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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-09043

BROAD STREET REALTY, INC.

(Exact name of registrant as specified in its charter)


Delaware	36-3361229
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11911 Freedom Drive, Suite 450 Reston, Virginia	20190
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (301) 828-1200

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     None

     N/A

     N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 30, 2025, the registrant had 34,959,395 shares of common stock outstanding.

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Condensed and Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	48
	Signatures	49

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)


	March 31, 2025			December 31, 2024
				(audited)
Assets
Real estate properties
Land	$	54,936		$	54,936
Building and improvements		288,345			288,042
Intangible lease assets		32,967			32,967
Construction in progress		977			604
Furniture and equipment		1,823			1,774
Less accumulated depreciation and amortization		(70,544	)		(66,907	)
Total real estate properties, net		308,504			311,416

Cash and cash equivalents		13,504			16,160
Restricted cash		4,807			4,574
Straight-line rent receivable		4,008			4,110
Tenant and accounts receivable, net of allowance of $300 and $374, respectively		2,269			1,690
Derivative assets		364			737
Other assets, net		6,826			6,564
Total Assets	$	340,282		$	345,251

Liabilities and Equity
Liabilities
Mortgage and other indebtedness, net (includes $16,688 and $16,911, respectively, at fair value under the fair value option)	$	246,864		$	247,050
Accounts payable and accrued liabilities		16,231			15,292
Unamortized intangible lease liabilities, net		277			321
Payables due to related parties		21			48
Deferred revenue		852			841
Total liabilities		264,245			263,552

Commitments and contingencies

Temporary Equity
Redeemable noncontrolling Fortress preferred interest		101,611			98,356

Permanent Equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized: Series A preferred stock, 20,000 shares authorized, 500 shares issued and outstanding at each of March 31, 2025 and December 31, 2024		—			—
Common stock, $0.01 par value, 300,000,000 shares authorized, 34,969,632 and 35,037,193 issued and outstanding at March 31, 2025 and December 31, 2024, respectively		350			350
Additional paid in capital		34,405			38,726
Accumulated deficit		(51,216	)		(46,939	)
Accumulated other comprehensive loss		(241	)		(1,104	)
Total Broad Street Realty, Inc. stockholders' deficit		(16,702	)		(8,967	)
Noncontrolling interest		(8,872	)		(7,690	)
Total permanent deficit		(25,574	)		(16,657	)
Total Liabilities, Temporary Equity and Permanent Equity	$	340,282		$	345,251

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Revenues
Rental income	$	9,842		$	9,511
Commissions		707			502
Management fees and other income		57			58
Total revenues		10,606			10,071
Operating Expenses
Cost of services		576			421
Property operating		3,105			3,006
Depreciation and amortization		3,580			3,819
Impairment of real estate assets		43			110
Bad debt (recovery) expense		(71	)		142
General and administrative		3,579			3,480
Total operating expenses		10,812			10,978
Operating loss		(206	)		(907	)

Other income (expense)
Interest and other income		165			217
Derivative fair value adjustment		(582	)		889
Net (loss) gain on fair value change of debt held under the fair value option		(240	)		2,343
Interest expense		(4,765	)		(4,333	)
Loss on extinguishment of debt		—			(7	)
Other expense		(1	)		(6	)
Total other expense		(5,423	)		(897	)
Net loss before income taxes		(5,629	)		(1,804	)
Income tax expense		—			(134	)
Net loss	$	(5,629	)	$	(1,938	)
Less: Preferred equity return on Fortress preferred equity		(3,497	)		(3,022	)
Less: Preferred equity accretion to redemption value		(997	)		(1,379	)
Less: Preferred OP units return		(170	)		(139	)
Plus: Net loss attributable to noncontrolling interest		1,352			839
Net loss attributable to common stockholders	$	(8,941	)	$	(5,639	)

Net loss attributable to common stockholders per share
Basic and diluted	$	(0.24	)	$	(0.16	)

Weighted average shares outstanding
Basic and diluted		36,681,457			35,875,326

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Net loss	$	(5,629	)	$	(1,938	)
Other comprehensive income:
Change in fair value due to credit risk on debt held under the fair value option		863			740
Total other comprehensive income		863			740
Comprehensive loss	$	(4,766	)	$	(1,198	)

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(in thousands, except share amounts)

(Unaudited)


	Preferred Stock				Common Stock
	Shares		Par Value		Shares			Par Value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Stockholder's Deficit			Non- controlling Interest			Total Equity
Balance at December 31, 2023		500	$	—		33,417,101		$	334	$	55,186		$	(36,387	)	$	547	$	19,680		$	(3,878	)	$	15,802
Shares surrendered for taxes upon vesting		—		—		(27,087	)		—		(24	)		—			—		(24	)		—			(24	)
Stock-based compensation		—		—		11,945			—		360			—			—		360			—			360
Preferred equity return on preferred equity investment		—		—		—			—		(3,022	)		—			—		(3,022	)		—			(3,022	)
Preferred equity accretion		—		—		—			—		(1,379	)		—			—		(1,379	)		—			(1,379	)
Preferred OP Units return		—		—		—			—		(139	)		—			—		(139	)		139			—
Other comprehensive income		—		—		—			—		—			—			740		740			—			740
Net loss		—		—		—			—		—			(1,099	)		—		(1,099	)		(839	)		(1,938	)
Balance at March 31, 2024		500		—		33,401,959			334		50,982			(37,486	)		1,287		15,117			(4,578	)		10,539

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity (Continued)

(in thousands, except share amounts)

(Unaudited)


	Preferred Stock				Common Stock
	Shares		Par Value		Shares			Par Value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income			Total Stockholder's Deficit			Non- controlling Interest			Total Equity
Balance at December 31, 2024		500	$	—		35,037,193		$	350	$	38,726		$	(46,939	)	$	(1,104	)	$	(8,967	)	$	(7,690	)	$	(16,657	)
Forfeiture of restricted stock		—		—		(10,313	)		—		—			—			—			—			—			—
Shares surrendered for taxes upon vesting		—		—		(57,248	)		—		(5	)		—			—			(5	)		—			(5	)
Stock-based compensation		—		—		—			—		348			—			—			348			—			348
Preferred equity return on preferred equity investment		—		—		—			—		(3,497	)		—			—			(3,497	)		—			(3,497	)
Preferred equity accretion		—		—		—			—		(997	)		—			—			(997	)		—			(997	)
Preferred OP Units return		—		—		—			—		(170	)		—			—			(170	)		170			—
Other comprehensive income		—		—		—			—		—			—			863			863			—			863
Net loss		—		—		—			—		—			(4,277	)		—			(4,277	)		(1,352	)		(5,629	)
Balance at March 31, 2025		500		—		34,969,632			350		34,405			(51,216	)		(241	)		(16,702	)		(8,872	)		(25,574	)

