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Fair Value Measures | 3 Months Ended
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Mar. 31, 2026
Fair Value Disclosures [Abstract] |
Fair Value Measures | Note 5 – Fair Value Measures Items Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of the dates indicated below, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands):
|  | Level 1 |  | Level 2 |  | Level 3 |  | Balance as of March 31, 2026
Derivative liabilities |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
|  | Level 1 |  | Level 2 |  | Level 3 |  | Balance as of December 31, 2025
Derivative liabilities |  | $ | — |  |  | $ | 5 |  |  | $ | — |  |  | $ | 5 |
Derivative Liabilities – The Company’s derivative financial instruments comprise interest rate collar agreements entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Original Revolving Facility and subsequently the New Revolving Facility with an aggregate notional amount of $75.0 million as of March 31, 2026 and December 31, 2025 (as described in Note 6 – Debt, Net). The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential non-performance risk and the performance risk of the counterparties. Although the Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of March 31, 2026 and December 31, 2025, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Items Measured at Fair Value on a Non-Recurring Basis Certain financial and non-financial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Real Estate and Other Investments – The Company performs quarterly impairment review procedures for real estate investments, right-of-use assets and its investment in the Unconsolidated Joint Venture, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of such assets may not be recoverable. See Note 3 – Real Estate Investments and Related Intangibles - Investment in Unconsolidated Joint Venture for discussion of an other-than-temporary impairment recognized on the Company’s investment in the Unconsolidated Joint Venture as of December 31, 2025. The following table summarizes the Company’s provisions for real estate asset impairment during the periods indicated below (dollars in thousands). The impairment charges reflect changes in the Company’s future cash flow assumptions for agreed-upon or estimated sales proceeds with respect to real estate assets that were expected to be sold as well as changes to assumptions with regard to management’s intent to sell or lease the real estate assets.
|  | Three Months Ended March 31, |  |
|  | 2026 |  | 2025 |  |  |  |
Number of properties |  | 1 |  |  | 2 |  |  |  |  |
Carrying value of impaired properties |  | $ | 11,293 |  |  | $ | 13,643 |  |  |  |  |
Provisions for impairment |  | (6,296) |  |  | (1,709) |  |  |  |  |
Estimated fair value |  | $ | 4,997 |  |  | $ | 11,934 |  |  |  |  |
The Company estimates fair values using Level 2 and Level 3 inputs and uses a combined income and market approach, specifically using discounted cash flow analysis and/or recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and make certain key assumptions, including the following: (1) capitalization rates; (2) discount rates; (3) number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions including the number of months to re-lease, market rental revenue and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. For the Company’s impairment tests over the real estate assets during the three months ended March 31, 2026, the fair value measurement for one property was determined by using a discount rate of 10.5% and a capitalization rate of 10.0%. During the three months ended March 31, 2026, the Company recognized impairment charges of $6.3 million for held and used properties. For the Company’s impairment tests over the real estate assets during the three months ended March 31, 2025, the fair value measurements for two properties were determined based on the sales prices under definitive agreements. During the three months ended March 31, 2025, the Company recognized impairment charges of $1.7 million for held for sale properties and no impairment charges were recognized for held and used properties or disposed properties. The following tables present certain of the Company’s assets which were subject to impairment as of the dates indicated below and therefore, have been measured at fair value on a non-recurring basis, aggregated by the level in the fair value hierarchy within which those assets fall (in thousands):
|  | Level 1 |  | Level 2 (1) |  | Level 3 (1) |  | Balance as of March 31, 2026
Assets of properties held and used |  | $ | — |  |  | $ | — |  |  | $ | 4,997 |  |  | $ | 4,997 |
|  | Level 1 |  | Level 2 (1) |  | Level 3 (1) |  | Balance as of December 31, 2025
Assets of properties held for sale |  | — |  |  | 12,803 |  |  | — |  |  | 12,803 |
____________________________________ (1)The fair value of the level 2 category was derived using negotiated sales prices with third parties and the fair value of the level 3 category was derived using discounted cash flow analysis and management estimates of selling prices. Fair Value of Financial Instruments The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, accounts receivable, notes receivable and accounts payable approximates their carrying value in the accompanying consolidated balance sheets due to their short-term nature. The following table presents carrying values and fair values of the Company’s long-term financial instruments as of the dates indicated below (dollars in thousands):
|  | Level |  | Carrying Value at March 31, 2026 |  | Fair Value at March 31, 2026 |  | Carrying Value at December 31, 2025 |  | Fair Value at December 31, 2025
Assets: |  |  |  |  |  |  |  |  |  |
Notes receivable |  | 3 |  | — |  |  | — |  |  | 678 |  |  | 678 |
Liabilities (1): |  |  |  |  |  |  |  |  |  |
Mortgages payable |  | 2 |  | $ | 370,278 |  |  | $ | 347,660 |  |  | $ | 373,000 |  |  | $ | 365,853 |
New Revolving Facility (2) |  | 2 |  | 127,000 |  |  | 127,000 |  |  | — |  |  | — |
Derivative liabilities |  | 2 |  | — |  |  | — |  |  | 5 |  |  | 5 |
Total |  |  |  | $ | 497,278 |  |  | $ | 474,660 |  |  | $ | 373,005 |  |  | $ | 365,858 |
____________________________________ (1)Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. (2)The carrying value and fair value for the Original Revolving Facility has been excluded from the table as of December 31, 2025, as its maturity date was less than one-year from the reporting date. Notes Receivable – The carrying value of the Company’s long-term promissory notes receivable, net of loan loss reserves, were determined to be at fair value based on management’s estimates of credit spreads and observable market interest rates, representing level 3 on the fair value hierarchy. Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of credit spreads and observable market interest rates, representing level 2 on the fair value hierarchy.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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