Variable Interest Entities

9 Months Ended

Sep. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated Variable Interest Entities

Included within our condensed consolidated financial statements as of September 30, 2025 and December 31, 2024 are five consolidated entities and one consolidated entity, respectively, that are VIEs for which we are the primary beneficiary. These entities were established to own and operate real estate property. Our involvement with these entities is through majority ownership and management of the property. The entities were deemed VIEs primarily because the unrelated investors do not have substantive kick-out rights to remove the managing partner by a vote of a simple majority or less and they do not have substantive participating rights. We determined that we are the primary beneficiary as (1) we have the power to direct activities of the VIEs that most significantly impact the VIEs economic performance and (2) we have the obligation to absorb losses or the right to receive benefits of the VIEs that could potentially be significant to the VIEs through our variable interests.

The majority of the operations of these VIEs are funded with cash flows generated from the properties. We have not provided financial support to these VIEs that we were not previously contractually required to provide, which consists primarily of funding expenses that are deemed necessary to continue to operate the entities and any operating cash shortfalls that the entities may experience.

In addition, included within our condensed consolidated financial statements as of September 30, 2025 and December 31, 2024 are four consolidated entities and two consolidated entities, respectively, that are VIEs that were established in connection with our DST Program. See additional information on the DST Program in Note 17 — “DST Program.” Our involvement with these entities is through our majority ownership and master lease agreements between the VIEs and the Company. These entities are deemed VIEs primarily because any equity ownership in the entities does not provide the equity owners voting rights. We determined that we are the primary beneficiary as (1) the VIEs have limited ongoing significant activities and the Company is responsible for the key decisions of the VIEs that were made at formation and has the power to direct the remaining activities of the VIEs such as the ability to exercise a fair market value purchase option and (2) the Company has the obligation to absorb losses or the right to receive benefits of the VIEs that could potentially be significant to the VIEs through the Company’s variable interests.

The majority of the operations of the VIE are funded with cash flows from the master lease between the VIE and a wholly-owned subsidiary of the Operating Partnership. We have not provided any financial support to the VIE other than the interests described in Note 17 — “DST Program.”

The table below summarizes the consolidated VIEs and the classification of the restricted assets and non-recourse VIE liabilities on our condensed consolidated balance sheets:


in thousands	September 30, 2025		December 31, 2024



Total number of consolidated VIEs	9		3

Restricted assets:
Investments in real estate, net	$	452,716	$	155,313
Cash and cash equivalents	5,782		2,254
Intangible assets, net	18,272		7,025
Other assets	2,095		1,108
Total restricted assets	$	478,865	$	165,700

VIE non-recourse liabilities:
Mortgages payable, net	$	83,843	$	—
Financing obligation, net	53,985		—
Accounts payable, accrued expenses, and other liabilities	7,793		4,147


Total VIE non-recourse liabilities:	$	145,621	$	4,147

Unconsolidated Variable Interest Entities

The table below summarizes the unconsolidated VIEs on our condensed consolidated balance sheets:


in thousands	September 30, 2025
Investments in Unconsolidated Entities	Carrying Amount		Maximum Risk of Loss		Ownership Percentage(1)
San Simeon Preferred Equity	$	29,750	$	24,400	—	%
Retail GP Fund	16,469		22,200		4.5% to 9.0%
Homestead	216		2,700		50.0%
Total unconsolidated variable interest entities	$	46,435	$	49,300


in thousands	December 31, 2024
Investments in Unconsolidated Entities	Carrying Amount		Maximum Risk of Loss		Ownership Percentage(1)
San Simeon Preferred Equity	$	28,693	$	24,400	—	%
Retail GP Fund	22,019		22,200		4.5% to 9.0%
Homestead	94		2,700		50.0%
Total unconsolidated variable interest entities	$	50,806	$	49,300

(1)Ownership percentage represents our entitlement to residual distributions after payments of priority returns, where applicable. Preferred equity investment ownership percentages are not presented.

We have concluded that these investments are VIEs primarily because the equity investors at risk lack the ability to make decisions that significantly impact the economic performance of the entities. We have determined that we are not the primary beneficiary because we either do not have the power or share the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. We have not provided financial support to the VIEs that we were not previously contractually required to provide.