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NOTES AND BONDS PAYABLE
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
NOTES AND BONDS PAYABLE NOTES AND BONDS PAYABLE
As of September 30, 2025 and December 31, 2024, the Company’s notes and bonds payable consisted of the following (dollars in thousands):
 
Book Value as of
September 30, 2025
Book Value as of
December 31, 2024
Contractual Interest Rate as of
September 30, 2025 (1)
Effective Interest Rate at
September 30, 2025 (1)
Payment Type (2)
Maturity Date (3)
Series B Bonds (4)
$117,434 $127,486 5.18%
5.18% (5)
(4)
01/31/2026 (5)
Series D Bonds (4)
177,575 161,436 11.00%
11.00% (5)
(4)
02/28/2029 (5)
PORT Mortgage Loan 131,793 31,792 4.74%4.74%Interest Only
10/01/2025 (6)
PORT Mortgage Loan 210,523 10,523 4.72%4.72%Interest Only03/01/2026
PORT MetLife Loan 1 (7)
54,796 55,939 3.90%3.90%Interest Only04/10/2026
PORT MetLife Loan 2 (7)
93,043 93,275 3.99%3.99%Interest Only04/10/2026
Crown Pointe Mortgage Loan54,738 54,738 
SOFR + 2.30%
11.54% (8)
Interest Only
04/01/2025 (8)
Lincoln Court Mortgage Loan (7)
31,325 31,325 
SOFR + 3.25%
12.49% (5)
Interest Only
08/07/2025 (5)
Madison Square Mortgage Loan (7)
20,040 20,722 
WSJ Prime + 3.00% (9)
13.50% (5)
Interest Only
11/30/2025 (5)
Bank of America Mortgage Loan (10)
152,636 156,836 
SOFR + 2.75%
9.99% (5)
Principal & Interest
09/01/2026 (5)
WhiteHawk Loan (11)
80,000 — 
SOFR + 6.50%
13.74% (5)
Interest Only
12/01/2027 (5)
Q&C Hotel Mortgage Loan (12)
21,847 21,966 
SOFR + 3.50%
12.74% (5)
Principal & Interest
07/29/2025 (5)
Richardson Office Mortgage Loan (12)
11,881 12,018 
SOFR + 3.50%
12.74% (5)
Principal & Interest
07/29/2025 (5)
Eight & Nine Corporate Centre Mortgage Loan (13)
19,406 20,000 
SOFR + 4.90%
14.14% (5)
Interest Only
02/09/2026 (5)
Series C Bonds (14)
— 39,049 
(14)
(14)
(14)
(14)
Georgia 400 Center Mortgage Loan (14)
— 39,662 
(14)
(14)
(14)
(14)
Total notes and bonds payable principal outstanding877,037 876,767 
Deferred financing costs and debt discount and premium, net (15)
(9,316)(11,475)
Total notes and bonds payable, net$867,721 $865,292 
_____________________
(1) Contractual interest rate represents the interest rate in effect under the loan as of September 30, 2025. Effective interest rate was calculated as the actual interest rate in effect as of September 30, 2025 (consisting of the contractual interest rate, contractual floor rates, and default rates, where applicable), using Secured Overnight Financing Rate (“SOFR”) or Wall Street Journal Prime Rate (“WSJ Prime”) as of September 30, 2025, where applicable.
(2) Represents the payment type required under these loans as of September 30, 2025. 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 September 30, 2025. 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) As of the filing date of this Quarterly Report on Form 10-Q, the Company was in technical default for these loans.
(6) Subsequent to September 30, 2025, the Company extended this loan to December 1, 2025.
(7) 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.
(8) On April 21, 2025, the Company entered into a forbearance agreement for the Crown Pointe Mortgage Loan, which provides for the acknowledgment of an existing event of default and the lender’s agreement to forbear from exercising its remedies until December 31, 2025. In September 2025, the Company entered into a purchase and sale agreement for the Crown Pointe office complex and the loan is non-recourse to the Company. Refer to Note 3 for additional details.
(9) The effective interest rate is at the higher of WSJ Prime plus 1.00% or 8.50%.
(10) This loan was cross-collateralized by the associated properties: Park Centre, 1180 Raymond, The Marq, and Oakland City Center. Subsequent to September 30, 2025, the Company received a notice of default and reservation of rights letter from the lender due to unmet debt service payment.
(11) In July 2025, the Company entered into a loan agreement with WhiteHawk for $80.0 million. The loan has an annual interest rate of one-month SOFR plus 6.50% with a SOFR floor of 3.50% and a maturity date of the earlier of December 1, 2027 or a triggering event. The loan is secured by the Company's undeveloped lands in Park Highlands and Richardson and 210 West 31st Street.
(12) These loans 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%.
(13) The effective interest rate is at the higher of one-month SOFR plus 4.90% or 8.90%. On March 28, 2025, the loan was amended to increase the maximum borrowing capacity to $23.5 million, subject to certain conditions.
(14) These loans were paid off during the nine months ended September 30, 2025.
(15) 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 three and nine months ended September 30, 2025, the Company incurred $19.8 million and $53.1 million, respectively, of interest expense. Included in interest expense during the three and nine months ended September 30, 2025 was $1.8 million and $5.4 million, respectively, of amortization of deferred financing costs and debt discount and premium.
During the three and nine months ended September 30, 2024, the Company incurred $20.6 million and $55.4 million, respectively, of interest expense. Included in interest expense during the three and nine months ended September 30, 2024 was $2.5 million and $7.3 million, respectively, of amortization of deferred financing costs and debt discount and premium.
As of September 30, 2025 and December 31, 2024, the Company’s interest payable was $10.4 million and $11.0 million, respectively.
The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of September 30, 2025 (in thousands):
October 1, 2025 through December 31, 2025
$568,139 
2026308,898 
$877,037 

As of September 30, 2025, the Company had $877.0 million of debt obligations scheduled to mature over the period from October 1, 2025 through September 30, 2026. The Company’s debt obligations are generally nonrecourse, subject to certain limited guaranty payments, except for the Series Bonds. The Company may seek to refinance the notes and bonds payable, choose to market the properties for sale or 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 September 30, 2025, the Lincoln Court Mortgage Loan was not in compliance with the debt service coverage requirement and the Eight & Nine Corporate Center Loan and Madison Square Mortgage Loan were not in compliance with the minimum net worth covenant. As a result of such non-compliance, the Company is required to provide a cash sweep for the Lincoln Court Mortgage Loan and the Eight & Nine Corporate Center Loan and the Madison Square Mortgage Loan Loan resulted in an event of default. Additionally, as of September 30, 2025, the Company was in default resulting from loan maturities for the: WhiteHawk Loan, Q&C Hotel Mortgage Loan, and Richardson Office Mortgage Loan. Subsequent to September 30, 2025, the Company was also in default for the Bank of America Mortgage Loan due to unmet debt service payments.
Israeli Bond Financings
As of September 30, 2025, the Company had Series Bonds outstanding of 975.3 million Israeli new shekels ($295.0 million as of September 30, 2025) with interest rates of 5.18% to 11.00%. The deeds of trust that govern the terms of the Series Bonds contain various financial and nonfinancial covenants. The Company was out of compliance for the following covenants for the Series Bonds: the consolidated equity capital covenant, the net adjusted financial debt ratio to the net CAP, and the bond rating covenant, as defined under the deed of trusts. The noncompliance of these covenants constitutes an event of default.