HIGHLANDS REIT, INC., 10-K filed on 3/14/2025
Annual Report
v3.25.0.1
Cover - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Jun. 30, 2024
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  
Document Financial Statement Error Correction [Flag] false  
Entity Shell Company false  
Entity Public Float   $ 231.0
Entity Common Stock, Shares Outstanding 724,321,419  
Entity Central Index Key 0001661458  
Document Period End Date Dec. 31, 2024  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
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 2025 Annual Meeting of Stockholders expected to be held on May 8, 2025.
  
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Audit Information
 12 Months Ended
Dec. 31, 2024
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, 2024
Dec. 31, 2023
Investment properties    
Land $ 83,792 $ 88,582
Building and other improvements 289,126 296,786
Construction in progress 3,663 10,850
Total 376,581 396,218
Less accumulated depreciation (87,211) (87,216)
Net investment properties 289,370 309,002
Cash and cash equivalents 29,864 17,078
Restricted cash and escrows 4,364 2,406
Accounts receivable (net of allowance of $139 and $125 as of December 31, 2024 and 2023, respectively) 6,909 6,255
Intangible assets, net 205 537
Deferred costs and other assets, net 6,028 5,874
Total assets 336,740 341,152
Liabilities    
Debt, net 120,713 120,931
Accounts payable and accrued expenses 9,867 13,335
Other liabilities 2,315 2,674
Total liabilities 132,895 136,940
Commitments and contingencies (See note 14)
Stockholders’ Equity    
Common stock, $0.01 par value, $1,000,000 shares authorized, 724,321 and 721,671 shares issued and outstanding as of December 31, 2024 and 2023, respectively 7,243 7,217
Additional paid-in capital 1,390,536 1,389,951
Accumulated distributions in excess of net income (1,192,873) (1,191,868)
Noncontrolling interests 203,845 204,212
Accumulated Other Comprehensive Income (Loss), Net of Tax 47 20
Equity, Attributable to Parent 204,953 205,320
Equity, Attributable to Noncontrolling Interest (1,108) (1,108)
Total liabilities and equity $ 336,740 $ 341,152
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Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Allowance for accounts and rent receivables $ 139 $ 125
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 724,321,000 721,671,000
Common stock, shares outstanding 724,321,000 721,671,000
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Combined Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Revenues    
Total revenues $ 36,080 $ 30,981
Expenses    
Property operating expenses 9,775 8,910
Real estate taxes 4,217 5,353
Depreciation and amortization 11,842 10,758
General and administrative expenses 11,706 12,513
Total expenses 37,540 37,534
Gain on sale of investment properties 6,869 0
Loss from operations (1,460) (6,553)
Interest income 1,210 1,347
Interest expense (7,629) (5,092)
Net loss (1,010) (10,298)
Net (income) loss attributable to noncontrolling interests 5 (3)
Net loss attributable to Highlands REIT, Inc. common stockholders $ (1,005) $ (10,301)
Net income per common share, basic (in dollars per share) $ 0 $ (0.01)
Net income per common share, diluted (in dollars per share) $ 0 $ (0.01)
Weighted average number of common shares outstanding, basic (in shares) 721,961,000 876,958,000
Weighted average number of common shares outstanding, diluted (in shares) 721,961,000 876,958,000
Unrealized gain (loss) on derivatives $ 32 $ (369)
Total other comprehensive income (loss) 32 (369)
Comprehensive loss (978) (10,667)
Comprehensive loss attributable to noncontrolling interests 0 60
Comprehensive loss attributable to Highlands REIT, Inc. common stockholders (978) (10,607)
Other property income    
Revenues    
Total revenues 1,003 935
Rental income    
Revenues    
Total revenues $ 35,077 $ 30,046
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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, 2022   888,243,000          
Beginning 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)
Noncontrolling interest equity distributions (1,127)           (1,127)
Share-based compensation (in shares)   2,819,000          
Repurchase of common stock 888 $ 29 859     888  
Repurchase of common stock (in shares)   (169,391,000)          
Repurchase of common stock (25,239) $ (1,694) (23,545)     (25,239)  
Ending balance (in shares) at Dec. 31, 2023   721,671,000          
Ending balance at Dec. 31, 2023 204,212 $ 7,217 1,389,951 (1,191,868) 20 205,320 (1,108)
Net income (1,010)     (1,005)   (1,005) (5)
Other comprehensive income (loss) 32       27 27 5
Share-based compensation (in shares)   2,683,000          
Repurchase of common stock 835 $ 26 809     835  
Repurchase of common stock (in shares)   (33,000)          
Repurchase of common stock (224)   (224)     (224)  
Ending balance (in shares) at Dec. 31, 2024   724,321,000          
Ending balance at Dec. 31, 2024 $ 203,845 $ 7,243 $ 1,390,536 $ (1,192,873) $ 47 $ 204,953 $ (1,108)
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Consolidated Statements of Cash Flow - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Cash flows from operating activities:    
Net loss $ (1,010) $ (10,298)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 11,842 10,758
Amortization of above and below market leases, net 1 (7)
Amortization of debt discounts and financing costs 718 456
Straight-line rental income (926) (706)
Gain on sale of investment properties, net (6,869) 0
Stock-based compensation expense 1,441 1,537
Changes in assets and liabilities:    
Accounts receivable, net 272 716
Deferred costs and other assets, net 24 (45)
Accounts payable and accrued expenses (2,479) (791)
Other liabilities (345) 649
Net cash flows provided by operating activities 2,669 2,269
Cash flows from investing activities:    
Capital expenditures and tenant improvements (5,645) (9,004)
Proceeds from sale of investment properties, net 20,071 0
Acquisition of investment properties 0 (21,288)
Payment of leasing fees (585) (955)
Net cash flows provided by (used in) investing activities 13,841 (31,247)
Cash flows from financing activities:    
Payment of debt issuance costs (3) (1,638)
Proceeds from debt 0 67,446
Payoff of debt 0 (17,112)
Principal payments of debt (933) (1,137)
Common stock repurchased (224) (25,239)
Payment for tax withholding for share-based compensation (606) (649)
Distributions to noncontrolling interest 0 (1,127)
Net cash flows provided by (used in) financing activities (1,766) 20,544
Net increase (decrease) in cash and cash equivalents and restricted cash and escrows 14,744 (8,434)
Cash and cash equivalents and restricted cash and escrows, at beginning of year 19,484 27,918
Cash and cash equivalents 29,864 17,078
Restricted cash 4,364 2,406
Cash and cash equivalents and restricted cash and escrows, at end of year 34,228 19,484
Supplemental disclosure of cash flow information:    
Cash paid for interest 6,927 4,274
Supplemental schedule of non-cash activities:    
Non-cash accruals for capital expenditures and tenant improvements 3,209 4,198
Assumption of mortgage debt on acquired investment properties, net of debt discount $ 0 $ 11,258
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Organization
 12 Months Ended
Dec. 31, 2024
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 and office 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 was 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-listed 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, 2024, 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, 2024 and 2023, the Company owned 18 and 20 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, 2024
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 noncontrolling 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, 2024 and 2023, 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. The Corvue Venture owns The Locale multi-family investment property located in Allendale, Michigan. 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, 2024 is $22,787 and $18,106, respectively, related 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. 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.
