What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-07-31 · 273 added, 167 removed, 663 unchanged (40% of the section changed)

3 unchanged sentences

($ in thousands, except share and per share data)

September 30,

2024 December 31,

23 unchanged sentences

219,666,129 and 219,448,429 shares issued and outstanding at

June 30, 2024 and December 31, 2023, respectively

September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 4,867,235 4,886,592

9 unchanged sentences

($ in thousands, except share and per share data)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

Total expenses 162,891 174,421 564,184 528,263

(Loss) gain on sales of operating properties, net ( 1,230 ) 28,440 ( 1,466 ) 28,440

Operating (loss) income ( 22,311 ) 59,309 17,114 90,107

Gain (loss) on sales of operating properties, net 602 ( 5,972 ) ( 864 ) 22,468

Operating income 44,964 26,826 62,078 116,933

Other (expense) income:

1 unchanged sentence

Income tax expense of taxable REIT subsidiaries ( 35 ) ( 68 ) ( 325 ) ( 84 )

Equity in (loss) earnings of unconsolidated subsidiaries ( 174 ) 118 ( 594 ) ( 126 )

Equity in loss of unconsolidated subsidiaries ( 607 ) ( 47 ) ( 1,201 ) ( 173 )

Gain on sale of unconsolidated property, net — — 2,325 —

Other income, net 4,371 950 12,294 1,657

Net (loss) income ( 49,303 ) 32,481 ( 34,867 ) 38,042

Net loss (income) attributable to noncontrolling interests 665 ( 423 ) 385 ( 593 )

Net (loss) income attributable to common shareholders $ ( 48,638 ) $ 32,058 $ ( 34,482 ) $ 37,449

Net (loss) income per common share – basic and diluted $ ( 0.22 ) $ 0.15 $ ( 0.16 ) $ 0.17

Net income (loss) 17,053 2,177 ( 17,814 ) 40,219

Net (income) loss attributable to noncontrolling interests ( 324 ) ( 107 ) 61 ( 700 )

Net income (loss) attributable to common shareholders $ 16,729 $ 2,070 $ ( 17,753 ) $ 39,519

Net income (loss) per common share – basic and diluted $ 0.08 $ 0.01 $ ( 0.08 ) $ 0.18

Weighted average common shares outstanding – basic 219,665,836 219,381,248 219,596,590 219,323,570

Weighted average common shares outstanding – diluted 220,096,693 219,976,080 219,596,590 219,809,543

Net (loss) income $ ( 49,303 ) $ 32,481 $ ( 34,867 ) $ 38,042

Net income (loss) $ 17,053 $ 2,177 $ ( 17,814 ) $ 40,219

Change in fair value of derivatives ( 12,700 ) ( 3,040 ) ( 14,867 ) ( 6,043 )

Total comprehensive (loss) income ( 54,011 ) 41,123 ( 37,033 ) 35,039

Comprehensive loss (income) attributable to noncontrolling

Total comprehensive income (loss) 4,353 ( 863 ) ( 32,681 ) 34,176

Comprehensive (income) loss attributable to noncontrolling

( 175 ) ( 195 ) 197 ( 806 )

Comprehensive (loss) income attributable to the Company $ ( 53,274 ) $ 40,594 $ ( 36,661 ) $ 34,428

Comprehensive income (loss) attributable to the Company $ 4,178 $ ( 1,058 ) $ ( 32,484 ) $ 33,370

The accompanying notes are an integral part of these consolidated financial statements.

12 unchanged sentences

Distributions to common shareholders — — — — ( 54,901 ) ( 54,901 )

Net income attributable to common

— — — — 14,156 14,156

Adjustment to redeemable noncontrolling

— — ( 1,010 ) — — ( 1,010 )

Net income attributable to common shareholders — — — — 14,156 14,156

Adjustment to redeemable noncontrolling interests — — ( 1,010 ) — — ( 1,010 )

Balance at March 31, 2024 219,603,862 $ 2,196 $ 4,887,573 $ 54,891 $ ( 1,413,828 ) $ 3,530,832

3 unchanged sentences

Net loss attributable to common shareholders — — — — ( 48,638 ) ( 48,638 )

Adjustment to redeemable noncontrolling

— — ( 4,118 ) — — ( 4,118 )

Adjustment to redeemable noncontrolling interests — — ( 4,118 ) — — ( 4,118 )

Balance at June 30, 2024 219,654,953 $ 2,197 $ 4,886,532 $ 50,255 $ ( 1,517,383 ) $ 3,421,601

Stock compensation activity 11,176 — 2,553 — — 2,553

Other comprehensive loss — — — ( 12,551 ) — ( 12,551 )

Distributions to common shareholders — — — — ( 57,113 ) ( 57,113 )

Net income attributable to common shareholders — — — — 16,729 16,729

Adjustment to redeemable noncontrolling interests — — ( 21,850 ) — — ( 21,850 )

Balance at September 30, 2024 219,666,129 $ 2,197 $ 4,867,235 $ 37,704 $ ( 1,557,767 ) $ 3,349,369

Balance at December 31, 2022 219,185,658 $ 2,192 $ 4,897,736 $ 74,344 $ ( 1,207,757 ) $ 3,766,515

2 unchanged sentences

Distributions to common shareholders — — — — ( 52,659 ) ( 52,659 )

Net income attributable to common

— — — — 5,391 5,391

Adjustment to redeemable noncontrolling

— — ( 3,821 ) — — ( 3,821 )

Net income attributable to common shareholders — — — — 5,391 5,391

Adjustment to redeemable noncontrolling interests — — ( 3,821 ) — — ( 3,821 )

Balance at March 31, 2023 219,325,898 $ 2,193 $ 4,896,049 $ 62,787 $ ( 1,255,025 ) $ 3,706,004

2 unchanged sentences

Distributions to common shareholders — — — — ( 52,650 ) ( 52,650 )

Net income attributable to common

— — — — 32,058 32,058

Adjustment to redeemable noncontrolling

— — ( 4,101 ) — — ( 4,101 )

Net income attributable to common shareholders — — — — 32,058 32,058

Adjustment to redeemable noncontrolling interests — — ( 4,101 ) — — ( 4,101 )

Balance at June 30, 2023 219,374,275 $ 2,194 $ 4,894,907 $ 71,323 $ ( 1,275,617 ) $ 3,692,807

Stock compensation activity ( 91 ) — 2,968 — — 2,968

Other comprehensive loss — — — ( 3,128 ) — ( 3,128 )

Distributions to common shareholders — — — — ( 52,653 ) ( 52,653 )

Net income attributable to common shareholders — — — — 2,070 2,070

Exchange of redeemable noncontrolling interests for common shares 13,161 — 301 — — 301

Adjustment to redeemable noncontrolling interests — — ( 7,071 ) — — ( 7,071 )

Balance at September 30, 2023 219,387,345 $ 2,194 $ 4,891,105 $ 68,195 $ ( 1,326,200 ) $ 3,635,294

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

15 unchanged sentences

Cash flows from investing activities:

Acquisitions of interests in properties ( 39,561 ) ( 78,273 )

Capital expenditures ( 101,915 ) ( 98,694 )

6 unchanged sentences

Distribution from unconsolidated joint venture 1,618 —

Capital contribution to unconsolidated joint venture ( 946 ) —

Net cash (used in) provided by investing activities ( 154,601 ) 8,013

Capital contributions to unconsolidated joint ventures ( 11,825 ) —

Net cash used in investing activities ( 469,459 ) ( 55,483 )

