What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 133 added, 59 removed, 213 unchanged (47% of the section changed)

16 unchanged sentences

Hospitality represents our ownership interests in various food and beverage operating businesses and sponsorship agreements related to these businesses.

We own, either wholly or through partnerships with third parties, and operate, including through license and management agreements, fine dining and casual dining restaurants, cocktail bars, nightlife and entertainment venues (The Fulton, Mister Dips, Carne Mare, and Gitano) and our unconsolidated venture, the Lawn Club.

We own, either wholly or through partnerships with third parties, and operate, including through license and management agreements, fine dining and casual dining restaurants, cocktail bars, nightlife and entertainment venues (The Fulton, Mister Dips, Carne Mare, Sadie’s and Sadie’s Garden Bar) and our unconsolidated venture, the Lawn Club.

These businesses are all our tenants and are part of our Landlord Operations.

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Landlord Operations assets include:

Pier 17, a historic building containing restaurants, entertainment, retail and office space, and The Rooftop at Pier 17, an outdoor concert venue;

the Tin Building, a mixed-use building leased to the Tin Building by Jean-Georges through February 2026.

Pier 17, a mixed-use building containing restaurants, entertainment, retail and office space, and The Rooftop at Pier 17, an outdoor concert venue;

the Tin Building, a historic building leased to the Tin Building by Jean-Georges through February 2026.

In February 2026, the Company entered into a lease of 100% of the Tin Building with Lux Entertainment to open the Balloon Museum;

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As of and through February 2026, the Company leased 100% of the rentable space in the Tin Building to the Tin Building by Jean-Georges, a Hospitality segment business.

The rental revenue and hospitality costs associated with the lease payments are eliminated in the Consolidated Statements of Operations for the three months ended March 31, 2025 and 2026.

The rental revenue and hospitality costs associated with the lease payments are eliminated in the Consolidated Statements of Operations for the three and six months ended June 30, 2025 and for the six months ended June 30, 2026.

In February 2026, the Company entered into a lease of 100% of the Tin Building with contemporary art experience creator, Lux Entertainment, to open their U.S.

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Lease Renewals and Occupancy

As of March 31, 2026 and December 31, 2025, the weighted average remaining term of our retail, office, and other properties leases where we are the lessor was approximately seven years, excluding renewal options.

As of June 30, 2026 and December 31, 2025, the weighted average remaining term of our retail, office, and other properties leases where we are the lessor was approximately eight years, excluding renewal options.

The stability of the rental revenue generated by our properties depends principally on our tenants’ ability to pay rent and our ability to collect rents, renew expiring leases, re-lease space upon the expiration or other termination of leases, lease currently vacant properties, and maintain or increase rental rates at our leased properties.

To the extent our properties become vacant, we would forego rental income while remaining responsible for the payment of property taxes and maintaining the property until it is re-leased, which could negatively impact our operating results.

As of March 31, 2026, our real estate assets at the Seaport were 88% leased or programmed.

As of June 30, 2026, our real estate assets at the Seaport were 89% leased or programmed.

Inflationary Pressures and Other Macroeconomic Trends

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Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table sets forth our operating results:

Three Months Ended March 31,

Three Months Ended June 30,

in thousands except percentages

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Net loss attributable to common stockholders

Net loss attributable to common stockholders increased $12.2 million, or 38%, to $44.1 million for the three months ended March 31, 2026, compared to $31.9 million in the prior-year period, primarily due to a $2.6 million decrease in hospitality revenue, a $1.0 million decrease in rental revenue, a $2.2 million increase to other (loss), net, a $0.3 million increase in provision for impairment, a $12.0 million increase to depreciation and amortization, a $1.3 million increase in interest expense, partially offset by a $5.5 million decrease in hospitality costs, decrease of $1.1 million in operating costs, and a decrease of $1.7 million of general and administrative expense.

Net loss attributable to common stockholders decreased $4.3 million, or 29%, to $10.5 million for the three months ended June 30, 2026, compared to $14.8 million in the prior-year period, primarily due to a $11.0 million decrease in hospitality costs, a $2.8 million increase in rental revenue, a $1.7 million decrease of general and administrative expense, and a $0.8 million decrease in operating costs, partially offset by a $8.2 million decrease to hospitality revenue, a $0.8 million increase in entertainment costs, a $0.5 million increase in other income (loss), net, and a $0.5 million decrease in equity in earnings (losses) from unconsolidated ventures.

