v3.26.1
Mortgage Notes, Repurchase Facility and Unsecured Revolving Credit Facility
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Mortgage Notes, Repurchase Facility and Unsecured Revolving Credit Facility

8. Mortgage Notes, Repurchase Facility and Unsecured Revolving Credit Facility

Mortgage notes

The following is a summary of the mortgage notes secured by the Company’s properties ($ in thousands):

 

 

 

 

 

 

Principal Balance Outstanding

 

Indebtedness

 

Interest Rate

 

Maturity Date

 

December 31, 2025

 

 

December 31, 2024

 

Fixed rate debt secured by our properties

 

 

 

 

 

 

 

 

 

 

Caroline West Gray

 

5.44%

 

December 1, 2029

 

$

45,911

 

 

$

45,911

 

Caroline Post Oak

 

5.44%

 

December 1, 2029

 

 

40,528

 

 

 

40,528

 

Coda on Centre

 

4.28%

 

May 1, 2029

 

 

27,860

 

 

 

28,397

 

The Elmstead(1)

 

4.30%

 

April 1, 2031

 

 

21,245

 

 

 

—

 

Bass Lofts

 

3.95%

 

September 5, 2027

 

 

14,902

 

 

 

—

 

One Brooklyn

 

4.35%

 

July 1, 2028

 

 

6,600

 

 

 

—

 

Charleston

 

5.08%

 

September 1, 2030

 

 

59,728

 

 

 

—

 

Baker Chocolate

 

3.91%

 

January 1, 2028

 

 

23,500

 

 

 

—

 

       Total fixed rate

 

 

 

 

 

 

240,274

 

 

 

114,836

 

Variable rate debt secured by our properties

 

 

 

 

 

 

 

 

 

 

6200 Bristol(2)

 

SOFR + 2.05%

 

April 1, 2029

 

 

10,000

 

 

 

10,000

 

Norfolk Industrial Portfolio(3)

 

SOFR + 1.75%

 

June 19, 2030

 

 

43,700

 

 

 

—

 

Preserve at Pine Valley(4)

 

SOFR + 1.50%

 

December 10, 2030

 

 

21,200

 

 

 

—

 

Vineyard Commons(5)

 

SOFR + 1.40%

 

January 1, 2030

 

 

45,175

 

 

 

—

 

Stablewood(6)

 

SOFR + 3.75%

 

August 8, 2028

 

 

5,292

 

 

 

—

 

       Total variable rate

 

 

 

 

 

 

125,367

 

 

 

10,000

 

Total loans secured by real estate

 

 

 

 

 

 

365,641

 

 

 

124,836

 

Deferred financing costs, net

 

 

 

 

 

 

(4,327

)

 

 

(1,142

)

Mortgage discount, net

 

 

 

 

 

 

(1,869

)

 

 

(603

)

Total debt secured by our properties

 

 

 

 

 

$

359,445

 

 

$

123,091

 

(1) This loan is comprised of a senior and a mezzanine loan. The interest rate and maturity date presented are the weighted average.

(2) The Company entered into an interest rate swap that was not designated as a hedge on April 2, 2024, which fixed the rate at 6.26%.

(3) The Company entered into an interest rate swap that was not designated as a hedge on June 20, 2025, which fixed the rate at 5.41%.

(4) The Company entered into an interest rate swap that was not designated as a hedge on December 10, 2025, which fixed the rate at 4.90%.

(5) The Company entered into an interest rate swap that was not designated as a hedge on December 10, 2025, which fixed the rate at 4.88%.

(6) Represents a line of credit secured by real estate with a maximum facility size of $50 million.

The following table details the future principal payments due under the Company’s mortgage notes as of December 31, 2025 ($ in thousands):

Year

 

Mortgage Notes

 

2026

 

$

1,176

 

2027

 

 

15,458

 

2028

 

 

37,579

 

2029

 

 

125,273

 

2030

 

 

166,662

 

Thereafter

 

 

19,493

 

Total future principal payments

 

$

365,641

 

Repurchase Facility

On August 22, 2024, the Company entered into a Master Repurchase Agreement (the “Repurchase Facility”). The Repurchase Facility initially provided for a maximum aggregate purchase price of $150 million and has a three-year term plus two, one-year extension options. Subject to the terms and conditions thereof, the Repurchase Facility provides for the purchase, sale and repurchase of senior mortgage loans and participation interests in performing senior mortgage loans satisfying certain conditions set forth in the Repurchase Facility. On November 14, 2025, the Repurchase Facility was amended to increase maximum aggregate purchase price from $150 million to $250 million.

