936,353 | ||||||||||||
| Marble Shadow Creek Investor, LLC (6,15) | 13.38 | 21,134,897 | 12.08 | 22,155,570 | ||||||||||||
| Marble Trailside Investor, LLC (7,16) | 9.84 | 15,539,525 | 8.47 | 15,539,525 | ||||||||||||
| Marble Travertine Investor, LLC (8,17) | - | - | 10.49 | 19,246,364 | ||||||||||||
| Real Estate, Preferred Member | ||||||||||||||||
| Marble Trailside Investor, LLC (4) | 8.69 | 13,723,576 | 7.48 | 13,723,576 | ||||||||||||
| Total investments in private operating companies, at fair value (March 31, 2025 cost $129,669,942) (December 31, 2024 cost $109,568,391) | 71.70 | % | $ | 113,261,454 | 73.07 | % | $ | 134,031,258 | ||||||||
| Percentage | Percentage | |||||||||||||||
| of Partners' | Fair | of Partners' | Fair | |||||||||||||
| Investment in affiliated private investment company, at fair value | Capital | Value | Capital | Value | ||||||||||||
| United States | ||||||||||||||||
| Real Estate, Preferred Equity | ||||||||||||||||
| Marble I&I Pref Opco, LP ( March 31, 2025 cost $45,155,054) (9) | ||||||||||||||||
| (December 31, 2024 cost $40,407,720) (17) | 26.50 | 41,864,340 | 25.14 | 46,117,084 | ||||||||||||
| Total investment in affiliated private investment company at fair value (March 31, 2025 cost $45,155,054) (December 31, 2024 cost $40,407,720) | 26.50 | % | $ | 41,864,340 | 25.14 | % | $ | 46,117,084 | ||||||||
The accompanying footnotes are an integral part of the financial statements
3
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2025
| (1) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Palms at Cinco Ranch Investor, LLC. Marble Palms at Cinco Ranch Investor, LLC has a 89.9% ownership interest in Palms at Cinco Ranch JV, LLC, which in turn owns 100% of Palms at Cinco Ranch Owner, LLC. Palms at Cinco Ranch Owner, LLC owns and operates Palms at Cinco Ranch, a 200-unit multifamily development. As of March 31, 2025, the unfunded commitment for this investment was $887,206. | |
| (2) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Vida Health Village Investor, LLC. Marble Vida Health Village Investor, LLC has a 66% ownership interest in RPMI 2680 N Orange Ave Venture, LLC which in turn owns 30% in Health Village Apartments Venture, LLC. Health Village Apartments Venture, LLC owns and operates Vida Health Village, a 285-unit multifamily development. | |
| (3) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Timbercreek Investor, LLC. Marble Timbercreek Investor, LLC has 19.13% ownership interest in 614 S 1st Street Investor, LLC, which in turn owns and operates Timbercreek Apartments, a 198-unit multifamily development. | |
| (4) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Aspire Lenox Park Investor, LLC, which in turn owns 78.18% of 1050 Lenox Park Blvd Owner, LLC, which in turn owns and operates Aspire Lenox Park Apartments, a 407-unit multifamily development. As of March 31, 2025, the unfunded commitment for this investment was $1,903,081. | |
| (5) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Metropole Investor, LLC. Marble Metropole Investor, LLC has a 90% ownership interest in Post RPMO JC LLC, which in turn owns 99.50% in RPMI Metropole Holdings LLC. Post RPMI Metropole Holdings LLC has 100% ownership in Post RPMI Metropole LP. Post RPMI Metropole LP owns and operates Metropole Apartments, a 289-unit multifamily development. As of March 31, 2025, the unfunded commitment for this investment was $1,327,962. | |
| (6) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Shadow Creek Investor, LLC, which in turn owns 79.99% in KV Shadow Creek Holdings, LLC, which in turn owns and operates Shadow Creek Apartments, a 347-unit multifamily development. As of March 31, 2025, the unfunded commitment for this investment was $1,987,803. | |
| (7) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Trailside Investor, LLC. Marble Trailside Investor, LLC has a 85% ownership interest in Trailside JV, LLC, which in turn owns 100% of Trailside Townhomes, LLC. Trailside Townhomes owns and operates a 149-unit multifamily development. | |