Items Included in Segment Operating EBITDA

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General and Administrative .

General and administrative costs decreased $1.7 million to $8.1 million for the three months ended March 31, 2026, compared to $9.8 million in the prior-year period, primarily due to a $0.7 million decrease

in legal and consulting costs, a $0.6 million decrease in labor costs, and a $0.3 million decrease administrative expenses incurred during the three months ended March 31, 2026 as compared to the prior-year period.

General and administrative costs decreased $1.7 million to $6.6 million for the three months ended June 30, 2026, compared to $8.3 million in the prior-year period, primarily due to a $2.0 million decrease

in labor costs, and a $0.4 million decrease in legal and consulting costs, partially offset by a $1.2 million increase in executive separation costs.

Depreciation and Amortization .

Depreciation and amortization increased $12.0 million to $20.1 million for the three months ended March 31, 2026, compared to $8.1 million in the prior-year period, primarily due to disposal of assets and accelerated depreciation on assets with updated estimated useful lives resulting from the closure of the Tin Building by Jean-Georges in February 2026.

Depreciation and amortization increased $0.2 million to $6.8 million for the three months ended June 30, 2026, compared to $6.6 million in the prior-year period, primarily due to $1.5 million of disposal of assets due to the tenant closures discussed below;

partially offset by a $1.2 million decrease resulting from a lower depreciable asset basis.

Interest Income (Expense) .

Interest income decreased $1.3 million to $0.3 million expense for the three months ended March 31, 2026 compared to $1.0 million income in the prior-year period.

Interest income decreased $0.1 million to $0.7 million for the three months ended June 30, 2026 compared to $0.8 million income in the prior-year period.

Other Income (Loss), net .

Other loss, net increased $0.6 million to $0.7 million loss for the three months ended June 30, 2026 compared to $0.1 million loss in the prior-year period.

This change was primarily due to $0.2 million increase in restructuring costs primarily related to restaurant closures during the period, as well as $0.3 million increase in pre-opening costs related to new ventures during the period.

Equity in Earnings (Losses) from Unconsolidated Ventures.

Equity in earnings (losses) from unconsolidated ventures decreased $0.5 million to earnings of $0.3 million for the three months ended June 30, 2026, compared to earnings of $0.8 million in the prior-year period.

This change was primarily due to a $0.3 million decrease in income for the Lawn Club and $0.2 million decrease in income from JG.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table sets forth our operating results:

Six Months Ended June 30,

in thousands except percentages

Hospitality revenue

Entertainment revenue

Rental revenue

Other revenue

Total revenue

Hospitality costs

Entertainment costs

Operating costs

General and administrative

Depreciation and amortization

Total expenses

Loss on assets held for sale

Provision for impairment

Other income (loss), net

Operating loss

Interest income (expense)

Equity in earnings (losses) from unconsolidated ventures

Loss before income taxes

Income tax (benefit) expense

Preferred distributions to noncontrolling interest in subsidiary

Net loss attributable to common stockholders

Net loss attributable to common stockholders increased $7.9 million, or 17%, to $54.6 million for the six months ended June 30, 2026, compared to $46.7 million in the prior-year period, primarily due to a $12.3 million increase in depreciation and amortization, a $10.8 million decrease in hospitality revenue, a $1.0 million increase in entertainment costs, a $2.8 million increase to other (loss), net, a $1.4 million increase to loss on assets held for sale, a $1.4 million decrease in interest income, and a $1.6 million decrease in equity earnings (losses), partially offset by a $16.5 million decrease in hospitality costs, a $1.9 million decrease in operating costs, a $3.4 million decrease in general and administrative expense, and a $1.8 million increase to rental revenue.

Items Included in Segment Operating EBITDA

Segment Operating EBITDA for each segment includes certain intersegment revenues and expenses that eliminate in the Consolidated Statements of Operations for all periods presented.

See “Segment Operating Results” for discussion of significant variances in revenues and expenses included in Segment Operating EBITDA.

Items Excluded from Segment Operating EBITDA

The following includes information on the significant variances in expenses and other items not directly related to segment activities.

