NOTE 7 - INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES

At June 30, 2026, the Company held investments in five real estate properties, two of which are included in investments in real estate, and three of which are included in properties held for sale on the consolidated balance sheets.

In March 2026, the Company sold unimproved land located in the Northeast region for $20.0 million. This sale generated a gain of $3.3 million, net of selling costs.

The following table summarizes the book value of the Company’s acquired assets and assumed liabilities (in thousands, except amounts in the footnotes):


	June 30, 2026							December 31, 2025
	Cost Basis		Accumulated Depreciation & Amortization			Carrying Value		Cost Basis		Accumulated Depreciation & Amortization			Carrying Value
Assets acquired:
Investments in real estate, equity:
Investments in real estate (1)	$	58,311	$	(8,964	)	$	49,347	$	74,468	$	(7,797	)	$	66,671
Right of use assets (2)(3)		19,664		(1,159	)		18,505		19,665		(1,024	)		18,641
Intangible assets (4)		9,469		(3,716	)		5,753		9,469		(3,342	)		6,127
Subtotal		87,444		(13,839	)		73,605		103,602		(12,163	)		91,439

Investments in real estate from lending activities:
Investments in real estate (1)		10,025		(397	)		9,628		10,025		(281	)		9,744
Right of use assets (2)(3)		399		(90	)		309		399		(63	)		336
Intangible assets (4)		364		(339	)		25		364		(270	)		94
Subtotal		10,788		(826	)		9,962		10,788		(614	)		10,174

Properties held for sale (5)		90,899		—			90,899		90,825		—			90,825
Total	$	189,131	$	(14,665	)	$	174,466	$	205,215	$	(12,777	)	$	192,438

Liabilities assumed:
Investments in real estate, equity:
Mortgage payables	$	20,253	$	651		$	20,904	$	19,565	$	620		$	20,185
Lease liabilities (3)(6)		45,337		—			45,337		44,958		—			44,958
Subtotal		65,590		651			66,241		64,523		620			65,143

Investments in real estate from lending activities:
Other liabilities		41		(41	)		—		41		(41	)		—
Lease liabilities (3)(6)		382		—			382		378		—			378
Subtotal		423		(41	)		382		419		(41	)		378

Liabilities held for sale (7)		3,233		—			3,233		3,131		—			3,131
Total	$	69,246	$	610		$	69,856	$	68,073	$	579		$	68,652

Total net investments in real estate and properties held for sale (8)	$	119,885				$	104,610	$	137,142				$	123,786

(1)

Investments in real estate include $1.0 million and $15.2 million of land, which is not depreciable, at June 30, 2026 and December 31, 2025, respectively. Also includes $327,000 and $3.7 million of construction in progress, which is also not depreciable until placed in service, at June 30, 2026 and December 31, 2025, respectively. Depreciation expense for the three and six months ended June 30, 2026, was $649,000 and $1.3 million, respectively. Depreciation expense for the three and six months ended June 30, 2025, was $620,000 and $1.2 million, respectively.

(2)

Primarily comprises a $18.3 million and $18.4 million right of use asset, at June 30, 2026 and December 31, 2025, respectively, associated with an acquired ground lease disclosed in footnote (6) below accounted for as an operating lease. Amortization is booked to real estate expenses on the consolidated statements of operations.

The Company acquired a ground lease with its equity investment in a hotel property in April 2022. This ground lease has an associated above-market lease intangible liability. The ground lease confers to the Company the right to use the land on which its hotel operates, and the ground lease payments increase 3.00% per year until 2116. The Company acquired the original 99-year lease with 94 years remaining. At June 30, 2026, 90 years remain in its term.

In December 2024, the Company entered into a parking lease at an asset acquired in August 2024. The parking lease allows the Company to have access to a designated amount of parking spots adjacent to the building which the Company operates. The lease payments increase 2.00% per year until 2123, or a 99-year lease. At June 30, 2026, 98 years remain in its term.