Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2024	Feb. 20, 2025	Jun. 30, 2024
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2024
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	1-9317
Entity Registrant Name	EQUITY COMMONWEALTH
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	04-6558834
Entity Address, Address Line One	Two North Riverside Plaza, Suite 2000
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60606
City Area Code	(312)
Local Phone Number	646-2800
Title of 12(b) Security	Common Shares of Beneficial Interest
Trading Symbol	EQC
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 2.2
Entity Common Stock, Shares Outstanding (in shares)		107,421,250
Entity Central Index Key	0000803649
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2024
Audit Information [Abstract]
Auditor Name	Ernst & Young LLP
Auditor Firm ID	42
Auditor Location	Chicago, Illinois

CONSOLIDATED STATEMENT OF NET ASSETS $ in Thousands	Dec. 31, 2024 USD ($)
ASSETS
Real estate	$ 132,500
Cash and cash equivalents	160,511
Rents receivable and other assets	613
Total assets	293,624
LIABILITIES
Liabilities for estimated costs in excess of estimated receipts during liquidation	100,019
Accounts payable, accrued expenses and other	10,908
Distributions payable	3,842
Total liabilities	114,769
Commitments and contingencies
Net assets in liquidation attributable to Equity Commonwealth common shareholders	178,605
Net assets in liquidation attributable to noncontrolling interest	250
Net assets in liquidation	$ 178,855

CONSOLIDATED BALANCE SHEET $ in Thousands	Dec. 31, 2023 USD ($)
Real estate properties:
Land	$ 44,060
Buildings and improvements	367,827
Total real estate properties, at cost, gross	411,887
Accumulated depreciation	(180,535)
Total real estate properties, at cost, net	231,352
Cash and cash equivalents	2,160,535
Rents receivable	15,737
Other assets, net	17,417
Total assets	2,425,041
LIABILITIES AND EQUITY
Accounts payable, accrued expenses and other	27,298
Rent collected in advance	1,990
Distributions payable	5,640
Total liabilities	34,928
Commitments and contingencies
Shareholders’ equity:
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880	119,263
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 106,847,438 shares issued and outstanding	1,068
Additional paid in capital	3,935,873
Cumulative net income	3,926,979
Cumulative common distributions	(4,864,440)
Cumulative preferred distributions	(733,676)
Total shareholders’ equity	2,385,067
Noncontrolling interest	5,046
Total equity	2,390,113
Total liabilities and equity	$ 2,425,041

CONSOLIDATED BALANCE SHEET (Parenthetical) $ in Thousands	12 Months Ended
CONSOLIDATED BALANCE SHEET (Parenthetical) $ in Thousands	Dec. 31, 2023 USD ($) $ / shares shares
Statement of Financial Position [Abstract]
Preferred shares of beneficial interest, par value (in dollars per share) \| $ / shares	$ 0.01
Preferred shares of beneficial interest, shares authorized (in shares)	50,000,000
Preferred shares, dividend yield	6.50%
Preferred shares of beneficial interest, shares issued (in shares)	4,915,196
Preferred shares, of beneficial interest, shares outstanding (in shares)	4,915,196
Liquidation preference payment to Series D preferred shareholders \| $	$ 122,880
Common shares of beneficial interest, par value (in dollars per share) \| $ / shares	$ 0.01
Common shares of beneficial interest, shares authorized (in shares)	350,000,000
Common shares of beneficial interest, shares issued (in shares)	106,847,438
Common shares of beneficial interest, shares outstanding (in shares)	106,847,438

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS $ in Thousands	2 Months Ended
	Dec. 31, 2024 USD ($)
Changes in net assets in liquidation:
Remeasurement of liabilities	$ (23,764)
Net decrease in liquidation value	(23,764)
Liquidating distributions	(2,042,654)
Changes in net assets in liquidation	(2,066,418)
Net assets in liquidation, end of period	$ 178,855

