v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2026
Fair Value Measurements  
Fair Value Measurements

Note 7. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis in accordance with ASC 820 - Fair Value Measurement. This includes the use of quoted prices in active markets, observable inputs, and unobservable inputs to determine the fair value of financial assets and liabilities. The accounting guidance for fair value measurement establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

•
Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical, unrestricted assets or liabilities in active markets.
•
Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly, valued using inputs other than quoted prices.
•
Level 3 – Prices or valuation that requires inputs that are both significant to the fair value measurement and unobservable.

The fair value of the Company’s financial instruments and non-financial assets has been estimated using available market information and accepted valuation methods. Given the inherent judgment and subjectivity involved, these estimates may differ from the values that could be realized in a sale or transaction.

Financial Assets and Liabilities Measured at Fair Value

Derivative contracts held by the Company are valued on a quarterly basis by obtaining third-party valuations from the Royal Bank of Canada and are classified as Level 2 in the fair value hierarchy. The valuation of these contracts is determined using a discounted cash flow analysis based on the terms of the contract and the forward interest rate curve adjusted for the Company’s nonperformance risk.

The Company estimates the fair value of its investments in debt securities on a quarterly basis using a discounted cash flow analysis in which the contractual cash flows of the notes are discounted at a rate reflecting the credit spread a market participant would require for an instrument with similar terms, credit characteristics and expected life. Observable transaction prices for the notes are not available. The credit spread is therefore an unobservable input, and these investments are classified as Level 3 in the fair value hierarchy. As of September 30, 2026, the discount rate used to determine the fair value of the investments in debt securities was 5.70%. The Company did not hold investments in debt securities as of December 31, 2025.

The following table details the Company’s assets measured at fair value on a recurring basis:

 

 

September 30, 2026

 

 

December 31, 2025

 

 

 

Level 2

 

 

Level 3

 

 

Level 2

 

 

Level 3

 

Interest rate swap contracts

 

$

—

 

 

$

—

 

 

$

(51

)

 

$

—

 

Investments in debt securities

 

 

—

 

 

 

24,569

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

24,569

 

 

$

(51

)

 

$

—

 

 

The following table details the Company's assets measured at fair value on a recurring basis using Level 3 inputs for the nine months ended September 30, 2026:

 

 

 

September 30, 2026

 

 

Balance at the beginning of the year

 

$

—

 

 

Purchases

 

 

24,569

 

 

Ending balance

 

$

24,569

 

 

 

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company had no financial assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2026 and December 31, 2025.

Financial Assets and Liabilities not Measured at Fair Value

The carrying amounts of cash and cash equivalents, restricted cash, receivables, certain other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to their terms and/or short-term nature. Financial liabilities not measured at fair value on our Condensed Consolidated Balance Sheets consist of notes and mortgages payable, a revolving credit facility, and an aggregation facility. The following table summarizes the carrying amounts and fair value of these financial instruments as of the dates set forth below.

 

 

As of September 30, 2026

 

 

As of December 31, 2025

 

 

Carrying
amount

 

 

Fair value

 

 

Carrying
amount

 

 

Fair value

 

Mortgages payable

 

$

1,028,772

 

 

$

916,802

 

 

$

917,655

 

 

$

840,792

 

Revolving credit facility

 

 

53,834

 

 

 

53,834

 

 

 

28,590

 

 

 

28,590

 

Aggregation facility

 

 

142,777

 

 

 

142,777

 

 

 

—

 

 

 

—

 

Unamortized deferred financing costs

 

 

(14,996

)

 

 

—

 

 

 

(14,125

)

 

 

—

 

Total

 

$

1,210,387

 

 

$

1,113,413

 

 

$

932,120

 

 

$

869,382