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Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
We are required to disclose an estimate of fair value of our financial instruments for which it is practicable to estimate the value. U.S. GAAP defines the fair value as the price that the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges by willing parties.
We determine the fair value of certain investments in accordance with the fair value hierarchy that requires an entity to maximize the use of observable inputs. The fair value hierarchy includes the following three levels based on the objectivity of the inputs, which were used for categorizing the assets or liabilities for which fair value is being measured and reported:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs).
Level 3 – Valuation generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow methodologies or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation.
The net carrying amounts of cash and cash equivalents, restricted cash, contractual receivables, other assets, and notes receivable from related parties reported in the condensed consolidated balance sheets approximate their fair values because of the short maturity of these instruments.
The Company’s investments in equity securities are recorded at fair value on the condensed consolidated balance sheets on a recurring basis. The Saltbox Inc. preferred stock does not have a readily determinable fair value and is therefore accounted for under the measurement alternative, whereby investments are carried at cost, less impairment, and further adjusted for observable price changes in orderly transactions for identical or similar investments. These investments are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. The investment in Fundrise Real Estate Interval Fund is valued at NAV as of the close of the last business day and is classified within Level 1 of the fair value hierarchy. See Note 7, Equity Securities, for further details on the net carrying amounts and fair values of these financial instruments.
The Company’s derivative financial instruments are recorded at fair value on the condensed consolidated balance sheets on a recurring basis. The interest rate cap instruments are valued primarily utilizing significant other observable inputs, such as interest rate, term to maturity, volatility, and current credit spreads (Level 2). The Warrants are classified as Level 3 as we use significant unobservable inputs for these estimated fair value measurements, including implied equity valuations and option pricing models. See Note 10, Fair Value of Financial Instruments, for further details on the fair values of these financial instruments.
The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis as of March 31, 2026, and presents the fair value hierarchy of the inputs used to determine such fair values (amounts in thousands). Quantitative information regarding significant unobservable inputs used in Level 3 fair value measurements is disclosed for investments that are material to the Fund.

Assets:Level 1Level 2Level 3Total
Equity securities$19,829 $- $802 $20,631 
Derivative financial instruments$- $1 $3 $4 
Total$19,829 $1 $805 $20,635 

The Fund’s other significant financial instruments are carried at cost or amortized cost on the condensed consolidated financial statements. Accordingly, fair value estimates for these instruments are presented for disclosure purposes only As of March 31, 2026 and December 31, 2025, the carrying amounts and fair values of other financial instruments were as follows (amounts in thousands):
March 31, 2026December 31, 2025
Carrying AmountFair ValueCarrying AmountFair Value
Assets:
Investments in real estate debt
   Amounts maturing within one year$2,475 $2,475 $2,475 $2,475 
   Amounts maturing after one year through five years10,302 10,315 10,141 10,155 
Total assets$12,777 $12,790 $12,616 $12,630 
Liabilities:
Mortgages payable$75,219 $75,784 $75,219 $75,801 
Total liabilities$75,219 $75,784 $75,219 $75,801 
Fair value estimates are subjective in nature and are dependent on a number of important assumptions, including estimates of future cash flows, risks, discount rates and relevant comparable market information associated with each financial instrument. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Any changes to the valuation methodology will be reviewed by management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while we anticipate that our valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value could result in a different estimate of fair value at the reporting date.
The Company’s other significant financial instruments are carried at cost or amortized cost on the condensed consolidated balance sheets. Accordingly, fair value estimates for these instruments are presented for disclosure purposes only. The following methods and assumptions were used in estimating fair value disclosures for financial instruments:

Investments in real estate debt (Level 3): The fair value of our investments in real estate debt is estimated using a discounted cash flow method (an income approach) and recent investment method (a market approach). Significant inputs and assumptions include the market-based interest or preferred return rate (discount rate), loan to value ratios, and expected repayment and prepayment dates.
Mortgages payable (Level 3): The aggregate fair value of our mortgages payable principal balances are estimated using a discounted cash flow method (an income approach) and recent investment method (a market approach). Significant inputs and assumptions include the market-based interest or preferred return rate (discount rates), loan to value ratios, and expected repayment and prepayment dates. Differences between the carrying values of mortgages payable in the table
above and the “Mortgages payable, net” in the condensed consolidated balance sheets are due to unamortized deferred financing costs.