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands	10 Months Ended	12 Months Ended
	Oct. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Revenues:
Rental revenue	$ 43,616,000	$ 55,336,000	$ 58,763,000
Other revenue	4,359,000	5,188,000	4,377,000
Total revenues	47,975,000	60,524,000	63,140,000
Expenses:
Operating expenses	22,542,000	27,462,000	24,184,000
Depreciation and amortization	13,384,000	17,444,000	17,810,000
General and administrative	30,089,000	36,974,000	30,378,000
Loss on asset impairment	49,250,000	0	0
Total expenses	115,265,000	81,880,000	72,372,000
Interest and other income, net	98,634,000	114,667,000	46,945,000
Gain on sale of properties, net	857,000	0	97,000
Income before income taxes	32,201,000	93,311,000	37,810,000
Income tax expense	(486,000)	(1,866,000)	(453,000)
Net income	31,715,000	91,445,000	37,357,000
Net income attributable to noncontrolling interest	(63,000)	(281,000)	(94,000)
Net income attributable to Equity Commonwealth	31,652,000	91,164,000	37,263,000
Preferred distributions	(7,988,000)	(7,988,000)	(7,988,000)
Net income attributable to Equity Commonwealth common shareholders	$ 23,664,000	$ 83,176,000	$ 29,275,000
Weighted average common shares outstanding — basic (in shares)	107,373	108,841	111,674
Weighted average common shares outstanding — diluted (in shares)	108,320	110,185	112,825
Earnings per common share attributable to Equity Commonwealth common shareholders:
Basic (in dollars per share)	$ 0.22	$ 0.76	$ 0.26
Diluted (in dollars per share)	$ 0.22	$ 0.75	$ 0.26

CONSLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Series D Preferred Shares	Common Shares	Additional Paid in Capital	Cumulative Net Income	Cumulative Common Distributions	Cumulative Preferred Distributions	Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2021		4,915,196	115,205,818
Beginning balance at Dec. 31, 2021	$ 3,055,270	$ 119,263	$ 1,152	$ 4,128,656	$ 3,798,552	$ (4,281,195)	$ (717,700)	$ 6,542
Increase (Decrease) in Stockholders' Equity
Net income	37,357				37,263			94
Repurchase of shares (in shares)			(6,110,646)
Repurchase of shares	(155,710)		$ (61)	(155,649)
Surrender of shares for tax withholding (in shares)			(160,506)
Surrender of shares for tax withholding	(4,160)		$ (2)	(4,158)
Share-based compensation (in shares)			493,586
Share-based compensation	11,939		$ 5	10,455				1,479
Contributions	1							1
Distributions	(120,965)					(112,327)	(7,988)	(650)
Adjustment for noncontrolling interest	0			262				(262)
Ending balance (in shares) at Dec. 31, 2022		4,915,196	109,428,252
Ending balance at Dec. 31, 2022	2,823,732	$ 119,263	$ 1,094	3,979,566	3,835,815	(4,393,522)	(725,688)	7,204
Increase (Decrease) in Stockholders' Equity
Net income	91,445				91,164			281
Repurchase of shares (in shares)			(3,018,411)
Repurchase of shares	(56,803)		$ (30)	(56,773)
Surrender of shares for tax withholding (in shares)			(134,193)
Surrender of shares for tax withholding	(3,395)		$ (1)	(3,394)
Share-based compensation (in shares)			436,398
Share-based compensation	15,977		$ 4	13,255				2,718
Distributions	(480,843)					(470,918)	(7,988)	(1,937)
Adjustment for noncontrolling interest	0			648				(648)
OP unit redemption (in shares)			135,392
OP Unit redemption	0		$ 1	2,571				(2,572)
Ending balance (in shares) at Dec. 31, 2023		4,915,196	106,847,438
Ending balance at Dec. 31, 2023	2,390,113	$ 119,263	$ 1,068	3,935,873	3,926,979	(4,864,440)	(733,676)	5,046
Increase (Decrease) in Stockholders' Equity
Net income	31,715				31,652			63
Surrender of shares for tax withholding (in shares)			(161,837)
Surrender of shares for tax withholding	(3,056)		$ (2)	(3,054)
Share-based compensation (in shares)			564,297
Share-based compensation	9,102		$ 6	8,922				174
Distributions	(7,045)					897	(7,988)	46
Adjustment for noncontrolling interest	0			424				(424)
OP unit redemption (in shares)			84,133
OP Unit redemption	0		$ 1	1,568				(1,569)
Ending balance (in shares) at Oct. 31, 2024		4,915,196	107,334,031
Ending balance at Oct. 31, 2024	2,420,829	$ 119,263	$ 1,073	3,943,733	3,958,631	(4,863,543)	(741,664)	3,336
Beginning balance (in shares) at Dec. 31, 2023		4,915,196	106,847,438
Beginning balance at Dec. 31, 2023	$ 2,390,113	$ 119,263	$ 1,068	$ 3,935,873	$ 3,926,979	$ (4,864,440)	$ (733,676)	$ 5,046
Ending balance (in shares) at Dec. 31, 2024			107,335,177

