HIGHLANDS REIT, INC., 10-K filed on 3/14/2024
Annual Report
v3.24.0.1
Cover - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Mar. 13, 2024
Jun. 30, 2023
Document and Entity Information [Abstract]      
Entity Filer Category 10-K    
Document Annual Report true    
Document Transition Report false    
Entity File Number 000-55580    
Entity Registrant Name HIGHLANDS REIT, INC.    
Entity Incorporation, State or Country Code MD    
Entity Tax Identification Number 81-0862795    
Entity Address, Address Line One 1 South Dearborn Street    
Entity Address, Address Line Two 20th Floor    
Entity Address, City or Town Chicago    
Entity Address, State or Province IL    
Entity Address, Postal Zip Code 60603    
City Area Code 312    
Local Phone Number 583-7990    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Entity Well-known Seasoned Issuer No    
Entity Shell Company false    
Entity Public Float     $ 248.8
Entity Common Stock, Shares Outstanding   721,670,944  
Entity Central Index Key 0001661458    
Document Period End Date Dec. 31, 2023    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Documents Incorporated by Reference
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates by reference portions of the registrant’s Proxy Statement for its 2024 Annual Meeting of Stockholders expected to be held on May 9, 2024.
    
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Audit Information
 12 Months Ended
Dec. 31, 2023
Auditor Information [Abstract]  
Auditor Location Chicago, Illinois
Auditor Firm ID 248
Auditor Name GRANT THORNTON LLP
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Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Investment properties    
Land $ 88,582 $ 79,726
Building and other improvements 296,786 272,232
Construction in progress 10,850 484
Total 396,218 352,442
Less accumulated depreciation (87,216) (76,888)
Net investment properties 309,002 275,554
Cash and cash equivalents 17,078 26,025
Restricted cash and escrows 2,406 1,893
Accounts receivable (net of allowance of $125 and $104 as of December 31, 2023 and 2022, respectively) 6,255 6,265
Intangible assets, net 537 0
Deferred costs and other assets, net 5,874 5,377
Total assets 341,152 315,114
Liabilities    
Debt, net 120,931 61,658
Accounts payable and accrued expenses 13,335 11,084
Other liabilities 2,674 2,015
Total liabilities 136,940 74,757
Commitments and contingencies (See note 14)
Stockholders’ Equity    
Common stock, $0.01 par value, 1,000,000 shares authorized, 721,671 and 888,243 shares issued and outstanding as of December 31, 2023 and 2022, respectively 7,217 8,882
Additional paid-in capital 1,389,951 1,412,637
Accumulated distributions in excess of net income (1,191,868) (1,181,567)
Non-controlling interests 204,212 240,357
Accumulated Other Comprehensive Income (Loss), Net of Tax 20 326
Stockholders' Equity Attributable to Parent 205,320 240,278
Stockholders' Equity Attributable to Noncontrolling Interest (1,108) 79
Total liabilities and equity $ 341,152 $ 315,114
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Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Allowance for accounts and rent receivables $ 125 $ 104
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 721,671,000 888,243,000
Common stock, shares outstanding 721,671,000 888,243,000
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Combined Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Revenues    
Total revenues $ 30,981 $ 31,356
Expenses    
Property operating expenses 8,910 8,794
Real estate taxes 5,353 5,597
Depreciation and amortization 10,758 10,413
General and administrative expenses 12,513 11,656
Total expenses 37,534 36,460
Loss on sale of investment properties 0 (6)
Loss from operations (6,553) (5,110)
Interest income 1,347 140
Interest expense (5,092) (2,680)
Net loss (10,298) (7,650)
Net income attributable to non-controlling interests (3) (12)
Net loss attributable to Highlands REIT, Inc. common stockholders $ (10,301) $ (7,662)
Net income per common share, basic (in dollars per share) $ (0.01) $ (0.01)
Net income per common share, diluted (in dollars per share) $ (0.01) $ (0.01)
Weighted average number of common shares outstanding, basic (in shares) 876,958,000 885,540,000
Weighted average number of common shares outstanding, diluted (in shares) 876,958,000 885,540,000
Unrealized gain (loss) on derivatives $ (369) $ 621
Total other comprehensive income (loss) (369) 621
Comprehensive loss (10,667) (7,029)
Comprehensive (income) loss attributable to non-controlling interests 60 (105)
Comprehensive loss attributable to Highlands REIT, Inc. common stockholders (10,607) (7,134)
Other property income    
Revenues    
Total revenues 935 920
Rental income    
Revenues    
Total revenues $ 30,046 $ 30,436
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Combined Consolidated Statements of Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-in Capital
Accumulated Distributions in Excess of Net Income
Accumulated Other Comprehensive Income
Parent [Member]
Non-controlling interests
Beginning balance (in shares) at Dec. 31, 2021   885,222          
Beginning balance at Dec. 31, 2021 $ 246,537 $ 8,852 $ 1,411,818 $ (1,173,905) $ (202) $ 246,563 $ (26)
Net income (7,650)     (7,662)   (7,662) 12
Other comprehensive income (loss) 621       528 528 93
Share-based compensation (in shares)   3,021          
Share-based compensation, net 849 $ 30 819     849  
Ending balance (in shares) at Dec. 31, 2022   888,243          
Ending balance at Dec. 31, 2022 240,357 $ 8,882 1,412,637 (1,181,567) 326 240,278 79
Net income (10,298)     (10,301)   (10,301) 3
Other comprehensive income (loss) (369)       (306) (306) (63)
Non-controlling interest equity distributions (1,127)           (1,127)
Share-based compensation (in shares)   2,819          
Share-based compensation, net 888 $ 29 859     888  
Repurchase of common stock (in shares)   (169,391)          
Repurchase of common stock (25,239) $ (1,694) (23,545)     (25,239)  
Ending balance (in shares) at Dec. 31, 2023   721,671          
Ending balance at Dec. 31, 2023 $ 204,212 $ 7,217 $ 1,389,951 $ (1,191,868) $ 20 $ 205,320 $ (1,108)
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Consolidated Statements of Cash Flow - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash flows from operating activities:    
Net loss $ (10,298) $ (7,650)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 10,758 10,413
Amortization of above and below market leases, net (7) (24)
Amortization of debt discounts and financing costs 456 160
Straight-line rental income (706) (2,840)
Loss on sale of investment properties, net 0 6
Stock-based compensation expense 1,537 1,467
Changes in assets and liabilities:    
Accounts receivable, net 716 (686)
Deferred costs and other assets, net (45) 24
Accounts payable and accrued expenses (791) 1,558
Other liabilities 649 65
Net cash flows provided by operating activities 2,269 2,493
Cash flows from investing activities:    
Capital expenditures and tenant improvements (9,004) (2,624)
Proceeds from sale of investment properties, net 0 8,938
Acquisition of investment properties (21,288) 0
Payment of leasing fees (955) (1,649)
Net cash flows provided by (used in) investing activities (31,247) 4,665
Cash flows from financing activities:    
Payment of debt issuance costs (1,638) (222)
Proceeds from debt 67,446 9,265
Payoff of debt (17,112) (8,677)
Principal payments of debt (1,137) (998)
Common stock repurchased (25,239) 0
Payment for tax withholding for share-based compensation (649) (618)
Distributions to noncontrolling interest (1,127) 0
Net cash flows provided by (used in) financing activities 20,544 (1,250)
Net increase (decrease) in cash and cash equivalents and restricted cash and escrows (8,434) 5,908
Cash and cash equivalents and restricted cash and escrows, at beginning of year 27,918 22,010
Cash and cash equivalents 17,078 26,025
Restricted cash 2,406 1,893
Cash and cash equivalents and restricted cash and escrows, at end of year 19,484 27,918
Supplemental disclosure of cash flow information:    
Cash paid for interest 4,274 2,526
Supplemental schedule of non-cash activities:    
Non-cash accruals for capital expenditures and tenant improvements 4,198 1,155
Assumption of mortgage debt on acquired investment properties, net of debt discount $ 11,258 $ 0
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Organization
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization Organization
Highlands REIT, Inc. (“Highlands”), which was formed in December 2015, is a Maryland corporation with a portfolio of investment properties including multi-family, retail, office and industrial properties, a correctional facility and unimproved land. Prior to April 28, 2016, Highlands was a wholly-owned subsidiary of InvenTrust Properties Corp. (“InvenTrust” and formerly known as Inland American Real Estate Trust, Inc.), its former parent. Unless stated otherwise or the context otherwise requires, the terms “we,” “our” and “us” and references to the “Company” refer to Highlands and its consolidated subsidiaries.
On April 28, 2016, Highlands spun-off from InvenTrust through a pro rata distribution by InvenTrust of 100% of the outstanding shares of common stock, $0.01 par value per share (the “Common Stock”), of Highlands to holders of record of InvenTrust's common stock as of the close of business on April 25, 2016 (the “Record Date”). Each holder of record of InvenTrust's common stock received one share of Common Stock for every one share of InvenTrust's common stock held at the close of business on the Record Date (the “Distribution”). As a result, Highlands became an independent, self-advised, non-traded public company. Highlands has elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”) for U.S. federal income tax purposes commencing with Highlands' short taxable year ending December 31, 2016.
Each investment property is owned by a separate legal entity, which maintains its own books and financial records, and each entity’s assets are not available to satisfy the liabilities of other affiliated entities. With the exception of one investment property we own through a variable interest entity with a third-party partner (the “Corvue Venture”), we are the sole owner of each of these separate legal entities. As of December 31, 2023, we have an approximate 95% interest in the Corvue Venture and have funded equity contributions to the Corvue Venture in the approximate amount of $10,200. See Note 2 for additional information regarding the basis of presentation of the Corvue Venture, which is consolidated in the accompanying consolidated financial statements.
As of December 31, 2023 and 2022, the Company owned 20 and 19 investment properties, respectively and one parcel of unimproved land.
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Basis of Presentation and Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
The accompanying consolidated financial statements include the accounts of Highlands and its consolidated subsidiaries. Highlands consolidates its wholly-owned subsidiaries and any other entities which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if Highlands is the primary beneficiary of a variable interest entity (“VIE”). The portions of the equity and net income of consolidated subsidiaries that are not attributable to the Company are presented separately as amounts attributable to non-controlling interests in our consolidated financial statements. Entities which Highlands does not control and entities which are VIEs in which Highlands is not a primary beneficiary, if any, are accounted for under appropriate GAAP. Highlands' subsidiaries generally consist of limited liability companies (“LLCs”). The effects of all significant intercompany transactions have been eliminated.
Consolidation
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. Under Accounting Standards Codification (“ASC”) 810 - Consolidation, an entity that holds a variable interest in a VIE and meets certain requirements is considered the primary beneficiary of the VIE and is required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the
VIE and have both the power to direct the activities that most significantly impact the economic performance of the VIE, and the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE.