Cash flows from financing activities:

11 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 123,258 $ 58,314

Non-cash investing and financing activities

Exchange of redeemable noncontrolling interests for common shares $ — $ 301

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

(in thousands, except unit data)

September 30,

2024 December 31,

23 unchanged sentences

Common equity, 219,666,129 and 219,448,429 units issued and outstanding

at June 30, 2024 and December 31, 2023, respectively

at September 30, 2024 and December 31, 2023, respectively

3,311,665 3,515,703

9 unchanged sentences

(in thousands, except unit and per unit data)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

Total expenses 162,891 174,421 564,184 528,263

(Loss) gain on sales of operating properties, net ( 1,230 ) 28,440 ( 1,466 ) 28,440

Operating (loss) income ( 22,311 ) 59,309 17,114 90,107

Gain (loss) on sales of operating properties, net 602 ( 5,972 ) ( 864 ) 22,468

Operating income 44,964 26,826 62,078 116,933

Other (expense) income:

1 unchanged sentence

Income tax expense of taxable REIT subsidiaries ( 35 ) ( 68 ) ( 325 ) ( 84 )

Equity in (loss) earnings of unconsolidated subsidiaries ( 174 ) 118 ( 594 ) ( 126 )

Equity in loss of unconsolidated subsidiaries ( 607 ) ( 47 ) ( 1,201 ) ( 173 )

Gain on sale of unconsolidated property, net — — 2,325 —

Other income, net 4,371 950 12,294 1,657

Net (loss) income ( 49,303 ) 32,481 ( 34,867 ) 38,042

Net income (loss) 17,053 2,177 ( 17,814 ) 40,219

Net income attributable to noncontrolling interests ( 63 ) ( 67 ) ( 204 ) ( 201 )

Net (loss) income attributable to common unitholders $ ( 49,377 ) $ 32,451 $ ( 35,008 ) $ 37,908

Allocation of net (loss) income:

Net income (loss) attributable to common unitholders $ 16,990 $ 2,110 $ ( 18,018 ) $ 40,018

Allocation of net income (loss):

Limited Partners $ 261 $ 40 $ ( 265 ) $ 499

1 unchanged sentence

$ 16,990 $ 2,110 $ ( 18,018 ) $ 40,018

Net (loss) income per common unit – basic and diluted $ ( 0.22 ) $ 0.15 $ ( 0.16 ) $ 0.17

Net income (loss) per common unit – basic and diluted $ 0.08 $ 0.01 $ ( 0.08 ) $ 0.18

Weighted average common units outstanding – basic 223,529,610 222,649,706 223,323,641 222,409,769

Weighted average common units outstanding – diluted 223,960,467 223,244,538 223,323,641 222,895,742

Net (loss) income $ ( 49,303 ) $ 32,481 $ ( 34,867 ) $ 38,042

Net income (loss) $ 17,053 $ 2,177 $ ( 17,814 ) $ 40,219

Change in fair value of derivatives ( 12,700 ) ( 3,040 ) ( 14,867 ) ( 6,043 )

Total comprehensive (loss) income ( 54,011 ) 41,123 ( 37,033 ) 35,039

Total comprehensive income (loss) 4,353 ( 863 ) ( 32,681 ) 34,176

Comprehensive income attributable to noncontrolling

( 63 ) ( 67 ) ( 204 ) ( 201 )

Comprehensive (loss) income attributable to common

Comprehensive income (loss) attributable to common

$ 4,290 $ ( 930 ) $ ( 32,885 ) $ 33,975

21 unchanged sentences

Balance at June 30, 2024 $ 3,371,346 $ 50,255 $ 3,421,601

Stock compensation activity 2,553 — 2,553

Other comprehensive loss attributable to Parent Company — ( 12,551 ) ( 12,551 )

Distributions to Parent Company ( 57,113 ) — ( 57,113 )

Net income attributable to Parent Company 16,729 — 16,729

Adjustment to redeemable noncontrolling interests ( 21,850 ) — ( 21,850 )

Balance at September 30, 2024 $ 3,311,665 $ 37,704 $ 3,349,369

Balance at December 31, 2022 $ 3,692,171 $ 74,344 $ 3,766,515

11 unchanged sentences

Balance at June 30, 2023 $ 3,621,484 $ 71,323 $ 3,692,807

Stock compensation activity 2,968 — 2,968

Other comprehensive loss attributable to Parent Company — ( 3,128 ) ( 3,128 )

Distributions to Parent Company ( 52,653 ) — ( 52,653 )

Net income attributable to Parent Company 2,070 — 2,070

Conversion of Limited Partner Units to shares of the Parent Company 301 — 301

Adjustment to redeemable noncontrolling interests ( 7,071 ) — ( 7,071 )

Balance at September 30, 2023 $ 3,567,099 $ 68,195 $ 3,635,294

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

15 unchanged sentences

Cash flows from investing activities:

Acquisition of interests in properties ( 39,561 ) ( 78,273 )

Capital expenditures ( 101,915 ) ( 98,694 )

6 unchanged sentences

Distribution from unconsolidated joint venture 1,618 —

Capital contribution to unconsolidated joint venture ( 946 ) —

Net cash (used in) provided by investing activities ( 154,601 ) 8,013

Capital contributions to unconsolidated joint ventures ( 11,825 ) —

Net cash used in investing activities ( 469,459 ) ( 55,483 )

Cash flows from financing activities:

11 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 123,258 $ 58,314

Non-cash investing and financing activities

Conversion of Limited Partner Units to shares of the Parent Company $ — $ 301

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

Notes to Consolidated Financial Statements

June 30, 2024

September 30, 2024

($ in thousands, except share, per share, unit and per unit amounts and where indicated in millions or billions)

6 unchanged sentences

We believe the Company qualifies as a real estate investment trust (“REIT”) under sections 856-860 of the Internal Revenue Code of 1986, as amended.

The Parent Company is the sole general partner of the Operating Partnership and, as of June 30, 2024, owned approximately 98.3 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The Parent Company is the sole general partner of the Operating Partnership and, as of September 30, 2024, owned approximately 98.2 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The remaining 1.8 % of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) were owned by the limited partners.

5 unchanged sentences

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) may have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading.

The unaudited consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein.

The unaudited consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein.

The unaudited consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the combined Annual Report on Form 10-K of the Parent Company and the Operating Partnership for the year ended December 31, 2023.

2 unchanged sentences

The results of operations for the interim periods are not necessarily indicative of the results that may be expected on an annual basis.

As of June 30, 2024, the Company’s portfolio consisted of the following:

As of September 30, 2024, the Company’s portfolio consisted of the following:

Properties Square Footage

5 unchanged sentences

The Corner – IN (2)

One Loudoun Expansion (3)

Hamilton Crossing Centre 1 92,283

1 unchanged sentence

(1) Included within operating retail properties are 10 properties that contain an office component.

Excludes one operating retail property classified as held for sale as of June 30, 2024.

Excludes one operating retail property classified as held for sale as of September 30, 2024.

Of the 179 operating retail properties, 176 are consolidated within these financial statements and the remaining three are accounted for under the equity method.

(2) This property is held in an unconsolidated joint venture in which the Company has a 50 % ownership interest.

(3) During the three months ended September 30, 2024, the Company began development activities on the retail and office portions of the expansion project at One Loudoun Downtown (the “One Loudoun Expansion”) in the Washington, D.C.

metropolitan statistical area (“MSA”).

