What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-02 · 144 added, 61 removed, 311 unchanged (40% of the section changed)

5 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE DATA )

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Land $ 383,808 $ 383,808

23 unchanged sentences

150,000 shares authorized;

88,157 and 88,029 shares issued and outstanding, as of March 31, 2025 and December 31, 2024, respectively

88,162 and 88,029 shares issued and outstanding, as of June 30, 2025 and December 31, 2024, respectively

Additional paid in capital 1,743,161 1,740,078

9 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Real estate rental revenue $ 62,099 $ 60,103 $ 123,592 $ 119,616

19 unchanged sentences

(IN THOUSANDS)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net loss $ ( 3,566 ) $ ( 3,471 ) $ ( 8,241 ) $ ( 7,118 )

Other comprehensive income:

Unrealized gain on interest rate hedges 89 83

Unrealized gain (loss) on interest rate hedges 334 ( 796 ) 423 ( 713 )

Reclassification of unrealized loss on interest rate derivatives to earnings 509 510 1,019 1,020

14 unchanged sentences

Share grants, net of forfeitures and tax withholdings 133 2 3,083 — — 3,085 — 3,085

Balance, March 31, 2025 88,157 $ 882 $ 1,741,220 $ ( 666,713 ) $ ( 12,467 ) $ 1,062,922 $ 279 $ 1,063,201

Balance, June 30, 2025 88,162 $ 882 $ 1,743,161 $ ( 686,226 ) $ ( 11,624 ) $ 1,046,193 $ 277 $ 1,046,470

Shares Issued and Out-standing Shares of Beneficial Interest at Par Value Additional Paid in Capital Distributions in Excess of

2 unchanged sentences

Net loss — — — ( 7,118 ) — ( 7,118 ) — ( 7,118 )

Unrealized gain on interest rate hedges — — — — 83 83 — 83

Unrealized loss on interest rate hedges — — — — ( 713 ) ( 713 ) — ( 713 )

Amortization of swap settlements — — — — 1,020 1,020 — 1,020

3 unchanged sentences

Share grants, net of forfeitures and tax withholdings 144 1 2,411 — — 2,412 — 2,412

Balance, June 30, 2024 88,011 $ 880 $ 1,737,941 $ ( 608,310 ) $ ( 12,651 ) $ 1,117,860 $ 285 $ 1,118,145

See accompanying notes to the consolidated financial statements.

ELME COMMUNITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(IN THOUSANDS)

Shares Issued and Out-standing Shares of Beneficial Interest at Par Value Additional Paid in Capital Distributions in Excess of

Net Income Accumulated Other Comprehensive Loss Total Shareholders’ Equity Noncontrolling Interests in Subsidiaries Total Equity

Balance, March 31, 2025 88,157 $ 882 $ 1,741,220 $ ( 666,713 ) $ ( 12,467 ) $ 1,062,922 $ 279 $ 1,063,201

Net loss — — — ( 3,566 ) — ( 3,566 ) — ( 3,566 )

Unrealized gain on interest rate hedges — — — — 334 334 — 334

Amortization of swap settlements — — — — 509 509 — 509

Distributions to noncontrolling interests — — — — — — ( 2 ) ( 2 )

Dividends ($ 0.18 per common share)

— — — ( 15,947 ) — ( 15,947 ) — ( 15,947 )

Share grants, net of share grant amortization and forfeitures 5 — 1,941 — — 1,941 — 1,941

Balance, June 30, 2025 88,162 $ 882 $ 1,743,161 $ ( 686,226 ) $ ( 11,624 ) $ 1,046,193 $ 277 $ 1,046,470

Shares Issued and Out-standing Shares of Beneficial Interest at Par Value Additional Paid in Capital Distributions in Excess of

Net Income Accumulated Other Comprehensive Loss Total Shareholders’ Equity Noncontrolling Interests in Subsidiaries Total Equity

Balance, March 31, 2024 88,003 $ 880 $ 1,736,524 $ ( 588,923 ) $ ( 12,365 ) $ 1,136,116 $ 288 $ 1,136,404

