| LONG-TERM DEBT |
NOTE 13. LONG-TERM DEBT As of June 30, 2026, the Company’s outstanding indebtedness, at face value, was as follows. See Note 14, “Interest Rate Swaps” for further disclosure related to the Company’s interest rate swaps. | | | | | | | | | | | | Face Value Debt
(in thousands) | | Stated Interest Rate | | Wtd. Avg. Rate as of June 30, 2026 | | Maturity Date | Revolving Facility (1) | | $ | 169,500 | | SOFR +
[1.25% - 2.20%] | | 4.82% | | February 2030 | 2029 Term Loan (2) | | | 100,000 | | SOFR +
[1.25% - 1.90%] | | 4.66% | | February 2029 | 2031 Term Loan (3) | | | 100,000 | | SOFR +
[1.25% - 1.90%] | | 3.35% | | February 2031 | Total Debt/Weighted-Average Rate | | $ | 369,500 | | | | 4.38% | | |
| (1) | As of June 30, 2026, the Company has utilized interest rate swaps to fix SOFR and achieve a weighted average fixed interest rate of 3.32% plus the applicable spread on $100 million of the outstanding balance on the Revolving Facility (hereinafter defined). |
| (2) | As of June 30, 2026, the Company has utilized interest rate swaps to fix SOFR and achieve a weighted average fixed interest rate of 3.36% plus the applicable spread on the $100 million 2029 Term Loan (hereinafter defined) balance. |
| (3) | As of June 30, 2026, the Company has utilized interest rate swaps to fix SOFR and achieve a weighted average fixed interest rate of 2.05% plus the applicable spread on the $100 million 2031 Term Loan (hereinafter defined) balance. |
Credit Facility. On February 4, 2026, the Company, the Operating Partnership, as borrower (the “Borrower”), and certain subsidiaries of the Borrower entered into an Amended and Restated Credit Agreement with Truist Bank, N.A., as administrative agent, and certain other lenders named therein (the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement provides for a $250 million senior unsecured revolving credit facility (the “Revolving Facility”), a $100 million senior unsecured term loan credit facility maturing in 2029 (the “2029 Term Loan”), and a $100 million senior unsecured term loan credit facility maturing in 2031 (the “2031 Term Loan” and, together with the Revolving Facility and the 2029 Term Loan, the “Facilities”). On February 4, 2026, in connection with the Borrower’s entry into the Amended and Restated Credit Agreement, the Borrower repaid all obligations outstanding under its previous credit agreement with KeyBank National Association, dated as of September 30, 2022, among the Company, as parent guarantor, the Borrower, certain subsidiaries of the Borrower, KeyBank National Association, as administrative agent, and certain other lenders named therein (as amended, the “Prior Credit Agreement”). As a result, the Prior Credit Agreement was terminated and the obligations thereunder were discharged. The terms of the Amended and Restated Credit Agreement include, among other things: | ● | the origination of the Revolving Facility in the amount of $250 million which matures on February 4, 2030, with two six-month extension options; |
| ● | indebtedness under the Revolving Facility accrues at a rate ranging from SOFR plus 125 basis points to SOFR plus 220 basis points, based on the total balance outstanding under the Revolving Facility as a percentage of the total asset value of the Company, as defined in the Amended and Restated Credit Agreement. The Company may utilize daily simple SOFR or term SOFR, at its election. The Revolving Facility also accrues a fee of 15 or 25 basis points for any unused portion of the borrowing capacity based on whether the unused portion is greater or less than 50% of the total borrowing capacity; |
| ● | the origination of the 2029 Term Loan in the amount of $100 million that matures on February 4, 2029; |
| ● | the origination of the 2031 Term Loan in the amount of $100 million that matures on February 4, 2031; |