| (8) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Travertine Investor, LLC. Marble Travertine Investor, LLC hhas a 75.36% ownership interest in RPMI 6032 Travertine Ln JV SLP, LLC, which in turn owns 100% RPMI 6032 Travertine Ln Holdings LLC. RPMI 6032 Travertine Ln Holdings LLC owns and operates The Hadley, a 374-unit multifamily development. As of March 31, 2025, the unfunded commitment for this investment was $753,636. | |
| (9) | Marble Capital Income and Impact Fund, L.P. and Subsidiaries have a 84.87% ownership interest in MC I&I Pref Opco, LP, an affiliated entity with the primary purpose to invest in preferred interests of privately held companies engaged in the acquisition and/or development and operation of various real estate projects. As of March 31, 2025, the Fund's uncalled capital commitment is $0. Redemptions are not permitted. Proceeds will be distributed as they become available, the timing of which is currently unknown. The fund does not have a fixed term. |
As of December 31, 2024
| (10) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Palms at Cinco Ranch Investor, LLC. Marble Palms at Cinco Ranch Investor, LLC has a 89.9% ownership interest in Palms at Cinco Ranch JV, LLC, which in turn owns 100% of Palms at Cinco Ranch Owner, LLC. Palms at Cinco Ranch Owner, LLC owns and operates Palms at Cinco Ranch, a 200-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $887,206. | |
| (11) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Vida Health Village Investor, LLC. Marble Vida Health Village Investor, LLC has a 66% ownership interest in RPMI 2680 N Orange Ave Venture, LLC which in turn owns 30% in Health Village Apartments Venture, LLC. Health Village Apartments Venture, LLC owns and operates Vida Health Village, a 285-unit multifamily development. | |
| (12) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Timbercreek Investor, LLC. Marble Timbercreek Investor, LLC has 19.13% ownership interest in 614 S 1st Street Investor, LLC, which in turn owns and operates Timbercreek Apartments, a 198-unit multifamily development. | |
| (13) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Aspire Lenox Park Investor, LLC, which in turn owns 78.18% of 1050 Lenox Park Blvd Owner, LLC, which in turn owns and operates Aspire Lenox Park Apartments, a 407-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $2,104,085. | |
| (14) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Metropole Investor, LLC. Marble Metropole Investor, LLC has a 90% ownership interest in Post RPMO JC LLC, which in turn owns 99.50% in RPMI Metropole Holdings LLC. Post RPMI Metropole Holdings LLC has 100% ownership in Post RPMI Metropole LP. Post RPMI Metropole LP owns and operates Metropole Apartments, a 289-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $1,339,315. | |
| (15) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Shadow Creek Investor, LLC, which in turn owns 79.99% in KV Shadow Creek Holdings, LLC, which in turn owns and operates Shadow Creek Apartments, a 347-unit multifamily development. As of December 31, 2024, the unfunded commitment for this investment was $2,630,633. | |
| (16) | Marble Capital Income and Impact Fund, LP and Subsidiaries have 100% ownership interest in Marble Trailside Investor, LLC. Marble Trailside Investor, LLC has a 85% ownership interest in Trailside JV, LLC, which in turn owns 100% of Trailside Townhomes, LLC. Trailside Townhomes owns and operates a 149-unit multifamily development. | |
| (17) | Marble Capital Income and Impact Fund, L.P. and Subsidiaries have a 84.87% ownership interest in MC I&I Pref Opco, LP, an affiliated entity with the primary purpose to invest in preferred interests of privately held companies engaged in the acquisition and/or development and operation of various real estate projects. As of December 31, 2024, the Fund's uncalled capital commitment is $0. Redemptions are not permitted. Proceeds will be distributed as they become available, the timing of which is currently unknown. The fund does not have a fixed term. |
The accompanying footnotes are an integral part of the financial statements
4
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Schedule of Investments (Unaudited) (Continued)
The following table represents security positions that are indirectly held by the Fund through MC I&I Pref Opco, LP. The cost and value represent the Fund's proportionate share of investments held by MC I&I Pref Opco, LP.