Net loss — — — ( 3,471 ) — ( 3,471 ) — ( 3,471 )

Unrealized loss on interest rate hedges

— — — — ( 796 ) ( 796 ) — ( 796 )

Amortization of swap settlements — — — — 510 510 — 510

Distributions to noncontrolling interests — — — — — — ( 3 ) ( 3 )

Dividends ($ 0.18 per common share)

— — — ( 15,916 ) — ( 15,916 ) — ( 15,916 )

Share grants, net of forfeitures and tax withholdings 8 — 1,417 — — 1,417 — 1,417

Balance, June 30, 2024 88,011 $ 880 $ 1,737,941 $ ( 608,310 ) $ ( 12,651 ) $ 1,117,860 $ 285 $ 1,118,145

See accompanying notes to the consolidated financial statements.

2 unchanged sentences

(IN THOUSANDS)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

16 unchanged sentences

Line of credit borrowings, net

( 1,000 ) ( 1,000 )

Dividends paid ( 31,841 ) ( 31,843 )

3 unchanged sentences

Net cash used in financing activities ( 33,088 ) ( 33,035 )

Net increase (decrease) in cash, cash equivalents and restricted cash 343 ( 1,635 )

Net decrease in cash, cash equivalents and restricted cash ( 1,516 ) ( 646 )

Cash, cash equivalents and restricted cash at beginning of period 8,609 8,538

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

NATURE OF BUSINESS

Elme Communities, a Maryland real estate investment trust, is a self-administered equity real estate investment trust (“REIT”), and successor to a trust organized in 1960.

Elme Communities, a Maryland real estate investment trust (the “Company”), is a self-administered equity real estate investment trust, and successor to a trust organized in 1960.

Our business primarily consists of the ownership of apartment communities in the greater Washington, DC metro and Sunbelt regions.

Within these notes to the financial statements, we refer to the three months ended March 31, 2025 and March 31, 2024 as the “2025 Quarter” and the “2024 Quarter,” respectively.

Within these notes to the financial statements, we refer to the three months ended June 30, 2025 and June 30, 2024 as the “2025 Quarter” and the “2024 Quarter,” respectively, and the six months ended June 30, 2025 and June 30, 2024 as the “2025 Period” and the “2024 Period,” respectively.

Federal Income Taxes

We believe that we qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), and intend to continue to qualify as such.

We believe that we qualify as a real estate investment trust (“REIT”) under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), and intend to continue to qualify as such.

To maintain our status as a REIT, we are, among other things, required to distribute 90% of our REIT taxable income (determined before the deduction for dividends paid and excluding net capital gains to our shareholders) on an annual basis.

2 unchanged sentences

Our TRS is subject to corporate federal and state income tax on its taxable income at regular statutory rates.

As of both March 31, 2025 and December 31, 2024, our TRS had a deferred tax asset of $ 1.4 million that was fully reserved.

As of both June 30, 2025 and December 31, 2024, our TRS had a deferred tax asset of $ 1.4 million that was fully reserved.

Proposed Portfolio Sale Transaction and Plan of Sale and Liquidation

Subsequent to quarter end, the Company entered into a Purchase Agreement dated August 1, 2025 (the “Purchase Agreement”), by and among the Company, WashREIT OP LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Seller”), Echo Sub LLC, a Delaware limited liability company and wholly owned subsidiary of Seller (the “Echo Sub”), CEVF VI Capital Holdings, LLC, a Delaware limited liability company (“Buyer”), and CEVF VI Co-Invest I Venture, LLC, a Delaware limited liability company.

Pursuant to and subject to the terms and conditions of the Purchase Agreement, Buyer has agreed to purchase all of the limited liability company interests of Echo Sub, which at the consummation of the transactions will indirectly own 19 of the Company’s multifamily properties, in exchange for an aggregate purchase price of $ 1.6 billion, subject to customary adjustments (the “Portfolio Sale Transaction”).

In connection with approval of the Purchase Agreement, the board of trustees approved a Plan of Sale and Liquidation (“Plan of Sale and Liquidation”).

