Commitments And Contingencies

12 Months Ended

Dec. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

13. Commitments and Contingencies

Construction Contracts. As of December 31, 2025, we estimate the remaining cost to complete the three projects currently under construction to be approximately $213.8 million. We expect to fund this amount through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured revolving credit facility and commercial paper program, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM programs, other unsecured borrowings, or secured mortgages.

Litigation. We are subject to various legal proceedings and claims which arise in the ordinary course of business. Matters which arise out of allegation of bodily injury, property damage, and employment practices are generally covered by insurance. While the resolution of these legal proceedings and claims cannot be predicted with certainty, management currently believes the final outcome of such matters will not have a material adverse effect on our consolidated financial statements.

We have been named as a defendant in several cases alleging antitrust violations by RealPage, Inc. (“RealPage”), a seller of revenue management software and owners and/or operators of multifamily housing, including us, which utilize this software. The complaints allege collusion among the defendants to fix rents in violation of Section 1 of the Sherman Act. The U.S. Judicial Panel on Multidistrict Litigation has consolidated 43 cases, including those filed against us, into a single action in the United States District Court for the Middle District of Tennessee. Separate and apart from these private causes of action, on November 1, 2023, we, along with 13 other owners and/or operators of multifamily housing and RealPage, were named as defendants in a lawsuit centering around the use of said revenue management software by the Attorney General of the District of Columbia. On February 28, 2024, we, along with 11 other owners and/or operators of multifamily housing and RealPage, were named as defendants in a lawsuit centering around the use of said revenue management software by the Attorney General of Arizona. On January 7, 2025, we, along with six other owners and/or operators of multifamily housing, were named in a civil lawsuit brought by the U.S. Department of Justice and ten states against RealPage with similar allegations. Additionally, we have been informed by other state regulators they are investigating this matter. We believe these various lawsuits are without merit and we intend to vigorously defend against them. As these proceedings are in the early stages, it is not possible for the Company to predict the outcome nor is it possible to estimate the amount of loss, if any, which may be associated with an adverse decision in any of these cases.

Other Commitments and Contingencies. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions, or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding as to either party unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the purchase or sale of real property are entered into, these contracts generally provide the purchaser with time to evaluate the property and conduct due diligence, during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but generally only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract. At December 31, 2025, we had approximately $0.6 million of earnest money deposits for potential acquisitions of land which are included in other assets, net in our consolidated balance sheet of which $0.5 million is non-refundable.

Lease Commitments. Substantially all of our operating leases recorded in our consolidated balance sheets are related to office facility leases. The lease and non-lease components, excluding short-term lease contracts with a duration of 12 months or less, are accounted for as a combined single component based upon the standalone price at the time the applicable lease is commenced and is recognized as a lease expense on a straight-line basis over the lease term. Most of our office facility leases include options to renew and generally are not included in the operating lease liabilities or ROU assets as they are not reasonably certain of being exercised. If an option to renew is exercised, it would be considered a separate contract and recognized based upon the standalone price at the time the option to renew is exercised. Variable lease payments which values are not known at lease commencement, such as executory costs of real estate taxes, property insurance, and common area maintenance, are expensed as incurred.

In June 2024, the Company entered into an operating lease agreement for our corporate headquarters. The lease commenced on October 1, 2025 with a twelve-year lease term. The agreement includes an option to terminate in October 2034 and an option to extend the term for an additional seven or ten years at the prevailing standalone price at the time of renewal. The ROU asset, net of lease incentives, was approximately $8.9 million at December 31, 2025.

The following is a summary of our operating lease related information:


($ in millions)		As of December 31,
Balance sheet	Classification	2025		2024
ROU assets, net	Other assets, net	$	11.0	$	2.5
Operating lease liabilities	Other liabilities	$	22.7	$	3.2


($ in millions)		Year ended
Statement of income and comprehensive income	Classification	2025		2024
Rent expense related to operating lease liabilities	General and administrative expenses and property management expenses	$	2.5	$	2.6
Variable lease expense	General and administrative expenses and property management expenses	1.5		1.1
Total lease expense		$	4.0	$	3.7


($ in millions)		Year ended
Statement of cash flows	Classification	2025			2024
Cash flows from operating leases	Net cash from operating activities	$	2.4		$	2.4
Supplemental lease information
Weighted average remaining lease term (years)		11.0			1.6
Weighted average discount rate - operating leases (1)		5.3		%	4.9		%

(1)We use a secured incremental borrowing rate, as defined by ASC 842, Leases, based on an estimated secured rate with applicable adjustments, as most of our lease contracts do not provide a readily determinable implicit rate.

The following is a summary of our maturities of our lease liabilities as of December 31, 2025:


(in millions)
Year ending December 31,	Operating Leases
2026	$	1.2
2027	1.4
2028	3.2
2029	3.1
2030	2.9
Thereafter	20.6
Discount for time value	(9.7)
Lease liability as of December 31, 2025	$	22.7

Employment Agreements. At December 31, 2025, we had employment agreements with 13 of our senior officers, the terms of which expire at various times through August 20, 2026. These agreements provide for minimum salary levels as well as various incentive compensation arrangements, which are payable based on the attainment of specific goals. The agreements also provide for severance payments and 12 provide a gross-up payment, or equivalent, if certain situations occur, such as termination without cause, or termination due to a change of control. In the case of 11 of the agreements, the severance payment equals one times the respective current annual base salary in the case of termination without cause, 2.99 times the respective average annual base salary over the previous three fiscal years in the case of a change of control and a termination of employment or a material adverse change in the scope of their duties, and in the case of termination through death or disability, the severance equals one times the annual base salary and targeted cash bonus for eight agreements, and incentive bonus in the case of three agreements. In the case of the other two agreements, the severance payment generally equals 2.99 times the respective average annual compensation over the previous three fiscal years in connection with, among other things, a termination without cause, termination through death or disability, or a change of control, and the officer would be entitled to receive continuation and vesting of certain benefits in the case of such termination.