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Cash flows from operating activities
Net loss	$	(5,629	)	$	(1,938	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization		3,580			3,819
Amortization of deferred financing costs and debt discounts		241			193
Amortization of above and below market lease intangibles, net		85			81
Loss on extinguishment of debt		—			7
Impairment of real estate assets		43			110
Straight-line rent revenue		143			(352	)
Straight-line rent expense		(2	)		66
Stock-based compensation		348			360
Change in fair value of derivatives		582			(889	)
Change in fair value of debt held under the fair value option		240			(2,343	)
Bad debt (recovery) expense		(71	)		142
Write-off of pre-acquisition costs		68			—
Write-off related party receivables		—			4
Changes in operating assets and liabilities
Tenants and accounts receivable, net		(508	)		(49	)
Other assets		(394	)		262
Accounts payable and accrued liabilities		282			2,031
Payables due to related parties		(27	)		(32	)
Deferred revenues		11			(176	)
Net cash from operating activities		(1,008	)		1,296
Cash flows from investing activities
Capitalized pre-acquisition costs, net of refunds		—			5
Insurance proceeds		776			516
Capital expenditures for real estate		(749	)		(2,806	)
Net cash from investing activities		27			(2,285	)
Cash flows from financing activities
Borrowings under debt agreements		385			17,869
Repayments under debt agreements		(537	)		(11,706	)
Preferred equity return on preferred equity investment		(1,239	)		(1,153	)
Capitalized pre-refinancing costs		—			(125	)
Taxes remitted upon vesting of restricted stock		(5	)		(24	)
Debt origination and discount fees		(46	)		(388	)
Net cash from financing activities		(1,442	)		4,473
(Decrease) increase in cash, cash equivalents, and restricted cash		(2,423	)		3,484
Cash, cash equivalents and restricted cash at beginning of period		20,734			13,797
Cash, cash equivalents and restricted cash at end of period	$	18,311		$	17,281

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Continued)

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents	$	13,504		$	14,631
Restricted cash		4,807			2,650
Cash, cash equivalents and restricted cash at end of period	$	18,311		$	17,281
Supplemental Cash Flow Information
Interest paid	$	4,750		$	3,773
Taxes paid, net of refunds	$	—		$	8

Supplemental disclosure of non-cash investing and financing activities
Capitalized Preferred Return	$	(2,248	)	$	(1,860	)
Accrued Current Preferred Return	$	(433	)	$	(399	)
Capitalized interest on Mezzanine loan	$	(400	)	$	(331	)
Accrued capital expenditures for real estate	$	283		$	148

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

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Notes to Interim Condensed Consolidated Financial Statements

Unaudited

March 31, 2025

Note 1 - Organization and Nature of Business

Broad Street Realty, Inc. (the “Company”) is focused on owning and managing essential grocery-anchored and mixed-use assets located in densely populated technology employment hubs and higher education centers within the Mid-Atlantic, Southeast and Colorado markets. As of March 31, 2025, the Company had gross real estate assets of $375.9 million (gross real estate properties less gross real estate intangibles liabilities) in 15 real estate properties. In addition, the Company provides commercial real estate brokerage services for its own portfolio and third-party office, industrial and retail operators and tenants.

The Company is structured as an “Up-C” corporation with substantially all of its operations conducted through Broad Street Operating Partnership, LP (the “Operating Partnership”) and its direct and indirect subsidiaries. As of March 31, 2025, the Company owned 86.4% of the Class A common units of limited partnership interest in the Operating Partnership (“Common OP units”) and Series A preferred units of limited partnership interest in the Operating Partnership (“Preferred OP units”) and, together with the Common OP units, “OP units”) and is the sole member of the sole general partner of the Operating Partnership. The Company began operating in its current structure on December 27, 2019, upon the completion of the Initial Mergers (as defined below) and operates as a single reporting segment.

Liquidity, Management’s Plan and Going Concern

The Company’s rental revenue and operating results depend significantly on the occupancy levels at its properties and the ability of its tenants to meet their rent and other obligations to the Company. The Company depends substantially on financing activities to provide it with the liquidity and capital resources needed to meet its working capital requirements and to make capital investments in connection with ongoing operations. The Company projects it will not have sufficient cash flow to cover its obligations over the next twelve months.

The Company’s financing is generally comprised of mortgage loans secured by the Company’s properties that typically mature within three to five years of origination. The Company is currently in contact with lenders and brokers in the marketplace to restructure the Company’s debt.

Specifically, as of March 31, 2025, the Company had three mortgage loans with a combined principal balance outstanding of approximately $24.0 million that mature within twelve months of the date that these condensed consolidated financial statements are issued. On May 6, 2025, the Company entered into an agreement to extend the maturity date of one of the three mortgage loans from June 1, 2025 to December 1, 2025, and, on May 20, 2025, the Company entered into an agreement to extend the maturity date of the second mortgage loans from April 30, 2025 to July 29, 2025. Also, in May 2025, the Company reached a verbal agreement with the lender to extend the maturity date of the third mortgage loan from June 1, 2025 to September 1, 2025 with an option to extend it for an additional 90 days, but the Company can provide no assurance that the lender will enter into a definitive agreement to effect this extension. The Company sought only a short-term extension with the current lender as the Company and the Fortress Member (as defined below) are seeking to sell the property that secures the mortgage loan. The Company projects that it will not have sufficient cash available to pay off the mortgage loans upon maturity and, therefore, the Company and the Fortress Member are seeking to sell the properties that secure the mortgage loans. Although the Company has a history of demonstrating its ability to successfully refinance its loans as they come due, there can be no assurances that the Company will be successful in its efforts to refinance the loans on favorable terms or at all. The Company also has the option to sell the properties securing the loans and use the proceeds to satisfy the outstanding loan obligations. If the Company is ultimately unable to repay or refinance these loans or sell the properties prior to maturity, the lender has the right to place the loans in default and ultimately foreclose on the properties securing the loans. Under this circumstance, the Company would not have any further financial obligations to the lenders as the current estimated market values of these properties are in excess of the outstanding loan balances.

