Multi-Tenant Retail Disposition

9 Months Ended

Sep. 30, 2025

Discontinued Operations and Disposal Groups [Abstract]

During the second quarter of 2025, the Company completed the Second Closing and Third Closing, resulting in the Multi-Tenant Retail Disposition being fully consummated (the First Closing was completed in the first quarter of 2025). The contract sale price of approximately $1.780 billion for the Multi-Tenant Retail Disposition is subject to various adjustments, some of which pertain to leases that the Company has negotiated, which were not finalized as of the signing of the Multi-Tenant Retail PSA or as of the time of the Closings. The closings occurred in the following stages (collectively, the “Closings”):

•On March 25, 2025, the Company completed the sale of 59 unencumbered properties (the “First Closing”).

•On June 10, 2025, the Company completed the sale of 28 encumbered properties (the “Second Closing”).

•On June 18, 2025, the Company completed the sale of 12 encumbered properties (the “Third Closing”).

•On June 30, 2025, the Company completed the sale of the one property whose tenant exercised its right of first refusal.

The Company recorded a gain on sale of $0.6 million for the three months ended September 30, 2025 and a loss on sale of approximately $51.3 million during the nine months ended September 30, 2025, related to the Multi-Tenant Retail Disposition. These amounts are recorded in loss from discontinued operations in the Company’s consolidated statement of operations for the three and nine months ended September 30, 2025. The consideration paid to the Company for the Second Closing and Third Closing included the assumption of two mortgages by RCG. The amount of principal assumed by RCG for these mortgages was $256.3 million and $210.0 million, respectively (see Note 5 — Mortgage Notes Payable, Net for additional information).

Discontinued Operations

As described in more detail in Note 2 — Basis of Presentation, entry into the Multi-Tenant Retail PSA represented a strategic shift in the Company’s business which initially met the held-for-sale and discontinued operations accounting criteria as of March 31, 2025 and continued to do so as of September 30, 2025. In connection with this transaction, the Company recorded receivables for the expected consideration (collectively, the “Multi-Tenant Disposition Receivable”) to be received by the

Company from RCG for leases in process at the time of, and specifically related to the Closings (see the “Multi-Tenant Disposition Receivable, Net” section below for additional information).

The following table presents the assets and liabilities associated with the Multi-Tenant Retail Portfolio. As of December 31, 2024, this includes assets and liabilities associated with the entire Multi-Tenant Retail Disposition, which includes the one property which was sold to the tenant who exercised its right of first refusal. As of September 30, 2025, this includes any remaining asset and liability balances that are expected to be settled over time, however, all 100 properties related to the Multi-Tenant Retail Disposition were sold as of June 30, 2025 and therefore are not included in the September 30, 2025 balances below:


(in thousands)	September 30, 2025		December 31, 2024
ASSETS
Land	$	—	$	369,829
Buildings, fixtures and improvements	—		1,172,804
Construction in progress	—		986
Acquired intangible lease assets	—		362,370
Total real estate investments, at cost	—		1,905,989
Less accumulated depreciation and amortization	—		(164,720)
Total real estate investments, net	—		1,741,269


Unbilled straight line rent	—		9,697
Operating lease right-of-use asset	—		8,107
Prepaid expenses and other assets	1,638		57,058
Assets related to discontinued operations	$	1,638	$	1,816,131

LIABILITIES
Mortgage notes payable, net	$	—	$	453,098
Acquired intangible lease liabilities, net	—		52,447
Accounts payable and accrued expenses	3,262		22,857
Operating lease liability	—		8,253
Prepaid rent	—		15,163
Liabilities related to discontinued operations	$	3,262	$	551,818

The operating results of the Multi-Tenant Retail Portfolio were as follows for the periods noted:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025 (1)		2024
Revenue from tenants	$	—	$	57,898	$	76,637	$	173,885

Expenses:
Property operating	—		18,351		26,020		57,984
Impairment charges	—		100		—		100
Merger, transaction and other costs	—		—		83		4
General and administrative	—		1,661		2,651		4,625
Depreciation and amortization	—		32,684		29,762		100,351
Total expenses	—		52,796		58,516		163,064
Operating income before loss on dispositions of real estate investments	—		5,102		18,121		10,821
Gain (loss) on dispositions of real estate investments	623		(33)		(51,332)		(76)
Operating income (loss) of discontinued operations	623		5,069		(33,211)		10,745
Other income (expense):
Interest expense (2)	—		(17,626)		(23,831)		(53,617)
Loss on extinguishment and modification of debt (3)	—		—		(15,098)		(1)
Gain (loss) on derivative instruments	1,834		5		(11,934)		26
Other income	7		(125)		42		(137)
Total other expense, net	1,841		(17,746)		(50,821)		(53,729)
Net income (loss) before income tax	2,464		(12,677)		(84,032)		(42,984)
Income tax expense	—		—		—		—
Income (loss) from discontinued operations	$	2,464	$	(12,677)	$	(84,032)	$	(42,984)

__________

(1) Includes (i) the results of the 28 properties included in the Second Closing through June 10, 2025, (ii) the results of the 12 properties included in the Third Closing through June 18, 2025, (iii) the results of the one property which was sold to the tenant who exercised its right of first refusal through June 30, 2025 and (iv) the results of the 59 properties included in the First Closing through March 25, 2025.