As of March 31, 2025
| Fund's | Percentage | |||||||
| Proportionate | of Partners' | |||||||
| Investment in MC I&I Pref Opco, LP, at fair value | Share | Capital | ||||||
| United States | ||||||||
| Real Estate, Preferred Member | ||||||||
| Marble Legacy Park Investor, LLC | $ | 13,272,734 | 7.2 | % | ||||
| Marble Patten East Investor, LLC | 5,467,404 | 3.0 | ||||||
| Marble Rainbow Mezz Lender, LLC | 20,435,821 | 11.1 | ||||||
| Marble Discovery Park Investor, LLC | 6,851,211 | 3.7 | ||||||
| Marble Water Tower Investor, LLC | $ | 5,278,622 | 2.9 | % | ||||
As of December 31, 2024
| Fund's | Percentage | |||||||
| Proportionate | of Partners' | |||||||
| Investment in MC I&I Pref Opco, LP, at fair value | Share | Capital | ||||||
| United States | ||||||||
| Real Estate, Preferred Member | ||||||||
| Marble Legacy Park Investor, LLC | $ | 11,882,131 | 7.5 | % | ||||
| Marble Patten East Investor, LLC | 5,754,242 | 3.6 | ||||||
| Marble Rainbow Mezz Lender, LLC | 18,007,486 | 11.4 | ||||||
| Marble Discovery Park Investor, LLC | $ | 6,136,170 | 3.9 | % | ||||
The accompanying footnotes are an integral part of the financial statements
5
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Statement of Operations (Unaudited)
For the three months ended March 31, 2025 and 2024
| March 31, 2025 | March 31, 2024 | |||||||
| Investment income allocated from affiliated private investment company | ||||||||
| Interest | $ | 541,392 | $ | 282,457 | ||||
| Distributions from private operating companies | 491,561 | 351,879 | ||||||
| Total investment income allocated from affliated private investment company | 1,032,953 | 634,336 | ||||||
| Investment income | ||||||||
| Dividend income | 14,340 | - | ||||||
| Distributions from private operating company | 1,498,362 | 637,822 | ||||||
| Total investment income | 1,512,702 | 637,822 | ||||||
| Expenses allocated from affiliated private investment company | ||||||||
| Professional Fees | 45,983 | 30,936 | ||||||
| Organizational expenses | 6,556 | 7,137 | ||||||
| Other expenses | 240 | 1,495 | ||||||
| Total expenses allocated from affiliated private investment company | 52,779 | 39,568 | ||||||
| Expenses | ||||||||
| Professional fees | 172,950 | 92,688 | ||||||
| Organizational expenses | 43,784 | 44,662 | ||||||
| Other expenses | 11,973 | 14,511 | ||||||
| Management fee | 148,344 | 45,179 | ||||||
| Dividend expense | 3,508 | - | ||||||
| Charitable contributions | 1,543 | - | ||||||
| Total expenses | 382,102 | 197,040 | ||||||
| Net investment income (loss) | $ | 2,110,774 | $ | 1,035,550 | ||||
| Realized and unrealized gain (loss) on investment | ||||||||
| Net change in unrealized appreciation (depreciation) allocated from investments in affiliated private investment company | $ | (494,517 | ) | $ | - | |||
| Net change in unrealized appreciation (depreciation) on investments in private operating company | 668,252 | - | ||||||
| Net gain (loss) on investments | 173,735 | - | ||||||
| Net increase (decrease) in partners' capital from operations | 2,284,509 | 1,035,550 | ||||||
| Increase in net assets resulting from operations attributable to non-controlling interest | 3,508 | - | ||||||
| Net increase (decrease) in partners' capital from operations attributable to partners | $ | 2,288,017 | $ | 1,035,550 | ||||
The accompanying footnotes are an integral part of the financial statements
6
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital (Unaudited)
For the three months ended March 31, 2025
| General | Limited | Non-controlling | ||||||||||||||
| Partner | Partner | Interest | Total | |||||||||||||
| Partners' capital, beginning of period | $ | 341,129 | $ | 157,622,018 | $ | - | $ | 157,963,147 | ||||||||
| Capital contributions | - | 25,533,227 | 125,000 | 25,658,227 | ||||||||||||
| Capital distributions | (4,640 | ) | (2,338,423 | ) | (3,508 | ) | (2,346,571 | ) | ||||||||
| Net increase (decrease) in partners' capital from operations | ||||||||||||||||
| Net investment income (loss) | 4,608 | 2,106,166 | 3,508 | 2,114,282 | ||||||||||||
| Net gain (loss) on investments | 284 | 173,451 | - | 173,735 | ||||||||||||
| Net increase (decrease) in partners' capital from operations | 4,892 | 2,279,617 | 3,508 | 2,288,017 | ||||||||||||
| Partners' capital, end of period | $ | 341,381 | $ | 183,096,439 | $ | 125,000 | $ | 183,562,820 | ||||||||
The accompanying footnotes are an integral part of the financial statements
7
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital (Unaudited) (Continued)
For the three months ended March 31, 2024
| General | Limited | |||||||||||
| Partner | Partner | Total | ||||||||||
| Partners' capital, beginning of period | $ | 22,787,151 | $ | 40,929,072 | $ | 63,716,223 | ||||||
| Capital contributions | - | 61,984,314 | 61,984,314 | |||||||||
| Capital distributions | - | (1,215,726 | ) | (1,215,726 | ) | |||||||
| Net increase (decrease) in partners' capital from operations | ||||||||||||
| Net investment income (loss) | - | 1,035,550 | 1,035,550 | |||||||||
| Net gain (loss) on investments | - | - | - | |||||||||
| Carried interest allocation to General Partner | - | - | - | |||||||||
