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DEFERRED CHARGES AND OTHER ASSETS, NET | 12 Months Ended
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Dec. 31, 2025
Other Assets [Abstract] |
DEFERRED CHARGES AND OTHER ASSETS, NET | DEFERRED CHARGES AND OTHER ASSETS, NET
(dollars in thousands) | December 31, 2025 | December 31, 2024
Deferred leasing costs | $ | 5,684 |  | $ | 4,765 |
Deferred financing costs (a) | 7,124 |  | 6,296 |
Deferred charges | 12,808 |  | 11,061 |
Accumulated amortization | (6,759) |  | (4,558) |
Deferred charges, net | 6,049 |  | 6,503 |
In-place lease values, related intangibles and other assets, net (b) | 8,999 |  | 9,519 |
Right of use assets (c) | 4,079 |  | 5,145 |
Prepaid expenses and other assets, net | 21,461 |  | 27,309 |
Total deferred charges and other assets, net | $ | 40,588 |  | $ | 48,476 |
(a)This amount relates to the deferred financing costs associated with the revolving credit facility. Deferred financing costs related to all other loans are netted against the respective mortgage obligation for all periods presented. See Note 2: Significant Accounting Policies – Deferred Financing Costs. (b)Includes the value of acquired above and below market lease intangibles in which the Company is the lessor which are recognized in rental revenue over the terms of the respective leases. The value of acquired in-place lease intangibles in which the Company is the lessor are amortized to Depreciation and amortization expense over the remaining initial terms of the respective leases. The impact of amortizing the acquired above and below-market lease intangibles increased revenue by approximately $18 thousand, $30 thousand and $0.1 million, and the impact of the amortization of acquired in-place lease values is included in Depreciation and amortization expense and amounted to approximately $1.1 million, $0.5 million and $2.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. (c)This amount has a corresponding liability of $5.7 million and $6.5 million as of December 31, 2025 and 2024, respectively, which is included in Accounts payable, accrued expense and other liabilities. See Note 12: Commitments and Contingencies – Office and Ground Lease Agreements for further details. DERIVATIVE FINANCIAL INSTRUMENTS Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate caps as part of its interest rate risk management strategy. An interest rate cap is a financial contract whereby the Company pays an upfront premium to a counterparty, and in return, if the specified reference interest rate exceeds the agreed-upon strike rate during the contract period, the counterparty makes payments to the Company, offsetting the increased interest expense exceeding the strike rate. The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates $0.8 million will be reclassified as an increase to interest expense. As of December 31, 2025, the Company had two interest rate caps outstanding and in effect with a notional amount of $185.0 million designated as cash flow hedges of interest rate risk, and two undesignated interest rate cap outstanding and in effect with a notional amount $145.0 million. In July 2025, the Company dedesignated the interest rate caps previously designated as hedging instruments in connection with the repayment of the 2024 Term Loan. Additionally, the Company terminated two interest rate caps previously designated as a hedging instrument in connection with the repayment of debt. As a result of these transactions, $0.5 million of deferred losses were recognized immediately within interest expense for the year ended December 31, 2025. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of December 31, 2025 and 2024 (dollars in thousands):
| Fair Value |
Asset Derivatives designated as hedging instruments | December 31, 2025 | December 31, 2024 | Balance sheet location
Interest rate caps designated as hedging instruments | $ | 196 |  | $ | 4,953 |  | Deferred charges and other assets, net
Interest rate caps not designated as hedging instruments | $ | 110 |  | $ | 525 |  | Deferred charges and other assets, net
The table below presents the effect of the Company’s derivative financial instruments designated as hedging instruments on the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):
Derivatives in Cash Flow Hedging Relationships | Amount of Gain or (Loss) Recognized in OCI on Derivative (a) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (a) (b) |  | Total Amount of Interest Expense presented in the Consolidated Statements of Operations
Year Ended December 31, | 2025 | 2024 | 2023 |  | 2025 | 2024 | 2023 |  |  |  | 2025 | 2024 | 2023
Interest rate caps | $(951) | $526 | $1,184 | Interest Expense | $(663) | $2,967 | $3,559 |  |  |  | $(88,579) | $(87,976) | $(89,355)
(a)Amounts exclude net losses of $631 thousand, net gains of $632 thousand, and zero recognized on unconsolidated jointly owned investments for the years ended December 31, 2025, 2024 and 2023, respectively. (b)The gain or loss reclassified from Accumulated OCI into Income is recorded in Interest Expense. Additionally, the Company recorded $0.7 million, $0.2 million, and zero of fair value adjustments related to the Company’s interest rate caps not designated as hedging instruments as an increase in Interest Expense on the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023. Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. Specifically, the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of December 31, 2025, the Company did not have any interest rate derivatives in a net liability position.

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- Definition Tabular disclosure of the amounts paid in advance for capitalized costs that will be expensed with the passage of time or the occurrence of a triggering event, and will be charged against earnings within one year or the normal operating cycle, if longer; the aggregate carrying amount of current assets, not separately presented elsewhere in the balance sheet; and other deferred costs. + References No definition available. + Details
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