Aster: SEC Filing Analysis
Belpointe PREP's Q3: Revenue Up, Losses Deeper – A Qualified Opportunity?
Belpointe PREP, LLC just dropped its Q3 2025 Form 10-Q. The headline? Revenue's up. Way up. But so are the losses. Let's dive into the numbers and see if this qualified opportunity zone play is actually qualifying as a smart investment, or just an opportunity for someone else.
Total revenue clocked in at $6.1 million, a significant jump from $1.6 million in the same period last year. That's a 281% increase—to be more exact, 281.25%. Impressive on the surface, right? But here's where the story gets more complicated. Net loss ballooned to $(28.4) million, compared to $(15.6) million the previous year. And that translates to a net loss per Class A Unit of $(7.64), versus $(4.30).
What's driving this discrepancy? Interest expense nearly doubled, from $5.8 million to $12.1 million. Depreciation and amortization also saw a hefty increase, from $2.4 million to $5.7 million. These are non-cash expenses, sure, but they still eat into profitability. It's like celebrating a bigger slice of cake while ignoring the fact that the cake itself is shrinking.
Digging Into the Developments
Belpointe PREP is pinning its hopes on two major projects: Aster & Links in Sarasota and VIV in St. Petersburg. Aster & Links, a mixed-use development, boasts over 55% of its 424 luxury residential units leased as of October 31, 2025. Construction's complete, and they've even snagged a Sprouts Farmers Market® as a retail anchor. That's a good sign. VIV, consisting of 269 apartment homes and 15,500 square feet of retail space, is nearing completion (approximately 97.7%). Leasing kicked off in October 2025, with move-ins slated for November.
The company highlights its focus on qualified opportunity zones, made a permanent feature of U.S. tax law by the One Big Beautiful Bill Act. Belpointe PREP is the only publicly traded qualified opportunity fund listed on a national securities exchange, which gives them a unique positioning, at least on paper. They're evaluating the implications of the Act, but the core strategy remains the same: acquire, develop, and manage properties in these zones. You can find more details in Belpointe PREP, LLC SEC 10-Q Report - TradingView.
However, these projects are also carrying a hefty debt load. Belpointe PREP has entered into interest rate cap agreements to manage interest rate risk on variable-rate loans tied to Aster & Links and VIV. Smart move, given the current interest rate environment. But those caps also come at a cost, adding to the expense sheet. I've looked at hundreds of these filings, and the increasing use of interest rate derivatives always raises an eyebrow. Are they truly hedging risk, or just kicking the can down the road?
It's also worth noting the construction management agreements, which include guaranteed maximum price contracts. This provides some cost certainty, but it doesn't eliminate the risk of cost overruns entirely. What happens if unforeseen issues arise? (And let's be honest, they usually do in construction.) The report doesn't specify the details of these contracts, but it's a critical piece of information for assessing the true risk profile of these projects.
The Opportunity Zone Conundrum
The promise of opportunity zones is enticing: tax incentives to spur investment in underserved areas. But it's not a free lunch. These projects often come with higher risks and longer timelines. Belpointe PREP is betting big on Florida's growth, particularly in Sarasota and St. Petersburg. But is that growth sustainable? And will it translate into enough rental income to offset the rising interest expenses and depreciation?
Belpointe PREP seems to be playing a long game, banking on the long-term benefits of qualified opportunity zone investments. But the short-term pain is undeniable. The increased revenue is overshadowed by the even greater increase in net losses. It's a classic case of "growth at all costs," and the question is whether that cost is ultimately too high.