| ● | indebtedness outstanding under the 2029 Term Loan and the 2031 Term Loan accrues at a rate ranging from SOFR plus 125 basis points to SOFR plus 190 basis points, based on the total balance outstanding under the Facilities as a percentage of the total asset value of the Company, as defined in the Amended and Restated Credit Agreement. The Company may utilize daily simple SOFR or term SOFR, at its election; |
| ● | an accordion feature which allows for total borrowings under the Facilities, in the aggregate, to be increased to an amount not to exceed $750 million; and |
| ● | the amendment of certain financial covenants. |
As of June 30, 2026, the commitment level under the Revolving Facility was $250.0 million and the Company had an outstanding balance of $169.5 million. The available borrowing capacity under the Revolving Facility, subject to borrowing base restrictions, was $80.5 million as of June 30, 2026. The Company is subject to customary restrictive covenants under the Amended and Restated Credit Agreement, including, but not limited to, limitations on the Company’s ability to: (a) incur indebtedness; (b) make certain investments; (c) incur certain liens; (d) engage in certain affiliate transactions; and (e) engage in certain major transactions such as mergers. The Amended and Restated Credit Agreement also contains financial covenants covering the Company, including but not limited to, tangible net worth and fixed charge coverage ratios. The Company was in compliance with all of its debt covenants as of June 30, 2026. Long-term debt as of June 30, 2026 and December 31, 2025 consisted of the following (in thousands): | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | | Total | | Due Within One Year | | Total | | Due Within One Year | Revolving Facility | | $ | 169,500 | | $ | — | | $ | 178,000 | | $ | — | 2026 Term Loan | | | — | | | — | | | 100,000 | | | 100,000 | 2027 Term Loan | | | — | | | — | | | 100,000 | | | — | 2029 Term Loan | | | 100,000 | | | — | | | — | | | — | 2031 Term Loan | | | 100,000 | | | — | | | — | | | — | Financing Costs, net of Accumulated Amortization | | | (1,948) | | | — | | | (261) | | | — | Total Long-Term Debt | | $ | 367,552 | | $ | — | | $ | 377,739 | | $ | 100,000 |
Payments applicable to reduction of principal amounts as of June 30, 2026 will be required as follows (in thousands): | | | | Year Ending December 31, | | Amount | Remainder of 2026 | | $ | — | 2027 | | | — | 2028 | | | — | 2029 | | | 100,000 | 2030 | | | 169,500 | 2031 | | | 100,000 | 2032 and Thereafter | | | — | Total Long-Term Debt - Face Value | | $ | 369,500 |
The carrying value of long-term debt as of June 30, 2026 consisted of the following (in thousands): | | | | | | Total | Current Face Amount | | $ | 369,500 | Financing Costs, net of Accumulated Amortization | | | (1,948) | Total Long-Term Debt | | $ | 367,552 |
In addition to the $1.9 million of financing costs, net of accumulated amortization included in the table above, as of June 30, 2026, the Company also had financing costs, net of accumulated amortization related to the Revolving Facility of $2.5 million which is included in other assets on the consolidated balance sheets. These costs are amortized on a straight-line basis over the term of the Revolving Facility and are included in interest expense in the consolidated statements of operations. The following table reflects a summary of interest expense incurred and paid during the three and six months ended June 30, 2026 and 2025 (in thousands): | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, 2026 | | June 30, 2025 | | June 30, 2026 | | June 30, 2025 | Interest Expense | | $ | 3,766 | | $ | 3,965 | | $ | 7,544 | | $ | 7,153 | Interest Expense from Obligation Under Participation Agreement | | | 510 | | | 150 | | | 820 | | | 365 | Amortization of Deferred Financing Costs to Interest Expense | | | 303 | | | 205 | | | 568 | | | 394 | Total Interest Expense | | $ | 4,579 | | $ | 4,320 | | $ | 8,932 | | $ | 7,912 | | | | | | | | | | | | | | Total Interest Paid | | $ | 4,240 | | $ | 3,510 | | $ | 9,057 | | $ | 6,683 |
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