v3.26.1
Fair Value of Financial Instruments
 9 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes observable inputs in active markets when measuring fair value. The three levels of inputs that may be used to measure fair value in order of priority are as follows:
Level 1 — Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access.
Level 2 — Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly.
Level 3 — Inputs include unobservable prices and are supported by little or no market activity and are significant to the overall fair value measurement.
As of June 30, 2026 and September 30, 2025, the fair values of certain of our financial instruments, which include cash and cash equivalents, amounts due from related parties, a revolving credit facility, accounts payable and accrued expenses and reimbursable accounts payable and accrued expenses, were not materially different from their carrying values due to their short term nature or floating interest rates.
We estimate the fair value of our fixed rate mortgage note payable, loans held for investment and, until its termination in November 2025, outstanding principal balances under our secured financing facility using significant unobservable inputs (Level 3), including discounted cash flow analyses and prevailing market interest rates.
The table below provides information regarding these financial instruments not carried at fair value in our condensed consolidated balance sheets as of June 30, 2026 and September 30, 2025:
As of June 30, 2026
As of September 30, 2025
Carrying Value
Fair Value
Carrying Value
Fair Value
Loans held for investment (1)
$— $— $60,984 $61,989 
Secured financing facility (1)
$— $— $44,586 $45,471 
Mortgage notes payable (2)
$138,807 $139,119 $136,168 $137,076 
(1)The investment loans and associated secured financing facility were sold/terminated in November 2025.
(2)Includes two floating rate mortgage notes with an aggregate carrying value of $93,169 that carry interest at a rate of SOFR plus a premium. The carrying values of these floating rate mortgage notes approximate their fair values.
On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices.
The following tables present our financial assets and liabilities that have been measured at fair value on a recurring basis:
June 30, 2026
Total
Level 1
Level 2
Level 3
Due from related parties related to equity based payment awards$12,865 $12,865 $— $— 
Investment in SEVN$38,591 $38,591 $— $— 
Investment in SVC$70,417 $70,417 $— $— 
Investment in OPI$7,464 $7,464 $— $— 
Investment in Fund VII$2,106 $— $— $2,106 
Investment in joint ventures
$17,622 $— $— $17,622 
Employer compensation liability related to equity based payment awards$12,865 $12,865 $— $— 
Interest rate caps$2,356 $— $2,356 $— 
September 30, 2025
Total
Level 1
Level 2
Level 3
Due from related parties related to equity based payment awards$15,797 $15,797 $— $— 
Investment in SEVN$17,610 $17,610 $— $— 
Investment in Fund VII$3,156 $— $— $3,156 
Investment in joint ventures$11,134 $— $— $11,134 
Employer compensation liability related to equity based payment awards$15,797 $15,797 $— $— 
Interest rate caps$1,758 $— $1,758 $— 
Earnout liability$3,639 $— $— $3,639 
The fair values of our interest rate caps are based on prevailing market prices in secondary markets for similar derivative contracts as of the measurement date.
The following tables present additional information about the valuation techniques and significant unobservable inputs for financial assets and liabilities that are measured at fair value and categorized within Level 3:
June 30, 2026
Fair Value
Valuation Technique
Unobservable Input
Range
Investment in Fund VII$2,106 
Discounted cash flow
Discount rates
6.50% - 7.00%
Exit capitalization rates
5.00% - 5.50%
Holding period
10 years
Investment in joint ventures
$17,622 Discounted cash flowExit capitalization rates
5.00% - 5.50%
Holding period
3 - 5 years
September 30, 2025
Fair Value
Valuation Technique
Unobservable Input
Range
Investment in Fund VII$3,156 
Discounted cash flow
Discount rates
6.50% - 7.00%
Exit capitalization rates
5.00% - 5.50%
Holding period
10 years
Investment in joint ventures
$11,134 Discounted cash flow
Unlevered IRR
12.02% - 12.37%
Exit capitalization rates
4.97% - 5.15%
Holding period3 years
Earnout liability
$3,639 
Monte Carlo
Capital deployment volatility
15.00%
Discount rate
5.84%
The tables below present a summary of the changes in fair value of our investment in Fund VII and Earnout liability measured on a recurring basis:
Three Months Ended June 30,Nine Months Ended June 30,
Fund VII2026202520262025
Beginning balance
$2,517 $3,813 $3,156 $— 
Contributions, net of receivable— — 276 — 
Changes in fair value for our investment in Fund VII
(411)(95)(1,326)3,718 
Ending balance
$2,106 $3,718 $2,106 $3,718 
Three Months Ended June 30,Nine Months Ended June 30,
Earnout Liability2026202520262025
Beginning balance
$— $7,278 $3,639 $11,958 
Changes in fair value for our Earnout liability
— (1,170)(3,639)(5,850)
Ending balance
$— $6,108 $— $6,108