On May 21, 2024, the Company agreed with CF Flyer PE Investor LLC (the “Fortress Member”), an affiliate of Fortress Investment Group LLC (“Fortress”), that, after revision of the total yield calculation as of March 31, 2024, the Company did not meet the minimum total yield requirement under the Amended and Restated Limited Liability Company Agreement (the “Eagles Sub-OP Operating Agreement”) of Broad Street Eagles JV LLC (the “Eagles Sub-OP”), by and between the Operating Partnership and the Fortress Member, which would constitute a Trigger Event (as defined in the Eagles Sub-OP Operating Agreement). Effective May 21, 2024, the Fortress Member and the Operating Partnership entered into a temporary waiver agreement (the “Temporary Waiver”) to waive the total yield failure and the existence of the Trigger Event until such time as the Fortress Member elected to revoke such waiver, which the Fortress Member was entitled to do at any time in its sole discretion. On April 8, 2025, the Fortress Member rescinded the Temporary Waiver and removed the Operating Partnership as the managing member of the Eagles Sub-OP in accordance with the terms of the Eagles Sub-OP Operating Agreement (the “Rescission and Removal Notice”). As a result of the Rescission and Removal Notice, the Fortress Member automatically became the managing member of the Eagles Sub-OP in accordance with the terms of the Eagles

Sub-OP Operating Agreement. The Rescission and Removal Notice also resulted in (i) the removal of any representatives of the Operating Partnership serving on any board of management of a subsidiary of the Eagles Sub-OP and (ii) the rescission of the rights of any agent or officer of the Eagles Sub-OP designated by the Operating Partnership, as the managing member of the Eagles Sub-OP.

All of the Company’s properties are owned by subsidiaries of the Eagles Sub-OP. As a result of the Rescission and Removal Notice, the Fortress Member has full control of all cash accounts owned by the Eagles Sub-OP and its subsidiaries, which accounts hold substantially all cash of the Company. Any use of such cash by the Company or the Operating Partnership requires the consent of the Fortress Member, and the Company can provide no assurance that the Fortress Member will provide such consent. On May 20, 2025, the Fortress Member informed the Company’s board of directors that it will fund the Company’s general and administrative expenses for key personnel, licenses, software and other expenses to be approved by the Fortress Member for the next two months, up to a total of $750,000, after which the Fortress Member will determine the appropriate next steps. The Fortress Member, in its capacity as managing member of Eagles Sub-OP, intends to cause Eagles Sub-OP to sell one or more properties to third-party buyers unaffiliated with the Fortress Member until the Preferred Equity Investment (as defined below) has been redeemed for the Redemption Amount (as defined in the Eagles Sub-OP Operating Agreement) and the entire outstanding principal balance of the Fortress Mezzanine Loan (as defined below) and the Prepayment Premium (as defined below) has been repaid. Further, the Company and the Fortress Member are currently marketing certain of the properties for sale. The Company can provide no assurances as to the timing of the sales of the properties or that the properties will be successfully sold. As of March 31, 2025, the Redemption Amount was $111.9 million and the outstanding principal balance of the Fortress Mezzanine Loan and the Prepayment Premium was $19.1 million. The combined carrying amount of the Preferred Equity Investment and the Fortress Mezzanine Loan was approximately $118.3 million at March 31, 2025. See Note 8 “Mortgage and Other Indebtedness” and Note 10 “Fortress Preferred Equity Investment” for additional information.

Based on the above, there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date that these condensed consolidated financial statements are available to be issued. The Company’s ability to continue as a going concern is dependent on the Company’s ability to find third-party equity and/or debt financing to pay off the Preferred Equity Investment and the Fortress Mezzanine Loan or the Company’s and the Fortress Member’s ability to sell properties as described above. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company cannot obtain third-party equity and/or debt financing or if the Company and the Fortress Member cannot sell properties as described above, the Company will not be able to satisfy its debt and preferred equity obligations. The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Under the Company's debt agreements, the Company is subject to certain covenants. In the event of a default, the lenders could accelerate the timing of payments under the applicable debt obligations and the Company may be required to repay such debt with capital from other sources, which may not be available on attractive terms, or at all, which would have a material adverse effect on the Company's liquidity, financial condition and results of operations. Other than the event of default under the mezzanine loan agreement for the Fortress Mezzanine Loan, the Company was in compliance with all covenants under its debt agreements as of March 31, 2025.

Note 2 - Accounting Policies and Related Matters

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim reports. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of its financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for a full year. The unaudited condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024, included in the Company’s 2024 Annual Report on Form 10-K filed with the SEC on March 28, 2025, as amended on April 29, 2025 (the “2024 Form 10-K”).

The interim condensed consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries and subsidiaries in which the Company has a controlling interest. All intercompany transactions and balances have been eliminated in consolidation.

For information about significant accounting policies, refer to the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2024, included in the 2024 Form 10-K. During the three months ended March 31, 2025, there were no material changes to these policies.

Accounting Guidance

Adoption of Accounting Standards

There were no adopted pronouncements during the three months ended March 31, 2025 that impacted the Company.

Issued Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires entities to annually disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU is effective for the Company for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of the guidance.

In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires entities to provide disaggregated disclosure of income statement expenses. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU is effective for the Company for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of this guidance.

Note 3 – Real Estate

Concentrations of Credit Risks

The following table contains information regarding the geographic concentration of the properties in the Company’s portfolio as of March 31, 2025, which includes rental income for the three months ended March 31, 2025 and 2024.


(dollars in thousands)	Number of Properties	Gross Real Estate Assets (1)		Percentage of Total Real Estate Assets			Rental income for the three months ended March 31,
Location	March 31, 2025	March 31, 2025		March 31, 2025			2025		2024
Maryland	6	$	102,898		27.4	%	$	3,617	$	3,074
Virginia	5		199,655		53.1	%		3,979		3,965
Washington D.C.	1		8,380		2.2	%		131		183
Colorado	3		65,016		17.3	%		2,115		2,289
	15	$	375,949		100.0	%	$	9,842	$	9,511

(1)

Represents total costs before accounting for any depreciation or amortization expenses.

Note 4 – Intangibles

The following is a summary of the carrying amount of the Company’s intangible assets and liabilities as of March 31, 2025 and December 31, 2024.


(in thousands)	March 31, 2025			December 31, 2024
Assets:
Above-market leases	$	4,153		$	4,153
Above-market leases accumulated amortization		(3,166	)		(3,038	)
In-place leases		28,814			28,814
In-place leases accumulated amortization		(23,326	)		(22,771	)
Total real estate intangible assets, net	$	6,475		$	7,158

Liabilities
Below-market leases	$	3,099		$	3,099
Below-market leases accumulated amortization		(2,822	)		(2,778	)
Total real estate intangible liabilities, net	$	277		$	321

For the three months ended March 31, 2025 and 2024, the Company recognized amortization related to in-place leases of approximately $0.6 million and $0.9 million, respectively, and net amortization related to above-market leases and below-market leases for each of the three months ended March 31, 2025 and 2024 of approximately $0.1 million in its condensed consolidated statements of operations.

