v3.26.1
Mortgages Payable, Net
 3 Months Ended
Mar. 31, 2026
Mortgages Payable Net [Abstract]  
Mortgages Payable, Net
5.Mortgages Payable, Net

 

Mortgages payable, net consists of the following:

 

Property  Interest Rate  Weighted
Average
Interest Rate
for the
Three
Months
Ended
March 31,
2026		   Maturity Date  Amount
Due at
Maturity		   As of
March 31,
2026		   As of
December 31,
2025		 
                       
Gantry Park Landing  6.30%   6.30%  February 2030  $64,860   $66,358   $66,558 
                           
Lower East Side Moxy Hotel (Senior Loan)  SOFR + 3.25%
(floor of 6.50%)		   6.92%  September 2028   124,700    124,700    124,700 
                           
Lower East Side Moxy Hotel (Junior Loan)  SOFR + 7.75%
(floor of 11.00%)		   11.42%  September 2028   31,310    31,310    31,310 
                           
Total mortgages payable      7.37%     $220,870    222,368    222,568 
                           
Less: Deferred financing costs                   (3,052)   (3,342)
                           
Total mortgages payable, net                  $219,316   $219,226 

 

One-month SOFR as of March 31, 2026 and December 31, 2025 was 3.66% and 3.69%, respectively. The Company’s loans are secured by the indicated real estate/investment and are non-recourse to the Company, unless otherwise indicated.

Gantry Park Loans

 

On January 28, 2025, the 2nd Street Joint Venture entered into a $67.2 million non-recourse mortgage loan (the “Gantry Park Loan”) collateralized by Gantry Park Landing with a maturity date of February 7, 2030, which bears interest at a fixed rate of 6.30%, requires monthly principal and interest payments pursuant to a 30-year amortization schedule for the first three years and interest-only payments thereafter through its maturity. A substantial portion of the proceeds received at the closing of the Gantry Park Loan were used to repay in full existing mortgage indebtedness, which was collateralized by Gantry Park Landing.

 

Moxy Mortgage Loans

 

On November 29, 2023, the Company entered into a senior mortgage loan facility (the “Moxy Senior Loan”) with an unrelated third party providing for up to $110.0 million. Simultaneously on November 29, 2023, the Company also entered into a junior mortgage loan facility (the “Moxy Junior Loan” and together with the Moxy Senior Loan the “Moxy Mortgage Loans”) with an unrelated third party providing for up to $31.3 million. The Moxy Mortgage Loans require monthly interest-only payments with their outstanding principal balances due upon maturity and they are both collateralized by the Lower East Side Moxy Hotel; however, the Moxy Junior Loan is subordinate to the Moxy Senior Loan.

 

On August 15, 2025, the Moxy Senior Loan was amended to increase its availability by $14.7 million from up to $110.0 million to up to $124.7 million, its maturity was extended to September 15, 2028 and its interest rate was prospectively reduced to SOFR + 3.25%, subject to a 6.50% floor. As of March 31, 2026 and December 31, 2025, the Moxy Senior Loan was fully funded and its outstanding principal balance was $124.7 million.

 

Simultaneously, on August 15, 2025, the Moxy Junior Loan was also amended pursuant to which its maturity was extended to September 15, 2028 and its interest rate was prospectively reduced to SOFR + 7.75%, subject to a 11.00% floor. As of March 31, 2026 and December 31, 2025, the outstanding principal balance of the Moxy Junior Loan was fully funded and its outstanding principal balance was $31.3 million.

 

Pursuant to the terms of the Moxy Mortgage Loans, the Company is required to enter into interest rate cap contracts with an aggregate notional amount equal to the total maximum amount available under the Moxy Mortgage Loans for as long as they remain outstanding.

 

On November 29, 2023, the Company entered into two interest rate cap agreements with notional amounts of $110.0 million and $31.3 million pursuant to which the SOFR rate was capped at 5.50% through June 1, 2025 and December 1, 2024, respectively.

 

In November 2024, the Company extended the term of the interest rate cap agreement with the notional amount of $31.3 million through December 1, 2025. Subsequently in November 2025, the Company further extended the term of this interest rate cap contract through December 1, 2026.

 

On May 30, 2025, the Company extended the term of the interest rate cap agreement with the notional amount of $110.0 million through June 1, 2026. In connection with the amendment of the Moxy Senior Loan, the Company restructured this interest rate cap agreement to increase its notional amount by $14.7 million to $124.7 million pursuant to which the SOFR rate is capped at 5.50% through June 1, 2026.

 

As of March 31, 2026 and December 31, 2025, the aggregate outstanding principal balance of the Moxy Mortgage Loans was $156.0 million.

 

The Moxy Mortgage Loans require the maintenance of a prescribed minimum debt yield ratio (“DYR”) measured at the end of each calendar quarter based on the trailing twelve months of operating results from the Lower East Side Moxy Hotel, subject to various adjustments at the lender’s discretion. However, any failure to meet the DYR does not constitute an event of default; rather, it provides the lender with the option to elect to retain any excess cash flow from the Lower East Side Moxy Hotel until the DYR is met. The Company also has the ability, at its option, to make proportional principal paydowns to the Moxy Senior Loan and the Moxy Junior Loan to achieve financial covenant compliance.

 

During the fourth quarter of 2025, the Company was informed by the lender that it did not meet the minimum DYR as of September 30, 2025 as a result of their discretionary adjustments and therefore, they have elected to retain any excess cash flow from the operations of the Lower East Side Moxy Hotel until the minimum DYR is met. During the first quarter of 2026, the Company was informed by the lender that it also did not meet the minimum DYR as of December 31, 2025. As of March 31, 2026 and December 31, 2025, a total of $6.0 million and $6.8 million, respectively, was held by the lender in escrow accounts, which is included in restricted cash on the consolidated balance sheets.

Based on the trailing twelve months of operating results of the Lower East Side Moxy Hotel, the Company also does not expect to meet the minimum DYR as of March 31, 2026, assuming similar discretionary adjustments will be made by the lender.

 

The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of March 31, 2026:

 

   2026   2027   2028   2029   2030   Thereafter   Total 
Principal maturities  $560   $811   $156,137   $-   $64,860   $           -   $222,368 
                                    
Less: Deferred financing costs                                 (3,052)
                                    
Total principal maturities, net                                $219,316 

 

Certain of the Company’s debt agreements require the maintenance of certain ratios, including debt service coverage. As of March 31, 2026, the Company was in compliance with all of its financial debt covenants,  other than for the Moxy Mortgage Loans as discussed above. Additionally, certain of the Company’s mortgages payable also contain clauses providing for prepayment penalties.

 

The Company has no additional significant maturities of mortgage debt over the next 12 months.