The Company estimates that it will incur net project costs of approximately $ 65.0 million to $ 75.0 million related to the One Loudoun Expansion.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Components of Investment Properties

The following table summarizes the composition of the Company’s investment properties as of June 30, 2024 and December 31, 2023 (in thousands) :

The following table summarizes the composition of the Company’s investment properties as of September 30, 2024 and December 31, 2023 (in thousands) :

Balance as of

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Land, buildings and improvements $ 7,543,145 $ 7,684,066

2 unchanged sentences

Components of Rental Income including Allowance for Uncollectible Accounts

Rental income related to the Company’s operating leases is comprised of the following for the three and six months ended June 30, 2024 and 2023 (in thousands) :

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

Rental income related to the Company’s operating leases is comprised of the following for the three and nine months ended September 30, 2024 and 2023 (in thousands) :

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

10 unchanged sentences

Short-Term Deposits

In January 2024, the Company invested $ 265.0 million in short-term deposits at Goldman Sachs Bank USA and KeyBank National Association.

As of June 30, 2024, the Company had $ 120.0 million remaining in short-term deposits.

The short-term deposits earned interest at a weighted average interest rate of 5.34 % with a final maturity date of July 22, 2024.

During the six months ended June 30, 2024, the Company earned $ 6.2 million of interest income on the deposits, which is recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive income.

In January 2024, the Company invested $ 265.0 million in short-term deposits at Goldman Sachs Bank USA (“Goldman Sachs”) and KeyBank National Association (“KeyBank”).

These short-term deposits earned interest at a weighted average interest rate of 5.34 % with a final maturity date of July 22, 2024.

During the nine months ended September 30, 2024, the Company earned $ 6.3 million of interest income on the January 2024 deposits, which is recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive income.

In August 2024, the Company invested $ 350.0 million in short-term deposits at Goldman Sachs and KeyBank.

The deposit balance approximates fair value and earns interest at a weighted average interest rate of 5.05 % with a final maturity date in February 2025.

During the three months ended September 30, 2024, the Company earned $ 2.2 million of interest income on the August 2024 deposits, which is recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive income.

Consolidation and Investments in Joint Ventures

The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the taxable REIT subsidiaries (“TRSs”) of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled, and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary.

As of June 30, 2024, we owned investments in two consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of June 30, 2024, these consolidated VIEs had mortgage debt totaling $ 110.9 million, which was secured by assets of the VIEs totaling $ 217.3 million.

As of September 30, 2024, we owned investments in two consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of September 30, 2024, these consolidated VIEs had mortgage debt totaling $ 110.3 million, which was secured by assets of the VIEs totaling $ 218.1 million.

The Operating Partnership guarantees the mortgage debt of these VIEs.

1 unchanged sentence

The Parent Company consolidates the Operating Partnership as it is the primary beneficiary.

As of June 30, 2024, the Company also owned investments in four unconsolidated joint ventures accounted for under the equity method, which are not considered VIEs.

As of September 30, 2024, the Company also owned investments in four unconsolidated joint ventures accounted for under the equity method, which are not considered VIEs.

On January 31, 2024, the joint venture that owned Glendale Center Apartments, of which we have an 11.5 % ownership interest, sold the 267 -unit property to a third party, resulting in a gain on sale of $ 20.2 million.

The Company recognized its share of the gain on sale of unconsolidated property of $ 2.3 million during the six months ended June 30, 2024.

The Company recognized its share of the gain on sale of unconsolidated property of $ 2.3 million during the nine months ended September 30, 2024.

In addition, the Company received a $ 1.6 million distribution upon the disposition of the property.

19 unchanged sentences

This election enables us to receive income and provide services that would otherwise be impermissible for a REIT.

Deferred tax assets and liabilities are established for temporary differences between the financial reporting bases and the tax bases of assets and liabilities at the tax rates expected to be in effect when the temporary differences reverse.

Deferred tax assets and liabilities are established for temporary

differences between the financial reporting bases and the tax bases of assets and liabilities at the tax rates expected to be in effect when the temporary differences reverse.

Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

5 unchanged sentences

We report the non-redeemable noncontrolling interests in subsidiaries as equity, and the amount of consolidated net income attributable to these noncontrolling interests is set forth separately in the accompanying consolidated financial statements.

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the six months ended June 30, 2024 and 2023 (in thousands) :

Six Months Ended June 30,

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the nine months ended September 30, 2024 and 2023 (in thousands) :

Nine Months Ended September 30,

Noncontrolling interests balance as of January 1, $ 2,430 $ 5,370

1 unchanged sentence

Distributions to noncontrolling interests (1)

Noncontrolling interests balance as of June 30,

( 760 ) ( 3,196 )

Noncontrolling interests balance as of September 30,

$ 1,874 $ 2,375

(1) During the nine months ended September 30, 2023, we received a $ 3.2 million distribution from excess proceeds related to a third-party financing.

Noncontrolling Interests – Joint Venture

3 unchanged sentences

Under terms defined in the joint venture agreement, after construction completion and stabilization of the development project (as defined in the joint venture agreement), the Company has the ability to call, and the joint venture partner has the ability to put to the Company, subject to certain conditions, the joint venture partner’s interest in the joint venture at fair value.

As of June 30, 2024, these conditions for exercising the put and call options have been met but neither the Company nor the joint venture partner has exercised their respective options.

As of September 30, 2024, the conditions for exercising the put and call options have been met but neither the Company nor the joint venture partner has exercised their respective options.

The joint venture is considered a VIE primarily because the Company’s joint venture partner does not have substantive kick-out rights or substantive participating rights.

5 unchanged sentences

The carrying amount of the redeemable noncontrolling interests in the Operating Partnership is reflected at the greater of historical book value or redemption value with a corresponding adjustment to additional paid-in capital.

As of June 30, 2024 and December 31, 2023, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balances were accordingly adjusted to redemption value.

As of September 30, 2024 and December 31, 2023, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balances were accordingly adjusted to redemption value.

We allocate net operating results of the Operating Partnership after noncontrolling interests in the consolidated properties based on the partners’ respective weighted average ownership interest.

1 unchanged sentence

This adjustment is reflected in our shareholders’ and Parent Company’s equity.

For the three and six months ended June 30, 2024 and 2023, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

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

For the three and nine months ended September 30, 2024 and 2023, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

1 unchanged sentence

Limited partners’ weighted average interests in the Operating Partnership 1.7 % 1.5 % 1.7 % 1.4 %

As of June 30, 2024, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.3 % and 1.7 %.

As of September 30, 2024, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.2 % and 1.8 %.

As of December 31, 2023, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.4 % and 1.6 %.

4 unchanged sentences

The Parent Company also has the right to redeem the Limited Partner Units directly from the limited partner in exchange for either cash in the amount specified above or a number of its common shares equal to the number of Limited Partner Units being redeemed.

There were 3,707,004 and 3,512,868 Limited Partner Units outstanding as of June 30, 2024 and December 31, 2023, respectively.

The increase in Limited Partner Units outstanding from December 31, 2023 is due to non-cash compensation awards granted to our executive officers in the form of Limited Partner Units.

The redeemable noncontrolling interests in the Operating Partnership for the six months ended June 30, 2024 and 2023 were as follows (in thousands) :

Six Months Ended June 30,

There were 3,960,037 and 3,512,868 Limited Partner Units outstanding as of September 30, 2024 and December 31, 2023, respectively.

