Notes Receivable |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Notes Receivable | Note 4. Notes Receivable
RSLCA Notes Receivable From Affiliated Party
The Company has invested in a short-term mezzanine loan to ExchangeRight (“ExchangeRight Mezz Loans”) for ExchangeRight’s Delaware Statutory Trust (“DST”) programs under a Revolving Secured Line of Credit Agreement (“RSLCA”). The loan agreement, as amended, matures on April 4, 2027, with a maximum of $250.0 million outstanding at any time, and bears interest at a rate equal to 12.0% per annum, while outstanding. On September 18, 2024, the Company entered into the first amendment to the Restated and Uncommitted Senior Revolving Line of Credit Agreement (the “Amendment”) with ExchangeRight. Under the Amendment, the Company is due a 0.25% unused facility fees and a 0.25% annual access fee, both payable by ExchangeRight quarterly in arrears.
The Company’s notes receivable are secured by interests in an affiliated party that indirectly owns net-leased necessity-based properties similar to the Company’s acquired properties, as well as a pledge agreement and subordination agreement provided by ExchangeRight. As a result, the risk profile of an investment in these notes is intended to be similar to ownership of the Company’s acquired properties while providing liquidity and an enhanced risk-adjusted return over investments with similar liquidity. The Company’s investment in the RSLCA notes receivable are held at amortized cost and totaled $19.0 million as of June 30, 2026.
Notes Receivable from Affiliated Parties
Since November 2022, the Company, as lender, has entered into four real estate notes with various net-leased DSTs owned by ExchangeRight as of the issuance date. The below table details the issuance date, maturity date, interest rate, and the Company’s outstanding note receivable under each of these agreements as of June 30, 2026, which is included in notes receivable from affiliates in the condensed consolidated balance sheet:
Under these real estate notes, the Company earned $0.3 million and $0.6 million in interest income during the three and six months ended June 30, 2026, respectively. The Company earned $0.3 million and $0.6 million during the three and six months ended June 30, 2025, respectively. Additionally, the Company had $0.1 million in interest income receivable in relation to these real estate notes as of June 30, 2026. |
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