Multi-Tenant Retail Disposition

3 Months Ended

Mar. 31, 2026

Discontinued Operations and Disposal Groups [Abstract]

During 2025 the Company completed the sale of the Multi-Tenant Retail Portfolio to RCG (the “Multi-Tenant Retail Disposition”) for a contract sale price of approximately $1.780 billion. 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 entry into the purchase and sale agreement on February 25, 2025 (the “Multi-Tenant Retail PSA”) or as of the time of each 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 $0.7 million for the three months ended March 31, 2026 and a loss on sale of approximately $85.2 million during the three months ended March 31, 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 months ended March 31, 2026 and 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.

Discontinued Operations

Entry into the Multi-Tenant Retail PSA to sell the Multi-Tenant Retail portfolio to RCG (as discussed above) 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 March 31, 2026. 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 March 31, 2026, this includes any remaining liability balance that is 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 March 31, 2026 or December 31, 2025 balances below:


(in thousands)	March 31, 2026		December 31, 2025
ASSETS











Prepaid expenses and other assets	$	—	$	348
Assets related to discontinued operations	$	—	$	348

LIABILITIES


Accounts payable and accrued expenses	$	641	$	890


Liabilities related to discontinued operations	$	641	$	890

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


	Three Months Ended March 31,
(In thousands)	2026		2025 (1)
Revenue from tenants	$	—	$	56,843

Expenses:
Property operating	—		19,431
Impairment charges	—		—
Acquisition, transaction and other costs	—		75
General and administrative	—		1,255
Depreciation and amortization	—		29,762
Total expenses	—		50,523
Operating income before loss on dispositions of real estate investments	—		6,320
Gain (loss) on dispositions of real estate investments	747		(85,187)
Operating income (loss) of discontinued operations	747		(78,867)
Other income (expense):
Interest expense (2)	—		(17,457)
Loss on extinguishment and modification of debt	—		66
Gain on derivative instruments	2,536		2,013
Other income	—		34
Total other income (expense), net	2,536		(15,344)
Net income (loss) before income tax	3,283		(94,211)
Income tax expense	—		—
Income (loss) from discontinued operations	$	3,283	$	(94,211)

__________

(1) Includes a full period of results for the 41 properties that had not yet been sold as of March 31, 2025 and 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 Revolving Credit Facility that was in place prior to entering into its new credit agreement in August 2025 (the “Prior Revolving Credit Facility”) (see Note 6 — Revolving Credit Facility for more information) and interest from the two mortgages that were assumed by RCG in the Multi-Tenant Retail Disposition. The Company calculated interest expense consistently 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.

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:


	Three Months Ended March 31,
(In thousands)	2026		2025
Depreciation	$	—	$	9,701
Amortization of intangibles	—		20,061
Amortization of discounts on mortgages	—		1,255
Amortization of below-market lease liabilities	—		(1,679)
Amortization of above-market lease assets	—		1,922
Unbilled straight-line rent	—		1,951
Gain from embedded derivative feature of multi-tenant disposition receivable	2,536		2,015
Loss on extinguishment of debt	—		—
Cash proceeds - multi-tenant disposition receivable	8,457		—
Net proceeds from the Multi-Tenant Retail Disposition	—		886,007

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 $22.0 million as of March 31, 2026 was recorded at fair value and is comprised of a gross receivable of $26.0 million and a net adjustment to fair value of $4.0 million. In calculating the fair value, the Company applied probability weighting, using a range of probabilities from 25% to 100% for the likelihood of the tenants moving to open and operating status. 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 three months ended March 31, 2026 and 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 March 31, 2026 and 2025, the Company adjusted the fair value of the embedded derivative to account for those resolutions, which resulted in gains of $2.5 million and $2.0 million for the three months ended March 31, 2026 and 2025, respectively. These amounts are presented as part of discontinued operations in the consolidated statements of operations.

Goodwill

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 statements of operations for the three months ended March 31, 2025.