Financing Arrangement

9 Months Ended

Sep. 30, 2025

Financing Arrangement:

On September 30, 2009, the Company formed a joint venture whereby a third party acquired a 49.9% interest in Chandler Fashion Center, a 1,401,000 square foot regional shopping center in Chandler, Arizona, and Freehold Raceway Mall, a 1,537,000 square foot regional shopping center in Freehold, New Jersey (collectively referred to herein as "Chandler Freehold"). As a result of the Company having certain rights under the agreement to repurchase the assets of Chandler Freehold, the transaction did not qualify for sale treatment. The Company, however, was not obligated to repurchase the assets. The Company accounted for its investment in Chandler Freehold as a financing arrangement.

On November 16, 2023, the Company acquired the remaining 49.9% ownership interest in Freehold Raceway Mall that it previously did not own. As a result, Freehold Raceway Mall is no longer part of the financing arrangement and is 100% owned by the Company. In connection with the acquisition of the 49.9% ownership interest, the Company recorded the $5,587 purchase amount as a reduction to the financing arrangement obligation.

On June 13, 2024, the partnership agreement between the Company and its partner was amended, removing the specific rights that prohibited the transaction's qualification for sale treatment. As a result, the transaction qualified for sale treatment and the Company no longer accounts for its investment in Chandler Fashion Center as a financing arrangement. The financing arrangement obligation was $88,721 on June 13, 2024 and was reversed and included in gain on sale of assets (See Note 16—Dispositions). References to Chandler Freehold for the period after November 16, 2023 through June 13, 2024 shall be deemed to only refer to Chandler Fashion Center.

The fair value (Level 3 measurement) of the financing arrangement obligation at June 13, 2024 was based upon a terminal capitalization rate of 7.00%, a discount rate of 8.25% and market rents per square foot of $45 to $240. The fair value of the financing arrangement obligation is sensitive to these significant unobservable inputs and a change in these inputs may result in a significantly higher or lower fair value measurement. Distributions to the partner, excluding distributions of excess loan proceeds, and changes in fair value of the financing arrangement obligation are recognized as related party interest expense on the Company's consolidated statements of operations.

During the nine months ended September 30, 2024, the Company recognized related party interest expense in the Company's consolidated statements of operations in connection with the financing arrangement as follows:


	For the Nine Months Ended September 30,
		2024
Distributions equal to the partner's share of net income		$	1,565
Distributions in excess of the partner's share of net income		966
Adjustment to fair value of financing arrangement obligation		(13,795)
		$	(11,264)