(2) Interest expense is comprised of interest on the Company’s Prior Revolving Credit Facility (as defined in Note 6 — Revolving Credit Facility) and interest from the two mortgages that were assumed by RCG in the Multi-Tenant Retail Disposition. The Company calculated interest expense consistently in both periods and, for the Prior Revolving Credit Facility, used the amount of the Prior Revolving Credit Facility that would have been required to be paid back upon removal of the Multi-Tenant Retail Portfolio from the borrowing base, multiplied by the weighted-average interest rate of the Prior Revolving Credit Facility.

(3) Primarily represents the acceleration of the unamortized discount on the two mortgages that were assumed by RCG.

The cash flows related to the Multi-Tenant Retail Portfolio have not been segregated and are included in the consolidated statements of cash flows. The following table presents certain cash flow information for the Multi-Tenant Retail Portfolio:


	Nine Months Ended September 30,
(In thousands)	2025		2024
Depreciation	$	9,701	$	28,742
Amortization of intangibles	20,061		71,608
Amortization of discounts on mortgages	2,376		4,051
Amortization of below-market lease liabilities	(1,679)		(5,172)
Amortization of above-market lease assets	1,922		6,655
Unbilled straight-line rent	2,496		4,983
Loss from embedded derivative feature of multi-tenant disposition receivable	11,932		—
Loss on extinguishment of debt	15,098		—
Cash proceeds - multi-tenant disposition receivable	58,756		—
Net proceeds from the Multi-Tenant Retail Disposition	1,093,432		—

Multi-Tenant Disposition Receivable, Net

At the time of the Closings, the Company recorded receivables from RCG which comprise the Multi-Tenant Disposition Receivable. As part of the portfolio sold, there are leases that had not yet commenced at the time of the Closings. As part of the transaction, the Company agreed to receive proceeds attributed to each of those leases when the respective tenants move into their space.

This receivable balance of $55.9 million as of September 30, 2025 was recorded at fair value and is comprised of a gross receivable of $70.6 million and a net adjustment to fair value of $14.7 million. In calculating the fair value, the Company applied probability weighting, using a range of probabilities from 0% to 98% for the likelihood of the tenants moving to open and operating status and in addition applied a discount rate of 9.5%. This receivable is classified as Level 3 of the fair value hierarchy due to the use of unobservable inputs (see Note 8 — Fair Value of Financial Instruments for additional information) and it represents the full potential amount to be received less the fair value of the embedded derivative ascribed to the potential variability of these commencements. This feature is marked to market each period with changes in value being recorded through earnings. During the nine months ended September 30, 2025, the Company resolved contingencies associated with potential commencements and obtained new facts and circumstances associated with certain other ongoing leases. As a result, in the three months ended September 30, 2025, the Company adjusted the fair value of the embedded derivative to account for those resolutions, which resulted in a gain of $1.8 million and a loss of $11.9 million for the three and nine months ended September 30, 2025, respectively. These amounts are presented as part of discontinued operations in the consolidated statements of operations.

Goodwill

The Company evaluates goodwill for impairment at least annually or upon the occurrence of a triggering event. The Company performed its annual impairment evaluation during the fourth quarter of 2024 to determine whether it was more likely than not that the fair value of each of its reporting units was less than their carrying value. For purposes of this assessment, an operating segment is a reporting unit. Based on this assessment, the Company determined that no goodwill was impaired as of December 31, 2024.

The First Closing of the Multi-tenant Retail Disposition was considered a triggering event, requiring the Company to perform a reassessment of the Multi-Tenant Retail segment’s goodwill as of March 31, 2025 since all of the segment’s properties (with the exception of one) were expected to be, and were ultimately, sold by the end of the second quarter of 2025 as part of the Multi-Tenant Retail Disposition. Based on this assessment, the Company determined that goodwill was impaired and recorded an impairment charge of $7.1 million in the first quarter of 2025, which represented a write off of the entire segment’s goodwill. This amount is presented in the goodwill impairment line item of the consolidated statement of operations for the nine months ended September 30, 2025.