INVESTMENT IN UNCONSOLIDATED REAL ESTATE JOINT VENTURE |
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVESTMENT IN UNCONSOLIDATED REAL ESTATE JOINT VENTURE | INVESTMENT IN UNCONSOLIDATED REAL ESTATE JOINT VENTURE In February 2026, the Company and the affiliate co-lender to the San Antonio Loan formed 123 Lex Ave Hotel Holdings LLC (the “Lex Ave JV”) based on their respective interests in the San Antonio Loan. On March 3, 2026, following the lenders' exercise of their foreclosure rights, the Lex Ave JV acquired the San Antonio hotel property that served as the underlying collateral for the San Antonio Loan through a credit bid equal to the aggregate unpaid principal balance of the San Antonio Loan of approximately $40.6 million (the “Lex Ave Hotel Foreclosure”). Following the Lex Ave Hotel Foreclosure, the Company exchanged its 65.0% interest in the San Antonio Loan for a 65.0% equity interest in the Lex Ave JV and recognized real estate owned (“REO”) at the lower of the carrying value of the San Antonio Loan and the fair value of the REO. The Company's investment in the Lex Ave JV was initially recognized at the fair value of the contributed REO of approximately $24.6 million. Following the Lex Ave Hotel Foreclosure, the Company owns a 65.0% membership interest in the Lex Ave JV. No gain or loss was recognized upon foreclosure and contribution because the Lex Ave Hotel Foreclosure was accounted for as an exchange of the San Antonio Loan for an equity method investment in the Lex Ave JV. During the three and six months ended June 30, 2026, the Company recognized equity in earnings of approximately $32.3 thousand, representing its 65.0% share of the Lex Ave JV's net income for the month ended March 31, 2026. The Company records its share of earnings and losses from the Lex Ave JV using a one-quarter reporting lag. Activity in the Company's investment in the Lex Ave JV during the six months ended June 30, 2026 was as follows:
Additional capital contributions primarily related to funding operating costs and capital requirements of the hotel property. The following table summarizes the Company’s investment in its unconsolidated real estate joint venture as of June 30, 2026 and December 31, 2025:
On May 21, 2026, the Company, through its investment in the Lex Ave JV, entered into a definitive agreement to sell the San Antonio hotel property. See Note 16 for additional information.
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