| Net increase (decrease) in partners' capital from operations | - | 1,035,550 | 1,035,550 | |||||||||
| Partners' capital, end of period | $ | 22,787,151 | $ | 102,733,210 | $ | 125,520,361 | ||||||
The accompanying footnotes are an integral part of the financial statements
8
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
| March 31, 2025 | March 31, 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net increase in partners' capital resulting from operations | $ | 2,284,509 | $ | 1,035,550 | ||||
| Increase in net assets resulting from operations attributable to non-controlling interest | 3,508 | - | ||||||
| Adjustments to reconcile net increase (decrease) in partners' capital from operations to net cash provided by (used in) operating activities: | ||||||||
| Interest income allocated from investment in affiliated private investment company | (541,392 | ) | (282,457 | ) | ||||
| Distributions from private operating company, allocated from affiliated private investment company | (491,561 | ) | (351,879 | ) | ||||
| Expenses allocated from investment in affiliated private investment company | 52,779 | 39,568 | ||||||
| Net change in unrealized appreciation (depreciation) allocated from investments in affiliated private investment company | 494,517 | - | ||||||
| Net change in unrealized appreciation (depreciation) on investments in private operating companies | (668,252 | ) | - | |||||
| Purchases of investment in affiliated private investment company | (4,747,334 | ) | - | |||||
| Proceeds from investment in affiliated private investment company | 980,246 | 623,082 | ||||||
| Purchases of investments in private operating companies | (20,101,551 | ) | (41,718,395 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Distributions receivable from investments in private operating companies | (52,018 | ) | (90,546 | ) | ||||
| Distribution receivable from investment in affiliated private investment company | (146,235 | ) | 212,907 | |||||
| Other assets | 41,535 | 23,644 | ||||||
| Dividends receivable | 1,256 | - | ||||||
| Due from related party | - | 20,591 | ||||||
| Prepaid management fee | - | 13,497 | ||||||
| Due to related party | (60,115 | ) | (17,656,324 | ) | ||||
| Accrued expenses | (30,128 | ) | (18,730 | ) | ||||
| Management fee payable | 785 | 19,210 | ||||||
| Other liabilities | 5,050 | - | ||||||
| Net cash used in operating activities | (22,974,401 | ) | (58,130,282 | ) | ||||
| Cash flows from financing activities | ||||||||
| Capital contributions, net of contributions received in advance | 22,900,000 | 61,984,314 | ||||||
| Capital distributions, net of distributions payable | (2,126,331 | ) | (1,335,827 | ) | ||||
| Net cash provided by financing activities | 20,773,669 | 60,648,487 | ||||||
| Net change in cash and cash equivalents | $ | (2,200,732 | ) | $ | 2,518,205 | |||
| Cash and cash equivalents, beginning of period | 5,233,740 | 74,556 | ||||||
| Cash and cash equivalents, end of period | $ | 3,033,008 | $ | 2,592,761 | ||||
The accompanying footnotes are an integral part of the financial statements
9
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
1. Nature of operations
Marble Capital Income and Impact Fund, LP (“Marble Capital Income and Impact”), a Delaware limited partnership, and its wholly owned subsidiaries MC Income and Impact REIT, LLC (“REIT”), a Delaware limited liability company, and MC I&I Common Opco, LP (Common Opco), a Delaware limited partnership, together (the “Fund”), commenced operations on July 26, 2023. The primary purpose of the Fund is to invest in privately held entities engaged in the acquisition and/or development and operation of real estate projects.
The Fund is managed by Marble Capital Income and Impact Fund GP, LLC (the “General Partner”), which serves as the general partner. The Partnership has perpetual existence but shall be dissolved and the affairs of the Fund wound up upon the occurrence of a disabling event with respect to the General Partner, a vote by limited partners representing at least 66.67% of the Fund’s interests to dissolve the Fund, or the election of the General Partner to terminate and dissolve the Fund provided written notice of such election to the limited partners with no majority of limited partners objecting to such dissolution.
2. Summary of significant accounting policies
Basis of Presentation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Fund is an investment company and follows the accounting and reporting guidance in FASB Topic 946 of the Codification, entitled Financial Services – Investment Companies.
In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of the financial statements for the interim periods included herein. The results of operations for the three months ended March 31, 2025 and March 31, 2024 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024.
Consolidation
The accompanying consolidated financial statements reflect consolidated accounts of Marble Capital Income and Impact and its wholly owned subsidiaries REIT and Common Opco, formed for the sole purpose of facilitating the Fund's investments. All intercompany balances were eliminated in the accompanying consolidated financial statements.