As of December 31, 2023 and 2022, we have determined we are the primary beneficiary of one VIE, the Corvue Venture, and have consolidated the operations of this entity in the accompanying consolidated financial statements. We reviewed the operating agreement of the Corvue Venture in order to determine our rights and the rights of our third-party partner, including whether those rights are protective or participating. We have determined we are the primary beneficiary of the Corvue Venture because we have (a) the power to direct the activities that most significantly impact the economic performance of the Corvue Venture, (b) the obligation to absorb the losses that could be significant to the Corvue Venture and (c) the right to receive the benefits that could be significant to the Corvue Venture. Included in total assets and liabilities on the Company’s consolidated balance sheets as of December 31, 2023 is $23,740 and $18,116, respectively, related to the Corvue Venture. Included in total assets and liabilities on the Company’s consolidated balance sheets as of December 31, 2022 is $24,926 and $18,028, respectively, related to the Corvue Venture. The assets of the Corvue Venture may only be used to settle obligations of the Corvue Venture and the creditors of the Corvue Venture have no recourse to the general credit of the Company.
Revenue Recognition
The Company accounts for leases under the provisions of ASC 842. The Company commences revenue recognition on leases when the lessee takes possession of, or controls the physical use of, the leased asset, unless the lessee is constructing improvements for which we are deemed to be the owner for accounting purposes. If we are deemed the owner for accounting purposes, the leased asset is the finished space and revenue recognition commences when the lessee takes possession of it, typically when the improvements are substantially complete. Alternatively, if the lessee is deemed to be the owner of the improvements for accounting purposes, then the leased asset is the unimproved space, and any tenant improvement allowances funded under the lease are treated as lease incentives which reduce rental income recognized over the lease term, and we commence revenue recognition when the lessee takes possession of the unimproved space.
The determination of who owns the tenant improvements, for accounting purposes, is based on contractual rights and is subject to significant judgment. In making that determination, we consider all of the following factors. No one factor, however, necessarily establishes its determination.
•whether the lease stipulates how and on what a tenant improvement allowance may be spent;
•whether the tenant or landlord retains legal title to the improvements;
•the uniqueness of the improvements;
•the expected economic life of the tenant improvements relative to the length of the lease; and
•who constructs or directs the construction of the improvements.
Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts receivable in the accompanying consolidated balance sheets.
We recognize cost reimbursement income from pass-through expenses on an accrual basis over the periods in which the expenses were incurred. Pass-through expenses are comprised of real estate taxes, operating expenses and common area maintenance costs which are reimbursed by tenants in accordance with specific allowable costs per tenant lease agreements.
Upon adoption of ASU 2016-02, we elected not to bifurcate lease contracts into lease and non-lease components, since the timing and pattern of revenue is not materially different and the non-lease components are not the primary component of the lease. Accordingly, both lease and non-lease components are presented in rental income in our consolidated financial statements. The adoption of ASU 2016-02 did not result in a material change to our recognition of real estate rental revenue.
The Company reviews the collectability of amounts due from its tenants on a regular basis. Such reviews consider the tenant's financial condition and payment history and other economic conditions impacting the tenant. Changes in collectability occur when the Company no longer believes it is probable that substantially all the lease payments will be collected over the term of the lease. If collection is not probable, the lease payments will be accounted for on a cash basis, and revenue will be recorded as
cash is received. If reassessed, and the collection of substantially all of the lease payments from the tenant becomes probable, the accrual basis of revenue recognition is reestablished.
The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met and amounts due are considered collectible.
Acquisition of Real Estate
We evaluate the inputs, processes and outputs of each investment property acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. Generally, acquisition of real estate qualifies as an asset acquisition.
We allocate the purchase price of real estate to land, building, other building improvements, tenant improvements, and intangible assets and liabilities (such as the value of above- and below-market leases and in-place leases). The values of above- and below-market leases are recorded as intangible assets, net, and other liabilities, respectively, in the consolidated balance sheets, and are amortized as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to rental income over the remaining term of the associated tenant lease. The values associated with in-place leases are recorded in intangible assets, net in the consolidated balance sheets and are amortized to depreciation and amortization expense in the consolidated statements of operations and comprehensive loss over the remaining lease term.
The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including below-market renewal options for which exercise of the renewal option appears to be reasonably assured. The remaining term of leases with renewal options at terms below market reflect the assumed exercise of such below-market renewal options and assume the amortization period would coincide with the extended lease term.
Real Estate Capitalization and Depreciation
Real estate is reflected at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. Depreciation expense is computed using the straight line method. Building and other improvements are depreciated based upon estimated useful lives of 30 years for building and improvements and 5-15 years for furniture, fixtures and equipment and site improvements. Tenant improvements are amortized on a straight line basis over the lesser of the life of the tenant improvement or the lease term as a component of depreciation and amortization expense. Leasing fees are amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense. Loan fees are amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan as a component of interest expense.
Direct and indirect costs that are clearly related to the construction and improvements of investment properties are capitalized. Costs incurred for property taxes and insurance are capitalized during periods in which activities necessary to get the asset ready for its intended use are in progress. Interest costs are also capitalized during such periods. Once the improvements are ready for their intended use, the amounts are reclassified to the appropriate fixed asset accounts. Depreciation begins when the improvement is placed in service.
Sale of Real Estate
We recognize gains and losses from sales of investment properties and land in accordance with FASB ASC 610-20, “Gains and Losses From the Derecognition of Nonfinancial Assets”. We recognize gains and losses from sales of investment properties and land when we transfer control of an investment property and when it is probable that we will collect substantially all of the related consideration.
Assets Held for Sale
A long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which all of the following criteria are met:
•Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group);
•The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups);
•An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated;
•The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within one year, except as permitted by paragraph 360-10-45-11;
•The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value. The price at which a long-lived asset (disposal group) is being marketed is indicative of whether the entity currently has the intent and ability to sell the asset (disposal group). A market price that is reasonable in relation to fair value indicates that the asset (disposal group) is available for immediate sale, whereas a market price in excess of fair value indicates that the asset (disposal group) is not available for immediate sale; and
•Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
If all of the above criteria are met, the Company classifies the investment property as held for sale. The Company does not consider the probability of sale criteria to be met when a contract is within the due diligence period and the earnest money is refundable. On the day that these criteria are met, the Company suspends depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. The assets and liabilities associated with those investment properties that are held for sale are classified separately on the consolidated balance sheets for the most recent reporting period and recorded at the lesser of the carrying value or fair value less costs to sell.
There were no assets held for sale on the consolidated balance sheets as of December 31, 2023 and 2022.
If the sale represents a strategic shift that has (or will have) a major effect on the Company's results of operations, the income and expenses for the period are classified as discontinued operations on the consolidated statement of operations and comprehensive income for all periods presented.
Impairment of Real Estate
The Company assesses the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable, such as a reduction in the expected holding period of the asset. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed the carrying value, the Company records an impairment loss to the extent that the carrying value exceeds the investment property's fair value. The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on the Company’s continuous process of analyzing each asset and reviewing assumptions about uncertain inherent factors, as well as the economic condition of the asset at a particular point in time.
The use of projected future cash flows and related holding period is based on assumptions that are consistent with the estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows and capitalization rates are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analyses could impact these assumptions and result in future impairment charges of the real estate assets.
The Company did not record impairments during the years ended December 31, 2023 and 2022. See Note 9 to the consolidated financial statements for additional information.
Earnings Per Share
Basic earnings per common share is calculated by dividing net income attributable to Highlands REIT, Inc. common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income attributable to Highlands REIT, Inc. common stockholders by the weighted-average number of common shares outstanding during the period, plus any additional common shares that would have been outstanding if the dilutive potential common shares had been issued.
Going Concern Basis of Accounting
When preparing financial statements for each annual and interim reporting period, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its evaluation, the Company considers, but is not limited to, any risks and/or uncertainties to its results of operations, contractual obligations in the form of near-term debt maturities, dividend requirements, or other factors impacting the Company’s liquidity and capital resources. No conditions or events that raised substantial doubt about the ability to continue as a going concern within one year were identified as of the issuance date of the financial statements contained in this Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amendments in this update require additional detailed and enhanced information about reportable segments’ expense, including significant segment expenses and other segment items that bridge segment revenue, significant expenses to segment profit or loss. The ASU also requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”) on an annual basis as well as an explanation of how the CODM uses the reported measures and other disclosures. The amendments in this update do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The guidance is effective for fiscal years beginning after December 15, 2023 with early adoption permitted. The Company is continuing to evaluate this guidance, but expects the standard to impact our disclosures around our segments and is not anticipated to have an impact on the Company’s consolidated financial statements.
Recently issued accounting standards or pronouncements not discussed herein have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on the consolidated financial statements of the Company.
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Acquired Properties
 12 Months Ended
Dec. 31, 2023
Asset Acquisitions [Abstract]  
Acquired Properties Acquired Investment Properties
The Company records identifiable assets and liabilities acquired at fair value. During the year ended December 31, 2023, the Company acquired one multi-family investment property for a gross acquisition price of $34,497. Under ASU No. 2017-01, the Company determined this transaction should be accounted for as an asset acquisition. Accordingly, the Company capitalized transaction costs of approximately $297.
During the year ended December 31, 2022, there were no asset acquisitions.
The following table reflects the investment property acquired during the year ended December 31, 2023.
Investment PropertyLocationAcquisition DateAcquisition Price
The Q LoftsSan Diego, CASeptember 20, 2023$34,497 
The purchase price was allocated as follows:
Total
Land$8,856 
Buildings and other improvements22,876 
Intangible assets, net645 
Deferred costs and other assets190 
Total assets$32,567 
Intangible liabilities, net$(21)
Debt discount on mortgage assumption1,951 
Total liabilities$1,930 
Total acquisition price$34,497 
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Disposed Investment Properties
 12 Months Ended
Dec. 31, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Disposed Investment Properties Disposed Investment Properties
There were no investment property dispositions during the year ended December 31, 2023.
The following table reflects the investment property dispositions during the year ended December 31, 2022.
Investment PropertyLocationDisposition DateGross Disposition PriceSale Proceeds, NetLoss on Sale
State Street MarketRockford, ILMarch 10, 2022$9,000 $8,938 $(6)
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Accounts Payable and Accrued Expenses
 12 Months Ended
Dec. 31, 2023
Payables and Accruals [Abstract]  
Accounts Payable and Accrued Expenses Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
 Year ended December 31,
 20232022
Accrued real estate taxes$6,300 $6,430 
Accrued compensation979 742 
Accrued interest payable570 208 
Other accrued expenses5,486 3,704 
  Total accounts payable and accrued expenses$13,335 $11,084 
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Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
Leasing as a lessor
We lease multi-family investment properties under operating leases with terms of generally one year or less. We lease commercial investment properties under operating leases with remaining lease terms that range from less than one year to fifteen years as of December 31, 2023 and 2022.
Rental income related to the Company's operating leases is comprised of the following:
Year ended December 31,
20232022
Rental income related to fixed lease payments$26,051 $25,603 
Rental income related to variable lease payments3,995 4,833 
Other property income935 920 
Total revenues$30,981 30981000$31,356 

Future Minimum Rental Income
As of December 31, 2023, commercial operating leases provide for future minimum rental income, assuming no expiring leases are renewed, as follows. Multi-family residential leases are not included as the terms are generally for one year or less.
2024$12,810 
202511,897 
202611,650 
202710,888 
20288,826 
Thereafter74,211 
Total$130,282 
Leasing as a lessee
We lease a portion of the land underlying Sherman Plaza, from a third party through a ground lease covering such land with a lease term expiring in October 2042.
