Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The table below summarizes the Company’s assets within the valuation hierarchy carried at fair value on a recurring basis as of June 30, 2025 (in thousands):

	Fair Value
	Level 1		Level 2		Level 3		Total
Assets
Bond	$	—	$	57	$	—	$	57
Common stock	43,925		—		126,472		170,397
Convertible notes	—		—		14,081		14,081
LLC interest	—		—		51,473		51,473
LP interest	—		67,145		167,398		234,543
Preferred Shares	—		—		72,719		72,719
Rights and warrants	—		1,788		—		1,788
Senior loan	—		40		45,947		45,987
	$	43,925	$	69,030	$	478,090	$	591,045

The table below summarizes the Company’s assets within the valuation hierarchy carried at fair value on a recurring basis as of December 31, 2024 (in thousands):

	Fair Value
	Level 1		Level 2		Level 3		Total
Assets
Bond	$	—	$	62	$	—	$	62
Common stock	46,436		—		157,828		204,264
Convertible notes	—		—		20,846		20,846
LLC interest	—		—		36,777		36,777
LP interest	—		76,396		189,659		266,055
Preferred Shares	—		—		69,895		69,895
Rights and warrants	—		1,788		—		1,788
Senior loan	—		52		43,693		43,745
	$	46,436	$	78,298	$	518,698	$	643,432

The table below sets forth a summary of changes in the Company’s Level 3 assets (assets measured at fair value using significant unobservable inputs) for the six months ended June 30, 2025 (in thousands):

	December 31, 2024		Contributions/ Purchases		Paid in- kind dividends		Transfer Into (Out of) Level 3		Redemptions/ conversions		Return of capital		Realized gain/(loss)		Unrealized gain/(loss)		June 30, 2025
Common stock	$	157,828	$	—	$	—	$	—	$	(3,687)	$	—	$	1,511	$	(29,180)	$	126,472
Convertible notes	20,846		—		—		—		(7,001)		—		—		236		14,081
LLC interest	36,777		22,345		—		—		(3,995)		—		3,462		(7,116)		51,473
LP interest	189,659		1,310		—		—		—		—		—		(23,571)		167,398
Preferred Shares	69,895		—		2,824		—		—		—		—		—		72,719
Senior loan	43,693		—		2,514		—		(522)		—		2		260		45,947
Total	$	518,698	$	23,655	$	5,338	$	—	$	(15,205)	$	—	$	4,975	$	(59,371)	$	478,090

    

The table below sets forth a summary of changes in the Company’s Level 3 assets (assets measured at fair value using significant unobservable inputs) for the six months ended June 30, 2024 (in thousands):

	December 31, 2023		Contributions/ Purchases		Paid in- kind dividends		Transfer Into (Out of) Level 3		Investments (Eliminated) Acquired Through Consolidation¹		Redemptions/ conversions		Return of capital		Realized gain/(loss)		Unrealized gain/(loss)		June 30, 2024
CLO	$	1,215	$	—	$	—	$	—	$	—	$	—	$	(1,266)	$	(22,735)	$	22,786	$	—
Common stock	176,256		904		—		—		(5,763)		—		—		—		(8,922)		162,475
Convertible notes	42,251		—		—		—		(19,835)		(2,125)		—		—		533		20,824
LLC interest	39,399		157		—		—		5,000		—		—		—		304		44,860
LP interest	195,898		4,185		—		—		—		—		—		—		2,886		202,969
Preferred Shares	66,268		—		2,613		—		—		(1,700)		—		—		—		67,181
Senior loan	46,353		6,500		2,135		—		—		(6,123)		—		574		(61)		49,378
Total	$	567,640	$	11,746	$	4,748	$	—	$	(20,598)	$	(9,948)	$	(1,266)	$	(22,161)	$	17,526	$	547,687

(1)    As a result of the NHT consolidation, certain investments were eliminated or acquired.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the significant unobservable inputs used in the fair valuation of assets categorized within Level 3 of the fair value hierarchy as of June 30, 2025.

Category	Valuation Technique	Significant Unobservable Inputs	Input Value(s) (Arithmetic Mean)				Fair Value
Common Stock	Market Approach	Unadjusted Price/MHz-PoP	$0.10	—	$0.90	$(0.48)	$	126,472
	Discounted Cash Flow	Discount Rate	7.00%	—	14.00%	(9.50)%
		Market Rent (per sqft)	$13.00	—	$42.50	$(27.75)
	NAV Approach	Discount Rate		10.00%
		NAV per Share		$7.72
		Multiple of EBITDA	3.00x	—	4.25x	(3.63)x
	Recent Transaction	Implied Enterprise Value from Transaction Price ($mm)		$1,151.00
Convertible Notes	Discounted Cash Flow	Discount Rate	6.08%	—	8.08%	(7.08)%	14,081
LLC Interest	Discounted Cash Flow	Discount Rate	7.00%	—	26.00%	(12.5)%	51,473
		Market Rent (per sqft)	$13.00	—	$42.50	$(27.75)
		Capitalization Rate		5.25%
LP Interest	Direct Capitalization Approach	Capitalization Rate	5.25%	—	5.50%	(5.375)%	167,398
	Market Approach	Discount to NAV		(7.50)%
	Recent Transaction	Price per Share		$14.01
Preferred Shares	Liquidation Analysis	Par		$1,000			72,719
Senior Loan	Discounted Cash Flow	Discount Rate	13.25%	—	15.00%	(14.13)%	45,947
Total							$	478,090