Cash and Cash Equivalents and Restricted Cash and Escrows
We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at financial institutions. The combined account balances at one or more institutions exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Restricted cash and escrows is comprised primarily of cash held by our lenders for payment of real estate taxes, insurance and certain capital expenditures and tenant improvements.
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, 2024 and 2023.
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, 2024 and 2023. 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 or loss 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 or loss 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.
Use of Estimates
The accompanying consolidated financial statements have been prepared in accordance with GAAP, which requires 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. Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to, evaluating the collectability of accounts receivable, allocating the purchase price of acquired investment properties, and evaluating the impairment of real estate assets. We base these estimates, judgments and assumptions on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.
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 was effective for fiscal years beginning after December 15, 2023 with early adoption permitted. The Company adopted this guidance for fiscal year 2024 and has determined that its impact is limited to incremental disclosures and will not have an impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public entities to provide additional disclosures in the notes to the financials statements of certain expense categories which are included in expense line items disclosed on the face of the income statements. Specifically, an entity should provide disclosures in a tabular format for each line item on the income statement which contains any of the following expenses: purchases of
inventory, employee compensation, depreciation, intangible asset amortization, and/or depreciation, depletion and amortization. ASU 2024-03 also requires an entity to disclose total selling expenses. ASU 2024-03 may be adopted on a prospective or retrospective basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently analyzing the impact adoption will have on its related disclosures.
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, 2024
Asset Acquisitions [Abstract]  
Acquired Properties Acquired Investment Properties
The Company records identifiable assets and liabilities acquired at fair value. There were no investment property acquisitions during the year ended December 31, 2024. 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.
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, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Disposed Investment Properties Disposed Investment Properties
The following table reflects the investment property dispositions during the year ended December 31, 2024.
Investment PropertyLocationDisposition DateGross Disposition PriceSale Proceeds, NetGain on Sale
Versacold USANew Ulm, MNFebruary 5, 2024$7,175 $6,995 $2,052 
Versacold USASt. Paul, MNFebruary 5, 2024$13,325 $13,076 $4,817 
$20,500 $20,071 $6,869 
There were no investment property dispositions during the year ended December 31, 2023.
v3.25.0.1
Accounts Payable and Accrued Expenses
 12 Months Ended
Dec. 31, 2024
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,
 20242023
Accrued real estate taxes$4,816 $6,300 
Accrued compensation213 979 
Accrued interest payable554 570 
Other accrued expenses4,284 5,486 
  Total accounts payable and accrued expenses$9,867 $13,335 
v3.25.0.1
Leases
 12 Months Ended
Dec. 31, 2024
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 fourteen years as of December 31, 2024 and less than one year to fifteen years as of December 31, 2023.
Certain of the Company’s commercial leases provide the tenant with one or more multi-year renewal options to extend their lease, subject to generally the same terms and conditions as the initial lease, potentially including rent increases.
Rental income related to the Company’s operating leases is comprised of the following:
Year ended December 31,
20242023
Rental income related to fixed lease payments$29,875 $26,051 
Rental income related to variable lease payments5,202 3,995 
Other property income1,003 935 
Total revenues$36,080 $30,981 

Future Minimum Rental Income
As of December 31, 2024, 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.
2025$12,671 
202613,114 
202712,947 
202812,554 
202911,807 
Thereafter91,156 
Total$154,249 
Tenant Concentration
For the year ended December 31, 2024, Trimble accounted for greater than 20% our total revenues. Specifically, the XP Power, LLC lease accounted for approximately 11.9% and Veeco Instruments accounted for approximately 9.7% of our total revenues for the year ended December 31, 2024.
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, 2024, the balances were $256 and were recorded in the consolidated balance sheets. We used a discount rate of approximately 4.5%, reflecting the Company’s incremental borrowing rate.
During the year ended December 31, 2024, we recognized a right of use asset (included in deferred costs and other assets) and lease liability (included in other liabilities for leased assets from a third party for our corporate office space with a lease term expiring January 31, 2026. At December 31, 2024, the balances were $43 and were recorded in the consolidated balance sheets. We used a discount rate of approximately 8.3%, 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 leases at December 31, 2024 and a reconciliation of those cash flows to the operating lease liability.
2025$63 
202625 
202721 
202821 
202921 
Thereafter267 
Total$418 
Imputed interest(119)
Lease liability$299 
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 fourteen years as of December 31, 2024 and less than one year to fifteen years as of December 31, 2023.
Certain of the Company’s commercial leases provide the tenant with one or more multi-year renewal options to extend their lease, subject to generally the same terms and conditions as the initial lease, potentially including rent increases.
Rental income related to the Company’s operating leases is comprised of the following:
Year ended December 31,
20242023
Rental income related to fixed lease payments$29,875 $26,051 
Rental income related to variable lease payments5,202 3,995 
Other property income1,003 935 
Total revenues$36,080 $30,981 

Future Minimum Rental Income
As of December 31, 2024, 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.
2025$12,671 
202613,114 
202712,947 
202812,554 
202911,807 
Thereafter91,156 
Total$154,249 
Tenant Concentration
For the year ended December 31, 2024, Trimble accounted for greater than 20% our total revenues. Specifically, the XP Power, LLC lease accounted for approximately 11.9% and Veeco Instruments accounted for approximately 9.7% of our total revenues for the year ended December 31, 2024.
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, 2024, the balances were $256 and were recorded in the consolidated balance sheets. We used a discount rate of approximately 4.5%, reflecting the Company’s incremental borrowing rate.
During the year ended December 31, 2024, we recognized a right of use asset (included in deferred costs and other assets) and lease liability (included in other liabilities for leased assets from a third party for our corporate office space with a lease term expiring January 31, 2026. At December 31, 2024, the balances were $43 and were recorded in the consolidated balance sheets. We used a discount rate of approximately 8.3%, 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 leases at December 31, 2024 and a reconciliation of those cash flows to the operating lease liability.
2025$63 
202625 
202721 
202821 
202921 
Thereafter267 
Total$418 
Imputed interest(119)
Lease liability$299 
v3.25.0.1
Intangible Assets and Liabilities
 12 Months Ended
Dec. 31, 2024
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, 2024 and 2023.
As of December 31,
20242023
Intangible Assets:
Acquired in-place lease$548 $548 
Acquired above market lease97 97 
Accumulated amortization(440)(108)
Intangible assets, net$205 $537 
Intangible liabilities:
Acquired below market leases$929 $929 
Accumulated amortization(909)(894)
Intangible liabilities, net$20 $35 
The portion of the purchase price allocated to acquired above market lease costs and acquired below market lease costs are amortized on a straight-line basis over the life of the related lease, including the respective renewal period for below market lease costs with fixed rate renewals, as an adjustment to rental income. Amortization pertaining to the above market lease costs is applied as a reduction to rental income. Amortization pertaining to the below market lease costs is applied as an increase to rental income. The portion of the purchase price allocated to acquired in-place lease intangibles is amortized on a straight line basis over the life of the related lease and is recorded as amortization expense.
The following table summarizes the amortization related to acquired above and below market lease costs and acquired in-place lease intangibles for the years ended December 31, 2024 and 2023.