The following table represents expected amortization of existing real estate intangible assets and liabilities as of March 31, 2025:


(in thousands)	Amortization of in-place leases		Amortization of above-market leases		Amortization of below-market leases			Total amortization, net
Remainder of 2025	$	1,469	$	322	$	(99	)	$	1,692
2026		1,433		253		(83	)		1,603
2027		933		167		(44	)		1,056
2028		503		112		(26	)		589
2029		383		80		(14	)		449
2030		287		23		(11	)		299
Thereafter		480		30		-			510
Total	$	5,488	$	987	$	(277	)	$	6,198

The Company amortizes the value of in-place leases to amortization expense, the value of above-market leases as a reduction of rental income and the value of below-market leases as an increase to rental income over the initial term of the respective leases.

As of March 31, 2025, the weighted average remaining amortization period of in-place lease intangibles, above-market lease intangible assets and below-market lease intangibles is approximately 1.7 years, 2.0 years and 0.7 years, respectively.

Note 5 - Tenant and Accounts Receivable

Items included in tenant and accounts receivable, net on the Company’s condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 are detailed in the table below:


(in thousands)	March 31, 2025		December 31, 2024
Tenant receivable, net	$	442	$	225
Accounts receivable, net		1,827		1,465
Total tenant and accounts receivable, net	$	2,269	$	1,690

Note 6 - Other Assets

Items included in other assets, net on the Company’s condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 are detailed in the table below:


(in thousands)	March 31, 2025		December 31, 2024
Prepaid assets and deposits	$	841	$	1,364
Leasing commission costs and incentives, net		2,594		2,297
Right-of-use assets, net		1,198		1,253
Pre-acquisition costs		—		73
Other receivables, net		1,086		460
Corporate property, net		115		125
Receivables from related parties		992		992
Total assets	$	6,826	$	6,564

Receivables due from related parties as of March 31, 2025 and December 31, 2024 are described further in Note 16 “Related Party Transactions.”

Note 7 - Accounts Payable and Accrued Liabilities

Items included in accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 are detailed in the table below:


(in thousands)	March 31, 2025		December 31, 2024
Trade payable	$	2,778	$	2,417
Accrued operating and administrative expenses (1)		7,103		6,348
Security deposit		2,447		2,462
Real estate tax payable		1,210		1,307
Interest payable		1,139		1,356
Derivative liability		229		20
Lease payable		1,325		1,382
Accounts payable and accrued liabilities	$	16,231	$	15,292

(1)

The table below provides additional details for items included in “Accrued operating and administrative expenses” as of March 31, 2025 and December 31, 2024:


(in thousands)	March 31, 2025		December 31, 2024
Payroll and payroll related expenses	$	1,421	$	1,155
Accrued cost of services		1,170		950
Accrued legal and professional fees		2,759		2,337
Insurance proceeds for repairs		—		2
Accrued construction in progress		84		80
Accrued property operating expenses		870		1,065
Other accrued expenses		799		759
Accrued operating and administrative expenses	$	7,103	$	6,348

Note 8 – Mortgage and Other Indebtedness

The table below details the Company’s debt balance at March 31, 2025 and December 31, 2024:


(dollars in thousands)	Maturity Date	Rate Type	Interest Rate (1)	March 31, 2025				December 31, 2024
Hollinswood Shopping Center Loan (2)	June 1, 2025	SOFR + 2.36%	6.68%	$	12,048			$	12,104
Avondale Shops Loan	June 1, 2025 (3)	Fixed	4.00%		2,714				2,745
Vista Shops at Golden Mile Loan (net of discount of $77 and $82, respectively) (4)	February 8, 2029	SOFR + 2.75%	6.90%		15,934				15,985
Brookhill Azalea Shopping Center Loan	April 30, 2025 (5)	SOFR + 2.75%	7.07%		9,198				9,198
Crestview Shopping Center Loan (net of discount of $28 and $33, respectively)	September 29, 2026	Fixed	7.83%		11,817				11,856
Lamar Station Plaza West Loan (net of discount of $49 and $54, respectively)	December 10, 2027	Fixed	5.67%		18,498				18,585
Highlandtown Village Shopping Center Loan (net of discount of $27 and $29, respectively)	May 10, 2028	SOFR + 2.5% (6)	6.09%		8,723				8,721
Midtown Colonial and Midtown Lamonticello Shopping Center Loan (net of discount of $150 and $168, respectively) (7)	May 1, 2027	Fixed	7.92%		19,010				18,992
Midtown Row Loan (net of discount of $13 and $14, respectively)	December 1, 2027	Fixed	6.48%		75,987				75,986
Midtown Row/Fortress Mezzanine Loan (8)	December 1, 2027	Fixed	14.00% (9)		16,688				16,911
Cromwell Field Shopping Center Loan (net of discount of $41 and $45, respectively)	December 22, 2027	Fixed	6.71%		12,897		(10)		12,508		(10)
Coral Hills Shopping Center Loan (net of discount of $165 and $169, respectively)	October 31, 2033	Fixed	6.95%		12,336				12,385
West Broad Shopping Center Loan (net of discount of $77 and $79, respectively)	December 21, 2033	Fixed	7.00%		11,498				11,545
The Shops at Greenwood Village (net of discount of $59 and $63, respectively)	October 10, 2028	SOFR + 2.85% (11)	5.85%		21,494				21,643
				$	248,842			$	249,164
Unamortized deferred financing costs, net					(1,978	)			(2,114	)
Total Mortgage and Other Indebtedness				$	246,864			$	247,050

(1)

Interest rates are as of March 31, 2025.

(2)

The Company entered into an interest rate swap which fixed the interest rate of this loan at 4.06% until December 1, 2024. On October 28, 2024, the Company entered into an agreement to extend the maturity date of this loan to March 1, 2025. On March 27, 2025, the Company entered into another agreement to further extend the maturity date of this loan to June 1, 2025. In May 2025, the Company reached a verbal agreement from the lender to further extend the maturity date of this loan to September 1, 2025, with an option to extend the maturity date for an additional 90 days, but the Company can provide no assurance that the lender will enter into a definitive agreement to effect this extension.

(3)

On May 6, 2025, the Company entered into an agreement to extend the maturity date of this loan to December 1, 2025.

