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Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is subject, from time to time, to various types of third-party legal claims or litigation that arise in the ordinary course of business, including, but not limited to, property loss claims, personal injury or other damages resulting from contact with the Company's properties. These claims and lawsuits and any resulting damages are generally covered by the Company's insurance policies. The Company accrues for legal costs associated with loss contingencies when these costs are probable and reasonably estimable. While the resolution of these matters cannot be predicted with certainty, based on currently available information, management does not expect that the final outcome of any pending claims or legal proceedings will have a material adverse effect on the financial condition, results of operations or cash flows of the Company. Captive Insurance Company In April 2023, the Company formed a wholly-owned captive insurance company (the "Captive"), which provides insurance coverage for all losses below the deductibles of the Company's third party liability insurance policies relating to wind, flood, named windstorm, earthquake, fire, and other property-related perils. The Company formed the Captive as part of its overall risk management program and to stabilize insurance costs, manage exposures, and recoup expenses through the function of the captive program. In January 2025, the Captive began underwriting the first layer of general liability insurance. An actuarial analysis is performed to estimate future projected claims, related deductibles, and projected expenses necessary to fund associated risk management programs. The Captive generally establishes annual premiums based on projections derived from the past loss experience. The Captive is capitalized in accordance with the applicable regulatory requirements. The following table summarizes the activity in the liability for unpaid losses and loss adjustment expenses:
|  | Three months ended March 31
|  | 2026 |  | 2025
Balance at the beginning of the period |  | $ | 300 |  |  | $ | 820 |
Incurred related to: |  |  |  |
Current year |  | 10 |  |  | 75 |
Prior years |  | 29 |  |  | — |
Total incurred |  | 39 |  |  | 75 |
Paid related to: |  |  |  |
Current year |  | — |  |  | — |
Prior years |  | (29) |  |  | (420) |
Total paid |  | (29) |  |  | (420) |
Balance at the end of the period |  | $ | 310 |  |  | $ | 475 |
Lessee Operating and Finance Lease Commitments The Company has non-cancelable leases for corporate office space for which the Company recognizes operating lease ROU assets and related lease liabilities. The land underlying West Ashley Station is subject to a long-term ground lease whereby the Company, as lessee, is required to pay fixed and variable rent. On June 10, 2025, the Company recognized a finance lease ROU asset of $8,965, inclusive of an initial fair value adjustment of $2,008, and related finance lease liability of $10,973. The ground lease expires in January 2092. For operating and finance leases, the discount rate applied to initially measure each ROU asset and lease liability is based on the Company's incremental borrowing rate ("IBR"), as the rates implicit in the lease are not readily determinable. The Company utilizes a market-based approach to estimate an IBR for each lease, which generally considers market-based interest rates and publicly available data for instruments with similar characteristics. The Company also considers adjustments, as needed, related to tenor, credit spreads, and credit ratings, if not fully incorporated by the aforementioned data sets. The following table summarizes the Company's operating and finance leases as of March 31, 2026 and December 31, 2025:
|  |  | As of
| Balance Sheet Caption |  | March 31, 2026 |  | December 31, 2025
Operating lease ROU assets | Deferred costs and other assets, net |  | $ | 2,683 |  |  | $ | 2,683 |
Operating lease ROU accumulated amortization | Deferred costs and other assets, net |  | $ | (1,223) |  |  | $ | (1,144) |
Operating lease liabilities | Other liabilities |  | $ | (2,027) |  |  | $ | (2,129) |
Finance lease ROU asset | Building and other improvements |  | $ | 8,965 |  |  | $ | 8,965 |
Finance lease ROU accumulated amortization | Accumulated depreciation |  | $ | (109) |  |  | $ | (75) |
Finance lease liability | Debt, net |  | $ | (11,133) |  |  | $ | (11,082) |
Weighted-average remaining lease term - Operating leases |  | 4.3 years |  | 4.5 years
Weighted-average remaining lease term - Finance lease |  | 65.9 years |  | 66.1 years
Weighted-average discount rate - Operating leases |  | 4.48 | % |  | 4.48 | %
Weighted-average discount rate - Finance lease |  | 6.80 | % |  | 6.80 | %
The following table summarizes the Company's lease costs for the three months ended March 31, 2026 and 2025:
| Statement of Operations Expense Caption |  |  |  | Three months ended March 31
|  |  |  |  |  | 2026 |  | 2025
Operating lease costs: |  |  |  |  |  |  |  |  |
Minimum lease cost | General and administrative |  |  |  |  |  | $ | 108 |  |  | $ | 108 |
Variable lease cost | General and administrative |  |  |  |  |  | $ | 71 |  |  | $ | 89 |
Finance lease costs: |  |  |  |  |  |  |  |  |
Amortization of ROU asset | Depreciation and amortization |  |  |  |  |  | $ | 34 |  |  | $ | — |
Interest on lease liability | Interest expense, net |  |  |  |  |  | $ | 188 |  |  | $ | — |
Variable lease cost | Property operating |  |  |  |  |  | $ | 38 |  |  | $ | — |
The following table summarizes the Company's future minimum lease obligations as of March 31, 2026:
| Future Minimum Lease Payments
Scheduled minimum payments by year: | Operating Leases |  | Finance Lease
Remaining 2026 | $ | 391 |  |  | $ | 413 |
2027 | 529 |  |  | 578 |
2028 | 522 |  |  | 605 |
2029 | 493 |  |  | 605 |
2030 | 293 |  |  | 605 |
Thereafter | — |  |  | 71,211 |
Total expected minimum lease obligation | 2,228 |  |  | 74,017 |
Less: Amount representing interest (a) | (201) |  |  | (62,884) |
Present value of net minimum lease payments | $ | 2,027 |  |  | $ | 11,133 |
(a)Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company's IBR.

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