Year ended December 31,
20242023
Amortization of:
Acquired above market lease$(15)$(4)
Acquired below market lease14 11 
Net revenues increase$(1)$7 
Acquired in-place lease intangibles$317 $103 
The following table presents the amortization during the next five years and thereafter related to intangible assets and liabilities as of December 31, 2024.
20252026202720282029ThereafterTotal
Amortization of:
Acquired above market lease$(15)$(15)$(15)$(15)$(14)$(3)$(77)
Acquired below market lease9 4 4 3 — — 20 
Net revenues increase$(6)$(11)$(11)$(12)$(14)$(3)$(57)
Acquired in-place lease intangibles$26 $26 $26 $26 $22 $2 $128 
v3.25.0.1
Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt Debt
Total debt outstanding as of December 31, 2024 and 2023 was as follows:
20242023
Debt, gross$123,884 $124,817 
Mortgage discount(1,855)(2,074)
Deferred financing costs, net(1,316)(1,812)
Total Debt, net$120,713 $120,931 
The Company’s outstanding mortgage indebtedness included 11 mortgage loans with various maturities through January 2036. The following table presents the principal amount of debt maturing each year, including amortization of principal based on debt outstanding at December 31, 2024, and the weighted average interest rates for the maturing debt in each specified period:
For the year ended December 31,As of December 31, 2024Weighted average
interest rate
2025$20,980 5.86 %
(1)
202623,084 4.56 %
202710,785 3.99 %
2028234 — %

2029245 — %
Thereafter68,556 5.73 %
(1)
Total$123,884 5.38 %
(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, 2024.
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 6.73% at December 31, 2024. In conjunction with the loan closing, the company purchased an interest rate cap contract to cap the interest at 7.44% through its November 01, 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 market 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, which requires, among other criteria, that at the time of the extension, the mortgage is not in default, a minimum debt service coverage ratio is met and the extension fee is paid. 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 will exercise its extension option at maturity.
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’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, 2024 and December 31, 2023, the Company guaranteed one mortgage loan up to $4,000 and all other mortgage debt was non-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.
Some of the mortgage loans require compliance with certain covenants, such as debt service coverage and net worth ratios. As of December 31, 2024 and 2023, the Company is in compliance with such covenants.
v3.25.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
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, 2024 and 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. 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 or loss 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 $32 and as other comprehensive loss was $369 for the years ended December 31, 2024 and 2023, 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 $60 will be reclassified as a decrease to interest expense over the next twelve months.
The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the consolidated balance sheets as of December 31, 2024 and 2023, respectively.
December 31, 2024
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $90 $— $90 
December 31, 2023
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $97 $— $97 
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, 2024, 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, 2024 and 2023, 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, 2024 and 2023.
 December 31, 2024December 31, 2023
 Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Debt, net$123,884 $118,781 $124,817 $119,242 
The Company estimates the fair value of its debt instruments using a weighted average market effective interest rate of 6.79% and 6.69% per annum as of December 31, 2024 and 2023, 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 5.76% to 9.47% and 5.52% to 9.66% as of December 31, 2024 and 2023, 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.
v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
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, 2024 and 2023, 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, 2024 and 2023. The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2024. 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, 2024 and 2023 or in the consolidated balance sheets as of December 31, 2024 and 2023. As of December 31, 2024, the Company’s, including its predecessors, 2023, 2022 and 2021 tax years remain subject to examination by U.S. and various state tax jurisdictions.
v3.25.0.1
Segment Reporting
 12 Months Ended
Dec. 31, 2024
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 Company’s Chief Executive Officer (the “CEO”) evaluates the results of operations and makes decisions about resources to be allocated between the multi-family and other property portfolios and therefore is the Company’s Chief Operating Decision Maker (“CODM”). The operating results are reviewed on an individual property basis , with specific attention to the multi-family portfolio since that is the go-forward strategy.
The CODM evaluates performance based on net operating income. Net operating income excludes general and administrative expenses, depreciation and amortization, other income and expenses, interest expense, gains or losses on the sale of investment properties and net income or loss from noncontrolling interests. The Company does not make adjustments for GAAP rent adjustments such as straightline rent or the amortization of intangibles, including above and below market rental income.
The following table summarizes net operating income by segment for the years ended December 31, 2024 and 2023.
For the year ended December 31, 2024For the year ended December 31, 2023
TotalMulti-familyOtherTotalMulti-familyOther
Rental income$35,077 $18,938 $16,139 $30,046 $16,712 $13,334 
Other property income1,003 1,003 — 935 935 — 
Total revenues36,080 19,941 16,139 30,981 17,647 13,334 
Property operating expenses9,775 6,808 2,967 8,910 6,143 2,767 
Real estate taxes4,217 2,234 1,983 5,353 1,926 3,427 
Net operating income$22,088 $10,899 $11,189 $16,718 $9,578 $7,140 
Non-allocated expenses (1)(23,548)(23,271)
Other income and expenses (2)(6,419)(3,745)
Gain on sale of investment properties (3)6,869 — 
Net income attributable to noncontrolling interests5 (3)
Net loss attributable to Highlands REIT, Inc. common stockholders$(1,005)$(10,301)
Balance Sheet Data
Real estate assets, net (4)$289,875 $191,847 $98,028 $309,539 $198,220 $111,319 
Non-segmented assets (5)46,865 31,613 
Total assets$336,740 $341,152 
Capital expenditures$5,645 $695 $4,950 $9,004 $643 $8,361 
(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)Gain on the sale of investment properties is related to the sale of the industrial portfolio.
(4)Real estate assets include intangible lease assets, net of amortization.
(5)Non-segmented assets include cash and cash equivalents, restricted cash and escrows, accounts receivable and deferred costs and other assets, net.
v3.25.0.1
Share Based Compensation
 12 Months Ended
Dec. 31, 2024
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, 2024, the Company granted 4,570 of fully vested shares of common stock with an aggregate value of $1,420 based on a weighted average estimated fair value per share of $0.31. During 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.
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, 2024, 7,046 shares were available for future issuance under the Incentive Award Plan. A summary of the Company’s stock awards activity as
of December 31, 2024 is as follows:
Non-Vested stock awardsStock AwardsWeighted Average Grant Date Fair Value
Balance at January 1, 2023— $— 
Granted4,570 — 
Vested(4,570)— 
Other— — 
Balance at December 31, 2024— $— 
The Company recognized stock-based compensation expense for the years ended December 31, 2024 and 2023 of $1,441 and $1,537, respectively, related to the Incentive Award Plan. For the years ended December 31, 2024 and 2023, the Company paid $606 and $649, respectively, related to tax withholding for share-based compensation.
Repurchase of Shares
On October 24, 2023, we launched a modified “Dutch Auction” self-tender offer in an effort to provide a liquidity option for certain of our stockholders who elected to tender their stock while at the same time balancing the best interests of the Company and of those stockholders who wished to remain invested in the Company. We believe that the tender offer provided an efficient mechanism to provide our stockholders who desired immediate liquidity with the opportunity to tender shares, while also providing a benefit to those stockholders who did not participate, as such stockholders automatically increased their relative percentage ownership interest in the Company and our future operations.