Advances under the Repurchase Facility accrue interest at a per annum rate equal to the Term SOFR Base Rate (as defined in the Repurchase Facility) for a one-month period plus a margin as agreed upon for each transaction. The Repurchase Facility contains affirmative and negative covenants and provisions regarding events of default. The Operating Partnership has agreed to provide a limited guarantee of the obligations of the Company under the Repurchase Facility.

Borrowings from the Repurchase Facility were used to originate the commercial mortgage loans (see Note 5).

The Company’s borrowings from the Repurchase Facility as of December 31, 2025 and 2024 are detailed in the following table ($ in thousands):

 

 

 

 

 

 

 

 

 

Borrowings Outstanding

 

 

 

Maximum Facility Size

 

 

Weighted-Average Interest Rate

 

Weighted-Average Maturity Date

 

December 31, 2025

 

 

December 31, 2024

 

Repurchase Facility

 

$

250,000

 

 

SOFR + 1.58%

 

August 22, 2027

 

$

168,450

 

 

$

46,800

 

Less: Unamortized deferred financing costs

 

 

 

 

 

 

 

 

 

(587

)

 

 

(417

)

 

 

$

250,000

 

 

 

 

 

 

$

167,863

 

 

$

46,383

 

The Company is subject to various financial and operational covenants under certain of its mortgage notes, line of credit secured by real estate and the Repurchase Facility. These covenants require the Company to maintain certain financial ratios, which may include leverage, debt yield, and debt service coverage, among others. As of December 31, 2025 and 2024, the Company was in compliance with its loan covenants that could result in a default under such agreements.

Unsecured revolving credit facility

On July 15, 2025, the Operating Partnership, as a borrower and certain subsidiaries of the Operating Partnership party thereto from time to time, as designated borrowers, entered into a credit agreement (the “Credit Agreement”) with Truist Bank (“Truist”), as the administrative agent and a letter of credit issuer, and each lender party thereto from time to time (the “Lenders”). The Credit Agreement provides for unsecured revolving credit commitments in an aggregate amount of up to $325.0 million for revolving loans and letter of credit issuances, with an accordion feature pursuant to which the borrowers may request to increase the revolving commitments and create new term loan tranches in an additional aggregate amount of up to $675.0 million, subject to the satisfaction of certain conditions (the “Credit Facility”). The proceeds of the Credit Facility will be used for general business purposes, including, debt refinancing, property acquisitions, new construction, renovations, capital expenditures, expansions, tenant improvements, leasing commissions, refinancing of existing lines, financing acquisition of permitted investments, dividends, redemptions, closing costs and equity investments primarily associated with commercial real estate property acquisitions or refinancings. The Credit Facility is guaranteed by the Company and certain subsidiaries of the Operating Partnership.

At the Operating Partnership’s election, revolving loans advanced under the Credit Agreement shall bear interest at a rate per annum equal to (a) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period (“Term SOFR”), as selected by the Operating Partnership, plus an applicable margin ranging between 1.30% and 1.80% per annum (“Term SOFR Margin”), or (b) the highest of (i) the federal funds rate plus 0.50%, (ii) Truist’s prime rate, (iii) Term SOFR for a one month tenor in effect on such day plus 1.00%, and (iv) 1.00% (“Base Rate”), plus an applicable margin ranging between 0.30% and 0.80% per annum (“Base Rate Margin”). Letters of credit issued under the Credit Facility will accrue a letter of credit fee equal to the applicable Term SOFR Margin times the daily amount available to be drawn under such letter of credit.

Revolving loans and letters of credit under the Credit Facility will mature on July 15, 2028, subject to any earlier termination in accordance with the terms of the Credit Agreement and to certain extension options detailed therein.

The Company’s borrowings from the Credit Facility as of December 31, 2025 and 2024 are detailed in the following table ($ in thousands):

 

 

 

 

 

 

 

 

 

Borrowings Outstanding

 

 

 

Maximum Facility Size

 

 

Weighted-Average Interest Rate

 

Maturity Date

 

December 31, 2025

 

 

December 31, 2024

 

Credit Facility

 

$

325,000

 

 

SOFR + 1.30%

 

July 15, 2028

 

$

73,000

 

 

$

—

 

Pursuant to the Credit Agreement, the Company has made certain representations and warranties and must comply with various covenants and reporting requirements. The Credit Agreement contains events of default for financings of this type. Upon the occurrence of certain events of default, Truist, as administrative agent, may, and at the instruction of the Lenders will, among other remedies, suspend the commitments of the Lenders and any obligation of the letter of credit issuers to make letter of credit extensions, terminate the commitments of the Lenders and any obligation of the letter of credit issuer to make letter of credit extensions, demand that existing letters of credit be cash collateralized, and declare the outstanding loans and other obligations under the Credit Facility immediately due and payable.