The Plan of Sale and Liquidation includes a plan of liquidation that provides for the Company’s complete liquidation and dissolution in accordance with Section 331, Section 336 and Section 346(a) of the Code.

Consummation of the Portfolio Sale Transaction and effectiveness of the Plan of Sale and Liquidation are subject to approval by the affirmative vote of the holders of the Company’s shares of beneficial interests entitled to cast a majority of all the votes entitled to be cast on the matter.

The Portfolio Sale Transaction is also subject to other customary closing conditions.

The Portfolio Sale Transaction and the Plan of Sale and Liquidation are referred to herein as the “Proposed Transactions”.

Commitment Letter

In connection with entering into the Purchase Agreement and approval of the Plan of Sale and Liquidation by the board of trustees, the Company obtained a commitment to provide debt financing in the original principal amount of $ 520 million (or $ 565 million if one of the 19 properties is not included in the closing of the Portfolio Sale Transaction) (the “Loan”), which will be secured by substantially all of the Company’s real estate assets and subsidiary equity interests that remain after the closing under the Purchase Agreement, pursuant to a commitment letter (the “Commitment Letter”) from Goldman Sachs Bank USA.

The Loan will have an initial term of one year with a one-year extension option, that may be exercised subject to certain conditions specified in the Commitment Letter.

The funding of the Loan provided for in the Commitment Letter is contingent

on the satisfaction of customary conditions, including but not limited to (a) execution and delivery of definitive documentation with respect to the Loan in accordance with the terms set forth in the Commitment Letter, and (b) closing of the Portfolio Sale Transaction.

The actual documentation governing the Loan has not been finalized, and accordingly, the actual terms may differ from the description of such terms in the Commitment Letter.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS

21 unchanged sentences

The right-of-use asset and associated liability is equal to the present value of the minimum lease payments, applying our incremental borrowing rate.

Our borrowing rate is computed based on observable borrowing rates taking into consideration our credit quality and adjusting to a secured borrowing rate for similar assets and term.

Our borrowing rate is computed based on observable borrowing rates taking into consideration our credit quality and adjusting to a secured borrowing rate for similar assets and terms.

Lease expense for the operating lease is recognized on a straight-line basis over the expected lease term and is included in “General and administrative expenses.”

6 unchanged sentences

We have properties under development/redevelopment and held for current or future development.

As of March 31, 2025, we have invested $ 30.4 million, including the cost of acquired land, in a residential development adjacent to Riverside Apartments.

As of June 30, 2025, we have invested $ 30.4 million, including the cost of acquired land, in a residential development adjacent to Riverside Apartments.

During the second quarter of 2022, we paused development activities at the aforementioned property and ceased associated capitalization of interest on spending and real estate taxes.

Properties Sold and Held for Sale

We intend to hold our properties for investment with a view to long-term appreciation, to engage in the business of acquiring, developing and owning our properties and to make occasional sales of properties that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable.

The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs or distributed to our shareholders.

Pending consummation of the Portfolio Sale Transaction and effectiveness of the Plan of Sale and Liquidation, we intend to hold our properties for investment with a view to long-term appreciation, to engage in the business of owning our properties and to make occasional sales of properties that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable.

The proceeds from the sales may be used to support other corporate needs or distributed to our shareholders.

Depreciation on these properties is discontinued at the time they are classified as held for sale, but operating revenues, operating expenses and interest expense continue to be recognized until the date of sale.

We did not sell or classify any properties as held for sale during the 2025 Quarter or in 2024.

As of March 31, 2025, we assessed our properties, including assets held for development, for impairment and did no t recognize any impairment charges during the 2025 Quarter.

We applied reasonable estimates and judgments in evaluating each of the properties as of March 31, 2025.

We did not sell or classify any properties as held for sale during the 2025 Period or in 2024.

As of June 30, 2025, we assessed our properties, including assets held for development, for impairment and did no t recognize any impairment charges during the 2025 Quarter.

We applied reasonable estimates and judgments in evaluating each of the properties as of June 30, 2025.

