v3.25.2
FAIR VALUE MEASUREMENT
 6 Months Ended
Jun. 30, 2025
FAIR VALUE MEASUREMENT  
FAIR VALUE MEASUREMENT

NOTE 10 - FAIR VALUE MEASUREMENT

​

The amounts included in the consolidated financial statements for cash and cash equivalents, short-term investments, leasing receivables from tenants and accounts payable and accrued liabilities approximates their fair values because of the short-term maturities of these instruments.

​

The following table presents the carrying value and estimated fair value of the Company’s financial instruments:

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2025

​

December 31, 2024

​

​

Carrying

​

​

​

​

Carrying

​

​

​

​

    

Value

    

Fair Value

    

Value

    

Fair Value

​

​

(in thousands)

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

Notes receivable

​

$

4,805

​

$

4,668

​

$

1,539

​

$

1,534

Notes receivable, affiliates

​

$

7,868

​

$

7,737

​

$

7,945

​

$

7,559

Derivative assets

​

$

9,979

​

$

9,979

​

$

14,449

​

$

14,449

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

Lines of Credit

​

$

24,166

​

$

24,166

​

$

4,992

​

$

4,992

Mortgage notes payable

​

$

501,056

​

$

470,619

​

$

508,644

​

$

483,630

Mortgage notes payable, affiliates

​

$

56,841

​

$

54,976

​

$

57,983

​

$

55,594

​

ASC 820-10 established a three-level valuation hierarchy for fair value measurement.  Management uses these valuation techniques to establish the fair value of the assets at the measurement date.  These valuation techniques are based upon observable and unobservable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect management’s assumptions.

​

These two types of inputs create the following fair value hierarchy:

●Level 1 – Quoted prices for identical instruments in active markets;
●Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable;
●Level 3 – Instruments whose significant inputs are unobservable.

​

The guidance requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

​

Recurring Fair Value Measurements

​

The following table presents the Company’s financial instruments, which are measured at fair value on a recurring basis, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.

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​

​

​

​

​

​

​

​

​

​

​

​

​

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Level 1

    

Level 2

    

Level 3

    

Total

​

​

(in thousands)

June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

Derivative assets

​

$

—

​

$

9,979

​

$

—

​

$

9,979

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

Derivative assets

​

$

—

​

$

14,449

​

$

—

​

$

14,449

​

Derivatives:  The fair value of interest rate swaps is determined using a discounted cash flow analysis on the expected future cash flows of the derivative.

​

The Company has determined that its derivative valuations in their entirety are classified within Level 2 of the fair value hierarchy. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered any applicable credit enhancements.

​

Fair Value Disclosures

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The following table presents the Trust’s financial assets and liabilities, which are measured at fair value for disclosure purposes, by the level in the fair value hierarchy within which they fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Level 1

    

Level 2

    

Level 3

    

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

Lines of Credit

​

$

—

​

$

—

​

$

24,166

​

$

24,166

Mortgage notes payable

​

$

—

​

$

—

​

$

470,619

​

$

470,619

Mortgage notes payable, affiliate

​

$

—

​

$

—

​

$

54,976

​

$

54,976

Notes receivable

​

$

—

​

$

—

​

$

4,668

​

$

4,668

Notes receivable, affiliate

​

$

—

​

$

—

​

$

7,737

​

$

7,737

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

Lines of Credit

​

$

—

​

$

—

​

$

4,992

​

$

4,992

Mortgage notes payable

​

$

—

​

$

—

​

$

483,630

​

$

483,630

Mortgage notes payable, affiliate

​

$

—

​

$

—

​

$

55,594

​

$

55,594

Notes receivable

​

$

—

​

$

—

​

$

1,534

​

$

1,534

Notes receivable, affiliate

​

$

—

​

$

—

​

$

7,559

​

$

7,559

​

Line of credit:  The Trust estimates the fair value of its line of credit approximates the carrying value due to the relatively short maturity of the instruments and that they carry a variable rate of interest.

​

Mortgage notes payable: The Trust estimates the fair value of its mortgage notes payable by discounting the future cash flows of each instrument at rates currently offered to the Trust for similar debt instruments of comparable maturities by

the Trust’s lenders. The rates used range from 5.85% to 6.00% and from 5.87% to 5.87% at June 30, 2025 and December 31, 2024, respectively.

​

Note payable: The Trust estimates the fair value of its note payable approximates the carrying value due to the relatively short maturity of the instruments and that they carry a variable rate of interest.

​

Notes receivable: The Trust estimates the fair value of its notes receivable by discounting future cash flows of each instrument at rates currently offered to the Trust for similar note instruments of comparable maturities by the Trust’s lenders. The rate used was 12.00% at June 30, 2025 and December 31, 2024.