The increase in Limited Partner Units outstanding from December 31, 2023 is due to non-cash compensation awards granted to our executive officers in the form of Limited Partner Units and the exercise of previously granted Appreciation Only Long-Term Incentive Plan (“AO LTIP”) Units in exchange for Limited Partner Units.

The redeemable noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2024 and 2023 were as follows (in thousands) :

Nine Months Ended September 30,

Redeemable noncontrolling interests balance as of January 1, $ 73,287 $ 53,967

2 unchanged sentences

Other, net including adjustments to redemption value 26,842 14,815

Total limited partners’ interests in the Operating Partnership balance as of June 30,

Total limited partners’ interests in the Operating Partnership balance as of September 30,

$ 97,026 $ 67,000

10 unchanged sentences

In March 2024, the SEC issued a final rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors.

This final rule is effective for the Company for the fiscal year beginning in 2025 and requires companies to annually disclose, among other things, (i) climate-related risks that have had or are reasonably likely to have a material impact on the Company, including on its strategy, results of operations, or financial condition, (ii) activities to mitigate or adapt to such risks, including a quantitative and qualitative description of material expenditures incurred and impacts on estimates and assumptions, (iii) information about oversight by a company’s board of directors of climate-related risks and management’s role in managing material climate-related risks;

and (iv) information on any climate-related targets or goals that are material to the company’s business, results of operations, or financial condition.

In addition, the final rule requires (i) disclosure of Scope 1 and/or Scope 2 greenhouse gas (“GHG”) emissions on a phased-in basis when those emissions are material, (ii) the filing of an attestation

report covering the disclosure of the Scope 1 and/or Scope 2 emissions on a phased-in basis, and (iii) disclosure of the financial statement effects of severe weather events and other natural conditions.

This final rule is effective for the Company for the fiscal year beginning in 2025 and requires companies to annually disclose climate-related information in registration statements and annual reports, including material climate-related risks and impacts on the Company, information about board oversight, risk management activities, and any material climate-related targets or goals.

In addition, the final rule requires disclosure of material Scope 1 and/or Scope 2 greenhouse gas emissions, which will be subject to independent third-party assurance, and the financial statement effects of severe weather events and other natural conditions.

In April 2024, the SEC announced a stay of these climate disclosure rules pending judicial review.

The Company will continue to evaluate the impact of this final rule until it becomes effective.

The Company is continuing to evaluate the impact of this final rule until it becomes effective.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures .

This new guidance became effective for the Company on January 1, 2024 and provides new disclosure requirements on significant segment expenses that will begin with the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2024.

Public entities with a single reportable segment such as the Company must apply all of the new disclosure requirements as well as all existing segment disclosure and reconciliation requirements in Topic 280 on an annual and interim basis.

The adoption of this pronouncement on January 1, 2024 did not have any effect on the Company’s consolidated financial statements.

The amended disclosure guidance will be applied prospectively.

The Company closed on the following asset acquisition during the nine months ended September 30, 2024 (dollars in thousands) :

Date Property Name MSA Property Type Square

Footage Acquisition

August 30, 2024 Parkside West Cobb Atlanta Multi-tenant retail 141,627 $ 40,125

The Company closed on the following asset acquisition during the nine months ended September 30, 2023 (dollars in thousands) :

Date Property Name MSA Property Type Square

Footage Acquisition

September 22, 2023 Prestonwood Place Dallas/Ft.

Worth Multi-tenant retail 155,975 $ 81,000

The above acquisitions were funded using a combination of available cash on hand, proceeds from dispositions and proceeds from the Company’s unsecured revolving line of credit.

Substantially all of the purchase price was allocated to investment properties.

DISPOSITIONS AND IMPAIRMENT CHARGES

The Company closed on the following disposition during the six months ended June 30, 2024 (dollars in thousands) :

The Company closed on the following disposition during the nine months ended September 30, 2024 (dollars in thousands) :

Date Property Name MSA Property Type Square

1 unchanged sentence

May 31, 2024 Ashland & Roosevelt Chicago Multi-tenant retail 104,176 $ 30,600 $ ( 1,234 )

The Company closed on the following dispositions during the six months ended June 30, 2023 (dollars in thousands) :

In addition, during the three months ended September 30, 2024, the Company received proceeds of $ 0.6 million and recognized a gain of $ 0.6 million as a result of the receipt of an escrow related to the disposition of Reisterstown Road Plaza that previously closed on September 11, 2023.

The Company closed on the following dispositions during the nine months ended September 30, 2023 (dollars in thousands) :

Date Property Name MSA Property Type Square

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June 8, 2023 Pan Am Plaza & Garage Indianapolis Land & garage — 52,025 23,635

September 11, 2023 Reisterstown Road Plaza Baltimore Multi-tenant retail 376,683 48,250 ( 5,903 )

534,855 $ 127,625 $ 22,468

As of June 30, 2024, we have classified City Center, a 362,278 square foot multi-tenant retail property in the New York MSA, as held for sale as the Company has committed to a plan to sell this asset and expects that the sale will be completed within one year.

Since June 30, 2024, we have classified City Center, a 362,278 square foot multi-tenant retail property in the New York MSA, as held for sale as the Company has committed to a plan to sell this asset and expects that the sale will be completed within one year.

This property qualified for held-for-sale accounting treatment upon meeting all applicable GAAP criteria as of June 30, 2024, at which time depreciation and amortization were ceased.

In addition, the assets and liabilities associated with this property are separately classified as held for sale in the accompanying consolidated balance sheet as of June 30, 2024.

In addition, the assets and liabilities associated with this property remain separately classified as held for sale in the accompanying consolidated balance sheet as of September 30, 2024.

No properties qualified for held-for-sale accounting treatment as of December 31, 2023.

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Based on this analysis, we recorded a $ 66.2 million non-cash impairment charge on City Center during the three months ended June 30, 2024.

The following table presents the assets and liabilities associated with City Center, the investment property classified as held for sale as of June 30, 2024 (in thousands) :

June 30, 2024

The following table presents the assets and liabilities associated with City Center, the investment property that remains classified as held for sale as of September 30, 2024 (in thousands) :

September 30, 2024

Net investment properties $ 68,567

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Liabilities associated with investment property held for sale $ 3,757

There were no discontinued operations for the six months ended June 30, 2024 and 2023 as none of the dispositions or planned dispositions represented a strategic shift that has had, or will have, a material effect on our operations or financial results.

During the three months ended September 30, 2023, in connection with the preparation and review of the third quarter 2023 financial statements, the Company recorded a $ 0.5 million impairment charge in connection with the sale of Eastside, a 43,640 square foot multi-tenant retail property in the Dallas/Ft.

Worth MSA, as a result of a change in the expected hold period.

The Company recorded the asset at the lower of cost or fair value less estimated costs to sell, which was approximately $ 14.1 million.

The estimated fair value of Eastside was based upon the expected sales price from an executed sales contract and

determined to be a Level 3 input within the fair value hierarchy.

Eastside was sold on October 24, 2023 for a gross sales price of $ 14.4 million.

There were no discontinued operations for the nine months ended September 30, 2024 and 2023 as none of the dispositions or planned dispositions represented a strategic shift that has had, or will have, a material effect on our operations or financial results.

DEFERRED COSTS AND INTANGIBLES, NET

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Deferred leasing costs, lease intangibles and similar costs are amortized on a straight-line basis over the terms of the related leases.