On December 8, 2023, the tender offer closed with the repurchase of 169,391 shares of common stock at a price per share of $0.14. Total cash required to complete the tender offer was $25,239, including all costs and fees of the tender offer. Subsequent to the close of the tender offer, the Company discovered an administrative error in which certain tender requests were not processed. We honored all such tender requests in April 2024, and accordingly another 33 shares were repurchased.
On December 15, 2023, we withheld 1,960 shares from employees to satisfy estimated statutory income tax obligations related to the annual employee stock grant. The value of the common shares withheld was based on the estimated share value as determined effective December 15, 2023.
During the year ended December 31, 2024, the Company incurred $224 of additional costs related to this previously executed tender offer.
On December 15, 2024, we withheld 1,887 shares from employees to satisfy estimated statutory income tax obligations related to the annual employee stock grant. The value of the common shares withheld was based on the estimated share value as determined effective December 15, 2024.
v3.25.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2024
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 leasing
commission. The total cost commitment was estimated to be approximately $9,100. The tenant began paying cash rent on January 1, 2023. The final payment to the tenant of $673 was made in September 2024 and, as of December 31, 2024, no additional amounts are due to the 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 is being accounted for as lessor-owned improvements, and leasing commission. The total cost commitment is estimated to be approximately $13,200. As of December 31, 2024, we estimate that remaining costs to be paid under this commitment are approximately $1,085. The final payment to the tenant was made in January 2025.
In April 2024, the Company executed a lease with LTF Lease Company, LLC, for an approximately 61,000 square foot Life Time Fitness at Sherman Plaza, located in Evanston, Illinois. The lease requires a significant tenant allowance, which is expected to be accounted for as lessor-owned improvements, and a leasing commission. Rental payments under this lease commenced March 1, 2025, the date tenant opened for business. The tenant began reimbursing for its share of common area maintenance upon taking possession of the space in July 2024. The total cost commitment is estimated to be approximately $9,200. As of December 31, 2024, we estimate that remaining costs to be paid under this commitment are approximately $5,400.
v3.25.0.1
Subsequent Events
 12 Months Ended
Dec. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
v3.25.0.1
Schedule III Real Estate and Accumulated Depreciation
 12 Months Ended
Dec. 31, 2024
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 $— $181 $3,075 $17,321 $20,396 $4,058 2018
Buerger Brothers Lofts
   Denver, CO		— 3,117 7,114 — 706 3,117 7,820 10,937 2,074 2017
Chamber Lofts
   Denver, CO		— 2,797 6,388 — 546 2,797 6,934 9,731 1,840 2017
Kenilworth Court
   Denver, CO		3,784 2,496 3,203 — 53 2,496 3,256 5,752 733 2018
Tennyson
   Denver, CO		10,250 1,533 17,410 — 71 1,533 17,481 19,014 3,509 2019
The Detroit and Detroit Terraces
   Denver, CO		10,998 3,370 15,006 — 159 3,370 15,165 18,535 3,274 2019
The Lafayette
   Denver, CO		5,481 2,457 7,067 — 248 2,457 7,315 9,772 1,741 2018
The Locale
   Allendale, MI		17,700 4,294 22,461 — 877 4,294 23,338 27,632 5,487 2019
The Muse
   Denver, CO		19,496 5,303 42,809 — 213 5,303 43,022 48,325 7,774 2019
The Q Lofts
   San Diego, CA		12,966 8,856 22,877 — 10 8,856 22,887 31,743 1,010 2023
The Sterling
   San Diego, CA		— 1,849 5,407 — 39 1,849 5,446 7,295 890 2020
The View
   San Diego, CA		— 7,272 8,862 — 668 7,272 9,530 16,802 2,119 2019
Other
Buckhorn Plaza
   Bloomsburg, PA		9,139 1,651 11,770 (35)2,562 1,616 14,332 15,948 9,467 2006
Hudson Correctional Facility
   Hudson, CO		— 1,382 — (1,382)— — — — — 2009
Palazzo Del Lago
   Orlando, FL		20,000 8,938 — — 19 8,938 19 8,957 11 2010
Sherman Plaza
   Evanston, IL		— 9,655 30,982 — 12,680 9,655 43,662 53,317 25,625 2006
The Market at Hilliard
   Hilliard, OH		14,070 4,432 13,308 — 4,730 4,432 18,038 22,470 10,936 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		— 12,732 10,045 — 23,482 12,732 33,527 46,259 6,639 2013
Corporate assets— — — — 33 — 33 33 24 N/A
Totals$123,884 $85,209 $241,849 $(1,417)$47,277 $83,792 $289,126 $372,918 $87,211 
Notes to Schedule III:
The aggregate cost of real estate owned at December 31, 2024 for U.S. federal income tax purposes was approximately $463,387 (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:
20242023
Balance at January 1$385,368 $351,958 
Acquisitions and capital improvements11,842 33,410 
Dispositions and write-offs(24,292)— 
Balance at December 31,$372,918 $385,368 
D.Reconciliation of accumulated depreciation:
20242023
Balance at January 1$87,216 $76,888 
Depreciation expense11,036 10,328 
Dispositions and write-offs(11,041)— 
Balance at December 31,$87,211 $87,216 
E.Depreciation is computed based upon the following estimated lives:
Buildings and improvements30 years
Tenant improvementsLife of the lease
Furniture, fixtures, & equipment and site improvements
5-15 years
v3.25.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Pay vs Performance Disclosure    
Net loss attributable to Highlands REIT, Inc. common stockholders $ (1,005) $ (10,301)
v3.25.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.25.0.1
Insider Trading Policies and Procedures
 12 Months Ended
Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.0.1
Cybersecurity Risk Management and Strategy Disclosure
 12 Months Ended
Dec. 31, 2024
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We designed our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we used the NIST CSF as a guide to help us create our cybersecurity policy.
Our cybersecurity risk management program forms a part of our overall enterprise risk management program, and shares reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
Our cybersecurity risk management program is dependent on the use of external service providers to assist with our information technology security controls. Our cybersecurity policy includes a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents and a third-party risk management process for relevant third-party service providers.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block]
Our cybersecurity risk management program forms a part of our overall enterprise risk management program, and shares reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block] Our Board considers cybersecurity risk as part of its risk oversight function and our Audit Committee is responsible for the oversight of cybersecurity and other information technology risks. The Audit Committee also oversees management’s implementation of our cybersecurity policy. Management will update the Audit Committee, as necessary, regarding any material cybersecurity incidents.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] Our management team, including our Chief Executive Officer, Chief Operating Officer and Chief Accounting Officer, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and retaining external information technology providers. The members of our management team do not have specialized cybersecurity backgrounds but have general experience managing financial, insurance, legal and operational risks. Our management team utilizes a third-party outsourced information technology service provider to monitor security events and actively respond to potential security incidents. If a security incident is identified, management in conjunction with the outsourced information technology service provider will take the appropriate actions to mitigate and remediate the security incident in a timely manner. Either during the incident, or post remediation, management will determine the materiality of the incident and if deemed material, will inform the Audit Committee and disclose the incident pursuant to SEC rules and regulations.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] If a security incident is identified, management in conjunction with the outsourced information technology service provider will take the appropriate actions to mitigate and remediate the security incident in a timely manner. Either during the incident, or post remediation, management will determine the materiality of the incident and if deemed material, will inform the Audit Committee and disclose the incident pursuant to SEC rules and regulations.
