Marketable Securities

The following is a summary of the Company’s available for sale securities:

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

As of June 30, 2026 and December 31, 2025, the Company’s mutual funds were classified as Level 1 assets and its equity securities were classified as Level 2 assets. The fair values of the Company’s investments in mutual funds are measured using quoted prices in active markets for identical assets and its investments in equity securities are measured using readily available quoted prices for these securities; however, the markets for the equity securities are not active.

There were no transfers between the level classifications during the six months ended June 30, 2026.

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and other assets, accounts payable and other liabilities, distributions payable and due to related parties approximated their fair values as of June 30, 2026 and December 31, 2025 because of the short maturity of these instruments.

As of June 30, 2026 and December 31, 2025, the estimated fair value of our mortgage payable approximated its carrying value because it bears interest at a floating rate.

Nonrecurring Fair Value Measurement - Philadelphia Hotel Portfolio

During the first quarter of 2026, the Company recorded a non-cash impairment charge of $5.2 million in order to reduce the carrying value of the Philadelphia Hotel Portfolio to its estimated fair value of $16.3 million as of March 31, 2026. In estimating the fair value of the Philadelphia Hotel Portfolio, the Company took into consideration various third-party offers obtained by an independent third-party broker, which were considered Level 2 inputs under the fair value hierarchy described above. See Note 3.

Margin loan

The Company has access to a margin loan from a financial institution that holds custody of certain of the Company’s marketable securities. The margin loan is collateralized by the marketable securities in the Company’s account. The amounts available to the Company under the margin loan are at the discretion of the financial institution and not limited to the amount of collateral in its account.  No amounts were outstanding under this margin loan as of June 30, 2026 and December 31, 2025. Any borrowing under the margin loan bear interest at SOFR plus 0.85% (4.48% as of June 30, 2026).