As of June 30, 2024 and December 31, 2023, deferred costs consisted of the following (in thousands) :

June 30, 2024 December 31, 2023

As of September 30, 2024 and December 31, 2023, deferred costs consisted of the following (in thousands) :

September 30, 2024 December 31, 2023

Acquired lease intangible assets $ 375,055 $ 433,771

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The amounts of such amortization included in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands) :

Six Months Ended June 30,

Nine Months Ended September 30,

Amortization of deferred leasing costs, lease intangibles and other $ 59,549 $ 83,768

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The amortization of below-market lease liabilities is recognized as revenue over the remaining life of the leases (including option periods for leases with below-market renewal options) through 2085.

Tenant rent payments

received in advance are recognized as revenue in the period to which they apply, which is typically the month following their receipt.

As of June 30, 2024 and December 31, 2023, deferred revenue, intangibles, net and other liabilities consisted of the following (in thousands) :

June 30, 2024 December 31, 2023

Tenant rent payments received in advance are recognized as revenue in the period to which they apply, which is typically the month following their receipt.

As of September 30, 2024 and December 31, 2023, deferred revenue, intangibles, net and other liabilities consisted of the following (in thousands) :

September 30, 2024 December 31, 2023

Unamortized in-place lease liabilities $ 147,363 $ 159,449

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Deferred revenue and other liabilities $ 248,852 $ 272,942

The amortization of below-market lease intangibles is included as a component of “Rental income” in the accompanying consolidated statements of operations and comprehensive income and totaled $ 9.8 million and $ 11.6 million for the six months ended June 30, 2024 and 2023, respectively.

The amortization of below-market lease intangibles is included as a component of “Rental income” in the accompanying consolidated statements of operations and comprehensive income and totaled $ 14.2 million and $ 18.5 million for the nine months ended September 30, 2024 and 2023, respectively.

MORTGAGE AND OTHER INDEBTEDNESS

The following table summarizes the Company’s indebtedness as of June 30, 2024 and December 31, 2023 (in thousands) :

June 30, 2024 December 31, 2023

The following table summarizes the Company’s indebtedness as of September 30, 2024 and December 31, 2023 (in thousands) :

September 30, 2024 December 31, 2023

Mortgages payable $ 149,477 $ 153,306

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Total mortgage and other indebtedness, net $ 3,239,928 $ 2,829,202

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of June 30, 2024, considering the impact of interest rate swaps, is summarized below (dollars in thousands) :

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of September 30, 2024, considering the impact of interest rate swaps, is summarized below (dollars in thousands) :

Outstanding Ratio Weighted Average

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(1) Fixed rate debt includes the portion of variable rate debt that has been hedged by interest rate swaps.

As of June 30, 2024, $ 820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 1.2 years.

As of September 30, 2024, $ 700.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 1.1 years.

(2) Variable rate debt includes the portion of fixed rate debt that has been hedged by interest rate swaps.

As of June 30, 2024, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 1.2 years.

As of September 30, 2024, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 0.9 years.

Mortgages Payable

The following table summarizes the Company’s mortgages payable (dollars in thousands) :

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Balance Weighted Average

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Total mortgages payable $ 149,477 $ 153,306

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of June 30, 2024 and December 31, 2023.

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of September 30, 2024 and December 31, 2023.

(2) The interest rate on the variable rate mortgage is based on Bloomberg Short Term Bank Yield Index (“ BSBY ”) plus 215 basis points.

The one-month BSBY rate was 5.39 % and 5.44 % as of June 30, 2024 and December 31, 2023, respectively.

The one-month BSBY rate was 4.87 % and 5.44 % as of September 30, 2024 and December 31, 2023, respectively.

Subsequent to September 30, 2024, the Secured Overnight Financing Rate (“ SOFR ”) replaced BSBY as the index for the variable rate mortgage.

Mortgages payable, which are secured by certain real estate and, in some cases, by guarantees from the Operating Partnership, are generally due in monthly installments of principal and interest and mature over various terms through 2033.

During the six months ended June 30, 2024, we made scheduled principal payments of $ 2.6 million related to amortizing loans.

During the nine months ended September 30, 2024, we made scheduled principal payments of $ 3.8 million related to amortizing loans.

Unsecured Notes

The following table summarizes the Company’s senior unsecured notes and exchangeable senior notes (dollars in thousands) :

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Maturity Date Balance Interest Rate Balance Interest Rate

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Senior notes – 4.95 % due 2031

December 15, 2031 350,000 4.95 % — — %

Senior notes – 5.50 % due 2034 (3)

March 1, 2034 350,000 4.60 % — — %

Total senior unsecured notes $ 2,380,000 $ 1,829,635

(1) $ 80,000 of 4.47 % senior unsecured notes due 2025 has been swapped to a variable rate of three-month Secured Overnight Financing Rate (“ SOFR ”) plus 3.65 % through September 10, 2025.

(1) $ 80,000 of 4.47 % senior unsecured notes due 2025 has been swapped to a variable rate of three-month SOFR plus 3.65 % through September 10, 2025.

(2) $ 75,000 of 4.57 % senior unsecured notes due 2027 has been swapped to a variable rate of three-month SOFR plus 3.75 % through September 10, 2025.

(3) The coupon rate of the Notes Due 2034 (defined below) is 5.50 %;

however, due to hedging activities, the Company’s interest rate is 4.60 %.

During the six months ended June 30, 2024, the Company completed a public offering of $ 350.0 million in aggregate principal amount of 5.50 % senior unsecured notes due 2034 (the “Notes Due 2034”).

however, as a result of hedging activities, the Company’s interest rate is 4.60 %.

In January 2024, the Company completed a public offering of $ 350.0 million in aggregate principal amount of 5.50 % senior unsecured notes due 2034 (the “Notes Due 2034”).

The Notes Due 2034 were priced at 98.670 % of the principal amount to yield 5.673 % to maturity and will mature on March 1, 2034, unless earlier redeemed.

A portion of the proceeds were used to repay the $ 149.6 million principal balance of the 4.58 % senior unsecured notes that matured on June 30, 2024.

Subsequent to June 30, 2024, the remaining proceeds were used to repay the $ 120.0 million unsecured term loan due July 2024 (the “$ 120 M Term Loan”) and for general corporate purposes.

The proceeds were used to repay the $ 149.6 million principal balance of the 4.58 % senior unsecured notes that matured on June 30, 2024 and the $ 120.0 million unsecured term loan that matured on July 17, 2024 (the “$ 120 M Term Loan”) and for general corporate purposes.

In August 2024, the Company completed a public offering of $ 350.0 million in aggregate principal amount of 4.95 % senior unsecured notes due 2031 (the “Notes Due 2031”).

The Notes Due 2031 were priced at 99.328 % of the principal amount to yield 5.062 % to maturity and will mature on December 15, 2031, unless earlier redeemed.

The Company expects the proceeds will be used to repay the $ 350.0 million principal balance of the 4.00 % senior unsecured notes due 2025 (the “Notes Due 2025”) and for general corporate purposes.

Exchangeable Senior Notes

In March 2021, the Operating Partnership issued $ 175.0 million aggregate principal amount of 0.75 % exchangeable senior notes maturing in April 2027 (the “Exchangeable Notes”).

The Exchangeable Notes are governed by an indenture between the Operating Partnership, the Company and U.S.

Bank National Association, as trustee.

The net proceeds from the offering of the Exchangeable Notes were approximately $ 169.7 million after deducting the underwriting fees and other expenses paid by the Company.