Cybersecurity Risk Role of Management [Text Block] Our management team, including our Chief Executive Officer, Chief Operating Officer and Chief Accounting Officer, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and retaining external information technology providers.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] Our management team, including our Chief Executive Officer, Chief Operating Officer and Chief Accounting Officer, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and retaining external information technology providers.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] The members of our management team do not have specialized cybersecurity backgrounds but have general experience managing financial, insurance, legal and operational risks. Our management team utilizes a third-party outsourced information technology service provider to monitor security events and actively respond to potential security incidents.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] If a security incident is identified, management in conjunction with the outsourced information technology service provider will take the appropriate actions to mitigate and remediate the security incident in a timely manner. Either during the incident, or post remediation, management will determine the materiality of the incident and if deemed material, will inform the Audit Committee and disclose the incident pursuant to SEC rules and regulations.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2024
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 noncontrolling 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.
Cash and Cash Equivalents and Restricted Cash and Escrows
We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at financial institutions. The combined account balances at one or more institutions exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Restricted cash and escrows is comprised primarily of cash held by our lenders for payment of real estate taxes, insurance and certain capital expenditures and tenant improvements.
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 or loss 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 or loss 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.
Use of Estimates
Use of Estimates
The accompanying consolidated financial statements have been prepared in accordance with GAAP, which requires 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. Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to, evaluating the collectability of accounts receivable, allocating the purchase price of acquired investment properties, and evaluating the impairment of real estate assets. We base these estimates, judgments and assumptions on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.
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 was effective for fiscal years beginning after December 15, 2023 with early adoption permitted. The Company adopted this guidance for fiscal year 2024 and has determined that its impact is limited to incremental disclosures and will not have an impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public entities to provide additional disclosures in the notes to the financials statements of certain expense categories which are included in expense line items disclosed on the face of the income statements. Specifically, an entity should provide disclosures in a tabular format for each line item on the income statement which contains any of the following expenses: purchases of
inventory, employee compensation, depreciation, intangible asset amortization, and/or depreciation, depletion and amortization. ASU 2024-03 also requires an entity to disclose total selling expenses. ASU 2024-03 may be adopted on a prospective or retrospective basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently analyzing the impact adoption will have on its related disclosures.
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.
v3.25.0.1
Acquired Properties (Tables)
 12 Months Ended
Dec. 31, 2024
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 
v3.25.0.1
Disposed Investment Properties (Tables)
 12 Months Ended
Dec. 31, 2024
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, 2024.
Investment PropertyLocationDisposition DateGross Disposition PriceSale Proceeds, NetGain on Sale
Versacold USANew Ulm, MNFebruary 5, 2024$7,175 $6,995 $2,052 
Versacold USASt. Paul, MNFebruary 5, 2024$13,325 $13,076 $4,817 
$20,500 $20,071 $6,869 
v3.25.0.1
Accounts Payable and Accrued Expenses (Tables)
 12 Months Ended
Dec. 31, 2024
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
 Year ended December 31,
 20242023
Accrued real estate taxes$4,816 $6,300 
Accrued compensation213 979 
Accrued interest payable554 570 
Other accrued expenses4,284 5,486 
  Total accounts payable and accrued expenses$9,867 $13,335 
v3.25.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Lease Income
Rental income related to the Company’s operating leases is comprised of the following:
Year ended December 31,
20242023
Rental income related to fixed lease payments$29,875 $26,051 
Rental income related to variable lease payments5,202 3,995 
Other property income1,003 935 
Total revenues$36,080 $30,981 
Payments to be received under Topic 842
As of December 31, 2024, 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.
2025$12,671 
202613,114 
202712,947 
202812,554 
202911,807 
Thereafter91,156 
Total$154,249 
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 leases at December 31, 2024 and a reconciliation of those cash flows to the operating lease liability.
2025$63 
202625 
202721 
202821 
202921 
Thereafter267 
Total$418 
Imputed interest(119)
Lease liability$299 
v3.25.0.1
Intangible Assets and Liabilities (Tables)
 12 Months Ended
Dec. 31, 2024
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, 2024 and 2023.
As of December 31,
20242023
Intangible Assets:
Acquired in-place lease$548 $548 
Acquired above market lease97 97 
Accumulated amortization(440)(108)
Intangible assets, net$205 $537 
Intangible liabilities:
Acquired below market leases$929 $929 
Accumulated amortization(909)(894)
Intangible liabilities, net$20 $35 
Summary of amortization of identified intangible assets and liabilities
The following table summarizes the amortization related to acquired above and below market lease costs and acquired in-place lease intangibles for the years ended December 31, 2024 and 2023.
Year ended December 31,
20242023
Amortization of:
Acquired above market lease$(15)$(4)
Acquired below market lease14 11 
Net revenues increase$(1)$7 
Acquired in-place lease intangibles$317 $103 
The following table presents the amortization during the next five years and thereafter related to intangible assets and liabilities as of December 31, 2024.
20252026202720282029ThereafterTotal
Amortization of:
Acquired above market lease$(15)$(15)$(15)$(15)$(14)$(3)$(77)
Acquired below market lease9 4 4 3 — — 20 
Net revenues increase$(6)$(11)$(11)$(12)$(14)$(3)$(57)
Acquired in-place lease intangibles$26 $26 $26 $26 $22 $2 $128 
Summary of accretion income for below market leases
The following table summarizes the amortization related to acquired above and below market lease costs and acquired in-place lease intangibles for the years ended December 31, 2024 and 2023.
Year ended December 31,
20242023
Amortization of:
Acquired above market lease$(15)$(4)
Acquired below market lease14 11 
Net revenues increase$(1)$7 
Acquired in-place lease intangibles$317 $103 
The following table presents the amortization during the next five years and thereafter related to intangible assets and liabilities as of December 31, 2024.
20252026202720282029ThereafterTotal
Amortization of:
Acquired above market lease$(15)$(15)$(15)$(15)$(14)$(3)$(77)
Acquired below market lease9 4 4 3 — — 20 
Net revenues increase$(6)$(11)$(11)$(12)$(14)$(3)$(57)
Acquired in-place lease intangibles$26 $26 $26 $26 $22 $2 $128 
v3.25.0.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Debt
Total debt outstanding as of December 31, 2024 and 2023 was as follows:
20242023
Debt, gross$123,884 $124,817 
Mortgage discount(1,855)(2,074)
Deferred financing costs, net(1,316)(1,812)
Total Debt, net$120,713 $120,931 
Scheduled Maturities of Mortgage Indebtedness he Company’s outstanding mortgage indebtedness included 11 mortgage loans with various maturities through January 2036. The following table presents the principal amount of debt maturing each year, including amortization of principal based on debt outstanding at December 31, 2024, and the weighted average interest rates for the maturing debt in each specified period:
For the year ended December 31,As of December 31, 2024Weighted average
interest rate
2025$20,980 5.86 %
(1)
202623,084 4.56 %
202710,785 3.99 %
2028234 — %

2029245 — %
Thereafter68,556 5.73 %
(1)
Total$123,884 5.38 %
(1)See below for discussion of the derivative agreements entered into with the mortgage loans obtained on Trimble and The Muse. For Trimble (2025), the interest rate in the table above is the fixed rate. For The Muse (thereafter), the interest rate is the rate in effect at December 31, 2024.
v3.25.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value, Liabilities Measured on Recurring Basis
The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the consolidated balance sheets as of December 31, 2024 and 2023, respectively.
