As of June 30, 2025, the Company had six operating and five direct financing lease agreements. The six operating leases have durations, including assumed renewals, ranging from 17.4 years to 36.3 years, excluding an adjacent parking lot lease with a term of 1.3 years. The Company did not enter into any additional ground leases during the six months ended June 30, 2025.

As of June 30, 2025, the Company had ROU assets and liabilities of $6.8 million and $7.8 million, respectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheets. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the lease guidance issued in 2019, as well as for new operating leases in the current period, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Because the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment.

The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 29.4 years and a weighted-average discount rate of 7.36% as of June 30, 2025. For each of the three months ended June 30, 2025 and 2024, the Company paid cash of $0.2 million for amounts included in the measurement of lease liabilities and recorded expense of$0.2 million on a straight-line basis in accordance with the current accounting guidance. For each of the six months ended June 30, 2025 and 2024, the Company paid cash of $0.4 million and recorded expense of $0.4 million. The ground operating lease expense is recorded in property operating and maintenance expense in the Company’s consolidated statements of operations and comprehensive loss.


	Future Base Rent Payments
(In thousands)	Operating Leases		Direct Financing Leases (1)
2025 (remainder)	$	317	$	39
2026	627		79
2027	596		81
2028	597		83
2029	599		85
Thereafter	19,043		5,845
Total minimum lease payments	21,779		6,212
Less: amounts representing interest	(13,978)		(2,194)
Total present value of minimum lease payments	$	7,801	$	4,018

(1)The direct finance lease liability is included in accounts payable and accrued expenses on the balance sheet as of June 30, 2025. The direct financing lease asset is included as part of building and improvements as the land component was not required to be bifurcated under ASU 840.

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of June 30, 2025, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties.

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of June 30, 2025, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.