Note 19 - Deconsolidation of Eagles Sub-OP

6 Months Ended

Jun. 30, 2025

Note 19 – Deconsolidation of Eagles Sub-OP

As previously discussed, on April 8, 2025, the Fortress Member provided the Rescission and Removal Notice, which rescinded the Temporary Waiver and removed the Operating Partnership as the managing member of the Eagles Sub-OP in accordance with the terms of the Eagles Sub-OP Operating Agreement. As such, the Company has determined that it is no longer the primary beneficiary of the Eagles Sub-OP as the Company no longer has a controlling financial interest in the Eagles Sub-OP. As a result, the Company deconsolidated the Eagles Sub-OP as of April 1, 2025 and recognized an approximately $56.9 million gain on deconsolidation of Eagles Sub-OP in its condensed consolidated statements of operations for the three and six months ended June 30, 2025, which is the difference measured as the aggregate of (i) the fair value of the Company’s retained investment in the Eagles Sub-OP and (ii) the carrying amount of the redeemable noncontrolling interest that was derecognized, less the carrying amount of the Eagles Sub-OP net assets derecognized. Amounts recorded directly to additional paid-in capital in connection with the deconsolidation are excluded from this gain. See the reconciliation further below. The Company also recorded the $12.3 million due to the Eagles Sub-OP relating to cash that was transferred

from the Eagles Sub-OP to the Company prior to March 31, 2025 as a distribution from the Eagles Sub-OP as it is not expected to be repaid.

The following assets, liabilities and equity of the Eagles Sub-OP were derecognized from the Company’s condensed consolidated balance sheet due to the Company no longer having a controlling financial interest in the Eagles Sub-OP. These balances are as of March 31, 2025.


(in thousands)
Assets:
Real estate properties, net	$	308,504
Cash and cash equivalents		12,956
Restricted cash		4,782
Straight-line rent receivable		4,008
Tenant and accounts receivable		1,350
Derivative assets		364
Other assets, net		5,506
Total assets, net	$	337,470

Liabilities:
Mortgage and other indebtedness, net		246,864
Accounts payable and accrued liabilities		11,331
Unamortized intangible lease liabilities, net		277
Deferred revenue		852
Total liabilities	$	259,324

Redeemable noncontrolling Fortress preferred interest	$	101,611
Accumulated other comprehensive loss	$	241

The following table provides a reconciliation of the $56.9 million gain on deconsolidation of Eagles Sub-OP in the Company’s condensed consolidated statement of operations for the six months ended June 30, 2025.


(in thousands)
Carrying amount of net assets derecognized (assets $337,470 less liabilities $259,324)	$	(78,146	)
Add: Carrying amount of redeemable noncontrolling Fortress preferred interest derecognized		101,611
Add: Fair value of retained investment recognized (see Note 3)		45,918
Less: Amount recorded directly to equity as a distribution from Eagles Sub-OP (see Statement of Equity)		(12,267	)
Less: Amount recorded in other comprehensive income upon deconsolidation		(241	)
Gain on deconsolidation of Eagles Sub-OP (as reported in the Statements of Operations)	$	56,875