December 31, 2024
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $90 $— $90 
December 31, 2023
Level 1Level 2Level 3Total
Derivative financial instruments designated as cash flow hedges:
Classified as “Deferred costs and other assets, net”$— $97 $— $97 
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, 2024 and 2023.
 December 31, 2024December 31, 2023
 Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Debt, net$123,884 $118,781 $124,817 $119,242 
v3.25.0.1
Segment Reporting (Tables)
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Summary of Net Property Operations
The following table summarizes net operating income by segment for the years ended December 31, 2024 and 2023.
For the year ended December 31, 2024For the year ended December 31, 2023
TotalMulti-familyOtherTotalMulti-familyOther
Rental income$35,077 $18,938 $16,139 $30,046 $16,712 $13,334 
Other property income1,003 1,003 — 935 935 — 
Total revenues36,080 19,941 16,139 30,981 17,647 13,334 
Property operating expenses9,775 6,808 2,967 8,910 6,143 2,767 
Real estate taxes4,217 2,234 1,983 5,353 1,926 3,427 
Net operating income$22,088 $10,899 $11,189 $16,718 $9,578 $7,140 
Non-allocated expenses (1)(23,548)(23,271)
Other income and expenses (2)(6,419)(3,745)
Gain on sale of investment properties (3)6,869 — 
Net income attributable to noncontrolling interests5 (3)
Net loss attributable to Highlands REIT, Inc. common stockholders$(1,005)$(10,301)
Balance Sheet Data
Real estate assets, net (4)$289,875 $191,847 $98,028 $309,539 $198,220 $111,319 
Non-segmented assets (5)46,865 31,613 
Total assets$336,740 $341,152 
Capital expenditures$5,645 $695 $4,950 $9,004 $643 $8,361 
(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)Gain on the sale of investment properties is related to the sale of the industrial portfolio.
(4)Real estate assets include intangible lease assets, net of amortization.
(5)Non-segmented assets include cash and cash equivalents, restricted cash and escrows, accounts receivable and deferred costs and other assets, net.
v3.25.0.1
Share Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2024
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, 2024 is as follows:
Non-Vested stock awardsStock AwardsWeighted Average Grant Date Fair Value
Balance at January 1, 2023— $— 
Granted4,570 — 
Vested(4,570)— 
Other— — 
Balance at December 31, 2024— $— 
v3.25.0.1
Organization (Details)
$ / shares in Units, $ in Thousands
Aug. 16, 2019
USD ($)
Apr. 28, 2016
$ / shares
shares
Dec. 31, 2024
parcel
property
$ / shares
Dec. 31, 2023
parcel
$ / 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     18  
Parcels of land | parcel     1 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    
v3.25.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Total assets $ 336,740,000 $ 341,152,000
Liabilities 132,895,000 136,940,000
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    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Total assets $ 22,787,000 $ 23,740,000
Liabilities $ 18,106,000 $ 18,116,000
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  
v3.25.0.1
Acquired Properties - Additional Information (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
USD ($)
segment
Dec. 31, 2023
USD ($)
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Acquisition of investment properties $ 0 $ 21,288
Capitalized transaction costs $ 297  
Multifamily    
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Number of properties acquired | segment 1  
v3.25.0.1
Acquired Properties - Properties Acquired (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Schedule of Asset Acquisitions, by Acquisition [Line Items]    
Acquisition of investment properties $ 0 $ 21,288
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  
v3.25.0.1
Disposed Investment Properties - Activity (Details) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 05, 2024
Dec. 31, 2024
Dec. 31, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]      
Gross disposition price $ 20,500    
Proceeds from sale of investment properties, net 20,071 $ 20,071 $ 0
Gain on sale of investment properties 6,869 $ 6,869 $ 0
Versacold USA, New Ulm, MN      
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]      
Gross disposition price 7,175    
Proceeds from sale of investment properties, net 6,995    
Gain on sale of investment properties 2,052    
Versacold USA, St. Paul, MN      
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]      
Gross disposition price 13,325    
Proceeds from sale of investment properties, net 13,076    
Gain on sale of investment properties $ 4,817    
v3.25.0.1
Accounts Payable and Accrued Expenses (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Payables and Accruals [Abstract]    
Accrued real estate taxes $ 4,816 $ 6,300
Accrued compensation 213 979
Accrued interest payable 554 570
Other accrued expenses 4,284 5,486
Total accounts payable and accrued expenses $ 9,867 $ 13,335
v3.25.0.1
Leases - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Lessor, Lease, Description [Line Items]    
Lease liability $ 299  
Customer Concentration Risk | Revenue Benchmark | Trimble    
Lessor, Lease, Description [Line Items]    
Concentration risk 20.00%  
Customer Concentration Risk | Revenue Benchmark | Trimble, XP Power, LLC Lease    
Lessor, Lease, Description [Line Items]    
Concentration risk 11.90%  
Customer Concentration Risk | Revenue Benchmark | Trimble, Veeco Instruments    
Lessor, Lease, Description [Line Items]    
Concentration risk 9.70%  
Multi-Family Investment Property    
Lessor, Lease, Description [Line Items]    
Lease terms 1 year  
Apartment Building    
Lessor, Lease, Description [Line Items]    
Lease terms 1 year  
Corporate Office Space    
Lessor, Lease, Description [Line Items]    
ROU asset $ 43  
Lease liability $ 43  
Discount rate 8.30%  
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-02    
Lessor, Lease, Description [Line Items]    
ROU asset $ 256  
Lease liability $ 256  
Discount rate 4.50%  
Minimum | Commercial Real Estate    
Lessor, Lease, Description [Line Items]    
Lease terms 1 year 1 year
Maximum | Commercial Real Estate    
Lessor, Lease, Description [Line Items]    
Lease terms 14 years 15 years
v3.25.0.1
Leases - Lease Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Leases [Abstract]    
Lease income related to fixed lease payments $ 29,875 $ 26,051
Lease income related to variable lease payments 5,202 3,995
Other property income 1,003 935
Lease income $ 36,080 $ 30,981
v3.25.0.1
Leases - Receivable Maturity (Details)
$ in Thousands
Dec. 31, 2024
USD ($)
Leases [Abstract]  
2025 $ 12,671
2026 13,114
2027 12,947
2028 12,554
2029 11,807
Thereafter 91,156
Total $ 154,249
v3.25.0.1
Leases - Operating Lease Liability Maturity (Details)
$ in Thousands
Dec. 31, 2024
USD ($)
Leases [Abstract]  
2025 $ 63
2026 25
2027 21
2028 21
2029 21
Thereafter 267
Total 418
Imputed interest (119)
Lease liability $ 299
Operating Lease, Liability, Statement of Financial Position [Extensible List] Other liabilities
v3.25.0.1
Intangible Assets and Liabilities - Summary (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]    
Accumulated amortization $ (440) $ (108)
Acquired in-place lease intangibles 205 537
Acquired below market leases 929 929
Accumulated amortization (909) (894)
Total 20 35
Acquired in-place lease    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets 548 548
Acquired in-place lease intangibles 128  
Acquired above market lease    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets 97 $ 97
Acquired in-place lease intangibles $ (77)  
v3.25.0.1
Intangible Assets and Liabilities - Lease Amortization, Rental Income Increase, and Lease Intangibles (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Amortization of:    
Acquired below market lease $ 14 $ 11
Net revenues increase (1) 7
Acquired in-place lease    
Amortization of:    
Intangible assets 317 103
Acquired above market lease    
Amortization of:    
Intangible assets $ 15 $ 4
v3.25.0.1
Intangible Assets and Liabilities - Amortization Schedule (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Acquired below market lease    
2025 $ 9  
2026 4  
2027 4  
2028 3  
2029 0  
Thereafter 0  
Total 20 $ 35
Net rental income increase, 2022 (6)  
Net rental income increase, 2023 (11)  
Net rental income increase, 2024 (11)  
Net rental income increase, 2025 (12)  
Net rental income increase, 2026 (14)  