Should external or internal circumstances change requiring the need to shorten holding periods or adjust future estimated cash flows from our properties, we could be required to record impairment charges in the future.

6 unchanged sentences

The initial interest rate is based on Adjusted Daily Simple SOFR plus a margin of 0.85 % and the initial facility fee equals 0.20 %.

As of March 31, 2025, the interest rate on the Amended and Restated Revolving Credit Facility was based on the Adjusted Daily Simple SOFR (inclusive of the 0.10 % credit spread adjustment) plus 0.85 % applicable margin, the daily SOFR was 4.41% and the facility fee was 0.20 %.

As of June 30, 2025, the interest rate on the Amended and Restated Revolving Credit Facility was based on the Adjusted Daily Simple SOFR (inclusive of the 0.10 % credit spread adjustment) plus 0.85 % applicable margin, the daily SOFR was 4.45% and the facility fee was 0.20 %.

All outstanding advances for the Amended and Restated Revolving Credit Facility are due and payable upon maturity in July 2028, unless extended pursuant to one or both of the two six-month extension options.

Interest only payments are due and payable generally on a monthly basis.

The amount of the Amended and Restated Revolving Credit Facility’s unsecured line of credit unused and available at March 31, 2025 was as follows (in thousands):

The amount of the Amended and Restated Revolving Credit Facility’s unsecured line of credit unused and available at June 30, 2025 was as follows (in thousands):

Committed capacity $ 500,000

1 unchanged sentence

Unused and available $ 325,000

We executed borrowings and repayments on the Amended and Restated Revolving Credit Facility during the 2025 Quarter as follows (in thousands):

We executed borrowings and repayments on the Amended and Restated Revolving Credit Facility during the 2025 Period as follows (in thousands):

Balance, December 31, 2024 $ 176,000

1 unchanged sentence

Repayments ( 80,000 )

Balance, March 31, 2025 $ 182,000

Balance, June 30, 2025 $ 175,000

NOTES PAYABLE

During 2023, we entered into a $ 125.0 million unsecured term loan (“2023 Term Loan”) with an interest rate of SOFR (subject to a credit spread adjustment of 10 basis points) plus a margin of 95 basis points (subject to adjustment depending on Elme Communities’ credit rating).

During 2023, we entered into a $ 125.0 million unsecured term loan (the “2023 Term Loan”) with an interest rate of SOFR (subject to a credit spread adjustment of 10 basis points) plus a margin of 95 basis points (subject to adjustment depending on Elme Communities’ credit rating).

The 2023 Term Loan had a two-year term ending in January 2025, with two one-year extension options.

We used the proceeds to prepay the remaining $ 100.0 million portion of the $ 250.0 million unsecured term loan (the “2018 Term Loan”) in full and a portion of our borrowings under our previous revolving credit facility.

We used the proceeds to prepay the remaining $ 100.0 million portion of the $ 250.0 million unsecured 2018 term loan in full and a portion of our borrowings under our previous revolving credit facility.

During 2024, we entered into a first amendment of the 2023 Term Loan (the “Term Loan Amendment”).

1 unchanged sentence

The Term Loan Amendment does not change the maturity or any of the pricing terms of the term loan outstanding under the 2023 Term Loan.

During the fourth quarter of 2024, we exercised one of two one-year extension options on the 2023 Term Loan to extend the maturity of the loan to January 10, 2026.

During 2024, we exercised one of two one-year extension options on the 2023 Term Loan to extend the maturity of the loan to January 10, 2026.

The interest rate on the 2023 Term Loan is effectively fixed at 5.77 % by two interest rate swap arrangements through its maturity date of January 10, 2026 (see note 6).

DERIVATIVE INSTRUMENTS

During the first quarter of 2023, we entered into two interest rate swap arrangements with an aggregate notional amount of $ 125.0 million that effectively fixed the interest at 4.73 % for the 2023 Term Loan beginning on July 21, 2023 through the 2023 Term Loan’s initial maturity date of January 10, 2025.

During the second quarter of 2024, we entered into two forward interest rate swap arrangements with an aggregate notional amount of $ 150.0 million beginning on January 10, 2025 through January 10, 2026.

