v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The three levels are defined as follows:
Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. We do not adjust the quoted price for these investments.
Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.
Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.
Certain investments that are measured at fair value using NAV per share as a practical expedient are not required to be categorized in the fair value hierarchy tables. The total fair value of these investments is included in the tables below to permit reconciliation of the fair value hierarchy to amounts presented on our condensed consolidated balance sheets. As of March 31, 2026 and December 31, 2025, none of these investments were expected to be sold at a value materially different than NAV.
Valuation of Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table details our financial instruments measured at fair value on a recurring basis:
March 31, 2026
Fair Value Measurements Using:
in thousandsLevel 1Level 2Level 3NAV as a Practical ExpedientTotal at Fair Value
Assets:
Investments in real estate-related securities$1,885 $28,778 $— $— $30,663 
Investments in commercial loans— — 197,098 — 197,098 
Investment in affiliated fund— — — 8,153 8,153 
Interest rate swap— 510 — — 510 
Total assets$1,885 $29,288 $197,098 $8,153 $236,424 
Liabilities:
Interest rate swaps$— $159 $— $— $159 
Total liabilities$— $159 $— $— $159 
December 31, 2025
Fair Value Measurements Using:
in thousandsLevel 1Level 2Level 3NAV as a Practical ExpedientTotal at Fair Value
Assets:
Investments in real estate-related securities$2,008 $31,251 $— $— $33,259 
Investments in commercial loans— — 95,335 — 95,335 
Investment in affiliated fund— — — 12,545 12,545 
Interest rate swap— 405 — — 405 
Total assets$2,008 $31,656 $95,335 $12,545 $141,544 
Liabilities:
Interest rate swaps$— $524 $— $— $524 
Total liabilities$— $524 $— $— $524 
Investments in commercial loans are carried at fair value based on significant unobservable inputs. The following table shows a reconciliation of the beginning and ending fair value measurements of our commercial real estate loan investments:
in thousandsInvestments in Commercial Loans
Balance as of December 31, 2025$95,335 
Loan originations114,000 
Unrealized gain (loss)8 
Loan repayment(12,245)
Balance as of March 31, 2026$197,098 
The following tables show the significant unobservable inputs related to the Level 3 fair value measurement of our investments in commercial loans as of March 31, 2026 and December 31, 2025:
March 31, 2026
TypeValuation TechniqueUnobservable InputWeighted Average RateRange
Commercial loansDiscounted cash flowDiscount rate6.43%
6.28% - 6.63%
December 31, 2025
TypeValuation TechniqueUnobservable InputWeighted Average RateRange
Commercial loanDiscounted cash flowDiscount rate8.75%N/A
The discount rate above is subject to change based on changes in economic and market conditions both current and anticipated, in addition to changes in use or timing of exit if applicable. These rates are also based on the location, type and nature of each property or instrument type and related industry publications. Changes in discount rates result in increases or decreases in the fair values of these investments. The discount rates encompass, among other things, uncertainties in the valuation models with respect to terminal capitalization rates and the amount and timing of cash flows. It is not possible for us to predict the effect of future economic or market conditions based on our estimated fair values.
Valuation of Liabilities Not Carried at Fair Value
The following table presents the principal balance and estimated fair value of our liabilities that are not carried at fair value on the condensed consolidated balance sheets:
March 31, 2026December 31, 2025
in thousandsPrincipal BalanceEstimated Fair ValuePrincipal BalanceEstimated Fair Value
Mortgage notes payable$235,655 $235,035 $235,318 $234,532 
Secured lending agreement157,680 157,680 66,480 66,480 
Revolving credit facility— — 40,000 40,000 
Total$393,335 $392,715 $341,798 $341,012 

Valuation of Assets Measured at Fair Value on a Nonrecurring Basis
Our real estate investments are not measured at fair value on an ongoing basis but are subject to fair value adjustments when there is evidence of impairment. We review our real estate investments for impairment each quarter or when there is an event or change in circumstances that could indicate the carrying amount of these investments may not be recoverable.
During the three months ended March 31, 2026 and 2025, we did not recognize any impairment losses on our real estate investments.