General and Administrative .

General and administrative costs decreased $3.4 million to $14.7 million for the six months ended June 30, 2026, compared to $18.1 million in the prior-year period, primarily due to a $3.8 million decrease in labor costs, and a $1.1 million decrease in legal and consulting costs, partially offset by a $2.6 million increase in severance costs.

Depreciation and Amortization .

Depreciation and amortization increased $12.2 million to $26.9 million for the six months ended June 30, 2026, compared to $14.7 million in the prior-year period, primarily due to disposal of assets at several tenants and accelerated depreciation on assets with updated estimated useful lives resulting from the closure of the Tin Building by Jean-Georges in February 2026, partially offset by a decrease resulting from a lower depreciable asset basis.

Interest Income (Expense) .

Interest income decreased $1.4 million to $0.4 million for the six months ended June 30, 2026 compared to $1.8 million income in the prior-year period.

This change is primarily due to a $1.0 million decrease in interest income earned, and a $0.4 million decrease in amounts capitalized to development assets which increased interest expense .

Other Income (Loss), net .

Other loss, net increased $2.2 million to $2.2 million loss for the three months ended March 31, 2026 compared to zero loss in the prior-year period.

This change was due to $2.0 million increase in restructuring costs primarily related to restaurant closures during the period, as well as $0.2 million increase in pre-opening costs related to new ventures during the period.

Other loss, net increased $2.8 million to $2.9 million loss for the six months ended June 30, 2026 compared to $0.1 million loss in the prior-year period.

This change was due to $2.2 million increase in restructuring costs primarily related to restaurant closures during the period, and a $0.5 million increase in pre-opening costs related to new ventures during the period.

Equity in Earnings (Losses) from Unconsolidated Ventures.

Equity in earnings (losses) from unconsolidated ventures decreased $1.1 million to losses of $1.0 million for the three months ended March 31, 2026, compared to earnings of $0.2 million in the prior-year period.

This change was primarily due to a $0.4 million increase in losses for the Lawn Club and a $0.7 million increase in losses for JG.

Equity in earnings (losses) from unconsolidated ventures decreased $1.6 million to losses of $0.6 million for the six months ended June 30, 2026, compared to earnings of $1.0 million in the prior-year period.

This change was primarily due to a $0.8 million decrease in income for the Lawn Club and a $0.8 million decrease in income for JG.

Segment Operating Results

Segment Operating EBITDA

The following table presents segment Operating EBITDA for Hospitality:

The following table presents Operating EBITDA for Hospitality:

Three Months Ended

Six Months Ended

Hospitality Operating EBITDA

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Hospitality revenue (a)

Other revenue

Total revenues

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Operating EBITDA

(a) Hospitality revenue includes amounts related to intercompany transactions that eliminate in the Statement of Operations.

(a) Hospitality revenue includes amounts related to intercompany transactions that eliminate in the Consolidated Statement of Operations.

(b) Hospitality costs include amounts related to intercompany leases that eliminate in the Statement of Operations.

For the three months ended March 31, 2026

Hospitality Operating EBITDA decreased $5.1 million compared to the prior-year period primarily due to the following:

For the three months ended June 30, 2026

Hospitality Operating EBITDA increased $6.6 million compared to the prior-year period primarily due to the following:

Hospitality Revenue

Hospitality revenue decreased $2.6 million to $5.1 million for the three months ended March 31, 2026, compared to $7.7 million in the prior-year period.

This change was primarily due to a decrease as a result of the closure of the Tin Building by Jean-Georges in February 2026.

Hospitality revenue decreased $8.1 million to $7.1 million for the three months ended June 30, 2026, compared to $15.2 million in the prior-year period.

This change was primarily due to a decrease as a result of the closure of the Tin Building by Jean-Georges in February 2026 as well as the closure of Malibu Farms, partially offset by the openings at Sadie’s and Sadie’s Garden Bar.

Hospitality Costs

Hospitality costs decreased $7.7 million to $12.7 million for the three months ended March 31, 2026, compared to $20.4 million in the prior-year period.

This is primarily resulting from the closure of the Tin Building by Jean-Georges in February 2026.

Hospitality costs decreased $14.8 million to $8.3 million for the three months ended June 30, 2026, compared to $23.1 million in the prior-year period.