(4)

On February 8, 2024, the Company refinanced the Vista Shops at Golden Mile Loan. The maturity date of the new loan is February 8, 2029. The Company entered into an interest rate swap which fixes the interest rate of the new loan at 6.90% for the term of the loan.

(5)

On January 31, 2025, the Company entered into an agreement to extend the maturity date of this loan to April 30, 2025. On May 20, 2025, the Company entered into another agreement to further extend the maturity date of this loan to July 29, 2025 and amend the interest rate to SOFR plus 3.09%.

(6)

The Company has entered into an interest rate swap which fixes the interest rate of this loan at 6.09%.

(7)

This loan was originated on April 30, 2024.

(8)

The outstanding balance reflects the fair value of the debt.

(9)

A portion of the interest on this loan is paid in cash (the “Current Interest”) and a portion of the interest is capitalized and added to the principal amount of the loan each month (the “Capitalized Interest”) and, together with the Current Interest, the “Mezzanine Loan Interest”). The initial Mezzanine Loan Interest rate was 12% per annum, comprised of a 5% Current Interest rate and a 7% Capitalized Interest rate. The Capitalized Interest rate increases each year by 1% and, as of March 31, 2025, was 9%. Effective April 8, 2025, the interest rate was increased by 4% as a result of the Trigger Event.

(10)

At March 31, 2025 and December 31, 2024, there was additional borrowing capacity of $2.1 million and $2.4 million, respectively, available for the Company to fund leasing costs and for the performance earnout.

(11)

The Company has entered into an interest rate swap which fixes the interest rate of this loan at 5.85%.

Mortgage Indebtedness

As of March 31, 2025 and December 31, 2024, the Company had approximately $232.2 million and $232.3 million, respectively, of outstanding mortgage indebtedness secured by individual properties.

On February 8, 2024, the Company refinanced the mortgage loan secured by Vista Shops at Golden Mile. The new loan has a principal balance of $16.2 million, bears interest at SOFR plus a spread of 2.75% per annum and matures on February 8, 2029. The Company entered into an interest rate swap which fixes the interest rate of the loan at 6.90%.

On April 30, 2024, the Company received a $19.2 million loan secured by Midtown Colonial and Midtown Lamonticello, which bears interest at a rate of 7.92% per annum and matures on May 1, 2027. The Company used a portion of the proceeds from the new mortgage loan to pay off the $8.5 million of the outstanding balance of another loan.

On October 28, 2024, the loan agreement and guaranty agreement for the Company’s mortgage loan secured by the Hollinswood property was amended to extend the maturity date to March 1, 2025. On March 27, 2025, the maturity date was further extended to June 1, 2025. In May 2025, the Company reached a verbal agreement with the lender to further extend the maturity date of this loan to September 1, 2025, with an option to extend the maturity date for an additional 90 days, but the Company can provide no assurance that the lender will enter into a definitive agreement to effect this extension.

On January 31, 2025, the promissory note for the Company's mortgage loan secured by the Brookhill property was amended to extend the maturity date to April 30, 2025. On May 20, 2025, the Company entered into another agreement to further extend the maturity date of this loan to July 29, 2025 and amend the interest rate to SOFR plus 3.09%.

On May 6, 2025, the promissory note for the Company’s mortgage loan secured by the Avondale property was amended to extend the maturity date to December 1, 2025.

Fortress Mezzanine Loan

In connection with the acquisition of Midtown Row, the Company entered into a $15.0 million mezzanine loan (the “Fortress Mezzanine Loan”) secured by 100% of the membership interests in the entity that owns Midtown Row. The Fortress Mezzanine Loan matures on December 1, 2027. The Company elected to measure the Fortress Mezzanine Loan at fair value in accordance with the fair value option. The fair value at March 31, 2025 and December 31, 2024 was $16.7 million and $16.9 million, respectively. For the three months ended March 31, 2025 and 2024, the Company recognized a net loss of $0.2 million and a net gain of $2.3 million, respectively, on fair value change of debt held under the fair value option in the condensed consolidated statements of operations and a net gain of $0.9 million and $0.7 million, respectively, in change in fair value due to credit risk on debt held under the fair value option in the condensed consolidated statements of comprehensive loss. For the three months ended March 31, 2025 and 2024, the Company recognized $0.6 million and $0.5 million, respectively, of interest expense in the condensed consolidated statements of operations, each of which includes $0.4 million and $0.3 million, respectively, of Capitalized Interest recorded in the condensed consolidated balance sheets.

As discussed below, effective May 21, 2024, the Fortress Member and the Operating Partnership entered into the Temporary Waiver. On April 8, 2025, the Fortress Member provided the Rescission and Removal Notice. The mezzanine loan agreement for the Fortress Mezzanine Loan provides for cross-default in the event of a Trigger Event. Accordingly, as a result of the Rescission and Removal Notice and the resulting Trigger Event under the Eagles Sub-OP Operating Agreement, an event of default exists and is continuing under the Fortress Mezzanine Loan. As a result of the event of default, (i) CF Flyer Mezz may require the immediate payment of all amounts owed under the Fortress Mezzanine Loan, (ii) CF Flyer Mezz may foreclose on the collateral for the Fortress Mezzanine Loan, (iii) the interest rate of the Fortress Mezzanine Loan automatically increased by the lesser of 4% or the maximum rate permitted by applicable law and (iv) CF Flyer Mezz may apply any sums in any cash management system account in any order and in any manner

as CF Flyer Mezz may elect. If CF Flyer Mezz accelerates the maturity date of all or any portion of the Fortress Mezzanine Loan by reason of the event of default, then, in addition to the payment of the outstanding principal and accrued and unpaid interest of the Fortress Mezzanine Loan, CF Flyer Mezz will be entitled to receive a prepayment premium in an amount sufficient to provide CF Flyer Mezz with the greater of (i) all accrued and unpaid interest (including all accrued and unpaid capitalized interest) with respect to the Fortress Mezzanine Loan and (ii) a 1.40x minimum multiple on the amount of the Fortress Mezzanine Loan (the “Prepayment Premium”).

The previously disclosed note sale and assignment agreement, pursuant to which CF Flyer Mezz Holdings LLC, the lender under the Fortress Mezzanine Loan (“CF Flyer Mezz”) and an affiliate of Fortress, agreed to sell the Fortress Mezzanine Loan, was terminated by CF Flyer Mezz on March 31, 2025 following a breach by the buyer of its obligations to complete the purchase.

