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Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The three levels are defined as follows:
Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. We do not adjust the quoted price for these investments.
Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.
Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.
Certain investments that are measured at fair value using NAV per share as a practical expedient are not required to be categorized in the fair value hierarchy tables. The total fair value of these investments is included in the tables below to permit reconciliation of the fair value hierarchy to amounts presented on our condensed consolidated balance sheets. As of June 30, 2025 and December 31, 2024, none of these investments were expected to be sold at a value materially different than NAV.
Valuation of Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table details our financial instruments measured at fair value on a recurring basis:
June 30, 2025
Fair Value Measurements Using:
in thousandsLevel 1Level 2Level 3NAV as a Practical ExpedientTotal at Fair Value
Assets:
Investments in real estate-related securities$1,954 $55,767 $— $— $57,721 
Investment in commercial loan— — 12,190 — 12,190 
Investment in affiliated fund— — — 14,487 14,487 
Interest rate caps— 4 — — 4 
Interest rate swap— 647 — — 647 
Total assets$1,954 $56,418 $12,190 $14,487 $85,049 
Liabilities:
Interest rate swap$— $374 $— $— $374 
Total liabilities$— $374 $— $— $374 
December 31, 2024
Fair Value Measurements Using:
in thousandsLevel 1Level 2Level 3NAV as a Practical ExpedientTotal at Fair Value
Assets:
Investments in real estate-related securities$5,600 $50,872 $— $— $56,472 
Investment in commercial loan— — 12,996 — 12,996 
Investment in affiliated fund— — — 21,342 21,342 
Interest rate caps— 237 — — 237 
Interest rate swap— 1,496 — — 1,496 
Total assets$5,600 $52,605 $12,996 $21,342 $92,543 
The following table details our investment in commercial loan measured at fair value on a recurring basis using Level 3 inputs:
in thousandsInvestment in Commercial Loan
Balance as of December 31, 2024$12,996 
Unrealized gain (loss)(45)
Loan repayment(761)
Balance as of June 30, 2025$12,190 
The following table shows the significant unobservable inputs related to the Level 3 fair value measurement of our investment in commercial loan as of June 30, 2025.
Weighted Average Rate
TypeAsset ClassValuation TechniqueUnobservable InputJune 30, 2025December 31, 2024
Commercial loanIndustrialDiscounted cash flowDiscount rate8.75%8.75%
The discount rate above is subject to change based on changes in economic and market conditions both current and anticipated, in addition to changes in use or timing of exit if applicable. These rates are also based on the location, type and nature of each property and related industry publications. Changes in discount rates result in increases or decreases in the fair values of these investments. The discount rates encompass, among other things, uncertainties in the valuation models with respect to terminal capitalization rates and the amount and timing of cash flows. It is not possible for us to predict the effect of future economic or market conditions based on our estimated fair values.
Valuation of Liabilities Not Carried at Fair Value
The following table presents the principal balance and estimated fair value of our liabilities that are not carried at fair value on the condensed consolidated balance sheets:
June 30, 2025December 31, 2024
in thousandsPrincipal BalanceEstimated Fair ValuePrincipal BalanceEstimated Fair Value
Mortgage notes payable$235,101 $233,849 $286,601 $283,937 
Total$235,101 $233,849 $286,601 $283,937 

Valuation of Assets Measured at Fair Value on a Nonrecurring Basis
Our real estate investments are not measured at fair value on an ongoing basis but are subject to fair value adjustments when there is evidence of impairment. We review our real estate investments for impairment each quarter or when there is an event or change in circumstances that could indicate the carrying amount of these investments may not be recoverable.
During the three and six months ended June 30, 2025 and 2024, we did not recognize any impairment losses on our real estate investments.