The Exchangeable Notes bear interest at a rate of 0.75 % per annum, payable semi-annually in arrears, and will mature on April 1, 2027.

During the nine months ended September 30, 2024 and 2023, we recognized approximately $ 1.0 million of interest expense related to the Exchangeable Notes.

Prior to January 1, 2027, the Exchangeable Notes will be exchangeable into cash up to the principal amount of the Exchangeable Notes exchanged and, if applicable, cash or common shares or a combination thereof only upon certain circumstances and during certain periods.

On or after January 1, 2027, the Exchangeable Notes will be exchangeable into cash up to the principal amount of the Exchangeable Notes exchanged and, if applicable, cash or common shares or a combination thereof at the option of the holders at any time prior to the close of business on the second scheduled trading day preceding the maturity date.

The initial exchange rate is 39.6628 common shares per $1,000 principal amount of Exchangeable Notes, which is equivalent to an initial exchange price of approximately $ 25.21 per common share and an exchange premium of

approximately 25 % based upon the closing price of $ 20.17 per common share on March 17, 2021.

The exchange rate is subject to adjustment upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest.

As of September 30, 2024, the exchange rate of the Exchangeable Notes is 40.6713 common shares per $1,000 principal amount of Exchangeable Notes due to adjustments related to dividends paid.

The Operating Partnership may redeem the Exchangeable Notes at its option, in whole or in part, on any business day on or after April 5, 2025, if the last reported sale price of the common shares has been at least 130 % of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Operating Partnership provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Exchangeable Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

In connection with the Exchangeable Notes, the Operating Partnership entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the initial purchasers of the Exchangeable Notes or their respective affiliates.

The Capped Call Transactions initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the number of common shares underlying the Exchangeable Notes.

The Capped Call Transactions are generally expected to reduce the potential dilution to holders of common shares upon exchange of the Exchangeable Notes.

The cap price of the Capped Call Transactions was initially approximately $ 30.26 , which represented a premium of approximately 50 % over the last reported sale price of our common shares on March 17, 2021 and is subject to anti-dilution adjustments under the terms of the Capped Call Transactions.

We incurred $ 9.8 million of costs related to the Capped Call Transactions, which are included within “Additional paid-in capital” in the accompanying consolidated balance sheets.

Unsecured Term Loans and Revolving Line of Credit

The following table summarizes the Company’s term loans and revolving line of credit (dollars in thousands) :

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Maturity Date Balance Interest Rate Balance Interest Rate

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January 8, 2026 $ — 6.11 % $ — 6.58 %

(1) $ 120,000 of SOFR -based variable rate debt has been swapped to a fixed rate of 1.58 % plus a credit spread based on a ratings grid ranging from 0.80 % to 1.65 % through July 17, 2024.

The applicable credit spread was 1.10 % as of June 30, 2024 and December 31, 2023.

Subsequent to June 30, 2024, the $ 120 M Term Loan was repaid with a portion of the proceeds from the Notes Due 2034.

(1) As of December 31, 2023, $ 120,000 of SOFR -based variable rate debt had been swapped to a fixed rate of 1.58 % plus a credit spread based on a ratings grid ranging from 0.80 % to 1.65 % through July 17, 2024.

The applicable credit spread was 1.10 % as of December 31, 2023.

(2) $ 250,000 of SOFR -based variable rate debt has been swapped to a fixed rate of 5.09 % through October 24, 2025.

1 unchanged sentence

(3) $ 150,000 of SOFR -based variable rate debt has been swapped to a fixed rate of 1.68 % plus a credit spread based on a ratings grid ranging from 0.75 % to 1.60 % through July 17, 2026.

The applicable credit spread was 1.05 % as of June 30, 2024 and December 31, 2023.

The applicable credit spread was 1.05 % as of September 30, 2024 and December 31, 2023.

(4) $ 300,000 of SOFR -based variable rate debt has been swapped to a fixed rate of 2.47 % plus a credit spread based on a ratings grid ranging from 1.15 % to 2.20 % through August 1, 2025.

The applicable credit spread was 1.35 % as of June 30, 2024 and December 31, 2023.

The applicable credit spread was 1.35 % as of September 30, 2024 and December 31, 2023.

(5) The revolving line of credit has two six-month extension options that the Company can exercise, at its election, subject to (i) customary representations and warranties, including, but not limited to, the absence of an event of default as defined in the unsecured credit agreement and (ii) payment of an extension fee equal to 0.075 % of the revolving line of credit capacity.

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The Company may irrevocably elect to convert to the ratings-based pricing grid at any time.

As of June 30, 2024, making such an election would have resulted in a lower interest rate;

As of September 30, 2024, making such an election would have resulted in a lower interest rate;

however, the Company had not made the election to convert to the ratings-based pricing grid.

The Credit Agreement includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

The greenhouse gas emission reduction targets have not been achieved as of June 30, 2024.

The following table summarizes the key terms of the Revolving Facility as of June 30, 2024 (dollars in thousands) :

The greenhouse gas emission reduction targets have not been achieved as of September 30, 2024.

The following table summarizes the key terms of the Revolving Facility as of September 30, 2024 (dollars in thousands) :

Leverage-Based Pricing Investment Grade Pricing

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and (v) a minimum unencumbered interest coverage ratio.

As of June 30, 2024, we were in compliance with all such covenants.

As of September 30, 2024, we were in compliance with all such covenants.

Subsequent to September 30, 2024, the Operating Partnership and the Company entered into the Third Amendment (the “Third Amendment”) to the Sixth Amended and Restated Credit Agreement, dated as of July 8, 2021 (as amended, the “Amended Credit Agreement”) that extended the maturity date of the Revolving Facility to October 3, 2028 with the option to extend such maturity date for either one one-year period or up to two six-month periods at the Company’s election, subject to the payment of an extension fee and certain other customary conditions.

The credit spreads and facility fees for both the leverage-based and investment grade pricing grids remain the same;

however, the Company has the ability to obtain more favorable pricing in certain circumstances when its total leverage ratio is (x) less than or equal to 35.0 % or (y) greater than 35.0 % but less than or equal to 37.5 % with respect to not more than one fiscal quarter following a period in which the condition described in clause (x) was satisfied (the “Leverage Toggle”).

In addition, the Third Amendment includes an adjustment to the sustainability-linked pricing provisions that allows the otherwise applicable interest rate margin to be reduced by up to two basis points if certain greenhouse gas emission reduction targets are achieved.

Unsecured Term Loans

As of June 30, 2024, the Operating Partnership has the following unsecured term loans:

(i) the $ 120 M Term Loan, (ii) a $ 250.0 million unsecured term loan due October 2025 (the “$ 250 M Term Loan”), (iii) a $ 150.0 million unsecured term loan due July 2026 (the “$ 150 M Term Loan”), and (iv) the $ 300 M Term Loan that matures in July 2029, each of which bears interest at a rate of SOFR plus a credit spread.

The $ 120 M Term Loan, $ 150 M Term Loan and $ 300 M Term Loan are each priced on a ratings-based pricing grid while the $ 250 M Term Loan is priced on a leverage-based pricing grid.

The agreements related to the $ 150 M Term Loan and $ 300 M Term Loan include a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth in each agreement.

Subsequent to June 30, 2024, the $ 120 M Term Loan was repaid with a portion of the proceeds from the Notes Due 2034.

