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FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent.
Items Measured at Fair Value on a Recurring Basis
The following table presents information about the Company’s assets measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):
Level 1Level 2Level 3
Balance as of March 31, 2025
Assets:
Mortgage secured loans receivable$— $— $658,427 $658,427 
Mezzanine loans receivable— — 87,173 87,173 
Financing receivable— — 96,628 96,628 
Total$— $— $842,228 $842,228 
Level 1Level 2Level 3
Balance as of December 31, 2024
Assets:
Mortgage secured loans receivable$— $— $660,392 $660,392 
Mezzanine loans receivable— — 80,612 80,612 
Financing receivable— — 96,004 96,004 
Total$— $— $837,008 $837,008 

The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands):
Investments in Real Estate Secured LoansInvestments in Mezzanine LoansInvestment in Financing Receivable
Balance at December 31, 2024
$660,392 $80,612 $96,004 
Originations— 6,389 — 
Accrued interest, net1,173 107 624 
Unrealized gain, net1,222 65 — 
Payments(4,360)— — 
Balance as of March 31, 2025
$658,427 $87,173 $96,628 
Real estate secured and mezzanine loans receivable: The fair value of the secured and mezzanine loans receivables were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. As such, the Company classifies each instrument as Level 3 due to the significant unobservable inputs used in determining market interest rates for investments with similar terms. During the three months ended March 31, 2025, the Company recorded a net unrealized gain of $1.3 million on its secured and mezzanine loans receivable, to bring the interest rates in line with market rates. During the three months ended March 31, 2024, the Company recorded an unrealized loss of $0.8 million on the Company’s secured and mezzanine loans receivable due to rising interest rates, partially offset by unrealized gains of $0.2 million due to increases in expected cash flows on floating rate loans. Future changes in market interest rates or collateral value could materially impact the estimated discounted cash flows that are used to determine the fair value of the secured and mezzanine loans receivable. As of March 31, 2025 and December 31, 2024, the Company did not have any loans that were 90 days or more past due.
The following table shows the quantitative information about unobservable inputs related to the Level 3 fair value measurements comprising the investments in secured and mezzanine loans receivables as of March 31, 2025:
Type
Book Value as of March 31, 2025
Valuation TechniqueUnobservable InputsRange
Mortgage secured loans receivable$658,427 Discounted cash flowDiscount Rate
8% - 14%
Mezzanine loans receivable87,173 Discounted cash flowDiscount Rate
12% - 14%
Financing receivable: The fair value was determined using a widely accepted valuation technique, discounted cash flow analysis, on the expected cash flows. The discount rate used to value the future cash inflows of the financing receivable at March 31, 2025 was 12%.
For the three months ended March 31, 2025, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy.

Items Disclosed at Fair Value
Considerable judgment is necessary to estimate the fair value disclosure of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the face value, carrying amount and fair value of the Company’s preferred equity investments and the Notes (as defined in Note 7, Debt, below) as of March 31, 2025 and December 31, 2024 is as follows (dollars in thousands):  
 March 31, 2025December 31, 2024
 LevelFace
Value		Carrying
Amount		Fair
Value		Face
Value		Carrying
Amount		Fair
Value
Financial assets:
Preferred equity investments3$53,782 $54,199 $54,199 $53,782 $54,199 $54,199 
Financial liabilities:
Senior unsecured notes payable2$400,000 $397,149 $374,880 $400,000 $396,927 $381,812 

Cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable, and accrued liabilities: The carrying values for these instruments approximate their fair values due to the short-term nature of these instruments.

Preferred equity investments: The fair value of the preferred equity investments was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. The Company utilized discount rates of 11% to 15% in its fair value calculation. As such, the Company classifies these instruments as Level 3.

Senior unsecured notes payable: The fair value of the Notes was determined using third-party quotes derived from orderly trades.

Unsecured revolving credit facility: The fair value approximates the carrying value as the interest rates are variable and approximate prevailing market interest rates and spreads for similar debt arrangements.