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COMMITMENTS AND CONTINGENCIES | 9 Months Ended
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Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is involved from time to time in litigation on various matters, including disputes with tenants, vendors and disputes arising out of agreements to purchase or sell properties. Given the nature of the Company’s business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system. The Company will establish reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable and when the amount of loss is reasonably estimable. The Company does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state, and local governments. The Company’s compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and the Company does not believe it will have a material adverse effect in the future. However, the Company cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current Properties or on properties that the Company may acquire. Debt Guarantees and Equity Funding Commitments As of September 30, 2025, the Company’s unconsolidated real estate ventures had aggregate indebtedness of $764.5 million. These loans are generally mortgage loans or secured construction loans, most of which are nonrecourse to the Company, except for customary recourse carve-outs. In addition, during construction undertaken by the unconsolidated real estate ventures, including the 3025 JFK Venture, the 3151 Market Street Venture, and the One Uptown Ventures, the Company has provided, and expects to continue to provide, cost overrun and completion guarantees, as well as customary environmental indemnities and guarantees of customary exceptions to nonrecourse provisions in loan agreements. In accordance with the agreement with its partner in the 3025 JFK Venture, the Company provided cost overrun and completion guarantees for the project developed by the 3025 JFK Venture. With respect to the $186.7 million construction loan obtained by 3025 JFK Venture on July 23, 2021, which was originally scheduled to mature on July 22, 2025, 3025 JFK Venture extended the maturity date to July 22, 2026 and capped the principal balance at the current balance of $178.0 million. The Company has also provided a carry guarantee and limited payment guarantee up to 25% of the principal balance of the construction loan. In accordance with the agreement with its partner in the 3151 Market Street Venture, which was formed in July 2022, the Company provided cost overrun and completion guaranties for the development of the project undertaken by this venture. The project was substantially completed in the fourth quarter of 2024. Projected development costs total approximately $317.0 million. As of September 30, 2025, the Company and partner in the venture have funded approximately $218.2 million of the development costs. The original 2022 budget for this development contemplated receipt of third party secured financing for approximately 50% of the development costs and equity funding for the balance of the costs, with 65% of the balance to be funded by the Company and 35% of the balance to be funded by the partner. As of the date of this Form 10-Q, no such third-party secured financing has been obtained and the partner funded $50.0 million in fulfillment of its total capital commitment. The venture continues to seek third-party secured financing. With respect to the One Uptown Ventures, the Company has provided completion guarantees and environmental indemnities in favor of its partner. In addition, the Company has provided completion guarantees, environmental indemnities and guarantees of exceptions to nonrecourse loan provisions in favor of the lenders for the One Uptown Ventures. Moreover, the Company has provided, in favor of the lenders, carry guarantees and limited payment guarantees up to 30% and 15% of the principal balance of the $121.7 million (office) and $85.0 million (multifamily) construction loans, respectively. The Company has agreed, pursuant to the leasehold mortgage loan to the New MAP Venture, to fund up to an additional $12.0 million for tenant and capital improvements pursuant to leases that the Company proposes, in its discretion, to enter into at the properties owned (through leasehold interests) by the New MAP Venture, which amounts, when funded, will accrue interest at 8.0% per annum. As of September 30, 2025, the Company has not funded any amounts on account of the foregoing commitment except for certain outstanding reimbursables for services provided by the Company. Impact of Natural Disasters and Casualty The Company carries liability insurance to mitigate its exposure to certain losses, including those relating to property damage. The Company records the estimated amount of expected insurance proceeds for property damage and other losses incurred as an asset (typically a receivable from the insurer) and income up to the amount of the losses incurred when receipt of insurance proceeds is deemed probable. Any amount of insurance recovery in excess of the amount of the losses is considered a gain contingency and is not recorded until the proceeds are received. Other Commitments or Contingencies In connection with the Schuylkill Yards Project, the Company entered into a neighborhood engagement program and, as of September 30, 2025, had $5.0 million of future fixed contractual obligations. The Company also committed to fund additional contributions under the program. As of September 30, 2025, the Company estimated that these additional contributions, which are not fixed under the terms of agreement, will be $2.0 million. The Company has committed to contribute $15.0 million to a venture capital fund that invests in early-stage life science companies. As of September 30, 2025, the Company had funded $4.2 million of the foregoing commitment. The Company invests in its p roperties and regularly incurs capital expenditures in the ordinary course of business to maintain the properties. The Company believes that such expenditures enhance its competitiveness. The Company also enters into construction, utility and service contracts in the ordinary course of business which may extend beyond one year. These contracts typically provide for cancellation with insignificant or no cancellation penalties.

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