Upon adoption of ASU 2016-02, we recognized a right of use asset (included in deferred costs and other assets, net) and lease liability (included in other liabilities). At December 31, 2023, the balances were $265 and were recorded in the consolidated balance sheets. We used a discount rate of approximately 4.5%, reflecting the Company's incremental borrowing rate.
The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on our operating ground lease at December 31, 2023 and a reconciliation of those cash flows to the operating lease liability.
2024$21 
202521 
202621 
202721 
202821 
Thereafter289 
Total$394 
Imputed interest(129)
Lease liability$265 
Leases Leases
Leasing as a lessor
We lease multi-family investment properties under operating leases with terms of generally one year or less. We lease commercial investment properties under operating leases with remaining lease terms that range from less than one year to fifteen years as of December 31, 2023 and 2022.
Rental income related to the Company's operating leases is comprised of the following:
Year ended December 31,
20232022
Rental income related to fixed lease payments$26,051 $25,603 
Rental income related to variable lease payments3,995 4,833 
Other property income935 920 
Total revenues$30,981 30981000$31,356 

Future Minimum Rental Income
As of December 31, 2023, commercial operating leases provide for future minimum rental income, assuming no expiring leases are renewed, as follows. Multi-family residential leases are not included as the terms are generally for one year or less.
2024$12,810 
202511,897 
202611,650 
202710,888 
20288,826 
Thereafter74,211 
Total$130,282 
Leasing as a lessee
We lease a portion of the land underlying Sherman Plaza, from a third party through a ground lease covering such land with a lease term expiring in October 2042.
Upon adoption of ASU 2016-02, we recognized a right of use asset (included in deferred costs and other assets, net) and lease liability (included in other liabilities). At December 31, 2023, the balances were $265 and were recorded in the consolidated balance sheets. We used a discount rate of approximately 4.5%, reflecting the Company's incremental borrowing rate.
The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on our operating ground lease at December 31, 2023 and a reconciliation of those cash flows to the operating lease liability.
2024$21 
202521 
202621 
202721 
202821 
Thereafter289 
Total$394 
Imputed interest(129)
Lease liability$265 
v3.24.0.1
Intangible Assets and Liabilities
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Liabilities Intangible Assets and Liabilities
The following table summarizes the Company's identified intangible assets and intangible liabilities, included in intangible assets, net and other liabilities on the accompanying consolidated balance sheets as of December 31, 2023 and 2022.
As of December 31,
20232022
Intangible Assets:
Acquired in-place lease$548 $— 
Acquired above market lease97 — 
Accumulated amortization(108)— 
Intangible assets, net$537 $— 
Intangible liabilities:
Acquired below market leases$929 $908 
Accumulated amortization(894)(883)
Intangible liabilities, net$35 $25 
The portion of the purchase price allocated to acquired above market lease costs and acquired below market lease costs are amortized on a straight-line basis over the life of the related lease, including the respective renewal period for below market lease costs with fixed rate renewals, as an adjustment to rental income. Amortization pertaining to the above market lease costs is applied as a reduction to rental income. Amortization pertaining to the below market lease costs is applied as an increase to rental income. The portion of the purchase price allocated to acquired in-place lease intangibles is amortized on a straight line basis over the life of the related lease and is recorded as amortization expense.
The following table summarizes the amortization related to acquired above and below market lease costs and acquired in-place lease intangibles for the years ended December 31, 2023 and 2022.
Year ended December 31,
20232022
Amortization of:
Acquired above market lease$(4)$— 
Acquired below market lease11 24 
Net revenues increase$7 $24 
Acquired in-place lease intangibles$103 $— 
The following table presents the amortization during the next five years and thereafter related to intangible assets and liabilities as of December 31, 2023.
20242025202620272028ThereafterTotal
Amortization of:
Acquired above market lease$(15)$(15)$(15)$(15)$(15)$(17)$(92)
Acquired below market lease14 9 4 4 4 — 35 
Net revenues increase$(1)$(6)$(11)$(11)$(11)$(17)$(57)
Acquired in-place lease intangibles$317 $26 $26 $26 $26 $24 $445 
v3.24.0.1
Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
Total debt outstanding as of December 31, 2023 and 2022 was as follows:
20232022
Debt, gross$124,817 $62,411 
Mortgage discount(2,074)(212)
Deferred financing costs, net(1,812)(541)
Total Debt, net$120,931 $61,658 
As of December 31, 2023, the Company's outstanding mortgage indebtedness included 11 mortgage loans with various maturities through January 2036, as follows:
For the year ended December 31,As of December 31, 2023Weighted average
interest rate
2024$— — %
202520,000 5.86 %
(1)
202623,742 4.56 %
202711,203 3.99 %

2028— — %
Thereafter69,872 5.91 %
(1)
Total$124,817 5.47 %
(1)See below for discussion of the derivative agreements entered into with the mortgage loans obtained on Trimble and The Muse. For Trimble (2025), the interest rate in the table above is the fixed rate. For The Muse (thereafter), the interest rate is the rate in effect at December 31, 2023
The Company obtained a loan on November 9, 2023 which was secured by a mortgage encumbering The Muse, one of the Company's multi-family investment properties. The loan has a principal balance of $19,496, matures on November 1, 2033 and requires interest-only payments through December 1, 2028 and principal and interest payments thereafter. The interest rate is variable and was 7.39% at December 31, 2023. In conjunction with the loan closing, the company purchased an interest rate cap contract to cap the interest at 7.44% through its November 1, 2026 expiration at which point the Company is required to purchase a new cap contract.
The Company’s mortgage and the related swap agreement on The Locale had an initial maturity date of September 1, 2023. Prior to the initial maturity date, the Company exercised the one-year extension option provided for in the loan documents and entered into a new swap agreement to fix the interest rate at 7.34% and extend the maturity date to September 1, 2024. On November 8, 2023, the Company placed permanent financing on The Locale and simultaneously repaid the $17,112 outstanding balance on the extended loan and terminated the swap agreement. The new loan matures on December 1, 2030, has a principal balance of $17,700, bears interest at a fixed rate of 6.49% and requires interest-only payments for the duration of its 7-year term.
On September 20, 2023, the Company assumed two mortgage loans in the total principal amount of $11,258, net of a debt discount of $1,951 in connection with the acquisition of The Q Lofts. The carrying value of the assumed debt was marked to fair value as of the acquisition date. According to the terms of the loan agreements, the contractual fixed rates are 4.61% and 4.50%, require payments of principal and interest and the maturity date of both loans is January 1, 2036. The debt discount will be amortized to interest expense over the life of the loans.
The Company obtained a loan on April 6, 2023 which was secured by a mortgage encumbering one of the buildings comprising the Trimble office investment property. The building is approximately 97,000 square feet and is currently occupied by Veeco Instruments, Inc. The loan secured by a mortgage on this Trimble building has a principal amount of $20,000, $4,000 of which is guaranteed by the Company. The loan matures on April 6, 2025, with a 12-month extension option, provided certain criteria are met at the time of extension. Simultaneously with the loan closing, we entered into a swap arrangement to fix the interest rate at 5.86% for the term of the loan.
The Company obtained a loan on January 24, 2023 which was secured by a mortgage encumbering Tennyson, one of the Company’s multi-family investment properties. The loan has a principal balance of $10,250. The loan matures on February 1, 2030, bears interest at a fixed rate of 4.84% and requires interest-only payments for the duration of its 7-year term.
The Company obtained two loans on June 30, 2022 which were each secured by a mortgage encumbering one of the Company's multi-family investment properties. The loan secured by a mortgage on Kenilworth Court has a principal amount of $3,784, and the loan secured by a mortgage on The Lafayette has a principal amount of $5,481. Both loans mature on July 1, 2032, bear interest at a fixed rate of 4.74% and require interest-only payment for the duration of their 10-year term.
The Company's ability to pay off the mortgages when they become due is dependent upon the Company's ability either to refinance the related mortgage debt or to sell the related investment property. With respect to each mortgage loan, if the applicable wholly-owned property-owning subsidiary is unable to refinance or sell the related investment property, or in the event that the estimated value is less than the mortgage balance, the applicable wholly-owned property-owning subsidiary may, if appropriate, satisfy a mortgage obligation by transferring title of the investment property to the lender or permitting a lender to foreclose. As of December 31, 2023, the Company guaranteed one mortgage loan up to $4,000 and as of December 31, 2022, none of our mortgage debt was recourse to the Company. However, Highlands or its subsidiaries may act as guarantor under customary, non-recourse, carve-out guarantees in connection with obtaining mortgage loans on certain of our investment properties.
The loan documents governing the mortgage that encumbered State Street Market included a “cash trap” provision that was triggered when DICK'S Sporting Goods, which was an anchor tenant at the investment property, failed to renew its lease agreement. The lender exercised its right to trigger this “cash trap” provision, and, beginning in the fourth quarter of 2020, all of the cash flows from State Street Market which would otherwise have been available for our use were trapped into a blocked account controlled by the lender pending approval of a substitute lease or repayment of the loan. The Company sold State Street Market on March 10, 2022 and the mortgage, with an outstanding principal balance of $8,677 at the time of sale, was simultaneously repaid. The funds previously trapped and held by the lender, along with all required lender escrows, totaling $2,000, were returned to the Company in April 2022.
Some of the mortgage loans require compliance with certain covenants, such as debt service coverage and net worth ratios. As of December 31, 2023 and 2022, the Company is in compliance with such covenants.
v3.24.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
In accordance with ASC 820, Fair Value Measurement and Disclosures, the Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
•Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
•Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The Company has estimated fair value using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and, to a limited extent, the use of derivative financial instruments. Specifically, the Company may enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments, described below, are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company may use interest rate swaps or caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. We do not enter into derivative financial instruments for speculative purposes. As of December 31, 2023, we had two derivative financial instruments designated as cash flow hedges. The interest rate swap on Trimble had an original notional amount of $20,000 and a maturity date of April 6, 2026. The interest rate cap on The Muse had an original notional amount of $19,496 and a maturity date of November 1, 2026. As of December 31, 2022, we had one derivative financial instrument designated as a cash flow hedge, with an original notional amount of $18,750 and a maturity date of September 1, 2023. These derivatives are measured at fair value on a recurring basis.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income on the consolidated balance sheets and is subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. The amounts recorded as other comprehensive income related to our derivative financial instrument was $369 and $621 for the years ended December 31, 2023 and 2022, respectively. Realized gains and losses will be recognized as they accrue in interest expense.
Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt. The Company estimates that $150 will be reclassified as a decrease to interest expense over the next twelve months.
The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the consolidated balance sheets as of December 31, 2023 and 2022, respectively.
December 31, 2023
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $97 $— $97 
December 31, 2022
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $383 $— $383 
The fair value of our derivative financial instruments were determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivative financial instrument. This analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest
rate market data and implied volatilities in such interest rates. While it was determined that the majority of the inputs used to value the derivative fall within Level 2 of the fair value hierarchy under authoritative accounting guidance, the credit valuation adjustments associated with the derivative also utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of December 31, 2023, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instrument was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instrument. As a result, it was determined that the derivative financial instrument in its entirety should be classified in Level 2 of the fair value hierarchy.
