Annual report [Section 13 and 15(d), not S-K Item 405]

Commitments and Contingencies

v3.25.4
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Ground Leases

We are obligated as lessee under four ground leases. Future minimum rental payments due under the terms of these leases as of December 31, 2025, are as follows (dollars in thousands):

Year Future Lease Payments Due Under Operating Leases
2026 $ 460 
2027 467 
2028 470 
2029 470 
2030 385 
Thereafter 2,974 
Total anticipated lease payments $ 5,226 
Less: amount representing interest (1,410)
Present value of lease payments $ 3,816 
Year Future Lease Payments Due Under Finance Leases
2026 172 
2027 178 
2028 178 
2029 178 
2030 178 
Thereafter 7,098 
Total anticipated lease payments $ 7,982 
Less: amount representing interest (5,018)
Present value of lease payments $ 2,964 

Rental expense incurred for properties with ground lease obligations was $0.5 million, $0.3 million, and $0.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. Three of our ground leases are treated as operating leases and rental expenses are reflected in property operating expenses on the consolidated statements of operations and comprehensive income. One of our ground leases is treated as a finance lease and rental expense is reflected in interest expenses on the consolidated statements of operations and comprehensive income. Our ground leases have a weighted average remaining lease term of 22.6 years and weighted average discount rate of 5.80%.

Letters of Credit

As of December 31, 2025, there were $2.1 million outstanding letters of credit.