Cash
Cash represents cash deposits held at financial institutions. Cash is held at major financial institutions and is subject to credit risk to the extent those balances exceed applicable Federal Deposit Insurance Corporation (“FDIC”) or
Securities Investor Protection Corporation (“SIPC”) limitations. As of March 31, 2025 and December 31, 2024, the Fund had cash equivalents of $1,819,244, and $2,363,647, respectively, in money market funds, which are stated at net asset value, and are classified as Level 1 in the fair value hierarchy.
In the normal course of business, substantially all of the Fund’s cash balances and transactions are transacted with Bank of America. The Fund is subject to credit risk to the extent any institution with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Fund’s management monitors the financial condition of such institutions and does not anticipate losses from these counterparties.
10
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
2. Summary of significant accounting policies (continued)
Fair Value - Definition and Hierarchy
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Fund uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly. These inputs may include: (a) quoted prices for similar assets in active markets; (b) quoted prices for identical or similar assets in markets that are not active; (c) inputs other than quoted prices that are observable for the asset; or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are unobservable and significant to the entire fair value measurement.
Private investment companies measured using net asset value as the practical expedient are not categorized within the fair value hierarchy.
The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, determining fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for investments categorized in Level 3. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is generally categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Fair Value – Valuation Techniques and Inputs
Investments in Private Operating Companies
The Fund establishes valuation processes and procedures to ensure that the valuation methodologies for investments that are categorized within Level 3 of the fair value hierarchy are fair, consistent, and verifiable.
The General Partner oversees the entire valuation process of the Fund’s Level 3 investments and is responsible for developing the Fund’s written valuation processes and procedures, conducting periodic reviews of the valuation policies, and evaluating the overall fairness and consistent application of the valuation policies. The valuations of the Fund’s Level 3 investments are evaluated quarterly if information or events leads the General Partner to adjust the valuation on an interim basis. Valuations determined by the General Partner are required to be supported by market data, internal cash flow models, or other methods the General Partner deems to be appropriate.
11
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
2. Summary of significant accounting policies (continued)
Fair Value – Valuation Techniques and Inputs (continued)
These assessments typically incorporate an income approach reflecting a discounted cash flow analysis. The net cash flow is forecast over the expected remaining economic life and discounted to present value using a discount rate. Inputs relied upon by the income approach include annual projected cash flows for each investment through their respective investment horizons. These cash flow assumptions may be probability-weighted to reflect the risks associated with achieving expected levels across various scenarios. Investments in private operating companies are included in Level 3 of the fair value hierarchy.
Investment in Affiliated Private Investment Company
The Fund values its investment in MC I&I Pref Opco, LP utilizing the net asset value provided by the underlying private investment fund as a practical expedient. If it is probable the Fund will sell the investment at an amount different from the net asset valuation, the committee considers other factors in addition to the net asset valuation in its determination of fair value. As of March 31, 2025 and December 31, 2024, the Fund valued its investment in MC I&I Pref Opco, LP entirely based on the net asset valuation provided by the underlying investment company as a practical expedient.
MC I&I Pref Opco, LP shares a valuation policy with the Fund and values its investments consistent with what is described in this Note 2.
Investment Transactions and Related Investment Income
Investment transactions are accounted for on a trade-date basis. Realized gains and losses on investment transactions are determined using cost calculated on a specific identification basis. Interest is recognized on the accrual basis and the collectability of interest receivable is evaluated when making accruals. Distributions that represent returns of capital in excess of cumulative profits and losses are credited to investment cost rather than investment income.
Income Taxes
The Fund does not record a provision for U.S. federal, state, or local income taxes because the partners report their share of the Fund’s income or loss on their income tax returns. The Fund files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. Generally, the Fund is subject to income tax examinations by major taxing authorities during the three-year period prior to the period covered by these consolidated financial statements.
MC Income and Impact REIT, LLC, a consolidated subsidiary of the Fund, has elected to be treated as a REIT under Sections 856 through 860 of the Code beginning with the tax year ended December 31, 2025. In general, a company which elects REIT status, distributes at least 90% of its REIT taxable income to its shareholders in any taxable year, and complies with certain other requirements. It is not subject to federal income taxation to the extent of the income which it distributes. If it fails to qualify as a REIT in any taxable year, it will be subject to federal income tax at regular corporate rates on its taxable income. Even if it qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed income. In order to maintain its qualifications as a REIT, MC Income and Impact REIT, LLC intends to make regular dividend payments to its shareholders that will represent at least 90% of its taxable income, which may not necessarily equal net investment income as determined in accordance with GAAP, determined without regard to the deductions for dividends paid and excluding any net capital gains. For the three months ended March 31, 2025 and March 31, 2024, MC Income and Impact REIT, LLC has complied with all REIT requirements, as amended, and promulgated regulations thereunder.