The following is a summary of the significant unobservable inputs used in the fair valuation of assets categorized within Level 3 of the fair value hierarchy as of December 31, 2024.

Category	Valuation Technique	Significant Unobservable Inputs	Input Value(s) (Arithmetic Mean)				Fair Value
Common Stock	Market Approach	Unadjusted Price/MHz-PoP	$0.10	—	$0.90	$(0.48)	$	157,828

	Discounted Cash Flow	Discount Rate	7.00%	—	14.50%	(9.63)%
		Market Rent (per sqft)	$13.00	—	$42.50	$(27.75)
	NAV Approach	Discount Rate		10.00%
		NAV per Share		12.75
		Multiple of EBITDA	3.00x	—	4.25x	(3.63)x
	Recent Transaction	Implied Enterprise Value from Transaction Price ($mm)		$1,149.00
		N/A	$25.31	—	$28.00	$(26.66)
		Discount to NAV	(30.00)%	—	(20.00)%	(25.00)%
		Offer Price per Share		$4.27
Convertible Notes	Discounted Cash Flow	Discount Rate	6.08%	—	(8.08)%	(7.08)%	20,846
LLC Interest	Discounted Cash Flow	Discount Rate	7.00%	—	26.00%	(12.5)%	36,777
		Market Rent (per sqft)	$13.00	—	$42.50	$(27.75)
		Capitalization Rate		5.13%
LP Interest	Direct Capitalization Approach	Capitalization Rate	5.25%	—	5.50%	(5.38)%	189,659
	Market Approach	Discount to NAV		(7.5)%
	Recent Transaction	Price per Share		$16.41
Preferred Shares	Liquidation Analysis	Par		$1,000			69,895
Senior Loan	Discounted Cash Flow	Discount Rate	13.30%	—	26.00%	(19.65)%	43,693
Total							$	518,698

Financial Instruments Not Carried at Fair Value

At June 30, 2025 and December 31, 2024, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other assets, accrued interest and dividends, accounts payable and other accrued liabilities, accrued real estate taxes payable, accrued interest payable, income tax payable, security deposits and prepaid rent approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments were determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.

In calculating the fair value of its long-term indebtedness, the Company used interest rate and spread assumptions that reflect current credit worthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs. Long-term indebtedness is carried at amounts that

reasonably approximate their fair value at June 30, 2025 and December 31, 2024, except for the following debt (in thousands):

	June 30, 2025				December 31, 2024
	Outstanding Principal Balance		Estimated Fair Value		Outstanding Principal Balance		Estimated Fair Value
Notes payable	$	90,840	$	70,227	$	98,721	$	78,607

Derivative Financial Instruments

The NHT segment manages interest rate risks primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments.

The NHT segment performs market valuations on its derivative financial instruments. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The NHT segment has an interest rate cap agreement related to the notes payable on the Park City and Bradenton properties. As of June 30, 2025, the interest rate cap agreements effectively cap one-month SOFR on $38.3 million of the NHT segment's floating rate mortgage and mezzanine indebtedness at a weighted average rate of 6.70%.

To comply with the provisions of ASC 820, Fair Value Measurement, the NHT segment incorporates credit valuation adjustments to appropriately reflect both the NHT segment’s own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the NHT segment’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the NHT segment and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to the NHT segment's derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. Additionally, in the case of interest rate caps, the NHT segment has no performance obligation, so no credit valuation adjustment is necessary. As a result, all of the Hospitality segment’s derivatives held as of June 30, 2025 were classified as Level 2 of the fair value hierarchy.

Changes in fair value of the interest rate caps are recorded directly as interest expense on the Consolidated Statement of Operations and Comprehensive Income (Loss). For the six months ended June 30, 2025, NHT recorded $(11.5) thousand in interest expense related to changes in the fair value of interest rate caps. The combined fair value of the interest rate caps is $0.5 million as of June 30, 2025, and is recorded as interest rate caps in the Consolidated Balance Sheets.

As of June 30, 2025, the Hospitality segment had the following outstanding interest rate caps:

Type of Derivative	Hedged Financial Instrument	Notional	Strike Rate	Reference Rate		Termination Date
Interest rate cap	Note payable	$39,300	2.00%	One-month SOFR	2.00%	February 5, 2026