The following table summarizes the key terms of the unsecured term loans as of June 30, 2024 (dollars in thousands) :

As of September 30, 2024, the Operating Partnership has the following unsecured term loans:

(i) a $ 250.0 million unsecured term loan due October 2025 (the “$ 250 M Term Loan”), (ii) a $ 150.0 million unsecured term loan due July 2026 (the “$ 150 M Term Loan”), and (iii) the $ 300 M Term Loan that matures in July 2029, each of which bears interest at a rate of SOFR plus a credit spread.

The $ 150 M Term Loan and the $ 300 M Term Loan are each priced on a ratings-based pricing grid while the $ 250 M Term Loan is priced on a leverage-based pricing grid.

The agreements related to the $ 150 M Term Loan and $ 300 M Term Loan include a sustainability metric based on targeted greenhouse gas emission reductions, which

results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth in each agreement.

The greenhouse gas emission reduction targets have not been achieved as of September 30, 2024.

The following table summarizes the key terms of the unsecured term loans as of September 30, 2024 (dollars in thousands) :

Unsecured Term Loans

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2.00 % – 2.55 %

$ 250,000 unsecured term loan due 2025

2.00 % – 2.50 %

2.00 % – 2.55 %

2.00 % – 2.50 %

$ 150,000 unsecured term loan due 2026

3 unchanged sentences

7/29/2029 N/A 1.15 % – 2.20 %

(1) Subsequent to June 30, 2024, the $ 120 M Term Loan was repaid with a portion of the proceeds from the Notes Due 2034.

(1) The maturity date may be extended for up to three additional periods of one year each at the Operating Partnership’s option, subject to certain conditions.

Under the agreement related to the $ 120 M Term Loan and the $ 150 M Term Loan, the Operating Partnership has the option to increase each of the term loans to $ 250.0 million upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay each of the $ 120 M Term Loan and $ 150 M Term Loan, in whole or in part, at any time without being subject to a prepayment fee.

The Operating Partnership has the option to increase the $ 150 M Term Loan to $ 250.0 million upon the Operating Partnership’s request, subject to certain conditions including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay the $ 150 M Term Loan in whole or in part, at any time, without being subject to a prepayment fee.

The Operating Partnership has the option to increase the $ 250 M Term Loan to $ 300.0 million, subject to certain conditions including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay the $ 250 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

The Operating Partnership is permitted to prepay the $ 300 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before July 29, 2024.

The Operating Partnership is permitted to prepay the $ 250 M Term Loan in whole or in part, without premium or penalty.

The Operating Partnership is permitted to prepay the $ 300 M Term Loan in whole or in part, at any time, without premium or penalty.

The unsecured term loan agreements contain representations, financial and other affirmative and negative covenants and events of default that are substantially similar to those contained in the Credit Agreement.

The unsecured term loan agreements all rank pari passu with the Operating Partnership’s Revolving Facility and other unsecured indebtedness of the Operating Partnership.

The Third Amendment also applied the Leverage Toggle and adjustment to the sustainability-linked pricing provisions to the $ 300 M Term Loan.

In addition, subsequent to September 30, 2024, the Operating Partnership entered into the Second Amendment (the “Second Amendment”) to the term loan agreement related to the $ 250 M Term Loan that extended the maturity date of the $ 250 M Term Loan to October 24, 2027 with the option to extend such maturity date by one one-year period at the Company’s election, subject to the payment of an extension fee and certain other customary conditions.

In conjunction with the Second Amendment, the $ 250 M Term Loan will be priced on a ratings-based pricing grid with the interest rate equal to (x) a margin ranging from 0.75 % to 1.60 % or (y) a base rate plus a margin ranging from 0.00 % to 0.60 % and includes the same Leverage Toggle for determining pricing and sustainability-linked pricing provisions as described above for the Third Amendment to the Amended Credit Agreement.

Debt Issuance Costs

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The following amounts of amortization of debt issuance costs are included as a component of “Interest expense” in the accompanying consolidated statements of operations and comprehensive income (in thousands) :

Six Months Ended June 30,

Nine Months Ended September 30,

Amortization of debt issuance costs $ 2,978 $ 2,685

2 unchanged sentences

The following amounts of amortization are included as a component of “Interest expense” in the accompanying consolidated statements of operations and comprehensive income (in thousands) :

Six Months Ended June 30,

Nine Months Ended September 30,

Amortization of debt discounts, premiums and hedge instruments $ 10,581 $ 14,992

In addition, the estimated amounts of the reduction to interest expense as of June 30, 2024 for each of the next five years and thereafter related to the amortization of debt discounts, premiums and assumed hedge instruments, assuming these instruments are held to maturity, are as follows (in thousands) :

July 2024 through December 2024 $ 6,222

In addition, the estimated amounts of the reduction to interest expense as of September 30, 2024 for each of the next five years and thereafter related to the amortization of debt discounts, premiums and assumed hedge instruments, assuming these instruments are held to maturity, are as follows (in thousands) :

October 2024 through December 2024 $ 3,011

Thereafter 4,462

Total unamortized debt discounts, premiums and hedge instruments $ 30,609

The following table reconciles total unamortized debt discounts, premiums and hedge instruments as of June 30, 2024 to the balance of unamortized discounts and premiums, net (in thousands) :

The following table reconciles total unamortized debt discounts, premiums and hedge instruments as of September 30, 2024 to the balance of unamortized discounts and premiums, net (in thousands) :

Unamortized discounts and premiums on mortgages payable, senior unsecured notes and unsecured term loans $ 28,902

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Fair Value of Fixed and Variable Rate Debt

As of June 30, 2024, the estimated fair value of fixed rate debt was $ 2.1 billion compared to the book value of $ 2.2 billion.

As of September 30, 2024, the estimated fair value of fixed rate debt was $ 2.5 billion compared to the book value of $ 2.5 billion.

The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 5.18 % to 6.26 %.

As of June 30, 2024, the estimated fair value of variable rate debt was $ 841.8 million compared to the book value of $ 835.8 million.

As of September 30, 2024, the estimated fair value of variable rate debt was $ 717.0 million compared to the book value of $ 715.2 million.

The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 6.00 % to 6.05 %.

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The agreements with each of our derivative counterparties provide that in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations.

The following table summarizes the terms and fair values of the Company’s derivative financial instruments that were designated and qualified as part of a hedging relationship as of June 30, 2024 and December 31, 2023 (dollars in thousands) :

The following table summarizes the terms and fair values of the Company’s derivative financial instruments that were designated and qualified as part of a hedging relationship as of September 30, 2024 and December 31, 2023 (dollars in thousands) :

Fair Value Assets (Liabilities) (1)

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date June 30, 2024 December 31, 2023

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date September 30, 2024 December 31, 2023

Cash Flow Four $ 250,000 SOFR 2.99 % 12/1/2022 10/24/2025 $ 2,038 $ 4,952

13 unchanged sentences

(3) The forward-starting interest rate swaps were terminated in conjunction with the issuance of the Notes Due 2034.

In August 2024, we entered into two intraday interest rate lock agreements with notional amounts totaling $ 350.0 million that fixed the interest rate on a portion of the Notes Due 2031, which were issued in August 2024, at 3.75 %.

We paid $ 0.1 million upon termination, which is included as a component of “Accumulated other comprehensive income” in the accompanying consolidated balance sheets and is being reclassified as an increase to interest expense over the term of the debt.

In December 2023, we entered into three forward-starting interest rate swap agreements with notional amounts totaling $ 150.0 million that swap a floating rate of compound SOFR for a fixed rate of 3.44 % with an effective date of June 28, 2024 and a maturity date of June 28, 2034.

