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Debt Obligations
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Debt Obligations Debt Obligations
Debt obligations consist of the following (dollars in thousands):
  September 30, 2025December 31, 2024
Mortgages payable$447,667 $450,481 
Junior subordinated notes37,400 37,400 
Credit facility 17,500 — 
Deferred financing costs (1)(4,357)(4,247)
Total debt obligations, net of deferred costs$498,210 $483,634 
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(1) Excludes $271 and $374 of deferred financing costs related to the credit facility which are reflected in other assets at September 30, 2025 and December 31, 2024, respectively.

Mortgages Payable

At September 30, 2025, the weighted average interest rate on the Company's mortgage payables was 4.12% and the weighted average remaining term to maturity is 5.6 years. For the three months ended September 30, 2025 and 2024, interest expense, which includes amortization of deferred financing costs, was $5,063,000 and $4,886,000, respectively. For the nine months ended September 30, 2025 and 2024, interest expense, which includes amortization of deferred financing costs, was $15,077,000 and $14,271,000, respectively.

On September 26, 2025, the Company refinanced the maturing mortgage of $15,375,000 (and bearing an interest rate of 4.42%) on Parkway Grande - San Marcos, TX with a new mortgage of $15,776,000; such new mortgage matures on October 1, 2032, bears an interest rate of 5.09% and is interest only for five years.

Credit Facility

The Company's credit facility, with an affiliate of Valley National Bank ("VNB"), allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40,000,000. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expenses (i.e., working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties, and matures in September 2027.

The interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.0%, equals one-month term SOFR plus 250 basis points. The interest rate in effect as of September 30, 2025 is 6.77%. There is an unused facility fee of 0.25% per annum on the total amount committed by VNB and unused by the Company. At September 30, 2025, the Company is in compliance in all material respects with its obligations under the facility.

On July 9, 2025, in connection with the Auburn Acquisition, the Company borrowed $7,000,000 from its credit facility. On September 19, 2025, in connection with the Savannah Acquisition, the Company borrowed $8,000,000. On September 30, 2025, in connection with supplementing working capital reserves, the Company borrowed $2,500,000.

At September 30, 2025 and December 31, 2024, there was a $17,500,000 and no outstanding balance, respectively, on the facility. Interest expense for the three months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $187,000 and $134,000, respectively. Interest expense for the nine months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $306,000 and $318,000, respectively. The remaining deferred financing costs of $271,000 and $374,000 are recorded as Other Assets on the Consolidated balance sheets at September 30, 2025 and December 31, 2024, respectively.

Junior Subordinated Notes

At September 30, 2025 and December 31, 2024, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of $222,000 and $237,000, respectively. The interest rate on outstanding balance resets quarterly and is equal to three month term SOFR + 2.26%. The interest rate in effect at September 30, 2025 and 2024 was 6.57% and 7.52%, respectively.
Note 10 – Debt Obligations (continued)

The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due. Interest expense for the three months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs, was $632,000 and $725,000, respectively. Interest
expense for the nine months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs, was $1,882,000 and $2,179,000, respectively.