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Commitments and Contingencies

9 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 11—Commitments and Contingencies

Lease Commitments—Future minimum lease obligations under non-cancelable operating leases as of September 30, 2025 are as follows ($ in thousands):⁽¹⁾


2025 (remaining three months)		$	1,559
2026			668
2027			764
2028			772
2029			780
Thereafter			7,979
Total undiscounted cash flows⁽¹⁾			12,522
Present value discount⁽²⁾			(5,430)
Lease liabilities		$	7,092

(1)

Includes cash flows that relate to a property that is majority-owned by a third party and is ground leased to the Company. The Company is obligated to pay the owner of the property $0.5 million, subject to adjustment for changes in the CPI, per year through 2044; however, the Company’s Ground Lease tenant at the property pays this expense directly under the terms of a master lease.

(2)

The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral. For operating leases, lease liabilities were discounted at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 5.6% and the weighted average remaining lease term is 14.0 years. During the three months ended September 30, 2025 and 2024, the Company made payments of $1.4 million and $1.4 million, respectively, related to its operating leases. During the nine months ended September 30, 2025 and 2024, the Company made payments of $4.3 million and $4.3 million, respectively, related to its operating leases.

Unfunded Commitments—The Company has unfunded commitments to certain of its Ground Lease tenants related to leasehold improvement allowances that it expects to fund upon the completion of certain conditions. As of September 30, 2025, the Company had $84.5 million of such commitments, excluding commitments to be funded by noncontrolling interests.

The Company also has an unfunded forward commitment of $35.0 million related to an agreement that it entered into for the addition to an existing Ground Lease if certain conditions are met (refer to Note 15). There can be no assurance that the conditions for closing this transaction will be satisfied and that the Company will fund the addition to the Ground Lease.

Other Commitments—The Company funds construction and development loans and build-outs of space in real estate assets over a period of time, both individually and through the Leasehold Loan Fund, if and when the borrowers and tenants meet established milestones and other performance criteria. We refer to these arrangements as performance-based commitments. As of September 30, 2025, the Company had $106.3 million of such commitments.

Legal Proceedings—The Company evaluates developments in legal proceedings that could require a liability to be accrued and/or disclosed. Based on its current knowledge, and after consultation with legal counsel, the Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.