v3.26.1
Business Combination
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Business Combination

NOTE 3 – BUSINESS COMBINATION

On May 1, 2026, following the contribution of capital raised as a result of the May 1, 2026 closing in the Company’s Public Offering, the Company determined that its investment in the Operating Partnership was significant to the Operating Partnership, as determined in accordance with GAAP. As a result, effective May 1, 2026, the Company consolidated the Operating Partnership through a step acquisition accounted for using the acquisition method of accounting, in accordance with ASC 805, Business Combinations.

Prior to May 1, 2026, the Company’s investment in the Operating Partnership was accounted for under the equity method of accounting. As a result of the consolidation, the Company measured and recognized 100% of the identifiable assets acquired, the liabilities assumed and any noncontrolling interests of the Operating Partnership, at fair value and recognized a $2,140 gain, which is net of accumulated other comprehensive income reversal of $275, on change in control representing the difference between the carrying value and fair value of its existing equity method interest immediately before consolidation of the Operating Partnership, which is presented in the Company’s consolidated statements of operations and comprehensive income (loss) as gain on consolidation of equity method investment.

The purchase price for the Operating Partnership was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The following table summarizes the purchase price allocation for the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value of the noncontrolling interests in the Operating Partnership as of the acquisition date.

 

 

May 1, 2026

 

Fair value of previously held equity method investment (1)

 

$

14,307

 

Fair value of noncontrolling interests (2)

 

 

125,135

 

Total purchase price

 

$

139,442

 

 

 

 

 

Assets acquired:

 

 

 

Land

 

$

69,660

 

Building and improvements

 

 

317,505

 

Cash and cash equivalents

 

 

6,081

 

Restricted cash

 

 

1,938

 

Accounts and rents receivable

 

 

235

 

Acquired lease intangible assets

 

 

40,383

 

Finance lease right-of-use asset

 

 

1,614

 

Operating lease right-of-use assets

 

 

4,994

 

Other assets

 

 

4,004

 

Total assets acquired

 

 

446,414

 

 

 

 

 

Liabilities assumed:

 

 

 

Mortgage loans payable

 

 

269,966

 

Credit facility payable

 

 

13,000

 

Accounts payable and accrued expenses

 

 

3,062

 

Finance lease liability

 

 

1,680

 

Operating lease liability

 

 

1,057

 

Distributions payable

 

 

618

 

Redemptions payable

 

 

1,150

 

Acquired lease intangible liabilities

 

 

13,219

 

Due to related parties

 

 

1,486

 

Other liabilities

 

 

1,734

 

Total liabilities assumed

 

 

306,972

 

 

 

 

 

Total purchase price

 

$

139,442

 
(1)
Calculated based on the NAV per share as of April 30, 2026.
(2)
Calculated based on the NAV per unit as of April 30, 2026.