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	10 Months Ended	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Oct. 31, 2024	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 31,715,000		$ 91,445,000	$ 37,357,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	11,460,000		14,914,000	15,230,000
Straight-line rental income	(533,000)		(93,000)	238,000
Other amortization	1,924,000		2,530,000	2,580,000
Amortization of right-of-use asset	151,000		0	0
Share-based compensation	9,102,000		15,977,000	11,939,000
Loss on asset impairment	49,250,000		0	0
Net gain on sale of properties	(857,000)	$ (857,000)	0	(97,000)
Change in assets and liabilities:
Rents receivable and other assets	(1,209,000)		(1,739,000)	(6,089,000)
Accounts payable, accrued expenses and other	(2,074,000)		(401,000)	5,513,000
Rent collected in advance	201,000		(365,000)	(1,631,000)
Net cash provided by operating activities	99,130,000		122,268,000	65,040,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate improvements	(13,469,000)		(5,691,000)	(3,577,000)
Proceeds from sale of properties, net	27,392,000		0	97,000
Net cash provided by (used in) investing activities	13,923,000		(5,691,000)	(3,480,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase and retirement of common shares	(3,056,000)		(60,198,000)	(159,870,000)
Contributions from holders of noncontrolling interest	0		0	1,000
Distributions to common shareholders	(2,036,000)		(468,232,000)	(112,199,000)
Distributions to preferred shareholders	(5,991,000)		(7,988,000)	(7,988,000)
Distributions to holders of noncontrolling interest	(50,000)		(1,846,000)	(280,000)
Net cash used in financing activities	(11,133,000)		(538,264,000)	(280,336,000)
Increase (decrease) in cash and cash equivalents	101,920,000		(421,687,000)	(218,776,000)
Cash and cash equivalents at beginning of period	2,160,535,000	2,160,535,000	2,582,222,000	2,800,998,000
Cash and cash equivalents at end of period	2,262,455,000		2,160,535,000	2,582,222,000
SUPPLEMENTAL CASH FLOW INFORMATION:
Taxes paid, net	182,000		1,946,000	456,000
NON-CASH INVESTING ACTIVITIES:
Recognition of right-of-use asset and lease liability	873,000		0	0
Accrued capital expenditures	1,513,000		2,881,000	934,000
NON-CASH FINANCING ACTIVITIES:
Distributions payable	4,608,000	$ 3,842,000	5,640,000	2,863,000
OP Unit redemption	$ 1,569,000		$ 2,572,000	$ 0

Organization	12 Months Ended
Organization	Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Equity Commonwealth, or the Company, is a real estate investment trust, or REIT, formed in 1986 under the laws of the State of Maryland. Our business is primarily the ownership and operation of office properties in the United States. The Company operates in an umbrella partnership real estate investment trust, or UPREIT, and conducts substantially all of its activities through EQC Operating Trust, a Maryland real estate investment trust, or the Operating Trust. The Company beneficially owned, 99.86% of the outstanding shares of beneficial interest, designated as units, in the Operating Trust, or OP Units, as of December 31, 2024, and the Company is the sole trustee of the Operating Trust. As the sole trustee, the Company generally has the power under the declaration of trust of the Operating Trust to manage and conduct the business of the Operating Trust, subject to certain limited approval and voting rights of other holders of OP Units. As of December 31, 2024, our portfolio consisted of one property (one building), with 0.7 million square feet, and we had $160.5 million of cash and cash equivalents. The numbers of buildings and square feet are unaudited.

