NOTES AND BONDS PAYABLE

12 Months Ended

Dec. 31, 2024

As of December 31, 2024 and 2023, the Company’s notes and bonds payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands):


	Book Value as of December 31, 2024		Book Value as of December 31, 2023		Contractual Interest Rate as of December 31, 2024 (1)	Interest Rate at December 31, 2024 (1)	Payment Type (2)	Maturity Date (3)
Series B Bonds (4)	$	127,486	$	321,724	4.18%	4.18%	(4)	01/31/2026
Series C Bonds (4)	39,049		99,461		9.00%	9.00%	(4)	06/30/2026
Series D Bonds (4)	161,436		—		9.75%	9.75%	(4)	02/28/2029
Crown Pointe Mortgage Loan	54,738		54,738		SOFR + 2.30%	6.83%	Interest Only	04/1/2025 (5)
Georgia 400 Center Mortgage Loan (6)	39,662		40,184		SOFR + 2.75%	7.28%	Principal & Interest	03/22/2025 (5)
PORT Mortgage Loan 1	34,967		34,967		4.74%	4.74%	Interest Only	10/01/2025
PORT Mortgage Loan 2	10,523		10,523		4.72%	4.72%	Interest Only	03/01/2026
PORT MetLife Loan 1 (6)	56,368		59,091		3.90%	3.90%	Interest Only	04/10/2026
PORT MetLife Loan 2 (6)	89,671		93,388		3.99%	3.99%	Interest Only	04/10/2026
Lincoln Court Mortgage Loan (6)	31,325		33,310		SOFR + 3.25%	7.78%	Interest Only	08/07/2025 (5)
Madison Square Mortgage Loan (6)	20,722		17,962		SOFR + 3.00%	7.53%	Interest Only	01/07/2025 (5)
Bank of America Mortgage Loan (7)	156,836		175,234		SOFR + 2.75%	7.28%	Principal & Interest	09/01/2026 (5)
Richardson Office Mortgage Loan (8)	12,018		12,209		SOFR +3.50% (8)	8.03%	Principal & Interest	04/30/2025 (5)
Q&C Hotel Mortgage Loan (8)	21,966		24,579		SOFR +3.50% (8)	8.03%	Principal & Interest	04/30/2025 (5)
Eight and Nine Corporate Centre Mortgage Loan	20,000		—		SOFR + 4.90% (9)	9.43%	Interest Only	02/09/2026 (5)
Lofts at NoHo Commons Mortgage Loan	—		68,451		(10)	(10)	(10)	(10)
Total Notes and Bonds Payable principal outstanding	876,767		1,045,821
Deferred financing costs and debt discount and premium, net (11)	(11,475)		(17,138)
Total Notes and Bonds Payable, net	$	865,292	$	1,028,683

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(1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2024. Effective interest rate was calculated as the actual interest rate in effect as of December 31, 2024 (consisting of the contractual interest rate and contractual floor rates), using Secured Overnight Financing Rate (“SOFR”) as of December 31, 2024, where applicable.

(2) Represents the payment type required under these loans as of December 31, 2024. Certain future monthly payments due under these loans also include amortizing principal payments.

(3) Represents the initial maturity date or the maturity date as extended as of December 31, 2024. For more information of the Company’s contractual obligations under its notes and bonds payable, see five-year maturity table, below.

(4) See “Israeli Bond Financings” below for additional details on the Company’s bonds.

(5) Subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. Subsequent to December 31, 2024, the Company extended the Madison Square Mortgage Loan to April 8, 2025. As of the filing date of this Annual Report on Form 10-K, the Company was in refinancing negotiations with the lender for the Georgia 400 Center Mortgage Loan.

(6) The Company’s notes and bonds payable are generally non-recourse. These mortgage loans have guarantees over certain balances whereby the Company would be required to make the remaining payments in the event that the Company turned the property over to the lender. As of December 31, 2024, the guaranteed amount in the aggregate was $204.0 million.

(7) This loan was cross-collateralized by the associated properties: Park Centre, 1180 Raymond, The Marq, and Oakland City Center and the Company made a principal repayment of $10.0 million on this loan on December 1, 2024.

(8) During the year ended December 31, 2024, the Company refinanced these loans and are cross-collateralized by the Richardson Office and Q&C Hotel properties. The effective interest rate is at the higher of one-month SOFR plus 3.50% or 7.50%.

(9) The effective interest rate is at the higher of one-month SOFR plus 4.90% or 8.90%.

(10) In September 2024, in connection with the disposition of the Lofts at NoHo Commons, the Company repaid the $68.5 million outstanding principal balance due under the Lofts at NoHo Commons Mortgage Loan.

(11) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable.

During the years ended December 31, 2024, 2023 and 2022, the Company incurred $71.9 million, $68.2 million and $48.1 million of interest expense, net, respectively. Included in interest expense, net for the years ended December 31, 2024, 2023 and 2022, was $9.4 million, $9.6 million and $8.5 million, respectively of amortization of deferred financing costs and debt discount and premium, net.

As of December 31, 2024 and 2023, the Company’s interest payable was $11.0 million and $9.0 million, respectively.

The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of December 31, 2024 (in thousands):


2025	$	244,464
2026	470,867
2027	53,812
2028	53,812
2029	53,812

	$	876,767

As of December 31, 2024, the Company had $244.5 million of debt obligations scheduled to mature over the period from January 1, 2025 through December 31, 2025. The Company has extension options with respect to $106.8 million of the debt obligations outstanding that are scheduled to mature over the next 12 months; however, the Company cannot exercise these options if not then in compliance with certain financial covenants in the loans without making a cash payment and there is no assurance that the Company will be able to meet these requirements. All of the Company’s debt obligations are generally non-recourse, subject to certain limited guaranty payments, as outlined in the table above, except for the Series Bonds. The Company plans to utilize available extension options or seek to refinance the notes and bonds payable. The Company may also choose to market the properties for sale or may negotiate a turnover of the secured properties back to the related mortgage lender.

Debt Covenant Compliance

The Company’s notes payable contain various financial debt covenants, including debt-to-value, debt yield, minimum equity requirements, and debt service coverage ratios. As of December 31, 2024, the Company was in compliance with all of these debt covenants with the exception that the Lincoln Court Mortgage Loan was not in compliance with the debt service coverage requirement. As a result of such non-compliance, the Company is required to provide a cash sweep for the Lincoln Court Mortgage Loan, and the remaining loans are at-risk of cash sweeps and/or principal pay downs if in non-compliance.

Israeli Bond Financings

As of December 31, 2024, the Company had bonds outstanding of 1.2 billion Israeli new shekels ($328.0 million as of December 31, 2024) (“Series Bonds”), of which 142.0 million Israeli new shekels ($39.0 million as of December 31, 2024) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments range from January 2025 to February 2029 with interest rates of 3.93% to 9.50%. During the year ended December 31, 2024, the Company issued 587.1 million Israeli new shekels ($161.4 million as of December 31, 2024) of Series D bonds to Israeli investors pursuant to a public offering registered with the Israel Securities Authority. During the year ended December 31, 2024, the Company repaid 700.9 million Israeli new shekels ($192.3 million as of December 31, 2024) of Series B bonds and also repaid 218.0 million Israeli new shekels ($59.8 million as of December 31, 2024) of Series C bonds collateralized by Park Highlands undeveloped land in connection with two real estate dispositions. The deeds of trust that govern the terms of the Series Bonds contain various financial covenants. As of December 31, 2024, the Company was in compliance with all of these financial debt covenants.