v3.26.1
NOTES PAYABLE
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
NOTES PAYABLE NOTES PAYABLE
Wells Fargo Line of Credit

On January 27, 2023, the Company, as limited guarantor, and certain of the wholly owned subsidiaries of the Operating Partnership, as co-borrowers, amended and restated its secured revolving credit facility (the “Wells Fargo Line of Credit”) with Wells Fargo Bank, National Association, as administrative agent, and other lending institutions that may become parties to the credit agreement. On December 27, 2023, the Wells Fargo Line of Credit was amended to add CIBC Inc. ("CIBC") to the credit facility as an additional lender; increase the maximum commitment amount from $100,000 to $120,000; revise or suspend certain covenants; and extend the maturity date to December 27, 2025. The maximum commitment of $120,000 is allocated 70.83% to Wells Fargo and 29.17% to CIBC. The interest rate under the Wells Fargo Line of Credit is based on the 30-day average of the secured overnight financing rate ("SOFR") plus a spread of 225 basis points. The Company continued to serve as limited guarantor to the Wells Fargo Line of Credit only with respect to specified bad acts.

On August 25, 2025, the Wells Fargo Line of Credit was amended (the “Fifth Amendment”) to: (a) extend the maturity date from December 27, 2025 to April 1, 2028; (b) amend the calculation of the Borrowing Base Value (described below); (c) require that the Company maintain a minimum liquidity amount of at least $1,000; (d) decrease the maximum commitment amount from $120,000 to $105,000; and (e) revise or eliminate certain covenants. Pursuant to the Fifth Amendment, the Borrowing Base Value is based on the sum of (1) the Loudoun Borrowing Base Value (described below) and (2) the lesser of (a) an amount equal to 65% of the aggregate value of all other properties in the collateral pool as determined by lender appraisals; and (b) an amount that results in a minimum debt service coverage ratio of 1.20:1.00 as determined under the Fifth Amendment. The interest rate under the Wells Fargo Line of Credit remains at SOFR plus a spread of 225 basis points.

A wholly owned subsidiary of the Company that is a borrower under the Wells Fargo Line of Credit has entered into a contract to sell the Loudoun Gateway property to a third party unaffiliated with the Company or its advisor (the “Loudoun Sale”). The completion of the Loudoun Sale is subject to certain conditions including but not limited to the ability of the buyer to receive a zoning exception from the relevant authorities allowing Loudoun Gateway to be converted to a data center use, which is subject to numerous conditions. As such, the completion of the Loudoun Sale remains uncertain and the closing date likely would not occur until late 2026 or early 2027.

The “Loudoun Borrowing Base Value” is equal to (a) prior to June 1, 2026, $12,513; (b) thereafter until July 31, 2027, an amount equal to $12,513 as reduced on the first day of every calendar month from and after June 1, 2026 by $500, provided however that such monthly reduction of the Loudoun Borrowing Base Value would increase to $1,000 in the event the Loudoun Sale has been terminated prior to its completion; and (c) from and after August 1, 2027, zero.

In exchange for keeping Loudoun Gateway as part of the pool of properties upon which the Borrowing Base Value is determined, on August 25, 2025 the Company entered into the Amended and Restated Guaranty Agreement, under which the Company will provide, for a limited time, a full repayment guaranty rather than a limited guaranty (the "Guaranty"). The provisions relating to the full repayment guaranty will automatically terminate once either (a) Loudoun Gateway has been released from the Wells Fargo Line of Credit, or (b) the Loudoun Borrowing Base Value has been reduced to zero (the "Loudoun Release"). Upon the occurrence of the Loudoun Release, the Guaranty will become a non-recourse limited guaranty. Upon entering into the Guaranty and until the Loudoun Release, the Company is not allowed to sell or transfer, but may encumber or finance under specified conditions, any of the following properties: Commerce Corner, The Glenn, Seattle East Industrial, Providence Square and The Flats at Carrs Hill (the "Significant Properties"). Upon the occurrence of the Loudoun
Release, the restrictions related to the Significant Properties shall no longer be in effect. Notwithstanding, in no event shall the Commerce Corner property be eligible for release from the Wells Fargo Line of Credit until the Wells Fargo Line of Credit is repaid in full and all commitments have been terminated.

As of March 31, 2026 and December 31, 2025, the borrowers' maximum borrowing capacity was $82,453 and $82,324, respectively, and the borrowers' outstanding balance was $64,250 and $78,300, respectively. As of March 31, 2026 and December 31, 2025, the weighted average interest rate was 5.92% and 6.27%, respectively.

The Wells Fargo Line of Credit agreement contains customary representations, warranties, borrowing conditions and affirmative, negative and financial covenants. The Company was in compliance with all applicable financial covenants as of March 31, 2026.

The following is a reconciliation of the carrying amount of the Wells Fargo Line of Credit at March 31, 2026 and December 31, 2025.
Balance at
LenderMarch 31, 2026December 31, 2025
Wells Fargo/CIBC$64,250 $78,300 
Deduct: Deferred financing costs, less accumulated amortization(819)(920)
Line of credit, net$63,431 $77,380 

Mortgage Loans

Certain wholly owned subsidiaries of the Company are obligors on various mortgage loans. Such mortgage loans contain fixed interest rates, allow for one-time transfer to another borrower subject to lender discretion and payment of applicable fees, and allow for full prepayment at certain times with payment of applicable penalties, if any. The following is a reconciliation of the carrying amount of the mortgage loans payable at March 31, 2026 and December 31, 2025.
Balance at
LenderEncumbered PropertyMarch 31, 2026December 31, 2025Interest RateMaturity Date
State Farm Life Insurance Company¹Elston Plaza$— $16,107 3.89 %July 1, 2026
Massachusetts Mutual Life Insurance CompanyThe Glenn66,000 66,000 3.02 December 1, 2028
Transamerica Life Insurance CompanyWallingford Plaza6,318 6,353 4.56 January 1, 2029
Nationwide Life Insurance CompanyProvidence Square29,700 29,700 3.67 October 5, 2029
JPMorgan Chase BankSeattle East Industrial45,140 45,140 3.87 January 1, 2030
Nationwide Life Insurance CompanyThe Flats at Carrs Hill25,500 25,500 5.51 July 1, 2030
$172,658 $188,800 
Deduct: Deferred financing costs, less accumulated amortization(461)(508)
Mortgage loans payable, net$172,197 $188,292 

¹On March 17, 2026, the Company sold Elston Plaza. The sales proceeds were used to fully repay the outstanding balance of the State Farm Life Insurance Company loan and reduce the outstanding balance under the Wells Fargo Line of Credit.

Aggregate future principal payments due on the Wells Fargo Line of Credit and mortgage loans payable as of March 31, 2026 are as follows:
YearAmount
2026 (remainder)$105 
2027145 
2028136,318 
202974,840 
203025,500 
Thereafter— 
Total$236,908