Plan of Sale

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Plan of Sale

On October 2, 2024, the Company filed a definitive proxy statement, or the Definitive Proxy, with the U.S. Securities and Exchange Commission, or SEC, related to a Special Meeting of Shareholders, or the Special Shareholder Meeting, for the following purposes: (i) to consider and vote upon the Plan of Sale and Dissolution of the Company, or the Plan of Sale, including the wind-down and complete liquidation of the Company, and the dissolution and termination of the Company, including the establishment of a Liquidating Entity (as defined in the Definitive Proxy), and (ii) on an advisory, non-binding basis, to consider and vote upon compensation that may become payable by the Company to its named executive officers in connection with the Plan of Sale, or the Executive Compensation Proposal. The Plan of Sale, which the Company’s Board of Trustees determined was in the best interests of the Company and its shareholders, authorizes the Company to sell all of its remaining properties, wind-down the Company’s affairs and distribute the net proceeds to shareholders. At the special shareholder meeting held on November 12, 2024, the Company’s shareholders approved both proposals with: (i) 85.5% of outstanding shares, and 99% of votes cast, in favor of the Plan of Sale proposal (two-thirds of outstanding shares required for approval), and (ii) 86.7% of votes cast in favor of the Executive Compensation Proposal (majority of votes cast required for approval).

The Company expects any future liquidity to its shareholders will be provided in the form of liquidating distributions. The Company anticipates making all liquidating distributions to its shareholders prior to the liquidation and dissolution of the Company and the establishment of a Liquidating Entity to pay any remaining liabilities. The Company can provide no assurances as to the ultimate amount or timing of its liquidating distributions or the timing of the complete liquidation and dissolution of the Company; however, the Company anticipates paying its final liquidating distribution and dissolving within six months of completion of the sale of its final property, which occurred on February 25, 2025.

The Plan of Sale authorizes the Company to sell its remaining properties without further shareholder approval, pay or establish a reserve fund for all actual and contingent liabilities, distribute net proceeds to shareholders, and wind-down the Company’s affairs, including the complete liquidation and dissolution of the Company. The Plan of Sale also authorizes the Board to establish or convert into a Liquidating Entity, which we anticipate, but cannot be certain, will occur after our final liquidating distribution is made.

Upon establishing or converting to the Liquidating Entity, our shareholders will receive non-transferable interests in the Liquidating Entity in proportion to the number of common shares owned by such shareholders. The purpose of the Liquidating Entity will be to pay any remaining liabilities and distribute any remaining proceeds to the holders of the interests in the Liquidating Entity.

The Company expects to comply with the requirements necessary to continue to qualify as a REIT through its liquidation and dissolution, or until such time as any remaining assets are transferred to a Liquidating Entity; provided, however, that the Board may elect to terminate the Company’s status as a REIT if it determines that such termination would be in the best interest of the shareholders.

Liabilities for Estimated Costs in Excess of Estimated Receipts During Liquidation

The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the Plan of Sale. As of December 31, 2024, the Company estimated that it will have costs in excess of estimated receipts during the liquidation process. These amounts can vary significantly due to, among other things, estimates of tenant improvement costs and capital expenditures, the timing and amounts associated with discharging known and contingent liabilities and the costs associated with the winding down of operations. These costs are estimated and are anticipated to be paid out over the liquidation period which is estimated to be complete by September 30, 2025, however, no assurances can be provided that this date will be met.