12
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
2. Summary of significant accounting policies (continued)
Income Taxes (continued)
The Fund is required to determine whether its tax positions are more likely than not to be sustained upon examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a “more-likely-than-not” threshold would be recorded as a tax expense in the current period. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of March 31, 2025 and March 31, 2024, and expects no changes to that conclusion within the next twelve months.
Use of Estimates
Preparing consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, including the fair value of investments, and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
Organization Costs
The Fund shall pay or reimburse the General Partner or its affiliates organizational expenses of the Fund. Organization costs in excess of the greater of (i) $2,000,000 or (ii) .75% of the Total Commitments shall be offset against management fees or be borne by the General Partner. Organization costs are expensed as incurred, and the amount incurred by the Fund is reflected on the Consolidated Statement of Operations. There were no excess organization costs incurred during the three months ended March 31, 2025 and 2024.
3. Fair value measurements
The following tables presents the classification of the Fund’s fair value measurements for the respective periods as shown below:
| March 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Assets (at fair value) | ||||||||||||||||
| Investments in private operating companies | ||||||||||||||||
| Real Estate, Common Member | $ | - | $ | - | $ | 120,307,682 | $ | 120,307,682 | ||||||||
| Real Estate, Preferred Member | - | - | 13,723,576 | 13,723,576 | ||||||||||||
| Total Investments, at fair value | $ | - | $ | - | $ | 134,031,258 | $ | 134,031,258 | ||||||||
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Assets (at fair value) | ||||||||||||||||
| Investments | ||||||||||||||||
| Investments in private operating companies | ||||||||||||||||
| Real Estate, Common Member | $ | - | $ | - | $ | 83,202,941 | $ | 83,202,941 | ||||||||
| Real Estate, Preferred Member | - | - | 13,723,576 | 13,723,576 | ||||||||||||
| Total Investments, at fair value | $ | - | $ | - | $ | 96,926,517 | $ | 96,926,517 | ||||||||
The Fund’s investment in MC I&I Pref Opco, LP is valued as permitted by the practical expedient and therefore, does not need to be categorized within the fair value hierarchy.
13
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
3. Fair value measurements (continued)
The following table summarizes the valuation techniques and significant unobservable inputs used for the Fund’s investments that are categorized in Level 3 of the fair value hierarchy as of March 31, 2025 and December 31, 2024 respectively:
| Fair
Value at March 31, 2025 | Valuation Technique | Unobservable
Inputs | Range of Inputs | |||||||
| Assets | ||||||||||
| Investments in private operating companies | ||||||||||
| Real Estate, Common Member | $ | 47,934,885 | Discounted
cash flow model | Discount
rate Months to exit | 11% 40 - 58 | |||||
| Real Estate, Preferred Member | $ | 13,723,576 | Discounted
cash flow model | Discount
rate Months to exit | 12% 45 | |||||
| Real Estate, Common Member | $ | 72,372,797 | Recent Transaction | N/A
| N/A
| |||||
| Fair Value at December 31, 2024 | Valuation Technique | Unobservable Inputs | Range of Inputs | |||||||
| Assets | ||||||||||
| Investments in private operating companies | ||||||||||
| Real Estate, Common Member | $ | 47,377,438 | Discounted cash flow model | Discount rate Months to exit | 11% 40 - 58 | |||||
| Real Estate, Preferred Member | $ | 13,723,576 | Discounted cash flow model | Discount rate Months to exit | 12% 45 | |||||
| Real Estate, Common Member | $ | 52,160,440 | Recent Transaction | N/A | N/A | |||||
During the three months ended March 31, 2025 and 2024, there were no transfers in or out of level 3 and the Fund purchased $20,101,551 and $41,718,395, respectively, of level 3 assets.
4. Committed capital
As of March 31, 2025 and December 31, 2024, the Fund has total capital commitments from its partners with respect to their partnership interests in the aggregate of $179,331,000, and $179,331,000, respectively. The General Partner may make capital calls up to the amount of unfunded capital commitments to enable the Fund to make investments, pay fees and expenses, or to provide reserves. No partner is required to fund an amount in excess of their unfunded capital commitments. As of March 31, 2025 and December 31, 2024, the Fund’s uncalled capital commitments amounted to $0, and $25,533,227, respectively, and the ratio of total contributed capital to total committed capital is 100.00%, and 85.76%, respectively.
14
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
5. Related party transactions
The Fund considers the General Partner, their principal owners, members of management, members of their immediate families, and entities under common control to be related parties to the Fund. Amounts due from and due to related parties are generally settled in the normal course of business without formal payment terms.