Deferred Financing Costs and Debt Discounts

The total amount of deferred financing costs associated with the Company’s debt as of March 31, 2025 and December 31, 2024 was $3.6 million, gross ($2.0 million, net) and $3.6 million, gross ($2.1 million, net), respectively. Debt discounts associated with the Company’s debt as of March 31, 2025 and December 31, 2024 was $1.0 million, gross ($0.3 million, net) and $1.2 million, gross ($0.6 million, net), respectively. Deferred financing costs and debt discounts are netted against the debt balance outstanding on the Company’s consolidated balance sheets and will be amortized to interest expense through the maturity date of the related debt.

The Company recognized amortization expense of deferred financing costs and debt discounts, which is included in interest expense in the consolidated statements of operations, of approximately $0.2 million for each of the three months ended March 31, 2025 and 2024.

Debt Maturities

The following table details the Company’s scheduled principal repayments and maturities during each of the next five years and thereafter as of March 31, 2025:


(dollars in thousands)	Amount Due
Remainder of 2025 (1)	$	43,774
2026		14,790
2027		126,007
2028		28,880
2029		15,449
2030		542
Thereafter		21,432
		250,874
Unamortized debt discounts and deferred financing costs, net and fair value option adjustment		(4,010	)
Total	$	246,864

(1)

Includes $18.0 million relating to the Fortress Mezzanine Loan.

Interest Rate Cap and Interest Rate Swap Agreements

On May 1, 2023, the Company entered into an interest rate swap agreement on The Shops at Greenwood Village mortgage loan to fix the interest rate at 5.85%.

On May 5, 2023, the Company entered into an interest rate swap agreement on the Highlandtown Village Shopping Center mortgage loan to fix the interest rate at 6.09%.

On February 8, 2024, the Company entered into an interest rate swap agreement on the Vista Shops at Golden Mile mortgage loan to fix the interest rate at 6.90%.

The Company recognizes all derivative instruments as assets or liabilities at their fair value in the condensed consolidated balance sheets. Changes in the fair value of the Company’s derivatives that are not designated as hedges or do not meet the criteria of hedge accounting are recognized in earnings. For the three months ended March 31, 2025 and 2024, the Company recognized losses of approximately $0.6 million and gains of approximately $0.4 million, respectively, as a component of “Derivative fair value adjustment” on the condensed consolidated statements of operations.

The fair value of the Company’s derivative financial instruments as of March 31, 2025 and December 31, 2024 was an interest rate swap asset of approximately $0.4 million and $0.7 million, respectively, and an interest rate swap liability of $0.2 million and less than $0.1 million at March 31, 2025 and December 31, 2024, respectively. The interest rate swap asset is included in Derivative assets and the interest rate swap liability is included in Accounts payable and accrued liabilities on the condensed consolidated balance sheets.

Covenants

The Company’s loan agreements contain customary financial and operating covenants including debt service coverage ratios and aggregate minimum unencumbered cash covenants. As of March 31, 2025, as disclosed above, the Company is in default under the mezzanine loan agreement for the Fortress Mezzanine loan as a result of the Rescission and Removal Notice. The Company was in compliance with all financial and operating covenants under its mortgage debt agreements.

Note 9 – Commitments and Contingencies

Litigation

From time to time, the Company or its properties may be subject to claims and suits in the ordinary course of business. The Company’s lessees and borrowers have indemnified, and are obligated to continue to indemnify, the Company against all liabilities arising from the operations of the properties and are further obligated to indemnify it against environmental or title problems affecting the real estate underlying such facilities. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on its condensed consolidated financial condition, results of operations or cash flows.

Note 10 – Fortress Preferred Equity Investment

As of March 31, 2025, the Company consolidated the Eagles Sub-OP under the guidance set forth in Accounting Standards Codification (“ASC”) 810, Consolidation. The Company evaluated whether the Eagles Sub-OP met the criteria for classification as a variable interest entity (“VIE”) or, alternatively, as a voting interest entity and concluded that that the Eagles Sub-OP met the criteria of a VIE. The Company was considered to have a controlling financial interest in the Eagles Sub-OP because the Company determined that it was the primary beneficiary because it was most closely associated with the Eagles Sub-OP. As discussed below, on April 8, 2025, the Fortress Member rescinded the Temporary Waiver and removed the Operating Partnership as the managing member of the Eagles Sub-OP. As a result, the Company will deconsolidate the Eagles Sub-OP in the second quarter of 2025 and account for its investment in the Eagles Sub-OP using the equity method of accounting in accordance with ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”) at the time of deconsolidation, as the Company no longer has a controlling financial interest in the Eagles Sub-OP.

On November 22, 2022, the Company, the Operating Partnership and the Eagles Sub-OP entered into a Preferred Equity Investment Agreement with the Fortress Member, pursuant to which the Fortress Member invested $80.0 million in the Eagles Sub-OP in exchange for a preferred membership interest (such interest, the “Fortress Preferred Interest” and such investment, the “Preferred Equity Investment”).

In connection with the Preferred Equity Investment, the Operating Partnership and the Fortress Member, the only holder of a preferred membership interest in the Eagles Sub-OP, entered into the Eagles Sub-OP Operating Agreement, and the Operating Partnership contributed to the Eagles Sub-OP its subsidiaries that, directly or indirectly, own Brookhill Azalea Shopping Center, Vista Shops, Hollinswood Shopping Center, Avondale Shops, Greenwood Village Shopping Center and Lamar Station Plaza East in November 2022, as well as Cromwell Field in December 2022. Pursuant to the Eagles Sub-OP Operating Agreement, the Operating Partnership had the obligation to contribute to the Eagles Sub-OP its direct or indirect subsidiaries owning eight additional properties. As of March 31, 2025, the Operating Partnership had contributed to the Eagles Sub-OP its subsidiaries that own Highlandtown, Crestview, Coral Hills, West Broad, Midtown Colonial and Midtown Lamonticello and, with the approval of the Fortress Member, sold Spotswood and Dekalb Plaza. All of the Company’s properties are owned by subsidiaries of the Eagles Sub-OP.

Pursuant to the Eagles Sub-OP Operating Agreement, the Fortress Member is entitled to monthly distributions, a portion of which is paid in cash (the “Current Preferred Return”) and a portion that accrues on and is added to the Fortress Equity Investment each month (the “Capitalized Preferred Return” and, together with the Current Preferred Return, the “Preferred Return”). The initial Preferred Return was 12% per annum, comprised of a 5% Current Preferred Return and a 7% Capitalized Preferred Return. The Capitalized Preferred Return increases each year by 1%. As of March 31, 2025 and December 31, 2024, the Capitalized Preferred Return was approximately $21.4 million and $19.2 million, respectively, and is reflected within Redeemable noncontrolling Fortress preferred interest on the condensed consolidated balance sheets. For each of the three months ended March 31, 2025 and 2024, the Company recognized approximately $1.2 million of Current Preferred Return, and, for the three months ended March 31, 2025 and 2024, the Company recognized $2.2 million and $1.8 million, respectively, of Capitalized Preferred Return, in each case as a reduction to additional paid-in capital in the condensed consolidated statements of equity.

As disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, the Fortress Member has approval rights over certain Major Actions (as defined in the Eagles Sub-OP Operating Agreement). In addition, the Company is required to maintain separate bank accounts for tenant improvement costs and leasing costs as well as the net proceeds from the Spotswood and Dekalb dispositions. Prior written consent of the Fortress Member is required for the disbursement and use of cash held in such accounts,

which had a combined balance of $6.9 million and $8.6 million as of March 31, 2025 and December 31, 2024, respectively, and is reflected in cash and cash equivalents.

On May 21, 2024, the Company agreed with the Fortress Member that, after revision of the total yield calculation as of March 31, 2024, the Company did not meet the minimum total yield requirement under the Eagles Sub-OP Operating Agreement, which would have been a Trigger Event. Effective May 21, 2024, the Fortress Member and the Operating Partnership entered into the Temporary Waiver to waive the total yield failure and the existence of the Trigger Event until such time as the Fortress Member elected to revoke such waiver, which the Fortress Member was entitled to do at any time in its sole discretion. On April 8, 2025, the Fortress Member provided the Rescission and Removal Notice, which rescinded the Temporary Waiver and removed the Operating Partnership as the managing member of the Eagles Sub-OP in accordance with the terms of the Eagles Sub-OP Operating Agreement. As a result of the Rescission and Removal Notice, the Fortress Member automatically became the managing member of the Eagles Sub-OP in accordance with the terms of the Eagles Sub-OP Operating Agreement. The Rescission and Removal Notice also resulted in (i) the removal of any representatives of the Operating Partnership serving on any board of management of a subsidiary of the Eagles Sub-OP and (ii) the rescission of the rights of any agent or officer of the Eagles Sub-OP designated by the Operating Partnership, as the managing member of the Eagles Sub-OP.

As a result of the Trigger Event, the Fortress Member has the right to cause the Eagles Sub-OP to redeem the Fortress Preferred Interest by payment to the Fortress Member of the full Redemption Amount upon not less than 90 days prior written notice to the Eagles Sub-OP. Additionally, as a result of the Trigger Event, the Fortress Member may cause the Eagles Sub-OP to sell one or more properties to third-party buyers unaffiliated with the Fortress Member until the entire Fortress Preferred Interest has been redeemed for the Redemption Amount. Further, as a result of the Trigger Event, the Fortress Member may (i) cause the Eagles Sub-OP to use certain reserve accounts to pay the Fortress Member the full Redemption Amount, (ii) terminate all property management and other service agreements with affiliates of the Company, (iii) take any action in connection with curing or reacting to a default under any mortgage loan and (iv) otherwise exercise its rights and remedies pursuant to the terms of the Eagles Sub-OP Operating Agreement.

As a result of the Trigger Event, (i) the rate for distributions payable on the Fortress Preferred Interest automatically increased by the lesser of 4% or the maximum rate permitted by applicable law and (ii) all distributions payable on the Fortress Preferred Interest are payable in cash, including the portion of distributions payable on the Fortress Preferred Interest that previously accrued on and was added to the Preferred Equity Investment.

As a result of the Rescission and Removal Notice, the Fortress Member has full control of all cash accounts owned by the Eagles Sub-OP and its subsidiaries, which accounts hold substantially all cash of the Company. Any use of such cash by the Company or the Operating Partnership requires the consent of the Fortress Member, and the Company can provide no assurance that the Fortress Member will provide such consent. On May 20, 2025, the Fortress Member informed the Company’s board of directors that it will fund the Company’s general and administrative expenses for key personnel, licenses, software and other expenses to be approved by the Fortress Member for the next two months, up to a total of $750,000, after which the Fortress Member will determine the appropriate next steps.

The Fortress Member’s interest in the Eagles Sub-OP under the Eagles Sub-OP Operating Agreement is a financial instrument with both equity and debt characteristics and is classified as mezzanine equity in our accompanying condensed consolidated financial statements. The instrument was initially recognized at fair value net of issuance costs. The Fortress Preferred Interest is redeemable at a determinable date (at year five, prior to year five if a Qualified Public Offering occurs or at any time so long as the Fortress Mezzanine Loan is repaid in full before or concurrently with such redemption) and therefore, at each subsequent reporting period we will accrete the carrying value to the amount due upon redemption of the Fortress Preferred Interest based on the effective interest method over the remaining term. All financial instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g., more equity-like or debt-like). Features identified as embedded derivatives that are material are recognized separately as a derivative asset or liability in the condensed consolidated financial statements. The Company has evaluated the Fortress Preferred Interest and determined that its nature is that of a debt host and certain embedded derivatives exist that would require bifurcation on the Company’s condensed consolidated balance sheets. For the three months ended March 31, 2024, the Company recognized a gain of $0.5 million in derivative fair value adjustment in the condensed consolidated statements of operations. For the three months ended March 31, 2025, the Company did not recognize a gain or loss in derivative fair value adjustment in the condensed consolidated statements of operations. There was no derivative liability at March 31, 2025 and December 31, 2024.

The following table summarizes the preferred equity investment activities for the three months ended March 31, 2025 and 2024.


(thousands)	Preferred Equity Investment
Balance at December 31, 2024	$	98,356
Preferred equity return		3,497
Preferred equity payment		(1,239	)
Preferred equity accretion		997
Balance at March 31, 2025	$	101,611


(thousands)	Preferred Equity Investment
Balance at December 31, 2023	$	87,288
Preferred equity return		3,022
Preferred equity payment		(1,153	)
Preferred equity accretion		1,379
Balance at March 31, 2024	$	90,536

The previously disclosed preferred membership interest and warrant purchase agreement, pursuant to which the Fortress Member and CF Flyer Mezz agreed to sell 100% of the Fortress Preferred Interest and the outstanding warrant to purchase 2,560,000 shares of the Company’s common stock at an exercise price of $0.01 per share, was terminated by the Fortress Member and CF Flyer Mezz on March 31, 2025 following a breach by the buyer of its obligations to complete the purchase.

Note 11 – Equity

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock, in one or more series, with a $0.01 par value per share, of which 20,000 shares have been designated as Series A preferred stock, $0.01 par value per share (the “Series A preferred stock”).

