REAL ESTATE

3 Months Ended

Mar. 31, 2026

Real Estate Held for Investment

As of March 31, 2026, the Company’s real estate portfolio held for investment was composed of 11 office properties encompassing in the aggregate approximately 5.4 million rentable square feet. As of March 31, 2026, the Company’s real estate portfolio held for investment was collectively 77.0% occupied. The following table summarizes the Company’s investments in real estate held for investment as of March 31, 2026 (in thousands):


Property	Date Acquired	City	State	Property Type	Total Real Estate, at Cost (1)		Accumulated Depreciation and Amortization (1)		Total Real Estate, Net (1)

Town Center	03/27/2012	Plano	TX	Office	$	149,202	$	(66,946)	$	82,256


60 South Sixth	01/31/2013	Minneapolis	MN	Office	88,240		(2,899)		85,341



Accenture Tower	12/16/2013	Chicago	IL	Office	583,978		(213,795)		370,183
Ten Almaden	12/05/2014	San Jose	CA	Office	131,814		(51,141)		80,673
Towers at Emeryville	12/23/2014	Emeryville	CA	Office	130,272		(2,654)		127,618
3003 Washington Boulevard	12/30/2014	Arlington	VA	Office	154,914		(54,916)		99,998

201 17th Street	06/23/2015	Atlanta	GA	Office	105,896		(43,404)		62,492
515 Congress	08/31/2015	Austin	TX	Office	139,225		(46,951)		92,274
The Almaden	09/23/2015	San Jose	CA	Office	90,201		—		90,201
3001 Washington Boulevard	11/06/2015	Arlington	VA	Office	61,070		(18,963)		42,107
Carillon	01/15/2016	Charlotte	NC	Office	182,055		(57,723)		124,332
					$	1,816,867	$	(559,392)	$	1,257,475

_____________________

(1) Amounts presented are net of impairment charges and write-offs of fully depreciated/amortized assets.

As of March 31, 2026, the following property represented more than 10% of the Company’s total assets:


Property	Location	Rentable Square Feet	Total Real Estate, Net (in thousands)		Percentage of Total Assets		Annualized Base Rent (in thousands) (1)		Occupancy
Accenture Tower	Chicago, IL	1,457,724	$	370,183	24.4	%	$	36,624	88.5	%

___________________

(1) Annualized base rent represents annualized contractual base rental income as of March 31, 2026, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

Operating Leases

The Company’s office properties are leased to tenants under operating leases for which the terms and expirations vary. As of March 31, 2026, the leases, including leases that have been executed but not yet commenced, had remaining terms, excluding options to extend, of up to 13.3 years with a weighted-average remaining term of 5.2 years. Some of the leases have provisions to extend the term of the leases, options for early termination for all or a part of the leased premises after paying a specified penalty, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $7.5 million and $7.1 million as of March 31, 2026 and December 31, 2025, respectively.

During the three months ended March 31, 2026 and 2025, the Company recognized deferred rent from tenants of $0.9 million and $2.2 million, respectively. As of March 31, 2026 and December 31, 2025, the cumulative deferred rent balance was $89.2 million and $89.5 million, respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $14.8 million and $15.5 million of unamortized lease incentives as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026, the future minimum rental income from the Company’s properties held for investment under its non-cancelable operating leases was as follows (in thousands):


April 1, 2026 through December 31, 2026	$	110,168
2027	134,596
2028	119,162
2029	96,079
2030	81,529
Thereafter	296,578
	$	838,112

As of March 31, 2026, the Company’s office properties held for investment were leased to approximately 340 tenants over a diverse range of industries and geographic areas. As of March 31, 2026, no tenant accounted for more than 10% of annualized base rent.

Geographic Concentration Risk

As of March 31, 2026, the Company’s net investments in real estate held for investment in Illinois, California and Texas represented 24.4%, 19.7% and 11.5% of the Company’s total assets, respectively. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Illinois, California and Texas real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results.

Impairment of Real Estate

During the three months ended March 31, 2026, the Company recorded non-cash impairment charges of $10.6 million to write down the carrying value of an office property to its estimated fair value as a result of changes in cash flow estimates, including a change to the anticipated hold period of the property, which triggered the future estimated undiscounted cash flows to be lower than the net carrying value of the property. The decrease in cash flow projections was primarily due to the continued softening of market conditions in the central business district where the asset is located, which included an increase in the terminal cap and discount rates, and reduced projected revenue due to slower projected rent growth and leasing activity in the market.

The Company did not record any impairment charges during the three months ended March 31, 2025.