The Fund pays the General Partner a management fee, initially calculated at a rate of 1.25% per annum, based on the limited partners’ Net Asset Value, payable quarterly in advance. Management fees for the three months ended March 31, 2025 and 2024, are recorded in the Consolidated Statement of Operations.
Due to related party on the Consolidated Statement of Assets and Liabilities represents amounts owed to Marble Capital LP, an affiliate of the Fund, for expense reimbursements.
6. Partners’ capital
Allocation of Partners’ Net Profits and Losses
At the end of each fiscal year of the Fund, the net profits and losses are allocated to the capital accounts of the partners as follows:
| (a) | Net profits and losses are generally allocated to the limited partners in proportion to their capital contributions. |
| (b) | Net profits related to the Fund’s investments, are allocated on the same basis as the partners’ distributions (as described below). |
Net profits and net losses included in (a) and (b) above include both realized and unrealized profits and losses.
Partners’ Distributions
The General Partner expects to cause the Fund to make distributions of distributable cash on a quarterly basis; however, the amount, timing and frequency of any distributions will be in the sole discretion of the General Partner. All distributions of distributable cash shall be distributed to the limited partners in amounts proportionate to the aggregate Fund Net Asset Value attributable to the partnership units held by the respective limited partners on the record date for such distribution.
The proceeds attributable to the Fund’s investments (which shall include all proceeds attributable to the disposition of such investments, net of expenses, as well as any dividends or interest income earned on such investments) are distributed to the partners in amounts proportionate to the aggregate partnership net asset value attributable to the partnership units held. The amount shall be distributed as follows:
| (a) | first, if the total return for the applicable period exceeds the sum of (1) the amount that results in a six percent (6.0%) annualized internal rate of return on the partnership net asset value of the partnership units excluding any partnership units held by the General Partner, “Hurdle Amount” and (2) the loss carryforward amount (if any) (any such excess, “Excess Profits”), one hundred percent (100%) of such annual Excess Profits until the total amount allocated to the General Partner equals fifteen percent (15%) of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to the General Partner (which is commonly referred to as the “catch-up”); and |
| (b) | second, to the extent there are remaining excess profits, fifteen percent (15%) of such remaining excess profits shall be entitled to the General Partner and eighty-five percent (85%) to the limited partners. |
15
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
6. Partners’ capital (continued)
Carried Interest Allocation
The capital accounts reflect the carried interest to the General Partner as if the Fund had realized all assets and settled all liabilities at the fair value reported in the consolidated financial statements, and allocated all gains and losses and distributed the net assets to the partners at the reporting date consistent with the provisions of the Fund’s governing documents. During the three months ended March 31, 2025 and 2024, the amounts of the carried interest that were allocated to the General Partner are shown on the Consolidated Statement of Changes in Partners’ capital, if any.
The General Partner, in its sole discretion, may waive or reduce the applicable carried interest with respect to any limited partners in proportion to their respective capital account balances.
Redemptions
Each limited partner shall have the right to request that the Fund redeem any partnership units held by such limited partner that have been outstanding for at least twelve (12) months (the “Lock-Out Period”) by providing the General Partner with a written request in a form acceptable to the General Partner at least one hundred and twenty (120) calendar days prior to the desired redemption date, limited to a semi-annual basis effective June 30th and December 31st of each calendar year. The Lock-Out Period shall not apply to (A) the General Partner, (B) The Special Limited Partner, and (3) participants of the Fund’s distribution reinvestment program (“DRP”). Unless waived by the General Partner in its sole discretion, the redemption request must be for partnership units with an aggregate partnership net asset value of at least $125,000. In no event will the General Partner, the Fund, or their respective affiliates be obligated to sell or finance, or cause to be sold or financed, or otherwise transfer, any assets (including assets owned directly or indirectly by the Fund), contribute additional capital or assets to the Fund, or take any other action (including incurring indebtedness) in order to redeem any partnership units. Redemption units will be redeemed on a pro rata basis based upon the relative number of redemption units submitted by each limited partner.
The redemption price of each redemption unit redeemed by a limited partner shall be equal to:
| (i) | with respect to the redemption units that may have been outstanding for at least twelve (12) months but fewer than twenty-four (24) months, ninety-five percent (95%) of the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date; |
| (ii) | with respect to redemption units that may have been outstanding for at least twenty-four (24) months but fewer than thirty-six (36) months (as of the applicable redemption date), ninety-seven and one-half percent (97.5%) of the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date; and |
| (iii) | with respect to redemption units that may have been outstanding for at least thirty-six (36) months (as of the applicable redemption date), the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date. Notwithstanding the foregoing, the redemption price of each redemption unit issued pursuant to the DRP, and each redemption unit issued to the General Partner or the Special Limited Partner shall be equal to one hundred percent (100%) of the Fund’s Net Asset Value per partnership unit as of the last day of the quarter immediately preceding the redemption date. |
The aggregate Fund’s Net Asset Value of total redemptions of partnership units as of each redemption date will be limited to no more than ten percent (10.0%) of the average aggregate Fund’s Net Asset Value over the preceding six-month period.
