v3.26.3
Debt, Net
 9 Months Ended
Sep. 30, 2026
Debt Disclosure [Abstract]  
Debt, Net

Note 7 – Debt, Net

 

2026 Debt Transactions

 

On June 10, 2026, we, through our indirect majority-owned subsidiaries, entered into a loan modification agreement (the “Loan Modification Agreement”) with KHRE SMA Funding, LLC, as lender, with respect to the fixed-rate loan secured by 900 8th Avenue South, Nashville, Tennessee (the “900 8th Land Loan”). The Loan Modification Agreement extended the maturity date of the 900 8th Land Loan from July 2, 2026 to July 2, 2027. In connection with the Loan Modification Agreement, we repaid $1.5 million in principal and paid $0.9 million in prepaid interest and fees. Refer to the table below for additional details regarding the 900 8th Land Loan.

 

2025 Debt Transactions

 

On September 29, 2025, we, through our indirect majority-owned subsidiaries, entered into a variable-rate non-recourse mortgage loan providing for up to $163.3 million in principal amount (the “Aster & Links Mortgage Loan”), and a variable-rate non-recourse mezzanine loan providing for up to $40.8 million in principal amount (the “Aster & Links Mezzanine Loan”, and together with the Aster & Links Mortgage Loan, the “Aster & Links Loans”) with SM Finance III LLC, as lender.

 

The following table details our Debt, net (dollars in thousands):

 

Indebtedness 

Weighted Average

Interest Rate

  Maturity Date  Maximum Facility   September 30, 2026   December 31, 2025 
             Carrying Value as of 
Indebtedness 

Weighted Average

Interest Rate

  Maturity Date  Maximum Facility   September 30, 2026   December 31, 2025 
             (unaudited)     
Fixed rate loans                     
900 8th Land Loan  9.50%  July 2027   N/A   $8,500   $10,000 
Variable rate loans                     
1000 First Construction Loan (1)  SOFR + 3.80%  June 2027  $104,000    97,345    81,300 
Aster & Links Loans (2)  SOFR + 2.55%  October 2027  $204,138    179,457    173,925 
Total debt              285,302    265,225 
Unamortized debt issuance costs              (1,256)   (2,274)
Unamortized debt discount              (1,296)   (2,313)
Debt, net             $282,750   $260,638 

 

 

(1) On June 28, 2024, we, through our indirect majority-owned subsidiary, entered into a variable rate construction loan for up to $104.0 million in principal amount (the “1000 First Construction Loan”), which is secured by our investment VIV. The 1000 First Construction Loan contains two one-year extension options, exercisable at our election, subject to certain terms and conditions set forth in the loan agreement. Advances under the 1000 First Construction Loan bear interest at a per annum rate equal to the one-month term Secured Overnight Financing Rate (“SOFR”) plus 3.80%, subject to a minimum all-in per annum rate of 7.55%. To mitigate our exposure to increases to the one-month term SOFR, we obtained an interest rate cap (see Note 9 – Derivative Instruments). The 1000 First Construction Loan is prepayable in whole or in part at any time with not less than 45 days’ notice. Full prepayment is subject to an interest make-whole amount, if any, calculated as of the prepayment date.

 

(2) The Aster & Links Loans bear interest at a fluctuating rate based on: (i) one-month term SOFR, subject to a 3.25% floor, plus (ii) a blended rate of 2.55%, and requires interest-only monthly payments during their term. The Aster & Links Loans each contain two one-year extensions exercisable at our election, subject to certain terms and conditions set forth in each of the loan agreements. The Aster & Links Loans are secured by a first-priority mortgage on Aster & Links and a pledge of the borrower’s equity interest in an indirect subsidiary of the Company. To mitigate our exposure to increases to the one-month term SOFR, we have obtained interest rate caps (see Note 9 – Derivative Instruments). The Aster & Links Loans are prepayable in whole or in part at any time with not less than 30 days’ notice.

 

 

The following table summarizes the scheduled future principal payments, excluding extension options, under our debt arrangements as of September 30, 2026 (amounts in thousands):

 

Year ended December 31,  (unaudited) 
2026 (remainder)  $— 
2027   285,302 
2028   — 
2029   — 
2030   — 
Thereafter   — 
Total  $285,302 

 

Interest paid, net of capitalized interest for the nine months ended September 30, 2026 and 2025, was $14.4 million and $13.8 million, respectively.

 

Amortization of deferred financing costs for the three months ended September 30, 2026 and 2025, was $0.7 million and $0.6 million, respectively, of which zero and $0.2 million was capitalized, respectively. Amortization of deferred financing costs for the nine months ended September 30, 2026 and 2025 was $2.0 million and $2.1 million, respectively, of which zero and $0.7 million was capitalized, respectively.

 

Guarantees and Covenants

 

Each of our indebtedness agreements are secured by either the individual underlying real estate investments or by a pledge of ownership interests in the entity that indirectly owns the real estate investment. In connection with certain agreements, we have provided guarantees of payment and performance, completion guarantees, which, among other things, guarantee completion of the work at each individual construction project, as well as carveout guarantees pursuant to which we guarantee the borrower’s obligations with respect to certain non-recourse carveout events, such as “bad acts,” environmental conditions, and violations of certain provisions of the loan documents. We also provided a customary environmental indemnity agreement to certain lenders pursuant to which we agreed to protect, defend, indemnify, release and hold harmless such lenders from and against certain environmental liabilities related to the real estate investments for which they apply.

 

We are subject to various financial and operational covenants in connection with the Aster & Links Loans and 1000 First Construction Loan which include, but are not limited to, maintaining liquid assets of no less than $10.0 million and a net worth of no less than $110.0 million. As of September 30, 2026, and December 31, 2025, we were in compliance with all of our loan covenants.