Non-Recurring Measurements
In accordance with ASC 360-10, the Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. During the years ended December 31, 2023 and 2022, events and circumstances indicated that certain investment properties might be impaired. However, the Company's estimate of undiscounted cash flows indicated that such carrying values were expected to be recovered. Nonetheless, it is reasonably possible that the estimate of undiscounted cash flows may change in the future resulting in the need to write down assets to fair value.
Financial Liabilities Disclosed at Fair Value on a Recurring Basis
The table below presents the fair value of financial instruments presented at carrying values in the consolidated financial statements as of December 31, 2023 and 2022.
 December 31, 2023December 31, 2022
 Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Debt, net$124,817 $119,242 $62,411 $57,474 
The Company estimates the fair value of its debt instruments using a weighted average market effective interest rate of 6.69% and 7.44% per annum as of December 31, 2023 and 2022, respectively. The Company estimates the fair value of its mortgage loans by discounting the anticipated future cash flows of each instrument at rates currently offered to the Company by its lenders for similar debt instruments of comparable maturities. The rates used are based on credit spreads observed in the marketplace during the quarter for similar debt instruments, and a floor rate that the Company has derived using its subjective judgment for each asset segment. Based on this, the Company determines the appropriate rate for each of its individual mortgage loans based upon the specific terms of the agreement, including the term to maturity, the quality and nature of the underlying investment property and its leverage ratio. The weighted average market effective interest rates used a range from 5.52% to 9.66% and 5.76% to 8.83% as of December 31, 2023 and 2022, respectively. The assumptions reflect the terms currently available on similar borrowing terms to borrowers with credit profiles similar to the Company’s. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy.
v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company is taxed and operates in a manner that will allow the Company to continue to qualify as a REIT for U.S. federal income tax purposes. So long as it maintains its qualification as a REIT, the Company generally will not be subject to U.S. federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders each year. If the Company fails to continue to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and would not be able to re-elect REIT status during the four years following the year of the failure. Although the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and U.S. federal income and excise taxes on its undistributed income.
MB REIT is currently disregarded as a separate entity from the Company for U.S. federal income tax purposes and is a Qualified REIT Subsidiary (“QRS”) of the Company. All assets, liabilities and items of income, deduction and credit of MB REIT are treated for U.S. federal income tax purposes as those of the Company.
During the years ended December 31, 2023 and 2022, no income tax benefit or expense was included in the consolidated statements of operations and comprehensive loss.
Uncertain Tax Positions
The Company had no unrecognized tax benefits as of or for the years ended December 31, 2023 and 2022. The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2023. The Company has no material interest or penalties relating to income taxes recognized in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022 or in the consolidated balance sheets as of December 31, 2023 and 2022. As of December 31, 2023, the Company's, including its predecessors, 2022, 2021 and 2020 tax years remain subject to examination by U.S. and various state tax jurisdictions.
v3.24.0.1
Segment Reporting
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
GAAP has established guidance for reporting information about a company’s operating segments. The Company monitors and reviews its segment reporting structure in accordance with guidance under FASB ASC Topic 280, Segment Reporting (“ASC 280”) to determine whether any changes have occurred that would impact its reportable segments. The Company currently has two business segments, consisting of multi-family and other.
The following table summarizes net operating income by segment for the years ended December 31, 2023 and 2022.
For the year ended December 31, 2023For the year ended December 31, 2022
TotalMulti-familyOtherTotalMulti-familyOther
Rental income$30,046 $16,712 $13,334 $30,436 $15,727 $14,709 
Other property income935 935 — 920 905 15 
Total revenues30,981 17,647 13,334 31,356 16,632 14,724 
Operating expenses14,263 8,069 6,194 14,391 7,691 6,700 
Net operating income$16,718 $9,578 $7,140 $16,965 $8,941 $8,024 
Non-allocated expenses (1)
(23,271)(22,069)
Other income and expenses (2)
(3,745)(2,540)
Loss on sale of investment properties (3)
— (6)
Net loss$(10,298)$(7,650)
Balance Sheet Data
Real estate assets, net$309,539 $198,220 $111,319 $275,554 $171,457 $104,097 
Non-segmented assets (4)
31,613 39,560 
Total assets$341,152 $315,114 
Capital expenditures$9,004 $643 $8,361 $2,624 $861 $1,763 
(1)Non-allocated expenses consists of general and administrative expenses and depreciation and amortization.
(2)Other income and expenses consists of interest income and interest expense.
(3)Loss on the sale of investment properties is related to State Street Market.
(4)Non-segmented assets include cash and cash equivalents, restricted cash and escrows, accounts receivable and deferred costs and other assets, net.
v3.24.0.1
Share Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Share Based Compensation Share Based Compensation
Incentive Award Plan
On April 28, 2016, the board of directors adopted, ratified and approved the Highlands REIT, Inc. 2016 Incentive Award Plan (the “Incentive Award Plan”), under which the Company may grant cash and equity-based incentive awards to eligible
employees, directors, and consultants. Prior to the Company’s spin-off from InvenTrust, the board of directors of the Company (then a wholly-owned subsidiary of InvenTrust) adopted, and InvenTrust, as the sole stockholder of Highlands, approved, the Incentive Awards Plan.
For the year ended December 31, 2023, the Company granted 4,779 of fully vested shares of common stock with an aggregate value of $1,515 based on a weighted average estimated fair value per share of $0.32. During the year ended December 31, 2022, the Company granted 5,149 of fully vested shares of common stock with an aggregate value of $1,445 based on a weighted average estimated fair value per share of $0.28.
Under the Incentive Award Plan, the Company was initially authorized to grant up to 43,000 shares of the Company's common stock pursuant to awards under the plan. On August 12, 2021, the board of directors increased the authorized number of shares of its Common Stock under the Incentive Award Plan from 43,000 to 67,000 pursuant to that certain Second Amendment to Highlands REIT, Inc. 2016 Incentive Award Plan, dated as of August 12, 2021. At December 31, 2023, 11,616 shares were available for future issuance under the Incentive Award Plan. A summary of the Company's stock awards activity as of December 31, 2023 is as follows:
Non-Vested stock awardsStock AwardsWeighted Average Grant Date Fair Value
Balance at January 1, 2023— $— 
Granted4,779 — 
Vested(4,779)— 
Other— 
Balance at December 31, 2023— $— 
The Company recognized stock-based compensation expense for the years ended December 31, 2023 and 2022 of $1,537 and $1,467, respectively, related to the Incentive Award Plan. For the years ended December 31, 2023 and 2022, the Company paid $649 and $618, respectively, related to tax withholding for share-based compensation.
v3.24.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the financial statements of the Company.
Highlands has also agreed to indemnify InvenTrust against all taxes related to the Company and its assets, including taxes attributable to periods prior to the separation and distribution. InvenTrust has agreed to indemnify the Company for any taxes attributable to the failure of InvenTrust’s or MB REIT (Florida). Inc., a subsidiary of the Company, to maintain its qualification as a REIT for any taxable year ending on or before December 31, 2016.
In February 2021, the Company executed a lease with Veeco Instruments, Inc. for approximately 97,000 square feet at Trimble. The lease required a significant tenant allowance, which is being accounted for as lessor-owned improvements, and a broker commission. The total cost commitment was estimated to be approximately $9,100. As of December 31, 2023, we estimate that remaining costs to be paid under this commitment are approximately $673. The tenant began paying cash rent on January 1, 2023. The remainder of the tenant allowance will be paid by the Company upon final request by tenant.
In November 2022, the Company executed a lease with XP Power, LLC for approximately 80,000 square feet at Trimble. Rental payments under this lease commenced in January 2024. The lease required significant landlord work, a tenant allowance, which will be accounted for as lessor-owned improvements, and leasing commission. The total cost commitment is estimated to be approximately $13,200. As of December 31, 2023, we estimate that remaining costs to be paid under this commitment are approximately $3,775.
v3.24.0.1
Subsequent Events
 12 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
On February 5, 2024, the Company sold both industrial properties to the tenant. The St. Paul, Minnesota location was sold at a price of $13,325 and the New Ulm, Minnesota location was sold at a price of $7,175. After paying closing expenses, we received approximately $20,300 in proceeds from the sale of these properties.
v3.24.0.1
Schedule III Real Estate and Accumulated Depreciation
 12 Months Ended
Dec. 31, 2023
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]  
Schedule III Real Estate and Accumulated Depreciation
Initial Cost (A) Gross amount at which carried at end of period
 Encumbrance LandBuildings and ImprovementsAdjustments to Land Basis (B)Adjustments to Building Basis (B)Land Buildings and Improvements Total (C)Accumulated Depreciation (D,E) Date of Completion of Construction or Acquisition
Multi-family
1620 Central Street
   Evanston, IL		$— $3,075 $17,140 $— $161 $3,075 $17,301 $20,376 $3,441 2018
Buerger Brothers Lofts
   Denver, CO		— 3,117 7,114 — 671 3,117 7,785 10,902 1,760 2017
Chamber Lofts
   Denver, CO		— 2,797 6,388 — 515 2,797 6,903 9,700 1,561 2017
Kenilworth Court
   Denver, CO		3,784 2,496 3,203 — 39 2,496 3,242 5,738 615 2018
Tennyson
   Denver, CO		10,250 1,533 17,410 — 48 1,533 17,458 18,991 2,871 2019
The Detroit and Detroit Terraces
   Denver, CO		11,203 3,370 15,006 — 97 3,370 15,103 18,473 2,713 2019
The Lafayette
   Denver, CO		5,481 2,457 7,067 — 228 2,457 7,295 9,752 1,478 2018
The Locale
   Allendale, MI		17,700 4,294 22,461 — 720 4,294 23,181 27,475 4,462 2019
The Muse
   Denver, CO		19,496 5,303 42,809 — 166 5,303 42,975 48,278 6,274 2019
The Q Lofts
   San Diego, CA		13,161 8,856 22,877 — — 8,856 22,877 31,733 202 2023
The Sterling
   San Diego, CA		— 1,849 5,407 — 30 1,849 5,437 7,286 698 2020
The View
   San Diego, CA		— 7,272 8,862 — 667 7,272 9,529 16,801 1,748 2019
Other
Buckhorn Plaza
   Bloomsburg, PA		9,357 1,651 11,770 (35)2,292 1,616 14,062 15,678 8,961 2006
Hudson Correctional Facility
   Hudson, CO		— 1,382 — (1,382)— — — — — 2009
Palazzo Del Lago
   Orlando, FL		— 8,938 — — 19 8,938 19 8,957 10 2010
Sherman Plaza
   Evanston, IL		— 9,655 30,982 — 12,633 9,655 43,615 53,270 24,066 2006
The Market at Hilliard
   Hilliard, OH		14,385 4,432 13,308 — 4,537 4,432 17,845 22,277 10,294 2005
Initial Cost (A) Gross amount at which carried at end of period
 Encumbrance LandBuildings and ImprovementsAdjustments to Land Basis (B)Adjustments to Building Basis (B)Land Buildings and Improvements Total (C)Accumulated Depreciation (D,E) Date of Completion of Construction or Acquisition
Trimble
   San Jose, CA		20,000 12,732 10,045 — 12,633 12,732 22,678 35,410 5,057 2013
Versacold USA - St. Paul
   St. Paul, MN		— 3,890 10,093 — — 3,890 10,093 13,983 5,698 2007
Versacold USA - New Ulm
   New Ulm, MN		— 900 9,359 — — 900 9,359 10,259 5,291 2007
Corporate— — — — 29 — 29 29 16 N/A
Totals$124,817 $89,999 $261,301 $(1,417)$35,485 $88,582 $296,786 $385,368 $87,216 
Notes to Schedule III:
The aggregate cost of real estate owned at December 31, 2023 for U.S. federal income tax purposes was approximately $479,131 (unaudited).