Upon transition to the liquidation basis of accounting on November 1, 2024, the Company accrued the following revenues and expenses expected to be incurred during liquidation (in thousands):


	As of November 1, 2024
Rental income	$	9,443
Interest income	13,006
Property operating expenses	(4,076)
General and administrative expenses	(32,212)
Liquidation preference payment to Series D preferred shareholders	(123,294)
Capital expenditures and tenant lease obligations	(8,808)
Liquidation transaction costs	(44,230)
Liabilities for estimated costs in excess of estimated receipts during liquidation	$	(190,171)

The change in the liabilities for estimated costs in excess of estimated receipts during liquidation as of December 31, 2024 is as follows (in thousands):


	November 1, 2024		Cash Payments (Receipts)		Remeasurement of Assets and Liabilities		December 31, 2024
Assets
Estimated net inflows from real estate	$	5,367	$	(4,242)	$	—	$	1,125
Estimated inflows from interest income	13,006		(9,513)		—		3,493
	18,373		(13,755)		—		4,618

Liabilities
Liquidation transaction costs(1)	(44,230)		2,411		—		(41,819)
General and administrative expenses	(32,212)		1,219		—		(30,993)
Liquidating catch-up distributions on unearned equity awards	—		—		(23,764)		(23,764)
Liquidation preference payment to Series D preferred shareholders	(123,294)		123,294		—		—
Capital expenditures and tenant lease obligations	(8,808)		747		—		(8,061)
	(208,544)		127,671		(23,764)		(104,637)
Total liabilities for estimated costs in excess of estimated receipts during liquidation	$	(190,171)	$	113,916	$	(23,764)	$	(100,019)

(1) Liquidation transaction costs primarily include severance expenses, advisory fees and other professional services expenses.

Net Assets In Liquidation

There were 107,335,177 common shares outstanding and 873,406 unvested restricted stock units at target, prior to any shares expected to be surrendered to satisfy statutory tax withholding obligations in connection with the vesting of such common shares, at December 31, 2024 (See Note 11). The net assets in liquidation as of December 31, 2024 were $178.9 million. Net assets in liquidation include projections of costs and expenses to be incurred during the estimated period required to complete the Plan of Sale. There is inherent uncertainty with these estimates and projections, and they could change materially based on, among other things, changes in the underlying assumptions of the projected cash flows. Cumulative liquidating distributions paid to common shareholders will include the $2.0 billion ($19.00 per common share) paid prior to December 31, 2024 plus any future distribution of our net assets in liquidation.

The decrease from total equity under the going concern basis of accounting as of October 31, 2024 to net assets in liquidation under the liquidation basis of accounting as of November 1, 2024 is primarily due to the liability for estimated costs in excess of estimated receipts during liquidation (See Note 4), the increase in estimated net realizable value of real estate and the write-off of assets and liabilities.