During 2023, we entered into two interest rate swap arrangements with an aggregate notional amount of $ 125.0 million that effectively fixed the interest at 4.73 % for the 2023 Term Loan beginning on July 21, 2023 through the 2023 Term Loan’s initial maturity date of January 10, 2025.

During the 2024 Quarter, we entered into two forward interest rate swap arrangements with an aggregate notional amount of $ 150.0 million beginning on January 10, 2025 through January 10, 2026.

These forward interest rate swap arrangements effectively fix (i) a portion of our variable rate debt based on an adjusted daily SOFR at 4.72 % (subject to applicable interest rate margins) and (ii) the 2023 Term Loan’s interest rate at 5.77 % beginning on January 10, 2025 through the extended loan maturity date of January 10, 2026.

4 unchanged sentences

Hedge ineffectiveness of our cash flow hedges is recorded in earnings.

The fair values of the interest rate swaps as of March 31, 2025 and December 31, 2024, were as follows (in thousands):

The fair values of the interest rate swaps as of June 30, 2025 and December 31, 2024, were as follows (in thousands):

Derivative Assets (Liabilities)

Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date March 31, 2025 December 31, 2024

Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date June 30, 2025 December 31, 2024

Interest rate swap $ 75,000 July 21, 2023 January 10, 2025 $ — $ 14

4 unchanged sentences

We record interest rate swaps on our consolidated balance sheets within Prepaid expenses and other assets when in a net asset position and within Accounts payable and other liabilities when in a net liability position.

The net unrealized gains on the effective swaps were recognized in Other comprehensive income (loss), as follows (in thousands):

Three Months Ended March 31,

Unrealized gain on interest rate hedges $ 89 $ 83

The net unrealized gains and losses on the effective swaps were recognized in Other comprehensive income (loss), as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Unrealized gain (loss) on interest rate hedges $ 334 $ ( 796 ) $ 423 $ ( 713 )

Amounts reported in Accumulated other comprehensive loss related to effective cash flow hedges will be reclassified to interest expense as interest payments are made on our variable-rate debt.

During the next twelve months, we estimate that an additional $ 0.5 million related to our outstanding interest rate swap arrangements will be reclassified as a net increase to interest expense.

The losses reclassified from Accumulated other comprehensive loss into interest expense for the three months ended March 31, 2025 and 2024, were as follows (in thousands):

Three Months Ended March 31,

The losses reclassified from Accumulated other comprehensive loss into interest expense for the three and six months ended June 30, 2025 and 2024, were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Loss reclassified from accumulated other comprehensive loss into interest expense $ 509 $ 510 $ 1,019 $ 1,020

1 unchanged sentence

We have agreements with each of our derivative counterparties that contain a provision whereby we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness.

As of March 31, 2025, the fair value of derivative liabilities was $ 0.8 million.

As of March 31, 2025, we have not posted any collateral related to these agreements.

As of June 30, 2025, the fair value of derivative liabilities was $ 0.5 million.

As of June 30, 2025, we have not posted any collateral related to these agreements.

Derivative instruments expose us to credit risk in the event of non-performance by the counterparty under the terms of the interest rate hedge agreements.

7 unchanged sentences

Significant unobservable inputs

The only assets or liabilities we had at March 31, 2025 and December 31, 2024 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Plan (“SERP”), which primarily consist of investments in mutual funds, and the interest rate derivatives (see note 6).

The only assets or liabilities we had at June 30, 2025 and December 31, 2024 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Plan (“SERP”), which primarily consist of investments in mutual funds, and the interest rate derivatives (see note 6).

We base the valuations related to the SERP on quoted prices in active markets and accordingly these valuations fall into Level 1 in the fair value hierarchy.

3 unchanged sentences

The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of ASC 820, Fair Value Measurement , we incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own

nonperformance risk and the respective counterparty’s nonperformance risk.

To comply with the provisions of ASC Topic 820, Fair Value Measurement , we incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk.

These credit valuation adjustments were concluded to not be significant inputs for the fair value calculations for the periods presented.

