v3.26.1
DEBT
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
DEBT DEBT
Mortgage Notes Payable, Net
As of March 31, 2026 and December 31, 2025, the Company’s mortgage notes payable consisted of the following (dollars in thousands):
CollateralMarch 31, 2026December 31, 2025
Interest
Rate (1)
Loan
Maturity
Taylor Fresh Foods property$12,004 $12,070 3.85%11/01/2029
Santa Clara Property (2)
11,969 — 3.86%10/01/2027
Total mortgage notes payable23,973 12,070 
Unamortized fair value adjustment of assumed mortgage note payable(180)— 
Unamortized deferred financing costs(85)(76)
Mortgage notes payable, net$23,708 $11,994 
(1)Represents the contractual interest rate in effect under the respective mortgage note payable.
(2)On January 16, 2026, the Company acquired the 27.3% remaining TIC interest, resulting in the Company holding a 100% interest in the Santa Clara Property and, accordingly, the Company consolidated the Santa Clara Property’s financial results, including the mortgage note payable secured by the Santa Clara Property, in its financial statements beginning on January 16, 2026.
The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable, net, which are Level 3 fair value measurements, reflecting unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, as of March 31, 2026 and December 31, 2025 (in thousands):
March 31, 2026December 31, 2025
Face ValueCarrying
Value		Fair ValueFace ValueCarrying
Value		Fair Value
Mortgage notes payable, net$23,973 $23,708 $23,063 $12,070 $11,994 $11,400 
Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of the period end and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of value.
Credit Facility, Net
The Company’s Operating Partnership entered into an agreement for a line of credit (the “Credit Agreement”) on January 18, 2022. The Credit Agreement currently provides a $280.0 million line of credit comprised of a $30.0 million revolving line of credit (the “Revolver”), and a $250.0 million term loan (the “Term Loan” and together with the Revolver, the “Credit Facility”) with KeyBank and the other lending institutions party thereto (collectively, the “Lenders”), including KeyBank as Agent for the Lenders (in such capacity, the “Agent”). The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness, and capital expenditures.
On January 16, 2026, the Company entered into an agreement with the Lenders to amend the Credit Agreement to (i) extend the maturity date of the credit facility for eighteen months to July 18, 2028, (ii) remove the 10 basis point secured overnight financing rate (“SOFR”) Adjustment and (iii) allow repurchases of shares of the Preferred Stock, by amending certain distribution covenants so long as such repurchases are funded by proceeds from the issuance of preferred or common stock or asset sales, in each case, occurring within the trailing twelve month period of such repurchase.
There was no outstanding balance on the Revolver at March 31, 2026 or December 31, 2025. During the three months ended March 31, 2026, the Company borrowed and repaid $2.0 million. The Credit Facility is priced on a leverage-based grid that fluctuates based on the Company’s actual leverage ratio at the end of the prior quarter. The Company also pays an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment.
On January 16, 2026, the Company entered into three new swap agreements, effective December 31, 2025, for $83.3 million each, for an aggregate of $250.0 million, corresponding to the Term Loan, which fixed SOFR for the year ending December 31, 2026 at 2.45%, resulting in a fixed interest rate of 4.15% based on the Company’s current leverage ratio. The Company paid aggregate premiums of $2.7 million, including accrued interest receivable, to buy down the fixed rate below the prevailing market rate. The Company designated the three pay-fixed, receive-floating interest rate swaps as cash flow hedges (see Note 6 for more details). The floating interest rate was 5.3875% on the Term Loan as of March 31, 2026.
The Credit Facility includes customary representations, warranties and covenants. The Credit Facility is secured by a pledge of all of the Operating Partnership’s equity interests in certain of the single-purpose, property-owning entities (the “Subsidiary Guarantors”) that are indirectly owned by the Company, and various cash collateral owned by the Operating Partnership and the Subsidiary Guarantors. In connection with the Credit Facility, the Company and each of the Subsidiary Guarantors entered into an Unconditional Guaranty of Payment and Performance in favor of the Agent, pursuant to which the Company and each of the Subsidiary Guarantors agreed to guarantee the full and prompt payment of the Operating Partnership’s obligations under the Credit Agreement.
Compliance with All Debt Agreements
Pursuant to the terms of mortgage notes payable on certain of the Company’s properties and the Credit Facility, the Company and/or the subsidiary borrowers are subject to certain financial loan covenants. The Company and/or the subsidiary borrowers were in compliance with such financial loan covenants as of March 31, 2026.
Future Principal Payments
The following summarizes the future principal repayments of the Company’s mortgage notes payable and Credit Facility as of March 31, 2026 (in thousands):
Credit Facility
Mortgage Notes
Payable		 Revolver Term LoanTotal
April through December 2026$470 $— $— $470 
202711,981 — — 11,981 
2028290 — 250,000 250,290 
202911,232 — — 11,232 
2030— — — — 
Thereafter— — — — 
Total principal 23,973 — 250,000 273,973 
Fair value adjustment of assumed mortgage note, net(180)—— (180)
Deferred financing costs, net(85)— (286)(371)
Net$23,708 $— $249,714 $273,422 
Interest Expense, Including Unrealized Gain or Loss on Interest Rate Swaps and Net of Derivative Settlements
The following is a reconciliation of the components of interest expense, net of derivative settlements and unrealized loss (gain) on interest rate swaps for the three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended
March 31,
20262025
Mortgage notes payable:
Interest expense$212 $343 
Amortization of deferred financing costs and fair value adjustment of assumed mortgage note payable31 7 
Credit facility:
Interest expense3,396 3,854 
Unused commitment fees18 19 
Amortization of deferred financing costs58 150 
Swap derivatives:
Derivative cash settlements(767)
(1)
(1,180)
(4)
Amortization of off-market interest rate derivatives539 
(1)
784 
(4)
Accrued interest from swap effective date to swap execution date139 
(1)
291 
(4)
Amortization of unrealized gain on interest rate swap valuation(250)
(2)
(250)
(2)
Loss on extinguishment of debt1,145 
(3)
— 
Other41 30 
Total interest expense, net of unrealized gain on interest rate swaps and derivative settlements$4,562 $4,048 
(1)Related to the three swap agreements effective December 31, 2025, for $83.3 million each, for an aggregate of $250.0 million, corresponding to the Term Loan, as described in Note 6. The Company paid aggregate premiums of $2.7 million, including accrued interest receivable of $0.1 million, to buy down the fixed rate below the market rate, and the resulting derivatives are amortized over the term of the swap agreements.
(2)The unrealized gain on interest rate swap derivative previously recorded in accumulated other comprehensive income and noncontrolling interest in Operating Partnership is being amortized on a straight-line basis as a reduction to interest expense through the original maturity date of the Credit Facility, January 18, 2027.
(3)As the Credit Agreement is a loan syndication, the Company evaluated the January 16, 2026 amendment on a creditor-by-creditor basis and determined certain creditor commitments were considered extinguishments of debt. As such, this balance includes the write-off of any related unamortized deferred costs, fees paid to these creditors, and a portion of costs incurred with third parties directly allocated to commitments that were considered extinguishments of debt.
(4)Related to the two swap agreements effective December 31, 2024, for $125.0 million each, for an aggregate of $250.0 million, corresponding to the Term Loan. The Company paid aggregate premiums of $4.2 million, including accrued interest receivable of $0.3 million, to buy down the fixed rate below the market rate, and the resulting derivatives were amortized over the term of the swap agreements.