This is primarily resulting from the closure of the Tin Building by Jean-Georges in February 2026 as well as the closure of Malibu Farms, partially offset by the new openings of Sadie’s and Sadie’s Garden Bar.

For the six months ended June 30, 2026

Hospitality Operating EBITDA increased $11.7 million compared to the prior-year period primarily due to the following:

Hospitality Revenue

Hospitality revenue decreased $10.8 million to $12.1 million for the six months ended June 30, 2026, compared to $22.9 million in the prior-year period.

This change was primarily due to a decrease as a result of the closure of the Tin Building by Jean-Georges in February 2026 as well as Malibu Farms, partially offset by the new openings at Sadie’s and Sadie’s Garden Bar.

Hospitality Costs

Hospitality costs decreased $22.5 million to $21.0 million for the six months ended June 30, 2026, compared to $43.5 million in the prior-year period.

This is primarily resulting from the closure of the Tin Building by Jean-Georges in February 2026 as well as Malibu Farms, partially offset by the new openings of Sadie’s and Sadie’s Garden Bar.

Entertainment

Segment Operating EBITDA

The following table presents segment Operating EBITDA for Entertainment:

The following table presents Operating EBITDA for Entertainment:

Entertainment Operating EBITDA

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

in thousands except percentages

4 unchanged sentences

Operating EBITDA

(a) Entertainment revenue includes amounts related to intercompany transactions that eliminate in the Statement of Operations.

(b) Entertainment costs include amounts related to intercompany transactions that eliminate in the Company’s Statement of Operations.

For the three months ended March 31, 2026

(a) Entertainment revenue includes amounts related to intercompany transactions that eliminate in the Consolidated Statement of Operations.

(b) Entertainment costs include amounts related to intercompany transactions that eliminate in the Consolidated Statement of Operations.

For the three months ended June 30, 2026

Entertainment Operating EBITDA decreased $1.1 million compared to the prior-year period primarily due to the following:

Entertainment Revenue

Entertainment revenue increased $0.3 million to $4.5 million for the three months ended March 31, 2026 compared to $4.2 million in the prior-year period.

This change was primarily due to increased revenue at the Aviators compared to the prior year period.

Entertainment revenue decreased $0.3 million to $19.8 million for the three months ended June 30, 2026 compared to $20.1 million in the prior-year period.

This change was primarily due to decrease in sponsorship revenue at the Seaport as well as a decrease in revenues at the Aviators due to fewer games compared to the prior period, partially offset by an increase in special events held at the Las Vegas Ballpark.

Entertainment Costs

Entertainment costs increased $0.2 million to $7.3 million for the three months ended March 31, 2026 compared to $7.1 million in the prior-year period.

This change was primarily due to increased costs related operating costs at the Aviators compared to the prior year period, partially offset by decreased rooftop event operating costs.

Entertainment costs increased $0.8 million to $16.2 million for the three months ended June 30, 2026 compared to $15.4 million in the prior-year period.

This change was primarily due to increased operating costs at The Rooftop at Pier 17, partially offset by decreased operating costs at the Aviators due to fewer games compared to the prior period.

For the six months ended June 30, 2026

Entertainment Operating EBITDA decreased $1.0 million compared to the prior-year period primarily due to the following:

Entertainment Revenue

Entertainment revenue remained unchanged at $24.3 million for the six months ended June 30, 2026 compared to $24.3 million in the prior-year period.

Entertainment Costs

Entertainment costs increased $1.0 million to $23.5 million for the six months ended June 30, 2026 compared to $22.5 million in the prior-year period.

This change was primarily due to increased field replacement costs at the Aviators, as well as increased rooftop event operating costs.

Landlord Operations

Segment Operating EBITDA

The following table presents segment Operating EBITDA for Landlord Operations:

The following table presents Operating EBITDA for Landlord Operations:

Three Months Ended

Six Months Ended

Landlord Operations Operating EBITDA

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Operating EBITDA

(a) Rental revenue includes amounts related to intercompany leases that eliminate in the Company’s Statement of Operations.

(b) Operating costs include amounts related to intercompany transactions that eliminate in the Company’s Statement of Operations.