As of March 31, 2025 and December 31, 2024, the Company had 500 shares of Series A preferred stock outstanding, all of which were assumed from MedAmerica Properties Inc. (“MedAmerica”) upon completion of the initial mergers on December 27, 2019 (the “Initial Mergers”). The holders of Series A preferred stock are entitled to receive, out of funds legally available for that purpose, cumulative, non-compounded cash dividends on each outstanding share of Series A preferred stock at the rate of 10.0% of the $100 per share issuance price (“Series A preferred dividends”). The Series A preferred dividends are payable semiannually to the holders of Series A preferred stock, when and as declared by the Company’s board of directors, on June 30 and December 31 of each year, that shares of Series A preferred stock are outstanding; provided that due and unpaid Series A preferred dividends may be declared and paid on any date declared by the Company’s board of directors. As of March 31, 2025, less than $0.1 million of Series A preferred dividends were undeclared.

Noncontrolling Interest

As of each of March 31, 2025 and December 31, 2024, the Company owned an 86.4% interest in the Operating Partnership.

Amended and Restated 2020 Equity Incentive Plan

On September 15, 2021, the Company’s board of directors approved the Amended and Restated 2020 Equity Plan (the “Plan”), which increased the number of shares of the Company’s common stock reserved for issuance under the Plan by 1,500,000 shares, from 3,620,000 shares to 5,120,000 shares. On April 9, 2024, the Company’s board of directors approved a further amendment and restatement of the Plan, which increased the number of shares of the Company's common stock reserved for issuance under the Plan by 1,400,000 shares, from 5,120,000 shares to 6,520,000 shares. The Plan provides for the grant of stock options, share awards (including restricted stock and restricted stock units), share appreciation rights, dividend equivalent rights, performance awards, annual cash incentive awards and other equity-based awards, including LTIP units, which are convertible on a one-for-one basis into Common OP units. As of March 31, 2025, there were 220,495 shares available for future issuance under the Plan, subject to certain adjustments set forth in the Plan. Each share subject to an award granted under the Plan will reduce the available shares under the Plan on a one-for-one basis. The Plan is administered by the compensation committee of the Company’s board of directors.

Restricted Stock

Awards of restricted stock are awards of the Company’s common stock that are subject to restrictions on transferability and other restrictions as established by the Company’s compensation committee on the date of grant that are generally subject to forfeiture if employment (or service as a director) terminates prior to vesting. Upon vesting, all restrictions would lapse. Except to the extent restricted under the award agreement, a participant awarded restricted stock will have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote and the right to receive dividends on the shares. The value of the awards is determined based on the market value of the Company’s common stock on the date of grant. The Company expenses the cost of restricted stock ratably over the vesting period.

The following tables summarizes the stock-based award activity under the Plan for the three months ended March 31, 2025 and 2024.


	Restricted Stock Awards			Weighted-Average Grant Date Fair Value Per Restricted Stock Award
Outstanding as of December 31, 2024		1,821,833		$	0.49
Vested		(467,908	)		0.65
Forfeitures		(10,313	)		0.40
Outstanding as of March 31, 2025		1,343,612		$	0.44


	Restricted Stock Awards			Weighted-Average Grant Date Fair Value Per Restricted Stock Award
Outstanding as of December 31, 2023		775,369		$	0.99
Vested		(190,665	)		1.20
Outstanding as of March 31, 2024		584,704		$	0.92

Of the restricted shares that vested during the three months ended March 31, 2025, 57,248 shares were surrendered by certain employees to satisfy their tax obligations.

Compensation expense related to these share-based payments for each of the three months ended March 31, 2025 and 2024 was approximately $0.1 million and was included in general and administrative expenses on the condensed consolidated statements of operations. The remaining unrecognized costs from stock-based awards as of March 31, 2025 was approximately $0.2 million and will be recognized over a weighted-average period of 0.7 years.

Restricted Stock Units

The Company’s restricted stock unit (“RSU”) awards represent the right to receive unrestricted shares of common stock based on the achievement of Company performance objectives as determined by the Company’s compensation committee. Grants of RSUs generally entitle recipients to shares of common stock equal to 0% up to 300% of the number of units granted on the vesting date. RSUs are not eligible to vote or to receive dividends prior to vesting. Dividend equivalents are credited to the recipient and are paid only to the extent that the RSUs vest based on the achievement of the applicable performance objectives.

On October 1, 2021, the Company granted certain employees RSUs with an aggregate target number of 1,220,930 RSUs, of which 0% to 300% will vest based on the Company’s Implied Equity Market Capitalization (defined as (i) the sum of (a) the number of shares of common stock of the Company outstanding and (b) the number of Common OP units outstanding (not including Common OP units held by the Company), in each case, as of the last day of the applicable performance period, multiplied by (ii) the value per share of common stock at the end of the performance period) on December 31, 2024, the end of the performance period, subject to the executive’s continued service on such date. Since the maximum amount of the award was not earned as of December 31, 2024, pursuant to the terms of the awards, the remaining RSUs may be earned based on the Company’s Implied Equity Market Capitalization as of December 31, 2025. To the extent performance is between any two designated amounts, the percentage of the target award earned will be determined using a straight-line linear interpolation between the two designated amounts. The value of the awards is determined by using a Monte Carlo simulation model in estimating the market value of the RSUs as of the date of grant. The Company expenses the cost of RSUs ratably over the vesting period. On February 28, 2023, 232,558 RSUs were forfeited as a result of an employee’s resignation.

Compensation expense related to the RSUs for each of the three months ended March 31, 2025 and 2024 was approximately $0.2 million and was included in general and administrative expenses on the condensed consolidated statement of operations. The remaining unrecognized costs from RSU awards as of March 31, 2025 was approximately $0.7 million and will be recognized over 0.8 years.

Note 12 – Revenues

Disaggregated Revenue

The following table represents a disaggregation of revenues from contracts with customers for the three months ended March 31, 2025 and 2024 by type of service:


	Topic 606	Three Months Ended March 31,
(in thousands)	Revenue Recognition	2025		2024
Topic 606 Revenues
Leasing commissions	Point in time	$	641	$	460
Property and asset management fees	Over time		40		36
Sales commissions	Point in time		66		42
Development fees	Over time		—		1
Engineering services	Over time		17		21
Topic 606 Revenue			764		560
Out of Scope of Topic 606 revenue
Rental income			9,842		9,511
Total Out of Scope of Topic 606 revenue			9,842		9,511
Total Revenue		$	10,606	$	10,071

Leasing Operations

The Company’s retail leases generally have an initial lease term of approximately 10 to

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Broad Street Realty, Inc. 10-Q