16
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
7. Non-controlling Interest
In order to qualify as a REIT, MC Income and Impact REIT, LLC admitted 125 preferred shareholders on January 7, 2025, raising $125,000. The preferred shareholders are entitled to an annual cumulative preferred dividend of 12% and a liquidation preference of amounts originally contributed. The preferred shareholders are reflected in the accompanying consolidated financial statements as a non-controlling interest and have been allocated net increase resulting from operations of $3,508 for the three months ended March 31, 2025.
8. Unfunded investment commitments
As of March 31, 2025 and December 31, 2024, the Fund had committed $45,155,054 and $40,407,719, respectively, to MC I&I Pref Opco, LP of which $0 and $0, respectively, remain unfunded. The Fund also has committed $136,529,630 and $116,529,630, respectively, to investments in private operating companies of which $6,859,688 and $6,961,239 remain unfunded at March 31, 2025 and December 31, 2024. As of March 31, 2025 and December 31, 2024, there were no recallable distributions.
9. Indemnifications
The Fund has provided general indemnification to the General Partner, any affiliate of the General Partner and any person acting on behalf of the General Partner or such affiliate when they act, in good faith, in the best interest of the Fund. The Fund is unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but expects the risk of having to make any payments under these general business indemnifications to be remote.
17
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
10. Financial highlights
Financial highlights for the three months ended March 31, 2025 and 2024, are as follows:
Internal Rate of Return
| March 31, 2025 | March 31, 2024 | |||||||
| Internal rate of return, since inception | ||||||||
| Through March 31, 2025 and 2024 | 6.67 | % | (0.79 | )% | ||||
| Through December 31, 2024 and 2023 | 7.08 | % | 6.70 | % | ||||
Ratios to Average Partners' Capital
| Total Expenses to General Partner | 1.03 | % | 1.01 | % | ||||
| Net investment income ratio | 5.03 | % | 4.44 | % |
Financial highlights are calculated for the limited partner class taken as a whole. An individual limited partner’s return and ratios may vary based on different management fees and carried interest arrangements and the timing of capital transactions. The ratios include allocated income & expenses from the affiliated private investment companies.
18
MARBLE CAPITAL INCOME AND IMPACT FUND, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 2025
10. Financial highlights (continued)
The Internal Rate of Return (“IRR”) of the limited partners since inception of the Fund is net of carried interest allocation to the General Partner, if any, and was computed based on the actual dates of capital contributions and distributions, and the ending aggregate limited partners’ capital at the end of the period.
The net investment income (loss) ratio does not reflect the effects of net realized and unrealized gain (loss) on investments or carried interest allocation to or from the General Partner, if any.
11. Market risk and other risk factors
The General Partner of the Fund seeks investment opportunities in multi-family development projects and investments in securities that offer the possibility of attaining capital appreciation obtained primarily through preferred and common equity investments. Certain events particular to the industry in which the Fund invests, as well as general economic and political conditions, may have a significant negative impact on the underlying investees' operations and profitability. In addition, the Fund is subject to changing regulatory and tax environments. Such events are beyond the Fund’s control, and the likelihood that they may occur cannot be predicted. Furthermore, most of the Fund’s underlying investments are made in private operating companies whose shares do not trade on established exchanges. While it is expected that these private operating companies may pursue initial public offerings, trade sales, or other liquidation events, there are generally no public markets for these investments at the current time. The Fund’s ability to liquidate its underlying investments in private operating companies and publicly traded investments and realized value is subject to significant limitations and uncertainties.
In the normal course of business, the Fund maintains its cash balances in financial institutions, which at times may exceed federally insured limits. The Fund is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. Management monitors the financial condition of such financial institutions and does not anticipate any losses from these counterparties.
The value of the Fund's investments will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities and investments owned by the fund and other factors generally affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the Fund's investments. Natural disasters, public health emergencies, terrorism, conflicts, and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
12. Subsequent events
The General Partner has evaluated subsequent events through June 27, 2025, the date these consolidated interim financial statements were available to be issued, and has determined that no subsequent events warrant adjustment to or disclosure in these consolidated interim financial statements.
19