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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2025
Commitments and Contingencies |
Commitments and Contingencies | Note 16 – Commitments and Contingencies The aggregate amount of the Company’s contractual commitments to fund future cash obligations in certain of its preferred equity investments was $27.0 million and $17.6 million at December 31, 2025 and 2024, respectively. In addition, the Company has two consolidated residential communities (Abode Wendell Falls and Harmony at Clear Creek) under construction comprised of an aggregate of 358 units. At December 31, 2025, the Company estimates the remaining costs to complete the construction of these two residential communities to be approximately $113.6 million. The Company intends to finance these costs through a combination of available cash, proceeds from construction loans, and preferred equity capital contributions. The Company also committed to acquire an aggregate of 100 residential community units known as Parkside at Summers Corner. The Company expects acquisitions to occur in tranches as construction is completed, and as of December 31, 2025, 88 units remain to be acquired, representing an aggregate purchase price of $22.6 million. The Company is subject to various legal actions and claims arising in the ordinary course of business. Although the outcome of any legal matter cannot be predicted with certainty, management does not believe that any of these legal proceedings or matters will have a material adverse effect on the consolidated financial position or results of operations or liquidity of the Company. Lessee – Operating Lease In connection with the Company moving its New York (Manhattan) headquarters, effective May 31, 2024, the Company, as lessee, and an unaffiliated third-party landlord entered into the NY Premises Lease (hereinafter, the “Lease”) for the NY Premises. In accordance with ASC Topic 842 Leases, the Company classifies the Lease as an operating lease, and by way of practical expedient, the Company has elected to account for lease and non-lease (ex. common area maintenance) components of the Lease as a single lease component in its consolidated statements of operations and comprehensive income (loss). The Company recognizes the single lease component on a straight-line basis over the term of the Lease, and expenses that are non-components of the lease, such as real estate taxes for which the Company is not a direct beneficiary of the arrangement, are expensed in the period in which the obligation for those payments are incurred. For the years ended December 31, 2025 and 2024, the Company recorded $0.3 million and $0.03 million, respectively, of net rent expense related to the Lease. Upon commencement of the Lease in November 2024, the Company recorded a right-of-use asset of $5.1 million and a lease liability of $5.0 million on its consolidated balance sheets. The right-of-use asset is included within accounts receivable, prepaids and other assets, net, and the lease liability is included within other accrued liabilities. The calculation of these amounts includes minimum lease payments over the Lease term, and the value of the right-of-use asset exceeds the value of the lease liability due to a prepaid lease payment. In determining the right-of-use asset and lease liability, the discount rate implicit in the Lease was not readily determinable. As such, the Company used third-party analysis to determine that a discount rate of 7.61% approximated the incremental borrowing rate that it would incur for a loan that was of a similar term as the Lease and with a similar form of underlying collateral. The Lease contains an extension option; however, the extension option was not included when determining the right-of-use asset or lease liability as it is not reasonably certain that the Company will exercise its option. The Lease does not include any residual value guarantees, and no variable lease payments were identified or included in the right-of-use asset and lease liability calculations. At December 31, 2025, the remaining right-of-use asset and lease liability balances were $4.4 million and $4.9 million, respectively, and the remaining Lease term was approximately 5.6 years. In addition, the Company incurred tenant improvement costs related to the renovation and buildout of the NY Premises which are capitalized and included within net real estate investments on the Company’s consolidated balance sheets. Such tenant improvement costs are depreciated on a straight-line basis over the term of the Lease. The following table summarizes the future minimum lease payments and total operating lease liability as of December 31, 2025 (amounts in thousands):
​ | ​ | ​ | ​
Year | ​ ​ ​ | Total
2026 | ​ | $ | 1,070
2027 | ​ |  | 1,070
2028 | ​ |  | 1,070
2029 | ​ |  | 1,070
2030 | ​ |  | 1,106
Thereafter | ​ |  | 667
Total future minimum lease payments (undiscounted cash flows) | ​ | $ | 6,053
Difference between future undiscounted cash flows and discounted cash flows | ​ |  | (1,144)
Total operating lease liability | ​ | $ | 4,909
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