For the three months ended March 31, 2026

Landlord Operations Operating EBITDA loss increased $2.2 million compared to the prior-year period primarily due to the following:

(a) Rental revenue includes amounts related to intercompany leases that eliminate in the Consolidated Statement of Operations.

(b) Operating costs include amounts related to intercompany transactions that eliminate in the Consolidated Statement of Operations.

For the three months ended June 30, 2026

Landlord Operations Operating EBITDA decreased $0.1 million compared to the prior-year period primarily due to the following:

Rental Revenue

Rental revenue decreased $3.3 million to $5.2 million for the three months ended March 31, 2026, compared to $8.5 million in the prior-year period.

This change was primarily driven by a decrease due to the closure of the Tin Building by Jean-Georges in February 2026, which reduced intercompany rental revenue, and an increase in reserves compared to the prior-year period.

Rental revenue decreased $0.8 million to $8.5 million for the three months ended June 30, 2026, compared to $9.3 million in the prior-year period.

This change was primarily driven by a decrease due to the closure of the Tin Building by Jean-Georges in February 2026, which reduced intercompany rental revenue, partially offset by current period lease termination income and accelerated rents associated with one lease termination as well as increased rental fees from events on Pier 17.

Other Revenue

Other revenue decreased $47,000 to $0.3 million for the three months ended March 31, 2026, compared to $0.3 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Other revenue decreased $0.1 million to $0.4 million for the three months ended June 30, 2026, compared to $0.5 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Operating Costs

Operating costs decreased $1.1 million to $7.0 million for the three months ended March 31, 2026, compared to $8.1 million in the prior year period.

Operating costs decreased $0.8 million to $6.9 million for the three months ended June 30, 2026, compared to $7.7 million in the prior year period.

This change was due to decreases in marketing, maintenance, insurance, and other landlord specific costs period over period.

For the six months ended June 30, 2026

Landlord Operations Operating EBITDA decreased $2.3 million compared to the prior-year period primarily due to the following:

Rental Revenue

Rental revenue decreased $4.1 million to $13.6 million for the six months ended June 30, 2026, compared to $17.7 million in the prior-year period.

Other Revenue

Other revenue decreased $0.1 million to $0.7 million for the six months ended June 30, 2026, compared to $0.8 million for the prior-year period as a result of a decrease in sponsorship revenues attributable to landlord operations.

Operating Costs

Operating costs decreased $1.9 million to $13.9 million for the six months ended June 30, 2026, compared to $15.8 million in the prior year period.

This change was due to decreases in marketing, maintenance, insurance, and other landlord specific costs period over period.

Liquidity and Capital Resources

As of March 31, 2026 and December 31, 2025, our cash and cash equivalents were $114.8 million and $77.8 million, respectively.

As of March 31, 2026 and December 31, 2025, our restricted cash was $29.9 million and $9.6 million, respectively.

As of June 30, 2026 and December 31, 2025, our cash and cash equivalents were $117.8 million and $77.8 million, respectively.

As of June 30, 2026 and December 31, 2025, our restricted cash was $9.2 million and $9.6 million, respectively.

Restricted cash is segregated in escrow accounts related to payment of principal and interest on the Company’s outstanding mortgages payable as well as the escrow funds related to post-closing obligations related to the sale of the 250 Water Street.

As of March 31, 2026 and December 31, 2025, we had third-party mortgages payable of $38.4 million and $99.6 million, respectively.

As of June 30, 2026 and December 31, 2025, we had third-party mortgages payable of $38.1 million and $100.4 million, respectively.

These balances included mortgages payable related to our 2 50 Water Street development asset, a variable-rate mortgage which required monthly installments of only interest, and the Las Vegas Ballpark, a fixed-rate mortgage which requires semi-annual installments of principal and interest.

During the three months ended March 31, 2026, the Company paid off the mortgage loan on 250 Water Street in conjunction with the sale of the property.

March 31, 2026 and December 31, 2025, the Company’s secured mortgage loans did not have any undrawn lender commitment available to be drawn for property development.

In February 2026, the Company paid off the mortgage loan on 250 Water Street in conjunction with the sale of the property.

As of June 30, 2026 and December 31, 2025, the Company’s secured mortgage loans did not have any undrawn lender commitment available to be drawn for property development.

