Commitments and Contingencies
Lending Commitments
The Company has lending commitments to borrowers pursuant to certain loan agreements in which the borrower may submit a request for funding contingent on achieving certain criteria, which must be approved by the Company as lender, such as leasing, performance of capital expenditures and construction in progress with an approved budget. At December 31, 2025, assuming the terms to qualify for future fundings, if any, had been met, total unfunded lending commitments for loans held for investment were $101.9 million for senior loans, $2.1 million for mezzanine loans and $8.2 million for preferred equity. At December 31, 2024, total unfunded lending commitments for loans held for investment were $105.2 million for senior loans and $1.1 million for mezzanine loans.
Ground Lease Obligation
The Company’s operating leases include ground leases acquired with real estate.
At December 31, 2025 and December 31, 2024, the weighted average remaining lease term was 11.8 years and 12.0 years for ground leases, respectively.
The following table presents ground lease expense, included in property operating expense, for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year Ended December 31, |
| | | | | | 2025 | | 2024 | | 2023 |
| Operating lease expense: | | | | | | | | | | |
| Minimum lease expense | | | | | | $ | 3,191 | | | $ | 3,157 | | | $ | 3,124 | |
| Variable lease expense | | | | | | — | | | — | | | — | |
| | | | | | $ | 3,191 | | | $ | 3,157 | | | $ | 3,124 | |
The operating lease liability for ground leases was determined using a weighted average discount rate of 5.4%. The following table presents future minimum rental payments, excluding contingent rents, on noncancellable ground leases on real estate as of December 31, 2025 (dollars in thousands):
| | | | | | | | |
| | |
| | |
| 2026 | | $ | 3,186 | |
| 2027 | | 2,868 | |
| 2028 | | 2,839 | |
| 2029 | | 1,896 | |
| 2030 and thereafter | | 12,263 | |
| Total lease payments | | 23,052 | |
| Less: Present value discount | | 6,564 | |
| Operating lease liability (Note 6) | | $ | 16,488 | |
For these ground leases, the Company has elected the practical expedient to combine lease and related nonlease components as a single lease component.
Office Lease
At December 31, 2025 and December 31, 2024, the weighted average remaining lease term was 3.4 years and 4.3 years for office leases, respectively. The office leases are located in New York, New York and Los Angeles, California.
For the years ended December 31, 2025, 2024 and 2023, the following table summarizes lease expense, included in operating expense (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year Ended December 31, | | |
| | | | | | 2025 | | 2024 | | 2023 | | |
| Corporate Offices | | | | | | | | | | | | |
| Operating lease expense: | | | | | | | | | | | | |
| Fixed lease expense | | | | | | $ | 1,308 | | | $ | 1,283 | | | $ | 1,258 | | | |
| Variable lease expense | | | | | | — | | | — | | | — | | | |
| | | | | | $ | 1,308 | | | $ | 1,283 | | | $ | 1,258 | | | |
Total cash paid for office leases was $1.2 million for the year ended December 31, 2025.
The operating lease liability for the office leases was determined using a weighted average discount rate of 2.4%. As of December 31, 2025, the Company’s future operating lease commitments for the corporate office leases were as follows (dollars in thousands):
| | | | | | | | |
| | Corporate Offices |
| | |
| | |
| 2026 | | $ | 1,323 | |
| 2027 | | 1,339 | |
| 2028 | | 1,155 | |
| 2029 | | 574 | |
| 2030 and thereafter | | — | |
| Total lease payments | | 4,391 | |
| Less: Present value discount | | 176 | |
| Operating lease liability (Note 6) | | $ | 4,215 | |
For these office leases, the Company has elected the practical expedient to combine lease and related nonlease components as a single lease component.
Litigation and Claims
The Company may be involved in litigation and claims in the ordinary course of the business. As of December 31, 2025, the Company was not involved in any legal proceedings that are expected to have a material adverse effect on the Company’s results of operations, financial position, or liquidity.