A.The initial cost to the Company represents the original purchase price of the investment property, including amounts incurred subsequent to acquisition which were contemplated at the time the investment property was acquired.
B.Adjustments to basis include provisions for asset impairments, partial dispositions and costs capitalized subsequent to acquisitions.
C.Reconciliation of real estate owned:
20232022
Balance at January 1$351,958 $353,555 
Acquisitions and capital improvements33,410 8,676 
Dispositions and write-offs— (10,273)
Balance at December 31,$385,368 $351,958 
D.Reconciliation of accumulated depreciation:
20232022
Balance at January 1$76,888 $67,478 
Depreciation expense10,328 10,136 
Dispositions and write-offs— (726)
Balance at December 31,$87,216 $76,888 
E.Depreciation is computed based upon the following estimated lives:
Buildings and improvements30 years
Tenant improvementsLife of the lease
Furniture, fixtures, & equipment and site improvements
5-15 years
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
The accompanying consolidated financial statements include the accounts of Highlands and its consolidated subsidiaries.
Principles of Consolidation Highlands consolidates its wholly-owned subsidiaries and any other entities which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if Highlands is the primary beneficiary of a variable interest entity (“VIE”). The portions of the equity and net income of consolidated subsidiaries that are not attributable to the Company are presented separately as amounts attributable to non-controlling interests in our consolidated financial statements. Entities which Highlands does not control and entities which are VIEs in which Highlands is not a primary beneficiary, if any, are accounted for under appropriate GAAP. Highlands' subsidiaries generally consist of limited liability companies (“LLCs”). The effects of all significant intercompany transactions have been eliminated.
Consolidation
Consolidation
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. Under Accounting Standards Codification (“ASC”) 810 - Consolidation, an entity that holds a variable interest in a VIE and meets certain requirements is considered the primary beneficiary of the VIE and is required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the
VIE and have both the power to direct the activities that most significantly impact the economic performance of the VIE, and the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE.
Revenue Recognition
Revenue Recognition
The Company accounts for leases under the provisions of ASC 842. The Company commences revenue recognition on leases when the lessee takes possession of, or controls the physical use of, the leased asset, unless the lessee is constructing improvements for which we are deemed to be the owner for accounting purposes. If we are deemed the owner for accounting purposes, the leased asset is the finished space and revenue recognition commences when the lessee takes possession of it, typically when the improvements are substantially complete. Alternatively, if the lessee is deemed to be the owner of the improvements for accounting purposes, then the leased asset is the unimproved space, and any tenant improvement allowances funded under the lease are treated as lease incentives which reduce rental income recognized over the lease term, and we commence revenue recognition when the lessee takes possession of the unimproved space.
The determination of who owns the tenant improvements, for accounting purposes, is based on contractual rights and is subject to significant judgment. In making that determination, we consider all of the following factors. No one factor, however, necessarily establishes its determination.
•whether the lease stipulates how and on what a tenant improvement allowance may be spent;
•whether the tenant or landlord retains legal title to the improvements;
•the uniqueness of the improvements;
•the expected economic life of the tenant improvements relative to the length of the lease; and
•who constructs or directs the construction of the improvements.
Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts receivable in the accompanying consolidated balance sheets.
We recognize cost reimbursement income from pass-through expenses on an accrual basis over the periods in which the expenses were incurred. Pass-through expenses are comprised of real estate taxes, operating expenses and common area maintenance costs which are reimbursed by tenants in accordance with specific allowable costs per tenant lease agreements.
Upon adoption of ASU 2016-02, we elected not to bifurcate lease contracts into lease and non-lease components, since the timing and pattern of revenue is not materially different and the non-lease components are not the primary component of the lease. Accordingly, both lease and non-lease components are presented in rental income in our consolidated financial statements. The adoption of ASU 2016-02 did not result in a material change to our recognition of real estate rental revenue.
The Company reviews the collectability of amounts due from its tenants on a regular basis. Such reviews consider the tenant's financial condition and payment history and other economic conditions impacting the tenant. Changes in collectability occur when the Company no longer believes it is probable that substantially all the lease payments will be collected over the term of the lease. If collection is not probable, the lease payments will be accounted for on a cash basis, and revenue will be recorded as
cash is received. If reassessed, and the collection of substantially all of the lease payments from the tenant becomes probable, the accrual basis of revenue recognition is reestablished.
The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met and amounts due are considered collectible.
Real Estate
Acquisition of Real Estate
We evaluate the inputs, processes and outputs of each investment property acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. Generally, acquisition of real estate qualifies as an asset acquisition.
We allocate the purchase price of real estate to land, building, other building improvements, tenant improvements, and intangible assets and liabilities (such as the value of above- and below-market leases and in-place leases). The values of above- and below-market leases are recorded as intangible assets, net, and other liabilities, respectively, in the consolidated balance sheets, and are amortized as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to rental income over the remaining term of the associated tenant lease. The values associated with in-place leases are recorded in intangible assets, net in the consolidated balance sheets and are amortized to depreciation and amortization expense in the consolidated statements of operations and comprehensive loss over the remaining lease term.
The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including below-market renewal options for which exercise of the renewal option appears to be reasonably assured. The remaining term of leases with renewal options at terms below market reflect the assumed exercise of such below-market renewal options and assume the amortization period would coincide with the extended lease term.
Real Estate Capitalization and Depreciation
Real estate is reflected at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. Depreciation expense is computed using the straight line method. Building and other improvements are depreciated based upon estimated useful lives of 30 years for building and improvements and 5-15 years for furniture, fixtures and equipment and site improvements. Tenant improvements are amortized on a straight line basis over the lesser of the life of the tenant improvement or the lease term as a component of depreciation and amortization expense. Leasing fees are amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense. Loan fees are amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan as a component of interest expense.
Direct and indirect costs that are clearly related to the construction and improvements of investment properties are capitalized. Costs incurred for property taxes and insurance are capitalized during periods in which activities necessary to get the asset ready for its intended use are in progress. Interest costs are also capitalized during such periods. Once the improvements are ready for their intended use, the amounts are reclassified to the appropriate fixed asset accounts. Depreciation begins when the improvement is placed in service.
Sale of Real Estate
We recognize gains and losses from sales of investment properties and land in accordance with FASB ASC 610-20, “Gains and Losses From the Derecognition of Nonfinancial Assets”. We recognize gains and losses from sales of investment properties and land when we transfer control of an investment property and when it is probable that we will collect substantially all of the related consideration.
Assets Held for Sale
Assets Held for Sale
A long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which all of the following criteria are met:
•Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group);
•The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups);
•An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated;
•The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within one year, except as permitted by paragraph 360-10-45-11;
•The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value. The price at which a long-lived asset (disposal group) is being marketed is indicative of whether the entity currently has the intent and ability to sell the asset (disposal group). A market price that is reasonable in relation to fair value indicates that the asset (disposal group) is available for immediate sale, whereas a market price in excess of fair value indicates that the asset (disposal group) is not available for immediate sale; and
•Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
If all of the above criteria are met, the Company classifies the investment property as held for sale. The Company does not consider the probability of sale criteria to be met when a contract is within the due diligence period and the earnest money is refundable. On the day that these criteria are met, the Company suspends depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. The assets and liabilities associated with those investment properties that are held for sale are classified separately on the consolidated balance sheets for the most recent reporting period and recorded at the lesser of the carrying value or fair value less costs to sell.
Impairment of Real Estate
Impairment of Real Estate
The Company assesses the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable, such as a reduction in the expected holding period of the asset. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed the carrying value, the Company records an impairment loss to the extent that the carrying value exceeds the investment property's fair value. The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on the Company’s continuous process of analyzing each asset and reviewing assumptions about uncertain inherent factors, as well as the economic condition of the asset at a particular point in time.
The use of projected future cash flows and related holding period is based on assumptions that are consistent with the estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows and capitalization rates are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analyses could impact these assumptions and result in future impairment charges of the real estate assets.
Earnings Per Share
Earnings Per Share
Basic earnings per common share is calculated by dividing net income attributable to Highlands REIT, Inc. common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income attributable to Highlands REIT, Inc. common stockholders by the weighted-average number of common shares outstanding during the period, plus any additional common shares that would have been outstanding if the dilutive potential common shares had been issued.
Going Concern Basis of Accounting
Going Concern Basis of Accounting
When preparing financial statements for each annual and interim reporting period, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its evaluation, the Company considers, but is not limited to, any risks and/or uncertainties to its results of operations, contractual obligations in the form of near-term debt maturities, dividend requirements, or other factors impacting the Company’s liquidity and capital resources. No conditions or events that raised substantial doubt about the ability to continue as a going concern within one year were identified as of the issuance date of the financial statements contained in this Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amendments in this update require additional detailed and enhanced information about reportable segments’ expense, including significant segment expenses and other segment items that bridge segment revenue, significant expenses to segment profit or loss. The ASU also requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”) on an annual basis as well as an explanation of how the CODM uses the reported measures and other disclosures. The amendments in this update do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The guidance is effective for fiscal years beginning after December 15, 2023 with early adoption permitted. The Company is continuing to evaluate this guidance, but expects the standard to impact our disclosures around our segments and is not anticipated to have an impact on the Company’s consolidated financial statements.
Recently issued accounting standards or pronouncements not discussed herein have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on the consolidated financial statements of the Company.
v3.24.0.1
Acquired Properties (Tables)
 12 Months Ended
Dec. 31, 2023
Asset Acquisitions [Abstract]  
Schedule Of Asset Acquisitions
The following table reflects the investment property acquired during the year ended December 31, 2023.
Investment PropertyLocationAcquisition DateAcquisition Price
The Q LoftsSan Diego, CASeptember 20, 2023$34,497 
The purchase price was allocated as follows:
Total
Land$8,856 
Buildings and other improvements22,876 
Intangible assets, net645 
Deferred costs and other assets190 
Total assets$32,567 
Intangible liabilities, net$(21)
Debt discount on mortgage assumption1,951 
Total liabilities$1,930 
Total acquisition price$34,497 
v3.24.0.1
Disposed Investment Properties (Tables)
 12 Months Ended
Dec. 31, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Sales Activity and Operations
The following table reflects the investment property dispositions during the year ended December 31, 2022.
Investment PropertyLocationDisposition DateGross Disposition PriceSale Proceeds, NetLoss on Sale
State Street MarketRockford, ILMarch 10, 2022$9,000 $8,938 $(6)
v3.24.0.1
Accounts Payable and Accrued Expenses (Tables)
 12 Months Ended
Dec. 31, 2023
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
 Year ended December 31,
 20232022
Accrued real estate taxes$6,300 $6,430 
Accrued compensation979 742 
Accrued interest payable570 208 
Other accrued expenses5,486 3,704 
  Total accounts payable and accrued expenses$13,335 $11,084 
v3.24.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Lease Income
Rental income related to the Company's operating leases is comprised of the following:
Year ended December 31,
20232022
Rental income related to fixed lease payments$26,051 $25,603 
Rental income related to variable lease payments3,995 4,833 
Other property income935 920 
Total revenues$30,981 30981000$31,356 
Payments to be received under Topic 842
As of December 31, 2023, commercial operating leases provide for future minimum rental income, assuming no expiring leases are renewed, as follows. Multi-family residential leases are not included as the terms are generally for one year or less.
2024$12,810 
202511,897 
202611,650 
202710,888 
20288,826 
Thereafter74,211 
Total$130,282 
Operating lease liability under Topic 842
The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on our operating ground lease at December 31, 2023 and a reconciliation of those cash flows to the operating lease liability.
2024$21 
202521 
202621 
202721 
202821 
Thereafter289 
Total$394 
Imputed interest(129)
Lease liability$265 
v3.24.0.1
Intangible Assets and Liabilities (Tables)
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of identified intangible assets and intangible liabilities
The following table summarizes the Company's identified intangible assets and intangible liabilities, included in intangible assets, net and other liabilities on the accompanying consolidated balance sheets as of December 31, 2023 and 2022.
As of December 31,
20232022
Intangible Assets:
Acquired in-place lease$548 $— 
Acquired above market lease97 — 
Accumulated amortization(108)— 
Intangible assets, net$537 $— 
Intangible liabilities:
Acquired below market leases$929 $908 
Accumulated amortization(894)(883)
Intangible liabilities, net$35 $25 
Summary of amortization of identified intangible assets and liabilities
The following table summarizes the amortization related to acquired above and below market lease costs and acquired in-place lease intangibles for the years ended December 31, 2023 and 2022.
Year ended December 31,
20232022
Amortization of:
Acquired above market lease$(4)$— 
Acquired below market lease11 24 
Net revenues increase$7 $24 
Acquired in-place lease intangibles$103 $— 
The following table presents the amortization during the next five years and thereafter related to intangible assets and liabilities as of December 31, 2023.
20242025202620272028ThereafterTotal
Amortization of:
Acquired above market lease$(15)$(15)$(15)$(15)$(15)$(17)$(92)
Acquired below market lease14 9 4 4 4 — 35 
Net revenues increase$(1)$(6)$(11)$(11)$(11)$(17)$(57)
Acquired in-place lease intangibles$317 $26 $26 $26 $26 $24 $445 
Summary of accretion income for below market leases
The following table summarizes the amortization related to acquired above and below market lease costs and acquired in-place lease intangibles for the years ended December 31, 2023 and 2022.
Year ended December 31,
20232022
Amortization of:
Acquired above market lease$(4)$— 
Acquired below market lease11 24 
Net revenues increase$7 $24 
Acquired in-place lease intangibles$103 $— 
The following table presents the amortization during the next five years and thereafter related to intangible assets and liabilities as of December 31, 2023.
20242025202620272028ThereafterTotal
Amortization of:
Acquired above market lease$(15)$(15)$(15)$(15)$(15)$(17)$(92)
Acquired below market lease14 9 4 4 4 — 35 
Net revenues increase$(1)$(6)$(11)$(11)$(11)$(17)$(57)
Acquired in-place lease intangibles$317 $26 $26 $26 $26 $24 $445 
v3.24.0.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Schedule of Debt
Total debt outstanding as of December 31, 2023 and 2022 was as follows:
20232022
Debt, gross$124,817 $62,411 
Mortgage discount(2,074)(212)
Deferred financing costs, net(1,812)(541)
Total Debt, net$120,931 $61,658 
Scheduled Maturities of Mortgage Indebtedness
As of December 31, 2023, the Company's outstanding mortgage indebtedness included 11 mortgage loans with various maturities through January 2036, as follows:
For the year ended December 31,As of December 31, 2023Weighted average
interest rate
2024$— — %
202520,000 5.86 %
(1)
202623,742 4.56 %
202711,203 3.99 %

2028— — %
Thereafter69,872 5.91 %
(1)
Total$124,817 5.47 %
(1)See below for discussion of the derivative agreements entered into with the mortgage loans obtained on Trimble and The Muse. For Trimble (2025), the interest rate in the table above is the fixed rate. For The Muse (thereafter), the interest rate is the rate in effect at December 31, 2023
v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value, Liabilities Measured on Recurring Basis
The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the consolidated balance sheets as of December 31, 2023 and 2022, respectively.
December 31, 2023
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $97 $— $97 
December 31, 2022
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $383 $— $383 
Schedule of the Fair Value of Financial Instruments
The table below presents the fair value of financial instruments presented at carrying values in the consolidated financial statements as of December 31, 2023 and 2022.
 December 31, 2023December 31, 2022
 Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Debt, net$124,817 $119,242 $62,411 $57,474 
v3.24.0.1
Segment Reporting (Tables)
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Summary of Net Property Operations
The following table summarizes net operating income by segment for the years ended December 31, 2023 and 2022.
For the year ended December 31, 2023For the year ended December 31, 2022
TotalMulti-familyOtherTotalMulti-familyOther
Rental income$30,046 $16,712 $13,334 $30,436 $15,727 $14,709 
Other property income935 935 — 920 905 15 
Total revenues30,981 17,647 13,334 31,356 16,632 14,724 
Operating expenses14,263 8,069 6,194 14,391 7,691 6,700 
Net operating income$16,718 $9,578 $7,140 $16,965 $8,941 $8,024 
Non-allocated expenses (1)
(23,271)(22,069)
Other income and expenses (2)
(3,745)(2,540)
Loss on sale of investment properties (3)
— (6)
Net loss$(10,298)$(7,650)
Balance Sheet Data
Real estate assets, net$309,539 $198,220 $111,319 $275,554 $171,457 $104,097 
Non-segmented assets (4)
31,613 39,560 
Total assets$341,152 $315,114 
Capital expenditures$9,004 $643 $8,361 $2,624 $861 $1,763 
(1)Non-allocated expenses consists of general and administrative expenses and depreciation and amortization.
(2)Other income and expenses consists of interest income and interest expense.
(3)Loss on the sale of investment properties is related to State Street Market.
(4)Non-segmented assets include cash and cash equivalents, restricted cash and escrows, accounts receivable and deferred costs and other assets, net.
v3.24.0.1
Share Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Summary of Stock Award Activity A summary of the Company's stock awards activity as of December 31, 2023 is as follows:
Non-Vested stock awardsStock AwardsWeighted Average Grant Date Fair Value
Balance at January 1, 2023— $— 
Granted4,779 — 
Vested(4,779)— 
Other— 
Balance at December 31, 2023— $— 
v3.24.0.1
Organization (Details)
$ / shares in Units, $ in Thousands
Aug. 16, 2019
USD ($)
Apr. 28, 2016
$ / shares
shares
Dec. 31, 2023
parcel
property
$ / shares
Dec. 31, 2022
property
$ / shares
Conversion of Stock [Line Items]        
Common stock, par value (in dollars per share) | $ / shares   $ 0.01 $ 0.01 $ 0.01
Number of assets (in property) | property     20 19
Parcels of land | parcel     1  
Corvue Venture        
Conversion of Stock [Line Items]        
Ownership percentage 95.00%      
Payments to acquire investments | $ $ 10,200      
Common stock        
Conversion of Stock [Line Items]        
Shares issued for each share held at date of spin-off (in shares) | shares   1    
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Total assets $ 341,152,000 $ 315,114,000
Liabilities 136,940,000 74,757,000
Assets held for sale $ 0 $ 0
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] Total revenues Total revenues
Variable Interest Entity, Primary Beneficiary | Corvue Venture    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Total assets $ 23,740,000 $ 24,926,000
Liabilities $ 18,116,000 $ 18,028,000
Buildings and improvements    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Estimated useful lives 30 years  
Furniture, fixtures, equipment and site improvements | Minimum    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Estimated useful lives 5 years  
Furniture, fixtures, equipment and site improvements | Maximum    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Estimated useful lives 15 years  
v3.24.0.1
Acquired Properties - Additional Information (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
segment
Dec. 31, 2022
USD ($)
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Acquisition of investment properties $ 21,288 $ 0
Capitalized transaction costs $ 297  
Multifamily    
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Number of properties acquired | segment 1  
v3.24.0.1
Acquired Properties - Properties Acquired (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Acquisition of investment properties $ 21,288 $ 0
The Q Lofts    
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Land 8,856  
Buildings and other improvements 22,876  
Intangible assets, net 645  
Deferred costs and other assets 190  
Total assets 32,567  
Intangible liabilities, net (21)  
Debt discount on mortgage assumption 1,951  
Total liabilities 1,930  
Total acquisition price 34,497  
The Sterling San Diego, CA    
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Acquisition of investment properties $ 34,497  
v3.24.0.1
Disposed Investment Properties - Activity (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Gross disposition price $ 0 $ 9,000
Proceeds from sale of investment properties, net 0 8,938
Loss on sale of investment properties 0 $ (6)
Citizens    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Loss on sale of investment properties $ 0  
v3.24.0.1
Accounts Payable and Accrued Expenses (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Payables and Accruals [Abstract]    
Accrued real estate taxes $ 6,300 $ 6,430
Accrued compensation 979 742
Accrued interest payable 570 208
Other accrued expenses 5,486 3,704
Total accounts payable and accrued expenses $ 13,335 $ 11,084
v3.24.0.1
Leases - Narrative (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Lessor, Lease, Description [Line Items]  
Lease liability $ 265
Multi-Family Investment Property  
Lessor, Lease, Description [Line Items]  
Lease terms 1 year
Apartment Building  
Lessor, Lease, Description [Line Items]  
Lease terms 1 year
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-02  
Lessor, Lease, Description [Line Items]  
Discount rate 4.50%
Minimum | Commercial Real Estate  
Lessor, Lease, Description [Line Items]  
Lease terms 1 year
Maximum | Commercial Real Estate  
Lessor, Lease, Description [Line Items]  
Lease terms 15 years
v3.24.0.1
Leases - Lease Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
Lease income related to fixed lease payments $ 26,051 $ 25,603
Lease income related to variable lease payments 3,995 4,833
Other property income 935 920
Lease income $ 30,981 $ 31,356
v3.24.0.1
Leases - Receivable Maturity (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Leases [Abstract]  
2024 $ 12,810
2025 11,897
2026 11,650
2027 10,888
2028 8,826
Thereafter 74,211
Total $ 130,282
v3.24.0.1
Leases - Operating Lease Liability Maturity (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Leases [Abstract]  
2024 $ 21
2025 21
2026 21
2027 21
2028 21
Thereafter 289
Total 394
Imputed interest (129)
Lease liability $ 265
Operating Lease, Liability, Statement of Financial Position [Extensible List] Other liabilities
v3.24.0.1
Intangible Assets and Liabilities - Summary (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Accumulated amortization $ (108) $ 0
Acquired in-place lease intangibles 537 0
Acquired below market leases 929 908
Accumulated amortization (894) (883)
Total 35 25
Acquired in-place lease    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets 548 0
Acquired in-place lease intangibles 445  
Acquired above market lease    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets 97 $ 0