Net rental income increase, Thereafter (3)  
Net rental income increase, Total (57)  
Acquired in-place lease intangibles 205 $ 537
Acquired above market lease    
Acquired below market lease    
2019 (15)  
2020 (15)  
2021 (15)  
2022 (15)  
2023 (14)  
Thereafter (3)  
Acquired in-place lease intangibles (77)  
Acquired in-place lease    
Acquired below market lease    
2019 26  
2020 26  
2021 26  
2022 26  
2023 22  
Thereafter 2  
Acquired in-place lease intangibles $ 128  
v3.25.0.1
Debt - Schedule of Debt Outstanding (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
Debt, gross $ 123,884 $ 124,817
Mortgage discount (1,855) (2,074)
Deferred financing costs, net (1,316) (1,812)
Debt, net $ 120,713 $ 120,931
v3.25.0.1
Debt - Scheduled Maturities (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Total $ 123,884 $ 124,817
Mortgages    
Debt Instrument [Line Items]    
2025 20,980  
2026 23,084  
2027 10,785  
2028 234  
2029 245  
Thereafter 68,556  
Total $ 123,884  
Weighted average interest rate    
2025 5.86%  
2026 4.56%  
2027 3.99%  
2028 0.00%  
2029 0.00%  
Thereafter 5.73%  
Total 5.38%  
v3.25.0.1
Debt - Narrative (Details)
$ in Thousands
 12 Months Ended
Nov. 08, 2023
USD ($)
Dec. 31, 2024
USD ($)
loan
Dec. 31, 2023
USD ($)
Nov. 09, 2023
USD ($)
Sep. 20, 2023
USD ($)
loan
Apr. 06, 2023
USD ($)
ft²
Jan. 24, 2023
USD ($)
Debt Instrument [Line Items]              
Mortgage loans assumed | loan         2    
Payoff of debt   $ 0 $ (17,112)        
Restricted cash   4,364 $ 2,406        
Mortgages              
Debt Instrument [Line Items]              
2025   $ 20,980          
2025   5.86%          
Number of loans | loan   1          
Secured Debt              
Debt Instrument [Line Items]              
Guaranteed amount   $ 4          
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            
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   6.73%          
Interest rate cap       7.44%      
v3.25.0.1
Fair Value Measurements - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
USD ($)
derivative_instrument
Dec. 31, 2023
USD ($)
derivative_instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Unrealized gain (loss) on derivatives $ 32 $ (369)
Cash flow hedge gain (loss) 60  
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 0.0679 0.0669
Discount rate | Long-term debt | Minimum    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long term debt measurement input 0.0576 0.0552
Discount rate | Long-term debt | Maximum    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long term debt measurement input 0.0947 0.0966
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
v3.25.0.1
Fair Value Measurements - Derivative Assets (Details) - Fair Value, Measurements, Recurring - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred costs and other assets $ 90 $ 97
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 90 97
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Deferred costs and other assets $ 0 $ 0
v3.25.0.1
Fair Value Measurements - Non-Recurring Measurements (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
USD ($)
Fair Value, Measurements, Nonrecurring  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Provision for asset impairment $ 0
v3.25.0.1
Fair Value Measurements - Not Measured at Fair Value (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Carrying Value    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Debt, net $ 123,884 $ 124,817
Estimated Fair Value    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Debt, net $ 118,781 $ 119,242
v3.25.0.1
Income Taxes (Details)
Dec. 31, 2024
USD ($)
Income Tax Disclosure [Abstract]  
Unrecognized tax benefits $ 0
v3.25.0.1
Segment Reporting - Narrative (Details)
 12 Months Ended
Dec. 31, 2024
segment
Segment Reporting [Abstract]  
Number of business segments (in segments) 2
v3.25.0.1
Segment Reporting - Net Property Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Feb. 05, 2024
Dec. 31, 2024
Dec. 31, 2024
Dec. 31, 2023
Segment Reporting Information [Line Items]        
Rental income     $ 36,080 $ 30,981
Total revenues     36,080 30,981
Property operating expenses     9,775 8,910
Real estate taxes     4,217 5,353
Net operating income     22,088 16,718
Gain on sale of investment properties $ 6,869   6,869 0
Net (income) loss attributable to noncontrolling interests     (5) 3
Net loss attributable to Highlands REIT, Inc. common stockholders     (1,005) (10,301)
Balance Sheet Data        
Total assets   $ 336,740 336,740 341,152
Capital expenditures     5,645 9,004
Reconciling items        
Segment Reporting Information [Line Items]        
Non-allocated expenses     (23,548) (23,271)
Other income and expenses     (6,419) (3,745)
Net (income) loss attributable to noncontrolling interests   (5)   3
Balance Sheet Data        
Total assets   46,865 46,865 31,613
Operating segments and corporate, non-segment        
Balance Sheet Data        
Total assets   289,875 289,875 309,539
Multi-family | Operating segments        
Segment Reporting Information [Line Items]        
Total revenues     19,941 17,647
Property operating expenses     6,808 6,143
Real estate taxes     2,234 1,926
Net operating income     10,899 9,578
Balance Sheet Data        
Total assets   191,847 191,847 198,220
Capital expenditures     695 643
Other | Operating segments        
Segment Reporting Information [Line Items]        
Total revenues     16,139 13,334
Property operating expenses     2,967 2,767
Real estate taxes     1,983 3,427
Net operating income     11,189 7,140
Balance Sheet Data        
Total assets   $ 98,028 98,028 111,319
Capital expenditures     4,950 8,361
Other property income        
Segment Reporting Information [Line Items]        
Total revenues     1,003 935
Other property income | Multi-family | Operating segments        
Segment Reporting Information [Line Items]        
Total revenues     1,003 935
Other property income | Other | Operating segments        
Segment Reporting Information [Line Items]        
Total revenues     0 0
Rental income        
Segment Reporting Information [Line Items]        
Total revenues     35,077 30,046
Rental income | Multi-family | Operating segments        
Segment Reporting Information [Line Items]        
Total revenues     18,938 16,712
Rental income | Other | Operating segments        
Segment Reporting Information [Line Items]        
Total revenues     $ 16,139 $ 13,334
v3.25.0.1
Share Based Compensation (Details) - USD ($)
$ / shares in Units, $ in Thousands
 1 Months Ended 12 Months Ended
Dec. 15, 2024
Dec. 15, 2023
Dec. 08, 2023
Apr. 30, 2024
Dec. 31, 2024
Dec. 31, 2023
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         $ 606 $ 649    
Weighted Average Grant Date Fair Value                
Accelerated Share Repurchases, Final Price Paid Per Share     $ 0.14          
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation 1,887,000 1,960,000            
Common Stock                
Weighted Average Grant Date Fair Value                
Repurchase of common stock (in shares)       33 33,000 169,391,000    
Incentive Award Plan                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Stock-based compensation expense         $ 1,441 $ 1,537    
Incentive awards                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Aggregate value of shares granted           $ 1,515    
Number of shares authorized to grant (up to) (in shares)             67,000,000 43,000,000
Shares available for future issuance (in shares)         7,046,000      
Stock Awards                
Beginning balance (in shares)         0      
Granted (in shares)         4,570,000 4,779,000    
Vested (in shares)         (4,570,000)      
Forfeited (in shares)         0      
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 $ 0.32    
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         $ 1,420      
Stock Awards                
Granted (in shares)         4,570,000      
Weighted Average Grant Date Fair Value                
Granted (in dollars per share)         $ 0.31      
v3.25.0.1
Commitments and Contingencies (Details)
$ in Thousands
 1 Months Ended
Apr. 30, 2020
ft²
Dec. 31, 2024
USD ($)
Apr. 30, 2024
USD ($)
ft²
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  
Veeco Instrument, Inc. Lease          
Lessor, Lease, Description [Line Items]          
Contractual obligation         $ 9,100
Contractual obligation, re-estimated remaining obligation   $ 673      