1 unchanged sentence

The valuation of interest rate derivatives fall into Level 2 in the fair value hierarchy.

The fair values of these assets as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

The fair values of these assets as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025 December 31, 2024

Value Level 1 Level 2 Level 3 Fair

11 unchanged sentences

The use of different market assumptions or estimation methodologies could have an effect on the estimated fair value amounts.

In addition, fair value estimates are made at a point in time and thus, estimates of fair value subsequent to March 31, 2025 may differ significantly from the amounts presented.

In addition, fair value estimates are made at a point in time and thus, estimates of fair value subsequent to June 30, 2025 may differ significantly from the amounts presented.

The valuations of cash and cash equivalents and restricted cash fall into Level 1 in the fair value hierarchy and the valuations of debt instruments fall into Level 3 in the fair value hierarchy.

As of March 31, 2025 and December 31, 2024, the carrying values and estimated fair values of our financial instruments were as follows (in thousands):

March 31, 2025 December 31, 2024

As of June 30, 2025 and December 31, 2024, the carrying values and estimated fair values of our financial instruments were as follows (in thousands):

June 30, 2025 December 31, 2024

Carrying Value Fair Value Carrying Value Fair Value

7 unchanged sentences

An amendment and restatement of the Omnibus Incentive Plan was approved by our board of trustees in April 2024 and approved by our shareholders in May 2024 to, among other changes, increase the number of shares available to be issued by 2,900,000 , from 2,400,000 shares to 5,300,000 shares (including shares issued pursuant to awards made under the Omnibus Incentive Plan prior to its amendment).

The Omnibus Incentive Plan, as amended, allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 5,300,000 shares over the ten-year period in which the plan is in effect.

The Omnibus Incentive Plan allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 5,300,000 shares over the ten-year period in which the plan is in effect.

Restricted share units are converted into shares of our stock upon full vesting through the issuance of new shares.

Total Compensation Expense

Total compensation expense recognized in the consolidated financial statements for all outstanding share-based awards was $ 1.4 million and $ 1.1 million for the 2025 Quarter and 2024 Quarter, respectively.

Total compensation expense recognized in the consolidated financial statements for all outstanding share-based awards was $ 1.7 million and $ 1.0 million for the 2025 Quarter and 2024 Quarter, respectively, and $ 3.1 million and $ 2.1 million for the 2025 Period and 2024 Period, respectively.

Restricted Share Awards

The total fair values of restricted share awards vested was $ 0.7 million and $ 0.6 million for the 2025 Quarter and 2024 Quarter, respectively.

The total unvested restricted share awards at March 31, 2025 was 493,625 shares, which had a weighted average grant date fair value of $ 15.82 per share.

As of March 31, 2025, the total compensation cost related to unvested restricted share awards was $ 6.0 million, which we expect to recognize over a weighted average period of 24 months.

The total fair values of restricted share awards vested was $ 1.1 million and $ 0.9 million for the 2025 Period and 2024 Period, respectively.

The total unvested restricted share awards at June 30, 2025 was 490,833 shares, which had a weighted average grant date fair value of $ 15.81 per share.

As of June 30, 2025, the total compensation cost related to unvested restricted share awards was $ 5.1 million, which we expect to recognize over a weighted average period of 21 months.

EARNINGS PER COMMON SHARE

4 unchanged sentences

Our dilutive earnings per share calculation includes the dilutive impact of operating partnership units under the if-converted method and our share-based awards with performance conditions prior to the grant date and all market condition awards under the contingently issuable method.

The computations of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024 were as follows (in thousands, except per share data):

Three Months Ended March 31,

The computations of basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net loss $ ( 3,566 ) $ ( 3,471 ) $ ( 8,241 ) $ ( 7,118 )

15 unchanged sentences

GAAP requires that segment disclosures present the measure(s) used by the CODM for purposes of assessing each segment’s performance.

NOI is a key measurement of our segment profit and loss and is defined as real estate rental revenue less real estate expenses.