Acquired in-place lease intangibles $ (92)  
v3.24.0.1
Intangible Assets and Liabilities - Lease Amortization, Rental Income Increase, and Lease Intangibles (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Amortization of:    
Acquired below market lease $ 11 $ 24
Net revenues increase 7 24
Acquired in-place lease    
Amortization of:    
Intangible assets 103 0
Acquired above market lease    
Amortization of:    
Intangible assets $ 4 $ 0
v3.24.0.1
Intangible Assets and Liabilities - Amortization Schedule (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Acquired below market lease    
2024 $ 14  
2025 9  
2026 4  
2027 4  
2028 4  
Thereafter 0  
Total 35 $ 25
Net rental income increase, 2022 (1)  
Net rental income increase, 2023 (6)  
Net rental income increase, 2024 (11)  
Net rental income increase, 2025 (11)  
Net rental income increase, 2026 (11)  
Net rental income increase, Thereafter (17)  
Net rental income increase, Total (57)  
Acquired in-place lease intangibles 537 $ 0
Acquired above market lease    
Acquired below market lease    
2019 (15)  
2020 (15)  
2021 (15)  
2022 (15)  
2023 (15)  
Thereafter (17)  
Acquired in-place lease intangibles (92)  
Acquired in-place lease    
Acquired below market lease    
2019 317  
2020 26  
2021 26  
2022 26  
2023 26  
Thereafter 24  
Acquired in-place lease intangibles $ 445  
v3.24.0.1
Debt - Schedule of Debt Outstanding (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Debt Disclosure [Abstract]    
Debt, gross $ 124,817 $ 62,411
Mortgage discount (2,074) (212)
Deferred financing costs, net (1,812) (541)
Debt, net $ 120,931 $ 61,658
v3.24.0.1
Debt - Scheduled Maturities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Total $ 124,817 $ 62,411
Mortgages    
Debt Instrument [Line Items]    
2024 0  
2025 20,000  
2026 23,742  
2027 11,203  
2028 0  
Thereafter 69,872  
Total $ 124,817  
Weighted average interest rate    
2024 0.00%  
2025 5.86%  
2026 4.56%  
2027 3.99%  
2028 0.00%  
Thereafter 5.91%  
Total 5.47%  
v3.24.0.1
Debt - Narrative (Details)
$ in Thousands
 12 Months Ended
Nov. 08, 2023
USD ($)
Jun. 30, 2022
USD ($)
loan
Dec. 31, 2023
USD ($)
loan
Dec. 31, 2022
USD ($)
Nov. 09, 2023
USD ($)
Sep. 20, 2023
USD ($)
loan
Apr. 06, 2023
USD ($)
ft²
Jan. 24, 2023
USD ($)
Apr. 30, 2022
USD ($)
Debt Instrument [Line Items]                  
Mortgage loans assumed | loan           2      
Debt Instrument, Number of Loans | loan   2              
Payoff of debt     $ (17,112) $ (8,677)          
Restricted cash     2,406 1,893          
Mortgages                  
Debt Instrument [Line Items]                  
2024     $ 0            
Restricted cash                 $ 2,000
2024     0.00%            
Number of loans | loan     1            
Secured Debt                  
Debt Instrument [Line Items]                  
Guaranteed amount     $ 4 $ 0          
Mortgage Loan in Connection with Acquisition of The Locale | Secured Debt                  
Debt Instrument [Line Items]                  
Mortgage loan     $ 17,700            
Interest rate 7.34%   6.49%            
Debt instrument, term     7 years            
Repayments of Debt $ 17,112                
Loan Secured by Mortgage on Kenilworth Court | Secured Debt                  
Debt Instrument [Line Items]                  
Mortgage loan   $ 3,784              
Interest rate   4.74%              
Debt instrument, term   10 years              
Loan Secured by Mortgage on The Lafayette | Secured Debt                  
Debt Instrument [Line Items]                  
Mortgage loan   $ 5,481              
Interest rate   4.74%              
Debt instrument, term   10 years              
Mortgage Loans Acquired In Acquisition Of The Q Lofts | Mortgages                  
Debt Instrument [Line Items]                  
Mortgage loan     $ 11,258            
Unamortized discount           $ 1,951      
The Q Lofts Mortgage Loan 1 | Mortgages                  
Debt Instrument [Line Items]                  
Interest rate           4.61%      
The Q Lofts Mortgage Loan 2 | Mortgages                  
Debt Instrument [Line Items]                  
Interest rate           4.50%      
Loan Secured by Mortgage Encumbering Trimble | Mortgages                  
Debt Instrument [Line Items]                  
Extension term             12 months    
Loan Secured by Mortgage Encumbering Trimble | Secured Debt                  
Debt Instrument [Line Items]                  
Mortgage loan             $ 20,000    
Interest rate             5.86%    
Building area | ft²             97,000    
Guaranteed amount             $ 4,000    
Loan Secured by Mortgage Encumbering Tennyson | Secured Debt                  
Debt Instrument [Line Items]                  
Mortgage loan               $ 10,250  
Interest rate               4.84%  
Debt instrument, term     7 years            
Loan Secured by Mortgage Encumbering The Muse | Secured Debt                  
Debt Instrument [Line Items]                  
Mortgage loan         $ 19,496        
Interest rate     7.39%            
Interest rate cap         7.44%        
v3.24.0.1
Fair Value Measurements - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
derivative_instrument
Dec. 31, 2022
USD ($)
derivative_instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Unrealized gain (loss) on derivatives $ (369) $ 621
Cash flow hedge gain (loss) 150  
Fair Value, Measurements, Nonrecurring    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Provision for asset impairment $ 0  
Discount rate | Long-term debt    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long term debt measurement input 0.0669 0.0744
Discount rate | Long-term debt | Minimum    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long term debt measurement input 0.0552 0.0576
Discount rate | Long-term debt | Maximum    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long term debt measurement input 0.0966 0.0883
Interest Rate Swap | Cash Flow Hedging    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Number of instruments held | derivative_instrument 2 2
Notional amount $ 20,000 $ 19,496
v3.24.0.1
Fair Value Measurements - Derivative Assets (Details) - Fair Value, Measurements, Recurring - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred costs and other assets $ 97 $ 383
Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred costs and other assets 0 0
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred costs and other assets 97 383
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred costs and other assets $ 0 $ 0
v3.24.0.1
Fair Value Measurements - Non-Recurring Measurements (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Fair Value, Measurements, Nonrecurring  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Provision for asset impairment $ 0
v3.24.0.1
Fair Value Measurements - Not Measured at Fair Value (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Carrying Value    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Debt, net $ 124,817 $ 62,411
Estimated Fair Value    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Debt, net $ 119,242 $ 57,474
v3.24.0.1
Income Taxes (Details)
Dec. 31, 2023
USD ($)
Income Tax Disclosure [Abstract]  
Unrecognized tax benefits $ 0
v3.24.0.1
Segment Reporting - Narrative (Details)
 12 Months Ended
Dec. 31, 2023
segment
Segment Reporting [Abstract]  
Number of business segments (in segments) 2
v3.24.0.1
Segment Reporting - Net Property Operations (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting Information [Line Items]    
Rental income $ 30,981 $ 31,356
Total revenues 30,981 31,356
Operating expenses 14,263 14,391
Net operating income 16,718 16,965
Loss on sale of investment properties 0 (6)
Net loss (10,298) (7,650)
Balance Sheet Data    
Total assets 341,152 315,114
Capital expenditures 9,004 2,624
Reconciling items    
Segment Reporting Information [Line Items]    
Non-allocated expenses (23,271) (22,069)
Other income and expenses (3,745) (2,540)
Balance Sheet Data    
Total assets 31,613 39,560
Operating segments and corporate, non-segment    
Balance Sheet Data    
Total assets 309,539 275,554
Multi-family | Operating segments    
Segment Reporting Information [Line Items]    
Total revenues 17,647 16,632
Operating expenses 8,069 7,691
Net operating income 9,578 8,941
Balance Sheet Data    
Total assets 198,220 171,457
Capital expenditures 643 861
Other | Operating segments    
Segment Reporting Information [Line Items]    
Total revenues 13,334 14,724
Operating expenses 6,194 6,700
Net operating income 7,140 8,024
Balance Sheet Data    
Total assets 111,319 104,097
Capital expenditures 8,361 1,763
Other property income    
Segment Reporting Information [Line Items]    
Total revenues 935 920
Other property income | Multi-family | Operating segments    
Segment Reporting Information [Line Items]    
Total revenues 935 905
Other property income | Other | Operating segments    
Segment Reporting Information [Line Items]    
Total revenues 0 15
Rental income    
Segment Reporting Information [Line Items]    
Total revenues 30,046 30,436
Rental income | Multi-family | Operating segments    
Segment Reporting Information [Line Items]    
Total revenues 16,712 15,727
Rental income | Other | Operating segments    
Segment Reporting Information [Line Items]    
Total revenues $ 13,334 $ 14,709
v3.24.0.1
Share Based Compensation (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Aug. 12, 2021
Apr. 28, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Payment for tax withholding for share-based compensation $ 649 $ 618    
Incentive Award Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense $ 1,537 1,467    
Incentive awards        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Aggregate value of shares granted   $ 1,445    
Number of shares authorized to grant (up to) (in shares)     67,000,000 43,000,000
Shares available for future issuance (in shares) 11,616,000      
Stock Awards        
Beginning balance (in shares) 0      
Granted (in shares) 4,779,000 5,149,000    
Vested (in shares) (4,779,000)      
Forfeited (in shares)      
Ending balance (in shares) 0 0    
Weighted Average Grant Date Fair Value        
Beginning balance (in dollars per share) $ 0      
Granted (in dollars per share) 0 $ 0.28    
Vested (in dollars per share) 0      
Forfeited (in dollars per share) 0      
Ending balance (in dollars per share) $ 0 $ 0    
Executive Officer        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Aggregate value of shares granted $ 1,515      
Stock Awards        
Granted (in shares) 4,779,000      
Weighted Average Grant Date Fair Value        
Granted (in dollars per share) $ 0.32      
v3.24.0.1
Commitments and Contingencies (Details)
$ in Thousands
 1 Months Ended
Apr. 30, 2020
ft²
Dec. 31, 2023
USD ($)
Nov. 30, 2022
USD ($)
ft²
Feb. 28, 2021
USD ($)
Lessor, Lease, Description [Line Items]        
Lease not yet commenced, leased area | ft²     80,000  
Lease not yet commenced, cost     $ 13,200  
Lessee, Operating Lease, Lease Not Yet Commenced, Estimated Remaining Cost   $ 3,775    
Veeco Instrument, Inc. Lease        
Lessor, Lease, Description [Line Items]        
Contractual obligation       $ 9,100
Contractual obligation, re-estimated remaining obligation   $ 673    
Veeco Instruments, Inc        
Lessor, Lease, Description [Line Items]        
Leased area | ft² 97,000      
v3.24.0.1
Subsequent Events (Details) - Subsequent Event
$ in Thousands
Feb. 05, 2024
USD ($)
Subsequent Event [Line Items]  
Proceeds from sale of industrial properties $ 20,300
St. Paul, Minnesota Location  
Subsequent Event [Line Items]  
Proceeds from sale of industrial properties 13,325
New Ulm, Minnesota Location  
Subsequent Event [Line Items]  
Proceeds from sale of industrial properties $ 7,175
v3.24.0.1
Schedule III Real Estate and Accumulated Depreciation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance $ 124,817  
Initial Cost, Land 89,999  
Initial Cost, Buildings and Improvements 261,301  
Adjustments to Land Basis (1,417)  
Adjustments to Building Basis 35,485  
Gross amount at which carried at end of period, Land and Improvements 88,582  
Gross amount at which carried at end of period, Buildings and Improvements 296,786  
Gross amount at which carried at end of period, Total 385,368 $ 351,958
Accumulated Depreciation 87,216 76,888
Notes to Schedule III    
Cost of real estate owned 479,131  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Beginning balance 351,958 353,555
Acquisitions and capital improvements 33,410 8,676
Dispositions and write-offs 0 (10,273)
Ending balance 385,368 351,958
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Beginning balance 76,888 67,478
Depreciation expense 10,328 10,136
Dispositions and write-offs 0 (726)
Ending balance $ 87,216 $ 76,888