Summary of Significant Accounting Policies	12 Months Ended
Summary of Significant Accounting Policies	Dec. 31, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The accounting policies and practices related to real estate properties discussed below are applicable to any real estate properties owned for the then-applicable period. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements and notes thereto have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, as contained within the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, including Subtopic 205-30, “Liquidation Basis of Accounting,” as indicated, and the rules and regulations of the SEC. Pursuant to the Company’s shareholders’ approval of the Plan of Sale on November 12, 2024, the Company adopted the liquidation basis of accounting as of and for the periods subsequent to November 1, 2024 (as the approval of the Plan of Sale by the Company’s shareholders became imminent in early November 2024 based on the results of the Company’s solicitation of proxies from its shareholders for their approval of the Plan of Sale). Accordingly, on November 1, 2024, assets were adjusted to their estimated net realizable value, or liquidation value, which represents the estimated amount of cash or other consideration that the Company expected to realize through the disposal of assets. The liquidation values of the Company’s real estate properties are presented on a net realizable value basis. Liabilities are carried at their contractual amounts due or estimated settlement amounts. The Company accrues costs and revenues that it expects to incur and earn as it carries out its liquidation activities through the end of the projected liquidation period to the extent it has a reasonable basis for estimation. Estimated costs expected to be incurred through the end of the liquidation period include budgeted property expenses and corporate overhead, costs to dispose of its real estate property, costs associated with satisfying known and contingent liabilities and other costs associated with the winding down and dissolution of the Company. Revenues are based on in place leases. These amounts are classified as a liability for estimated costs in excess of estimated receipts during liquidation on the consolidated statement of net assets. Actual costs and income may differ from amounts reflected in the financial statements because of the inherent uncertainty in estimating future events. These differences may be material. See Note 2, “Plan of Sale” and Note 4, “Liabilities for Estimated Costs in Excess of Estimated Receipts During Liquidation” for further discussion. Actual costs incurred but unpaid prior to the Company’s adoption of the liquidation basis of accounting on November 1, 2024, are included in accounts payable and accrued expenses and distributions payable on the consolidated statement of net assets. All our liabilities under either the going concern basis of accounting or the liquidation basis of accounting are derecognized when we pay the obligation or when we are legally released from being the primary obligor under the liability. Net assets in liquidation represents the remaining estimated liquidation value available to shareholders upon liquidation. Due to the uncertainty in the estimated cash flows from operations and the time required to complete the Plan of Sale, actual liquidation costs and sale proceeds may differ materially from the amounts estimated. As a result of the change to the liquidation basis of accounting, the Company no longer presents a consolidated balance sheet, a consolidated statement of operations, a consolidated statement of equity or a consolidated statement of cash flows subsequent to October 31, 2024. These statements are only presented for prior year periods. The consolidated financial statements include our investments in 100% owned subsidiaries and majority owned subsidiaries that are controlled by us. References to we, us, our and the Company, refer to Equity Commonwealth and its consolidated subsidiaries, unless the context indicates otherwise. All intercompany transactions and balances have been eliminated. Dollar amounts presented may be approximate. Share amounts are presented in whole numbers, except where noted. Use of Estimates Preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that may affect the amounts reported in these financial statements and related notes. The Company is required to estimate all costs and revenue it expects to incur and earn through the end of liquidation including the estimated amount of cash it expects to collect on disposal of its assets and the estimated costs to dispose of its assets. All of the estimates and evaluations are susceptible to change and actual results could differ from these estimates. Real Estate Properties Liquidation Basis of Accounting As of November 1, 2024, the Company’s real estate was adjusted to its estimated net realizable value, or liquidation value, to reflect the change to the liquidation basis of accounting. The liquidation value represents the estimated amount of cash or other consideration that the Company expected to realize through the disposal of its assets. The Company estimated the liquidation value of its real estate based on a contractual purchase price for the property. The liquidation value of the Company’s real estate is presented on an undiscounted basis and real estate is no longer depreciated. Subsequent to November 1, 2024, all changes in the estimated liquidation value of the real estate is reflected as a change to the Company’s net assets in liquidation. Costs to sell the property such as credits for capital costs, contractual lease obligations and rent abatements are included in Liabilities for estimated costs in excess of estimated receipts during liquidation. Going Concern Basis We record real estate properties at cost. We depreciate real estate investments on a straight-line basis over estimated useful lives of up to 40 years for buildings and improvements, and up to 12 years for personal property. Each time we enter into a new lease, or materially modify an existing lease, we evaluate its classification as either a finance or operating lease. The classification of a lease as finance or operating affects the carrying value of a property, as well as our recognition of rental payments as revenue. These evaluations require us to make estimates of, among other things, the remaining useful life and fair market value of a leased property, appropriate discount rates and future cash flows. We allocate the consideration paid for our properties among land, buildings and improvements and, for properties that qualify as acquired businesses under the Business Combinations Topic of the FASB Accounting Standards Codification, or ASC, to identified intangible assets and liabilities, consisting of the value of above market and below market leases, the value of acquired in place leases and the value of tenant relationships. Purchase price allocations and the determination of useful lives are based on our estimates and, under some circumstances, studies from independent real estate appraisal firms to provide market information and evaluations that are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determination of useful lives. We allocate the consideration to land, buildings and improvements based on a determination of the fair values of these assets assuming the property is vacant. We determine the fair value of a property using methods that we believe are similar to those used by independent appraisers. Purchase price allocations for above market and below market leases are based on the estimated present value (using an interest rate which reflects our assessment of the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the acquired in place leases and (2) our estimate of fair market lease rates for the corresponding leases, measured over a period equal to the remaining non-cancelable terms of the respective leases. Purchase price allocations to acquired in place leases and tenant relationships are determined as the excess of (1) the purchase price paid for a property after adjusting existing in place leases to estimated market rental rates over (2) the estimated fair value of the property as if vacant. We aggregate this value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant's lease; however, the value of tenant relationships has not been separated from acquired in place lease value for our properties because we believe such value and related amortization expense is immaterial for acquisitions reflected in our historical financial statements. We consider certain factors in performing these analyses including estimates of carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs to execute similar leases in current market conditions, such as leasing commissions, legal and other related costs. If we believe the value of tenant relationships is material in the future, those amounts will be separately allocated and amortized over the estimated lives of the relationships. We recognize the excess, if any, of the consideration paid over amounts allocated to land, buildings and improvements and identified intangible assets and liabilities as goodwill and we recognize gains if amounts allocated exceed the consideration paid. We amortize capitalized above market lease values as a reduction to rental income over the remaining terms of the respective leases. We amortize capitalized below market lease values as an increase to rental income over the remaining terms of the respective leases. We amortize the value of acquired in place leases exclusive of the value of above market and below market acquired in place leases to expense over the remaining terms of the respective leases. If a lease is terminated prior to its stated expiration, the unamortized lease intangibles relating to that lease is written off. We review our properties for impairment quarterly, or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment indicators may include our decision to dispose of an asset before the end of its estimated useful life, declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long-term prospects for improvement in property performance, weak or declining tenant profitability, and cash flow or liquidity. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets may not be recoverable, we assess the recoverability of these assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. The determination of undiscounted cash flow includes consideration of many factors including income to be earned from the investment over our anticipated hold period, holding costs (exclusive of interest), estimated selling prices, and prevailing economic and market conditions. In the event that such expected undiscounted future cash flows do not exceed the carrying values, we estimate the fair value of the assets and record an impairment charge equal to the amount by which the carrying value exceeds the estimated fair value. Estimated fair values are calculated based on the following information, (i) recent third party estimates of market value, (ii) market prices for comparable properties, or (iii) the present value of future cash flows. During the ten months ended October 31, 2024, we recorded a loss on asset impairment of $49.3 million. During the years ended December 31, 2023 and 2022 we did not record any loss on asset impairment. When we classify properties as held for sale, we discontinue the recording of depreciation expense and estimate their fair value less costs to sell. If we determine that the carrying value for these properties exceed their estimated fair value less costs to sell, we record a loss on asset impairment. As of December 31, 2023, we did not have any properties classified as held for sale. Certain of our formerly owned real estate assets contained hazardous substances, including asbestos. We believe any asbestos in our former buildings is contained in accordance with current regulations. If the asbestos is removed or these properties are renovated or demolished, certain environmental regulations govern the manner in which the asbestos must be handled and removed. We do not believe that there are other environmental conditions or issues at any of our former properties that have had or will have a material adverse effect on us. However, no assurances can be given that we will not be required to incur costs in the future in connection with the remediation of contamination or compliance with environmental, health and safety laws that will have a material adverse effect on our business or financial condition. As December 31, 2024 and 2023, we did not have any accrued environmental remediation costs. Cash and Cash Equivalents Our cash and cash equivalents consist of cash maintained in time deposits, depository accounts and money market accounts. We regularly monitor the credit ratings of the financial institutions holding our deposits to minimize our exposure to credit risk. Throughout the year, we have cash balances in excess of federally insured limits deposited with various financial institutions. We do not believe we are exposed to any significant credit risk on cash and cash equivalents. Other Assets, Net Going Concern Basis Other assets consist principally of deferred leasing costs, capitalized lease incentives and prepaid property operating expenses. Deferred leasing costs are amortized on a straight-line basis over the terms of the respective leases. Capitalized lease incentives are amortized on a straight-line basis against rental income over the terms of the respective leases. Accrued Liquidation Costs Liquidation Basis of Accounting In accordance with the liquidation basis of accounting, the Company has recorded certain estimated liquidation costs to the extent it has a reasonable basis for estimation. These consist of compensation expense, legal fees, accounting fees, other professional service fees and other dissolution costs. These amounts are included in Liabilities for estimated costs in excess of estimated receipts during liquidation on the consolidated statement of net assets. See Note 4. Revenue Recognition Liquidation Basis of Accounting Under the liquidation basis of accounting, the Company has accrued all income that it expects to earn through the completion of its liquidation to the extent it has a reasonable basis for estimation. Revenue from tenants is estimated based on the contractual in place leases through the anticipated disposition date of the property. These amounts are presented net of estimated expenses and other liquidation costs and are classified in liabilities for estimated costs in excess of estimated receipts during liquidation on the consolidated statement of net assets. Going Concern Basis Rental revenue from operating leases, which includes rent concessions (including free rent and other lease incentives) and scheduled increases in rental rates during the lease term, represents the lease component and is recognized on a straight-line basis over the life of the lease agreements. We defer the recognition of contingent rental income, such as percentage rents, until the specific targets that trigger the contingent rental income are achieved. Rental revenue also includes non-lease components such as property level operating expenses reimbursed by our tenants and other incidental revenues, which are recorded as expenses are incurred. We concluded that the timing and pattern of transfer for non-lease components and the associated lease component are the same. We determined that the predominant component was the lease component and we have elected to account for and present the lease component and non-lease component of our leases as a single component in Rental revenue in our consolidated statements of operations in accordance with FASB Topic 842. Lessee Lease Classification Going Concern Basis We classify leases as either finance or operating in accordance with FASB Topic 842, Leases. This classification determines whether the related expense is recognized based on an effective interest method for finance leases or on a straight-line basis over its life for operating leases. Additionally, lessees are required to record a right-of-use asset and lease liability for all leases with a term greater than 12 months. We have made an accounting policy election as permitted under ASC 842 to forgo recognition of a right-of-use asset and lease liability for short-term leases of less than 12 months. Earnings Per Common Share Going Concern Basis Earnings per common share, or EPS, is computed using the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if our series D convertible preferred shares, our restricted share units, or RSUs, or beneficial interests in the Operating Trust, or LTIP Units, were converted into our common shares, which could result in a lower EPS amount. The effect of our series D convertible preferred shares on net income attributable to common shareholders is anti-dilutive for the ten months ended October 31, 2024 and years ended December 31, 2023 and 2022. Reclassifications Reclassifications have been made to the prior years' financial statements and notes to conform to the current year's presentation. Legal Matters We are or may become a party to various legal proceedings. We are not currently involved in any litigation nor, to our knowledge, is any litigation threatened against us where the outcome would, in our judgment based on information currently available to us, have a material adverse effect on the Company. Income Taxes We are a REIT under the Internal Revenue Code of 1986, as amended, and are generally not subject to federal and state income taxes provided we distribute our taxable income to our shareholders and meet other requirements for qualifying as a REIT. We are also subject to certain state and local taxes without regard to our REIT status. Going Concern Basis The Income Taxes Topic of the FASB ASC prescribes how we should recognize, measure and present in our financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Deferred tax assets are recognized to the extent that it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized upon settlement. We classify interest and penalties related to uncertain tax positions, if any, in our financial statements as a component of general and administrative expense. New Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the disclosures about a public entity's reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted ASU 2023-07 on January 1, 2024, and the adoption did not have a material impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements.

Liabilities for Estimated Costs in Excess of Estimated Receipts During Liquidation

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]