LTF Lease Company LLC          
Lessor, Lease, Description [Line Items]          
Lease not yet commenced, leased area | ft²     61,000    
Lease not yet commenced, cost     $ 9,200    
Lessee, Operating Lease, Lease Not Yet Commenced, Estimated Remaining Cost   5,400      
Trimble          
Lessor, Lease, Description [Line Items]          
Lessee, Operating Lease, Lease Not Yet Commenced, Estimated Remaining Cost   $ 1,085      
Veeco Instruments, Inc          
Lessor, Lease, Description [Line Items]          
Leased area | ft² 97,000        
v3.25.0.1
Schedule III Real Estate and Accumulated Depreciation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance $ 123,884  
Initial Cost, Land 85,209  
Initial Cost, Buildings and Improvements 241,849  
Adjustments to Land Basis (1,417)  
Adjustments to Building Basis 47,277  
Gross amount at which carried at end of period, Land and Improvements 83,792  
Gross amount at which carried at end of period, Buildings and Improvements 289,126  
Gross amount at which carried at end of period, Total 372,918 $ 385,368
Accumulated Depreciation 87,211 87,216
Notes to Schedule III    
Cost of real estate owned 463,387  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Beginning balance 385,368 351,958
Acquisitions and capital improvements 11,842 33,410
Dispositions and write-offs (24,292) 0
Ending balance 372,918 385,368
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Beginning balance 87,216 76,888
Depreciation expense 11,036 10,328
Dispositions and write-offs (11,041) 0
Ending balance $ 87,211 $ 87,216
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 181  
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 17,321  
Gross amount at which carried at end of period, Total 20,396  
Accumulated Depreciation 4,058  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 20,396  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 4,058  
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 706  
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 7,820  
Gross amount at which carried at end of period, Total 10,937  
Accumulated Depreciation 2,074  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 10,937  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 2,074  
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 546  
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 6,934  
Gross amount at which carried at end of period, Total 9,731  
Accumulated Depreciation 1,840  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 9,731  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,840  
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 53  
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 3,256  
Gross amount at which carried at end of period, Total 5,752  
Accumulated Depreciation 733  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 5,752  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 733  
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 71  
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 17,481  
Gross amount at which carried at end of period, Total 19,014  
Accumulated Depreciation 3,509  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 19,014  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 3,509  
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 10,998  
Initial Cost, Land 3,370  
Initial Cost, Buildings and Improvements 15,006  
Adjustments to Building Basis 159  
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 15,165  
Gross amount at which carried at end of period, Total 18,535  
Accumulated Depreciation 3,274  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 18,535  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 3,274  
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 248  
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 7,315  
Gross amount at which carried at end of period, Total 9,772  
Accumulated Depreciation 1,741  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 9,772  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,741  
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 877  
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 23,338  
Gross amount at which carried at end of period, Total 27,632  
Accumulated Depreciation 5,487  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 27,632  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 5,487  
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 213  
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 43,022  
Gross amount at which carried at end of period, Total 48,325  
Accumulated Depreciation 7,774  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 48,325  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 7,774  
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 39  
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 5,446  
Gross amount at which carried at end of period, Total 7,295  
Accumulated Depreciation 890  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 7,295  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 890  
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 668  
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 9,530  
Gross amount at which carried at end of period, Total 16,802  
Accumulated Depreciation 2,119  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 16,802  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 2,119  
Multifamily | The Q Lofts | Denver, Colorado    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 12,966  
Initial Cost, Land 8,856  
Initial Cost, Buildings and Improvements 22,877  
Adjustments to Building Basis 10  
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 22,887  
Gross amount at which carried at end of period, Total 31,743  
Accumulated Depreciation 1,010  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 31,743  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 1,010  
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 9,139  
Initial Cost, Land 1,651  
Initial Cost, Buildings and Improvements 11,770  
Adjustments to Land Basis (35)  
Adjustments to Building Basis 2,562  
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 14,332  
Gross amount at which carried at end of period, Total 15,948  
Accumulated Depreciation 9,467  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 15,948  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 9,467  
Retail Site | Palazzo Del Lago Orlando, FL | Bloomsburg, Pennsylvania    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Encumbrance 20,000  
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 12,680  
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 43,662  
Gross amount at which carried at end of period, Total 53,317  
Accumulated Depreciation 25,625  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 53,317  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 25,625  
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 14,070  
Initial Cost, Land 4,432  
Initial Cost, Buildings and Improvements 13,308  
Adjustments to Building Basis 4,730  
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 18,038  
Gross amount at which carried at end of period, Total 22,470  
Accumulated Depreciation 10,936  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 22,470  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 10,936  
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  
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 0  
Initial Cost, Land 12,732  
Initial Cost, Buildings and Improvements 10,045  
Adjustments to Building Basis 23,482  
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 33,527  
Gross amount at which carried at end of period, Total 46,259  
Accumulated Depreciation 6,639  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 46,259  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance 6,639  
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 11  
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 11  
Other | Corporate    
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]    
Adjustments to Building Basis 33  
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 33  
Gross amount at which carried at end of period, Total 33  
Accumulated Depreciation 24  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward]    
Ending balance 33  
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward]    
Ending balance $ 24