See Note 4 – Mortgages Payable, Net in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report for additional information.

5 unchanged sentences

The following table sets forth a summary of our cash flows:

Three Months Ended March 31,

Six Months Ended June 30,

Cash used in operating activities

2 unchanged sentences

Operating Activities

Cash used in operating activities decreased $10.1 million to $10.3 million in the three months ended March 31, 2026, compared to $20.5 million in the prior-year period.

Cash used in operating activities decreased $9.4 million to $11.8 million in the six months ended June 30, 2026, compared to $21.2 million in the prior-year period.

The decrease primarily relates to changes in cash used in operating activities in each of our segments and decreased general and administrative expenses.

Investing Activities

Cash provided by investing activities increased $144.5 million to $130.0 million in the three months ended March 31, 2026, compared to $14.5 million of cash used in investing activities in the prior-year period.

Cash provided by investing activities increased $134.0 million to $115.2 million in the six months ended June 30, 2026, compared to $18.8 million of cash used in investing activities in the prior-year period.

The increase in cash provided by investing activities was primarily related to proceeds from the sale of 250 Water Street.

Financing Activities

Cash used in financing activities increased $61.4 million to $62.3 million in the three months ended March 31, 2026, compared to $0.9 million in the prior-year period, primarily due to the payment of the mortgage loan on 250 Water Street.

Cash used in financing activities increased $61.3 million to $63.8 million in the six months ended June 30, 2026, compared to $2.5 million in the prior-year period, primarily due to the payment of the mortgage loan on 250 Water Street.

Contractual Obligations

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We have an outstanding mortgage payable related to the Las Vegas Ballpark, which is collateralized by the Las Vegas Ballpark.

A summary of our mortgages payable as of March 31, 2026 and December 31, 2025 can be found in Note 4 – Mortgages Payable, Net in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

A summary of our mortgages payable as of June 30, 2026 and December 31, 2025 can be found in Note 4 – Mortgages Payable, Net in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

We lease land or buildings at certain properties from third parties.

Rental payments are expensed as incurred and have been, to the extent applicable, straight-lined over the term of the lease.

Contractual rental expense was $1.8 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively.

The amortization of straight-line rents included in the contractual rent amount was $0.5 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively.

A summary of our lease obligations as of March 31, 2026 and December 31, 2025, can be found in Note 9 – Leases in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

Contractual rental expense was $1.8 million and $1.7 million for the three months ended June 30, 2026 and 2025, respectively, and $3.5 million and $3.3 million for the six months ended June 30, 2026 and 2025, respectively.

The amortization of straight‑line rents included in the contractual rent amount was $0.5 million and $0.3 million for the three months ended June 30, 2026 and 2025, respectively, and $1.0 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively.

A summary of our lease obligations as of June 30, 2026 and December 31, 2025, can be found in Note 9 – Leases in the Unaudited Notes to the Consolidated Financial Statements included in this Quarterly Report.

Critical Accounting Estimates

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Our Unaudited Consolidated Financial Statements include all of our accounts, including our majority owned and controlled subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary.

If the Company determined it was not the primary beneficiary of a VIE during the three months ended March 31, 2026 and 2025, the Company did not consolidate the VIE in which it holds a variable interest.

If the Company determined it was not the primary beneficiary of a VIE during the three and six months ended June 30, 2026 and 2025, the Company did not consolidate the VIE in which it holds a variable interest.

Judgments and Uncertainties

23 unchanged sentences

Judgments and Uncertainties

The capitalization of development costs requires judgment, and can directly and materially impact our results of operations because, for example, (i) if we do not capitalize costs that should be capitalized, then our operating expenses would be overstated during the development period, and the subsequent depreciation of the developed real estate would be understated, or (ii) if we capitalize costs that should not be capitalized, then our operating expenses would be understated during the development period, and the subsequent depreciation of the real estate would be overstated.

For the three months ended March 31, 2026 and 2025, we capitalized development costs of $6.1 million and $2.3 million, respectively.

during the development period, and the subsequent depreciation of the real estate would be overstated.

For the six months ended June 30, 2026 and 2025, we capitalized development costs of $0.0 million and $5.2 million, respectively.

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 2. Management’s Discussion and Analysis