11 unchanged sentences

We have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives use Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.

As of June 30, 2024 and December 31, 2023, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives.

As of September 30, 2024 and December 31, 2023, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our

As a result, we have determined that our derivative valuations were classified within Level 2 of the fair value hierarchy.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings.

Approximately $ 4.9 million and $ 9.8 million was reclassified as a reduction to interest expense during the three and six months ended June 30, 2024, respectively.

Approximately $ 3.5 million and $ 7.7 million was reclassified as a reduction to interest expense during the three and six months ended June 30, 2023,

respectively.

Approximately $ 4.1 million and $ 13.9 million was reclassified as a reduction to interest expense during the three and nine months ended September 30, 2024, respectively.

Approximately $ 5.5 million and $ 13.2 million was reclassified as a reduction to interest expense during the three and nine months ended September 30, 2023, respectively.

As interest payments on our derivatives are made over the next 12 months, we estimate the decrease to interest expense to be approximately $ 12.8 million, assuming the current SOFR curve.

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Distributions

Our Board of Trustees declared a cash distribution of $ 0.25 per common share and Common Unit for the second quarter of 2024.

This distribution was paid on July 16, 2024 to common shareholders and common unitholders of record as of July 9, 2024.

For the six months ended June 30, 2024, we declared cash distributions totaling $ 0.50 per common share and Common Unit.

For the three and six months ended June 30, 2023, we declared cash distributions of $ 0.24 and $ 0.48 per common share and Common Unit, respectively.

Our Board of Trustees declared a cash distribution of $ 0.26 per common share and Common Unit for the third quarter of 2024.

This distribution was paid on October 16, 2024 to common shareholders and common unitholders of record as of October 9, 2024.

For the nine months ended September 30, 2024, we declared cash distributions totaling $ 0.76 per common share and Common Unit.

For the three and nine months ended September 30, 2023, we declared cash distributions of $ 0.24 and $ 0.72 per common share and Common Unit, respectively.

Share Repurchase Program

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In February 2024, the Company extended the Share Repurchase Program for an additional year to February 28, 2025, if not terminated or extended prior to that date.

As of June 30, 2024, the Company has no t repurchased any shares under the Share Repurchase Program.

As of September 30, 2024, the Company has no t repurchased any shares under the Share Repurchase Program.

EARNINGS PER SHARE OR UNIT

Basic earnings per share or unit is calculated based on the weighted average number of common shares/units outstanding during the period.

Diluted earnings per share/unit is calculated based on the weighted average number of common shares/units outstanding during the period combined with the incremental average common shares/units that would have been outstanding assuming the conversion of all potentially dilutive common shares/units into common shares/units as of the earliest date possible.

Basic earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period.

Diluted earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period combined with the incremental average common shares or units that would have been outstanding assuming the conversion of all potentially dilutive common shares or units into common shares or units as of the earliest date possible.

Potentially dilutive securities include (i) outstanding options to acquire common shares;

(ii) Limited Partner Units, which may be exchanged for either cash or common shares at the Parent Company’s option and under certain circumstances;

(iii) “appreciation only” long-term incentive plan units;

and (iv) deferred common share units, which may be credited to the personal accounts of non-employee trustees in lieu of compensation paid in cash or the issuance of common shares to such trustees.

(iii) AO LTIP Units;

(iv) deferred common share units, which may be credited to the personal accounts of non-employee trustees in lieu of compensation paid in cash or the issuance of common shares to such trustees, and (v) common shares issuable upon the exchange of the Company’s Exchangeable Notes.

The Company calculates the potential dilutive effect of the Exchangeable Notes under the if-converted method, which considers only the amounts settled in excess of the principal in diluted earnings per share as the principal must be paid in cash.

Limited Partner Units have been omitted from the Parent Company’s denominator for the purpose of computing diluted earnings per share since the effect of including those amounts in the denominator would have no dilutive impact.

Weighted average Limited Partner Units outstanding were 3.7 million for the three and six months ended June 30, 2024 and 3.0 million for the three and six months ended June 30, 2023.

Due to the net loss allocable to common shareholders and common unitholders for the three and six months ended June 30, 2024, no securities had a dilutive impact for those periods.

Weighted average Limited Partner Units outstanding were 3.9 million and 3.7 million for the three and nine months ended September 30, 2024, and 3.3 million and 3.1 million for the three and nine months ended September 30, 2023, respectively.

The following summarizes the calculation of basic and diluted earnings per share for the Parent Company.

We have omitted the calculation of basic and diluted earnings per unit since the dilutive securities for the Operating Partnership are the same as those for the Parent Company (dollars in thousands, except per share data) :

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income (loss) attributable to common shareholders –

basic and diluted

$ 16,729 $ 2,070 $ ( 17,753 ) $ 39,519

Weighted average common shares outstanding – basic 219,665,836 219,381,248 219,596,590 219,323,570

Effect of dilutive securities:

AO LTIP Units 244,447 529,790 — 430,999

Deferred common share units 68,956 65,042 — 54,974

Exchangeable Notes 117,454 — — —

Weighted average common shares outstanding – diluted 220,096,693 219,976,080 219,596,590 219,809,543

Net income (loss) per common share – basic $ 0.08 $ 0.01 $ ( 0.08 ) $ 0.18

Net income (loss) per common share – diluted $ 0.08 $ 0.01 $ ( 0.08 ) $ 0.18

Due to the net loss allocable to common shareholders and common unitholders for the nine months ended September 30, 2024, no securities had a dilutive impact for that period.

COMMITMENTS AND CONTINGENCIES

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In 2017, we provided a repayment guaranty on a $ 33.8 million construction loan associated with the development of the Embassy Suites at the University of Notre Dame, consistent with our 35 % ownership interest.

Our portion of the repayment

guaranty was limited to $ 5.9 million, and the guaranty’s term was through July 1, 2024, the maturity date of the construction loan.

As of June 30, 2024, the outstanding loan balance was $ 32.3 million, of which our share was $ 11.3 million.

Subsequent to June 30, 2024, the joint venture repaid the construction loan and we contributed $ 10.2 million representing our 35 % share of the debt repaid.

Our portion of the repayment guaranty was limited to $ 5.9 million, and the guaranty’s term was through July 1, 2024, the maturity date of the construction loan.

In July 2024, the joint venture repaid the construction loan and we contributed $ 10.2 million representing our 35 % share of the debt repaid.

In 2021, we provided repayment and completion guaranties on loans totaling $ 66.2 million associated with the development of The Corner mixed-use project in the Indianapolis MSA.

As of June 30, 2024, the outstanding balance of the loans was $ 70.1 million, of which our share was $ 35.1 million.

As of September 30, 2024, the outstanding balance of the loans was $ 69.9 million, of which our share was $ 35.0 million.

Legal Proceedings

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SUBSEQUENT EVENTS

Subsequent to June 30, 2024, we:

• repaid the $ 120.0 million unsecured term loan due July 2024 with a portion of the proceeds from the Notes Due 2034 and the corresponding interest rate swaps matured;

• contributed $ 10.2 million to the repayment of the construction loan at Embassy Suites at the University of Notre Dame representing our 35 % share of the joint venture debt repaid.

Subsequent to September 30, 2024, we entered into the third amendment to the sixth amended and restated unsecured credit agreement and amended the terms of the $ 250 M Term Loan.

See Note 7 to the consolidated financial statements for further details.

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