Variable Interest Entities

9 Months Ended

Sep. 30, 2025

Variable Interest Entities [Abstract]

Other Real Estate Partnerships

The Other Real Estate Partnerships are variable interest entities ("VIEs") of the Operating Partnership and the Operating Partnership is the primary beneficiary, thus causing the Other Real Estate Partnerships to be consolidated by the Operating Partnership. In addition, the Operating Partnership is a VIE of the Company and the Company is the primary beneficiary.

The following table summarizes the assets and liabilities of the Other Real Estate Partnerships, as reflected in our Consolidated Balance Sheets. All amounts are shown net of intercompany eliminations:


	September 30, 2025		December 31, 2024
ASSETS
Assets:
Net Investment in Real Estate	$	290,164	$	296,588


Operating Lease Right-of-Use Assets	10,584		12,818
Cash and Cash Equivalents	2,083		2,463

Deferred Rent Receivable	15,587		16,060
Prepaid Expenses and Other Assets, Net	11,992		11,937
Total Assets	$	330,410	$	339,866
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:

Accounts Payable, Accrued Expenses and Other Liabilities	$	7,817	$	8,625
Operating Lease Liabilities	10,160		10,186
Rents Received in Advance and Security Deposits	7,102		8,412
Partners' Capital	305,331		312,643
Total Liabilities and Partners' Capital	$	330,410	$	339,866

Joint Venture

The Joint Venture was formed for the purpose of developing, leasing, operating and selling land located in the Phoenix, Arizona metropolitan area. We hold our Joint Venture interest through a consolidated partnership (the "Joint Venture Partnership") in which we hold an 88% interest and in which a third-party partner holds the remaining 12% interest. As we hold the power to direct the activities that most significantly impact the economic performance of the Joint Venture Partnership, we consolidate the Joint Venture Partnership and reflect our partner's share as Noncontrolling Interest (see Note 6). The Joint Venture Partnership holds a 49% interest in the unconsolidated Joint Venture, which we account for under the equity method of accounting. Excluding the minority interest holder's share, we own a 43% interest in the Joint Venture. The Joint Venture Partnership is held through a wholly-owned TRS of the Operating Partnership.

Under the operating agreement for the Joint Venture, we act as the managing member and are entitled to receive fees for providing management, leasing, development, construction supervision, disposition and asset management services. In addition, we may earn incentive fees based on the ultimate financial performance of the Joint Venture.

During the nine months ended September 30, 2025 and 2024, we earned fees of $1,233 and $2,113, respectively, from the Joint Venture, related to asset management, property management, leasing and development services we provided to the Joint Venture, of which $113 and $427, respectively, were deferred due to our economic interest in the Joint Venture. During the nine months ended September 30, 2025 and 2024, we incurred $524 and $1,005, respectively, in fees paid for third-party development, property management and leasing services associated with the Joint Venture. At September 30, 2025 and December 31, 2024, we had outstanding receivables from the Joint Venture of $252 and $364, respectively.

During the year ended December 31, 2024, the Joint Venture substantially completed development of three buildings, (collectively the “Project”): Building A (approximately 0.4 million square feet of GLA), Building B (approximately 0.4 million square feet of GLA) and Building C (approximately 1.0 million square feet of GLA). During the nine months ended September 30, 2025, we purchased Buildings A and B from the Joint Venture (see Note 3).

Net income of the Joint Venture for the nine months ended September 30, 2025 and 2024 was $40,348 and $4,581, respectively. The net income for the nine months ended September 30, 2025 includes a gain on sale of $40,266, of which $39,591 related to the sales of Buildings A and B. Our economic share of the gain on sale related to the sales of Buildings A and B for the nine months ended September 30, 2025 was $17,072. However, as we acquired Buildings A and B from the Joint Venture, our share of the gain on sale was offset against the basis of the real estate acquired.

For the nine months ended September 30, 2025 and 2024, we earned incentive fees of $8,070 and $916, respectively, from the Joint Venture. During the nine months ended September 30, 2025, we offset $6,968 of incentive fees against the basis of real estate in connection with our acquisition of Buildings A and B. As such, during the nine months ended September 30, 2025 and 2024, $1,102 and $916, respectively, were reflected in the Equity In Income of Joint Venture line item in the Consolidated Statements of Operations.

In connection with the Project, the Joint Venture has a construction loan that matures on July 29, 2026, and has a one-year extension option, which is subject to then meeting certain financial conditions (the "Joint Venture Loan"). As of September 30, 2025 and December 31, 2024, the balance of the Joint Venture Loan is $38,392 and $131,111, respectively, excluding $40 and $269, respectively, of unamortized debt issuance costs.

As of September 30, 2025, we maintain an outstanding completion guarantee to the lender and our third-party joint venture partner for timely completion of the construction of Building C, as tenant improvements are not complete. We have also provided the lender with a guarantee covering typical non-recourse exceptions and an environmental indemnity. It is not possible to estimate the amount of additional costs, if any, that we may incur in connection with our completion guarantees to the third-party lender and/or our joint venture partner as well as the non-recourse exception and environmental indemnity guarantees; however, we do not expect that we will be required to make any significant payments in satisfaction of these guarantees.