Leases

3 Months Ended

Mar. 31, 2026

Note 3 – Leases

Lessor Accounting

We earn lease revenue from our residential, retail, office, and warehouse properties that are leased to tenants under operating leases. Certain of our leases may include options to extend or terminate the lease, which are included in the lease term when we are reasonably certain they will be exercised. Revenues from such leases are reported as Rental revenue in our consolidated statements of operations and are comprised of (i) lease components, which includes fixed and variable lease payments, and (ii) non-lease components which includes reimbursements of property level operating expenses. We have elected the practical expedient under Accounting Standards Codification Topic 842, Leases, to combine both lease and non-lease components, as the timing and pattern of transfer are the same.

Fixed lease revenues represent the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancelable term of the lease. Variable lease revenues include payments based on (i) tenant reimbursements, (ii) changes in the index or market-based indices after the inception of the lease, or (iii) percentage rents. Variable lease revenues are not recognized until the specific events that trigger the variable payments have occurred.

The following table summarizes the components of lease revenues (amounts in thousands):

	2026		2025
	Three Months Ended March 31,
	2026		2025
	(unaudited)		(unaudited)
Fixed lease revenues	$	4,109	$	1,522
Variable lease revenues ⁽¹⁾		73		181
Lease revenues ^{(2) (3)}	$	4,182	$	1,703

⁽¹⁾	Includes reimbursements for property taxes, insurance, and common area maintenance services.

⁽²⁾	Excludes lease intangible amortization of less than $0.1 million and less than $0.1 million for the three months ended March 31, 2026 and 2025, respectively.

⁽³⁾	Excludes straight-line rent of less than $0.1 million and less than $0.1 million for the three months ended March 31, 2026 and 2025, respectively.

In certain of our leases, the tenant is obligated to pay the real estate taxes, insurance, and certain other expenses directly to the vendor. These obligations, which have been assumed by the tenants, are not reflected in our consolidated financial statements. To the extent any such tenant defaults on its lease or if it is deemed probable that the tenant will fail to pay for such obligations, a liability for such obligations would be recorded.

We assess the collectability of substantially all lease payments due, including unbilled rent receivable balances, by reviewing a tenant’s payment history and financial condition, and the age of the receivables. Changes to collectability are recognized as a current period adjustment to rental revenue. We have assessed the collectability of all recorded lease revenues as probable as of March 31, 2026.