Furniture, fixtures, & equipment and site improvements | Minimum    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Investment in real estate and accumulated depreciation, life used for depreciation 5 years  
Furniture, fixtures, & equipment and site improvements | Maximum    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Investment in real estate and accumulated depreciation, life used for depreciation 15 years  
Buildings and improvements    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Investment in real estate and accumulated depreciation, life used for depreciation 30 years  
Multifamily | 1620 Central Street Evanston, IL | Evanston, Illinois    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land $ 3,075  
Initial Cost, Buildings and Improvements 17,140  
Adjustments to Building Basis 161  
Gross amount at which carried at end of period, Land and Improvements 3,075  
Gross amount at which carried at end of period, Buildings and Improvements 17,301  
Gross amount at which carried at end of period, Total 20,376  
Accumulated Depreciation 3,441  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 20,376  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 3,441  
Multifamily | Buerger Brothers Lofts Denver, CO | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 3,117  
Initial Cost, Buildings and Improvements 7,114  
Adjustments to Building Basis 671  
Gross amount at which carried at end of period, Land and Improvements 3,117  
Gross amount at which carried at end of period, Buildings and Improvements 7,785  
Gross amount at which carried at end of period, Total 10,902  
Accumulated Depreciation 1,760  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 10,902  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,760  
Multifamily | Chamber Lofts Denver, CO | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 2,797  
Initial Cost, Buildings and Improvements 6,388  
Adjustments to Building Basis 515  
Gross amount at which carried at end of period, Land and Improvements 2,797  
Gross amount at which carried at end of period, Buildings and Improvements 6,903  
Gross amount at which carried at end of period, Total 9,700  
Accumulated Depreciation 1,561  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 9,700  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,561  
Multifamily | Kenilworth Court Denver, CO | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 3,784  
Initial Cost, Land 2,496  
Initial Cost, Buildings and Improvements 3,203  
Adjustments to Building Basis 39  
Gross amount at which carried at end of period, Land and Improvements 2,496  
Gross amount at which carried at end of period, Buildings and Improvements 3,242  
Gross amount at which carried at end of period, Total 5,738  
Accumulated Depreciation 615  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 5,738  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 615  
Multifamily | Tennyson Denver, CO | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 10,250  
Initial Cost, Land 1,533  
Initial Cost, Buildings and Improvements 17,410  
Adjustments to Building Basis 48  
Gross amount at which carried at end of period, Land and Improvements 1,533  
Gross amount at which carried at end of period, Buildings and Improvements 17,458  
Gross amount at which carried at end of period, Total 18,991  
Accumulated Depreciation 2,871  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 18,991  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 2,871  
Multifamily | The Detroit And Detroit Terraces | Evanston, Illinois    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 11,203  
Initial Cost, Land 3,370  
Initial Cost, Buildings and Improvements 15,006  
Adjustments to Building Basis 97  
Gross amount at which carried at end of period, Land and Improvements 3,370  
Gross amount at which carried at end of period, Buildings and Improvements 15,103  
Gross amount at which carried at end of period, Total 18,473  
Accumulated Depreciation 2,713  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 18,473  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 2,713  
Multifamily | The Lafayette Denver, CO | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 5,481  
Initial Cost, Land 2,457  
Initial Cost, Buildings and Improvements 7,067  
Adjustments to Building Basis 228  
Gross amount at which carried at end of period, Land and Improvements 2,457  
Gross amount at which carried at end of period, Buildings and Improvements 7,295  
Gross amount at which carried at end of period, Total 9,752  
Accumulated Depreciation 1,478  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 9,752  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,478  
Multifamily | The Locale Allendale, MI | Allendale MI    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 17,700  
Initial Cost, Land 4,294  
Initial Cost, Buildings and Improvements 22,461  
Adjustments to Building Basis 720  
Gross amount at which carried at end of period, Land and Improvements 4,294  
Gross amount at which carried at end of period, Buildings and Improvements 23,181  
Gross amount at which carried at end of period, Total 27,475  
Accumulated Depreciation 4,462  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 27,475  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 4,462  
Multifamily | The Muse Denver, CO | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 19,496  
Initial Cost, Land 5,303  
Initial Cost, Buildings and Improvements 42,809  
Adjustments to Building Basis 166  
Gross amount at which carried at end of period, Land and Improvements 5,303  
Gross amount at which carried at end of period, Buildings and Improvements 42,975  
Gross amount at which carried at end of period, Total 48,278  
Accumulated Depreciation 6,274  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 48,278  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 6,274  
Multifamily | The Sterling San Diego, CA | Sand Diego, California    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 1,849  
Initial Cost, Buildings and Improvements 5,407  
Adjustments to Building Basis 30  
Gross amount at which carried at end of period, Land and Improvements 1,849  
Gross amount at which carried at end of period, Buildings and Improvements 5,437  
Gross amount at which carried at end of period, Total 7,286  
Accumulated Depreciation 698  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 7,286  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 698  
Multifamily | The View San Diego, CA | Sand Diego, California    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 7,272  
Initial Cost, Buildings and Improvements 8,862  
Adjustments to Building Basis 667  
Gross amount at which carried at end of period, Land and Improvements 7,272  
Gross amount at which carried at end of period, Buildings and Improvements 9,529  
Gross amount at which carried at end of period, Total 16,801  
Accumulated Depreciation 1,748  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 16,801  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,748  
Multifamily | The Q Lofts | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 13,161  
Initial Cost, Land 8,856  
Initial Cost, Buildings and Improvements 22,877  
Adjustments to Building Basis 0  
Gross amount at which carried at end of period, Land and Improvements 8,856  
Gross amount at which carried at end of period, Buildings and Improvements 22,877  
Gross amount at which carried at end of period, Total 31,733  
Accumulated Depreciation 202  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 31,733  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 202  
Retail Site | Buckhorn Plaza Bloomsburg, PA | Bloomsburg, Pennsylvania    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 9,357  
Initial Cost, Land 1,651  
Initial Cost, Buildings and Improvements 11,770  
Adjustments to Land Basis (35)  
Adjustments to Building Basis 2,292  
Gross amount at which carried at end of period, Land and Improvements 1,616  
Gross amount at which carried at end of period, Buildings and Improvements 14,062  
Gross amount at which carried at end of period, Total 15,678  
Accumulated Depreciation 8,961  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 15,678  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 8,961  
Retail Site | Sherman Plaza Evanston, IL | Evanston, Illinois    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 9,655  
Initial Cost, Buildings and Improvements 30,982  
Adjustments to Building Basis 12,633  
Gross amount at which carried at end of period, Land and Improvements 9,655  
Gross amount at which carried at end of period, Buildings and Improvements 43,615  
Gross amount at which carried at end of period, Total 53,270  
Accumulated Depreciation 24,066  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 53,270  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 24,066  
Retail Site | The Market at Hilliard Hilliard, OH | Hilliard, Ohio    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 14,385  
Initial Cost, Land 4,432  
Initial Cost, Buildings and Improvements 13,308  
Adjustments to Building Basis 4,537  
Gross amount at which carried at end of period, Land and Improvements 4,432  
Gross amount at which carried at end of period, Buildings and Improvements 17,845  
Gross amount at which carried at end of period, Total 22,277  
Accumulated Depreciation 10,294  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 22,277  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 10,294  
Net Lease | Hudson Correctional Facility Hudson, CO | Hudson, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 1,382  
Adjustments to Land Basis (1,382)  
Adjustments to Building Basis 0  
Gross amount at which carried at end of period, Land and Improvements 0  
Gross amount at which carried at end of period, Buildings and Improvements 0  
Gross amount at which carried at end of period, Total 0  
Accumulated Depreciation 0  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 0  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 0  
Net Lease | Versacold USA - St. Paul St. Paul, MN | St. Paul, Minnesota    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 3,890  
Initial Cost, Buildings and Improvements 10,093  
Gross amount at which carried at end of period, Land and Improvements 3,890  
Gross amount at which carried at end of period, Buildings and Improvements 10,093  
Gross amount at which carried at end of period, Total 13,983  
Accumulated Depreciation 5,698  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 13,983  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 5,698  
Net Lease | Versacold USA - New Ulm New Ulm, MN | New Ulm, Minnesota    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 900  
Initial Cost, Buildings and Improvements 9,359  
Gross amount at which carried at end of period, Land and Improvements 900  
Gross amount at which carried at end of period, Buildings and Improvements 9,359  
Gross amount at which carried at end of period, Total 10,259  
Accumulated Depreciation 5,291  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 10,259  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 5,291  
Multi-Tenant Office | Trimble San Jose, CA | San Jose, California    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 20,000  
Initial Cost, Land 12,732  
Initial Cost, Buildings and Improvements 10,045  
Adjustments to Building Basis 12,633  
Gross amount at which carried at end of period, Land and Improvements 12,732  
Gross amount at which carried at end of period, Buildings and Improvements 22,678  
Gross amount at which carried at end of period, Total 35,410  
Accumulated Depreciation 5,057  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 35,410  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 5,057  
Other | Palazzo Del Lago Orlando, FL | Orlando, Florida    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Initial Cost, Land 8,938  
Adjustments to Building Basis 19  
Gross amount at which carried at end of period, Land and Improvements 8,938  
Gross amount at which carried at end of period, Buildings and Improvements 19  
Gross amount at which carried at end of period, Total 8,957  
Accumulated Depreciation 10  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 8,957  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 10  
Other | Corporate    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Adjustments to Building Basis 29  
Gross amount at which carried at end of period, Land and Improvements 0  
Gross amount at which carried at end of period, Buildings and Improvements 29  
Gross amount at which carried at end of period, Total 29  
Accumulated Depreciation 16  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 29  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance $ 16