The following tables present revenues, NOI, capital expenditures and total assets for the three months ended March 31, 2025 and 2024 from our Residential segment as well as Other, and reconcile NOI to net loss as reported (in thousands):

Three Months Ended March 31, 2025

The following tables present revenues, NOI, capital expenditures and total assets for the three and six months ended June 30, 2025 and 2024 from our Residential segment as well as Other, and reconcile NOI to net loss as reported (in thousands):

Three Months Ended June 30, 2025

Residential Other Consolidated

2 unchanged sentences

Net operating income $ 36,422 $ 3,015 $ 39,437

Other expense:

Property management expenses ( 2,256 )

5 unchanged sentences

Total assets $ 1,692,236 $ 117,968 $ 1,810,204

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Residential Other Consolidated

2 unchanged sentences

Net operating income $ 34,870 $ 3,251 $ 38,121

Other expense:

Property management expenses ( 2,175 )

2 unchanged sentences

Interest expense ( 9,384 )

Other income 1,410

Net loss $ ( 3,471 )

1 unchanged sentence

Total assets $ 1,738,354 $ 123,121 $ 1,861,475

Six Months Ended June 30, 2025

Residential Other Consolidated

Real estate rental revenue $ 114,690 8,902 $ 123,592

Real estate expenses 41,870 2,786 44,656

Net operating income $ 72,820 $ 6,116 $ 78,936

Other income (expense):

Property management expenses ( 4,502 )

General and administrative expenses ( 16,918 )

Depreciation and amortization ( 46,799 )

Interest expense ( 18,958 )

Net loss $ ( 8,241 )

Capital expenditures $ 14,370 $ 81 $ 14,451

Six Months Ended June 30, 2024

Residential Other Consolidated

Real estate rental revenue $ 110,363 9,253 $ 119,616

Real estate expenses 40,980 2,721 43,701

Net operating income $ 69,383 $ 6,532 $ 75,915

Other income (expense):

Property management expenses ( 4,393 )

General and administrative expenses ( 12,334 )

Depreciation and amortization ( 48,838 )

Interest expense ( 18,878 )

Other income 1,410

Net loss $ ( 7,118 )

Capital expenditures $ 21,437 $ 109 $ 21,546

SHAREHOLDERS’ EQUITY

5 unchanged sentences

At the time of such termination, approximately $ 340.0 million remained unsold under such prior program.

We did no t issue common shares under the Equity Distribution Agreement or any prior equity distribution agreements during the 2025 Quarter or 2024 Quarter.

We did no t issue common shares under the Equity Distribution Agreement or any prior equity distribution agreements during the 2025 Period or 2024 Period.

We have a dividend reinvestment program, whereby shareholders may use their dividends and optional cash payments to purchase common shares.

1 unchanged sentence

Net proceeds under this program are used for general corporate purposes.

We did not issue common shares under the dividend reinvestment program during the 2025 Quarter and 2024 Quarter.

We did not issue common shares under the dividend reinvestment program during the 2025 Period or 2024 Period.

SUBSEQUENT EVENTS

Subsequent to quarter end, the Company entered into the Purchase Agreement.

In connection with approval of the Purchase Agreement, the board of trustees approved a Plan of Sale and Liquidation.

The Portfolio Sale Transaction is also subject to other customary closing conditions.

Commitment Letter

In connection with entering into the Purchase Agreement and approval of the Plan of Sale and Liquidation by the board of trustees, the Company obtained a commitment from Goldman Sachs Bank USA to provide the Loan, which will be secured by substantially all of the Company’s real estate assets and subsidiary equity interests that remain after the closing under the Purchase Agreement.

The Loan will have an initial term of one year with a one-year extension option, that may be exercised subject to certain conditions specified in the Commitment Letter.

The funding of the Loan provided for in the Commitment Letter is contingent on the satisfaction of customary conditions, including but not limited to (a) execution and delivery of definitive documentation with respect to the Loan in accordance with the terms set forth in the Commitment Letter, and (b) closing of the Portfolio Sale Transaction.

The actual documentation governing the Loan has not been finalized, and accordingly, the actual terms may differ from the description of such terms in the Commitment Letter.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements