Financial Data and Key Metrics Changes - The company reported same store revenue growth of 3.9% and NOI growth of 5.5% year over year, driven by stronger rent growth in the Washington Metro portfolio and favorable real estate tax appeals in Atlanta [15][16] - The annualized net debt to adjusted EBITDA was 5.6 times during the first quarter, with over 60% of total capacity available on the line of credit and no secured debt [16] Business Line Data and Key Metrics Changes - Same store multifamily occupancy averaged 94.8% during Q1, up 50 basis points year over year, with a 1.9% same store blended lease rate growth during the quarter [11] - The initial estimated blended rate growth for April is 2.6%, indicating a typical upswing heading into the spring leasing season [11] Market Data and Key Metrics Changes - In the Washington Metro area, annual supply peaked at 2.2% annual net inventory growth in Q1 2025, below the national average of 2.9%, with projections for a decline to 1.8% by Q4 2025 and further to 1.1% by Q4 2026 [7][8] - Northern Virginia's private sector job growth was two and a half times that of the broader Washington Metro Region over the past four years, positioning the company favorably [6] Company Strategy and Development Direction - The Board of Trustees is overseeing a formal evaluation of strategic alternatives to maximize shareholder value, initiated from a position of strength [9][10] - The company is focused on enhancing its multifamily REIT performance and profitability while navigating the current volatility in capital markets [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of the portfolio and business, despite a fluctuating macro environment, and highlighted the ongoing success of the value-add renovation pipeline [16] - The company anticipates that improvement in bad debt will contribute more significantly to revenue growth in 2025 than initially expected [15] Other Important Information - The company completed 88 renovations during the quarter with an ROI of approximately 18%, aiming to complete over 500 full renovations in 2025 [13] - The managed WiFi program is expected to generate additional NOI of $600,000 to $800,000 in 2025 from the initial seven communities, with further upside anticipated from future phases [14] Q&A Session Summary Question: Insights on the multifamily transaction market in DC - Management noted that the living sector is performing well with continued capital flows and active lenders, indicating a competitive environment with cap rates ranging from 4.25% to 5.25% depending on the buyer profile [19][22] Question: Addition of Ron to the Board and its timing - The strategic review process was initiated last year, and Ron's addition to the Board was part of a refreshment process aimed at maximizing shareholder value [23][24] Question: Acceleration of the WiFi initiative income - The rollout of the Managed WiFi initiative has progressed faster than anticipated, allowing for quicker income generation as the spring leasing season approaches [28][29]

Core Viewpoint - Elme (ELME) reported quarterly funds from operations (FFO) of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, marking a 4.35% surprise [1] Financial Performance - The company achieved revenues of $61.49 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.61% and showing an increase from $59.51 million year-over-year [2] - Over the last four quarters, Elme has exceeded consensus revenue estimates three times [2] Stock Performance and Outlook - Elme shares have increased approximately 2% since the beginning of the year, contrasting with the S&P 500's decline of -5.3% [3] - The future performance of Elme's stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [3][4] Estimate Revisions - The current consensus FFO estimate for the upcoming quarter is $0.24 on revenues of $61.6 million, and for the current fiscal year, it is $0.95 on revenues of $247.63 million [7] - The estimate revisions trend for Elme is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The REIT and Equity Trust - Residential industry, to which Elme belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Portfolio Overview - Elme Communities owns approximately 9,400 apartment homes, with 75% located in the Washington Metro area and 25% in the Atlanta Metro area[18] - The company anticipates an operational upside of $2.4 million to $2.6 million in 2025[18] - 79% of the apartment portfolio is classified as B Value-Add, while 10% is Class B, 7% is Class A-, and 4% is Class A[18] Financial Performance and Guidance - Elme Communities projects Core FFO per diluted share to be between $0.91 and $0.97 in 2025[47] - Same-store multifamily revenue growth is expected to range from 2.1% to 3.6% in 2025[47] - Same-store multifamily NOI growth is projected to be between 1.5% and 3.5%[47] - Other same-store NOI, consisting of Watergate 600, is expected to range from $11.5 million to $12.25 million[47] Market Dynamics and Strategy - Elme submarkets are expected to have a lower annual net inventory growth of 2.1% compared to the US average of 2.9% and Sunbelt markets average of 3.8%[56,58] - The company targets Class B rents priced below 95% of the market median to minimize competition with new deliveries in both Washington and Atlanta metros[85,88] - Elme's renovation pipeline includes approximately 3,000 units, with an expected spend of ~$8.6 million in 2025 and an ROI of approximately 18% in Q1 2025[40,44]

First Quarter 2025 Results & Outlook [Financial and Operational Highlights](index=2&type=section&id=Financial%20and%20Operational%20Highlights) Elme Communities reported a net loss of $0.05 per diluted share, with Core FFO per diluted share increasing to $0.24, driven by strong operational performance Q1 2025 Financial Results per Diluted Share | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss per diluted share | $(0.05) | $(0.04) | | Core FFO per diluted share | $0.24 | $0.23 | - The CEO noted that while federal workforce reductions are a factor, the company's focus on mid-market rents and its strong presence in Northern Virginia are expected to support resilient performance[4](index=4&type=chunk) - Same-store multifamily NOI increased by **5.5%** year-over-year[5](index=5&type=chunk) - Same-store multifamily Average Occupancy rose by **0.5%** to **94.8%** year-over-year[5](index=5&type=chunk) - Effective blended Lease Rate Growth was **1.9%**, driven by **5.0%** growth on renewals, offset by a **(2.0)%** decline on new leases[5](index=5&type=chunk) - The company maintained a strong balance sheet with **$324 million** in available liquidity and an annualized Net Debt to Adjusted EBITDA ratio of **5.6x**[5](index=5&type=chunk) [Strategic Review & 2025 Guidance](index=3&type=section&id=Strategic%20Review%20%26%202025%20Guidance) The Board initiated a strategic review to maximize shareholder value, while the company reiterated its full-year 2025 Core FFO per diluted share guidance - The Board of Trustees has initiated a formal review to evaluate strategic alternatives for the company, which is currently ongoing[6](index=6&type=chunk) Full Year 2025 Guidance (in millions) | Metric | Guidance Range | | :--- | :--- | | **Core FFO per diluted share** | **$0.91 - $0.97** | | Same-store multifamily Revenue growth | 2.1% - 3.6% | | Same-store multifamily Expense growth | 2.75% - 4.25% | | Same-store multifamily NOI growth | 1.5% - 3.5% | | Other same-store NOI (Watergate 600) | $11.5 - $12.25 | | G&A, net of core adjustments | $25.25 - $26.25 | | Interest expense | $37.35 - $38.35 | 2025 Guidance Reconciliation: Net Loss to Core FFO per Share | | Low | High | | :--- | :--- | :--- | | Net loss per diluted share | $(0.17) | $(0.11) | | Real estate depreciation and amortization | 1.05 | 1.05 | | NAREIT FFO per diluted share | 0.88 | 0.94 | | Core adjustments | 0.03 | 0.03 | | **Core FFO per diluted share** | **$0.91** | **$0.97** | [Dividends](index=4&type=section&id=Dividends) Elme Communities declared a quarterly dividend of $0.18 per share, payable on July 3, 2025, to shareholders of record as of June 17, 2025 - The Board of Trustees declared a quarterly dividend of **$0.18 per share**[11](index=11&type=chunk) - The dividend will be paid on July 3, 2025, to shareholders of record on June 17, 2025[11](index=11&type=chunk) Financial Statements and Key Data [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Elme reported Q1 2025 total real estate rental revenue of $61.5 million, with a net loss of $4.7 million, primarily due to higher general and administrative expenses Q1 2025 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Real estate rental revenue | $61,493 | $59,513 | | Total Expenses | $56,708 | $55,076 | | Real estate operating income | $4,785 | $4,437 | | Interest expense | $(9,460) | $(9,494) | | **Net loss** | **$(4,675)** | **$(3,647)** | Per Share Data | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss (Diluted) | $(0.05) | $(0.04) | | NAREIT FFO (Diluted) | $0.21 | $0.24 | | Dividends paid | $0.18 | $0.18 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, Elme's total assets were $1.83 billion, with total liabilities at $764.4 million and total equity at $1.06 billion Balance Sheet Highlights (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate held for investment, net | $1,778,889 | $1,796,014 | | Cash and cash equivalents | $6,396 | $6,144 | | **Total assets** | **$1,827,579** | **$1,845,762** | | Notes payable, net | $523,061 | $522,953 | | Line of credit | $182,000 | $176,000 | | **Total liabilities** | **$764,378** | **$763,684** | | **Total equity** | **$1,063,201** | **$1,082,078** | [Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)](index=10&type=section&id=Funds%20From%20Operations%20(FFO)%20and%20Adjusted%20Funds%20From%20Operations%20(AFFO)) In Q1 2025, NAREIT FFO was $18.6 million, while Core FFO increased to $21.6 million and Core AFFO reached $21.2 million Q1 2025 FFO Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(4,675) | $(3,647) | | Real estate depreciation and amortization | 23,239 | 24,943 | | **NAREIT FFO** | **18,564** | **21,296** | | Other non-operating expenses | 3,041 | — | | Gain on land easements | — | (1,410) | | **Core FFO** | **$21,605** | **$19,886** | Q1 2025 AFFO Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | NAREIT FFO | $18,564 | $21,296 | | Recurring capital improvements | (2,917) | (2,771) | | Other adjustments | 2,555 | 2,113 | | **AFFO** | **18,202** | **20,638** | | Other non-operating expenses | 3,041 | — | | Gain on land easements | — | (1,410) | | **Core AFFO** | **$21,243** | **$19,228** | Portfolio Analysis [Same-Store Multifamily Operating Results](index=20&type=section&id=Same-Store%20Multifamily%20Operating%20Results) Same-store multifamily NOI grew **5.5%** to **$36.5 million** in Q1 2025, driven by revenue growth and improved average occupancy of **94.8%** Q1 2025 Same-Store Multifamily Performance vs. Q1 2024 | Region | Revenue % Chg | Expense % Chg | NOI % Chg | Avg Occupancy % | Avg Rent % Chg | | :--- | :--- | :--- | :--- | :--- | :--- | | Virginia | 4.5% | 0.4% | 6.5% | 96.5% | 3.5% | | DC / Maryland | 2.0% | 2.2% | 1.9% | 94.9% | 1.9% | | Georgia | 3.6% | 2.4% | 4.6% | 90.6% | (4.4)% | | **Total** | **3.9%** | **1.2%** | **5.5%** | **94.8%** | **1.7%** | - Sequentially, total same-store NOI increased by **2.3%** from Q4 2024, largely due to a significant **11.2%** decrease in operating expenses in the Georgia portfolio[60](index=60&type=chunk) - Blended lease rate growth for the quarter was **1.9%**, composed of a **5.0%** increase on renewals and a **(2.0)%** decrease on new leases[57](index=57&type=chunk) [Same-Store Operating Expenses - Multifamily](index=22&type=section&id=Same-Store%20Operating%20Expenses%20-%20Multifamily) Total same-store operating expenses increased by **1.2%** year-over-year in Q1 2025, driven by controllable expenses but offset by lower real estate taxes Q1 2025 Same-Store Operating Expense Changes (YoY) (in thousands) | Expense Category | Q1 2025 | % Change vs Q1 2024 | | :--- | :--- | :--- | | Controllable operating expenses | $9,685 | 5.5% | | Real estate taxes | $5,878 | (7.3)% | | Utilities | $3,747 | 4.6% | | Insurance | $1,236 | 3.7% | | **Total same-store operating expenses** | **$20,546** | **1.2%** | [Schedule of Properties](index=23&type=section&id=Schedule%20of%20Properties) Elme's portfolio includes 9,374 multifamily homes with **94.8%** average occupancy and the Watergate 600 office property, which is **82.3%** leased - The total multifamily portfolio comprises **9,374 apartment homes** with an average occupancy of **94.8%** for Q1 2025[65](index=65&type=chunk) - A fire at the Elme Marietta property on March 24, 2024, has left **24 units** unavailable. These units are expected to be back in service by the end of Q4[67](index=67&type=chunk) Office Property - Watergate 600 | Property | Net Rentable SF | Leased % | Ending Occupancy % | % of Total Portfolio NOI | | :--- | :--- | :--- | :--- | :--- | | Watergate 600 | 300,000 | 82.3% | 82.3% | 8% | Capital Analysis [Adjusted EBITDA](index=26&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 increased to **$31.3 million**, primarily driven by higher operating income and adjustments for non-operating expenses Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(4,675) | $(3,647) | | Interest expense | 9,460 | 9,494 | | Real estate depreciation and amortization | 23,239 | 24,943 | | Other non-operating expenses | 3,041 | — | | Other adjustments | 199 | (1,299) | | **Adjusted EBITDA** | **$31,264** | **$29,491** | [Long Term Debt Analysis](index=27&type=section&id=Long%20Term%20Debt%20Analysis) As of March 31, 2025, Elme's total unsecured debt was **$705.1 million** with a **4.9%** weighted average interest rate and a well-staggered maturity profile Debt Composition as of March 31, 2025 (in thousands) | Debt Type | Balance Outstanding | Weighted Avg. Interest Rate | | :--- | :--- | :--- | | Fixed rate bonds | $398,212 | 4.5% | | Term loan | $124,849 | 5.8% | | Credit facility | $182,000 | 5.3% | | **Total** | **$705,061** | **4.9%** | Future Debt Maturities (in thousands) | Year | Total Debt | | :--- | :--- | | 2025 | $— | | 2026 | $125,000 | | 2027 | $— | | 2028 | $232,000 | | Thereafter | $350,000 | | **Total** | **$707,000** | - The company is in compliance with all its unsecured public and private debt covenants, with significant headroom on key metrics such as leverage and debt service coverage[84](index=84&type=chunk) [Capitalization and Dividend Payout Ratios](index=30&type=section&id=Capitalization%20and%20Dividend%20Payout%20Ratios) As of March 31, 2025, Elme's total market capitalization was **$2.24 billion**, with a debt to market capitalization ratio of **0.31:1** and a Core FFO dividend payout ratio of **75.0%** Market Capitalization as of March 31, 2025 (in thousands) | Metric | Value | | :--- | :--- | | Equity Market Capitalization | $1,533,932 | | Total Debt | $705,061 | | **Total Market Capitalization** | **$2,238,993** | | Total Debt to Market Capitalization | 0.31 : 1 | Q1 2025 Dividend Payout Ratios | Basis | Payout Ratio | | :--- | :--- | | Payout Ratio (Core FFO basis) | 75.0% | | Payout Ratio (Core AFFO basis) | 75.0% | Definitions [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like NAREIT FFO, Core FFO, AFFO, Core AFFO, NOI, and Adjusted EBITDA to clarify operating performance and dividend capacity - **NAREIT FFO:** Calculated as net income excluding gains/losses from property sales, real estate impairments, and real estate depreciation and amortization[33](index=33&type=chunk) - **Core FFO:** Adjusts NAREIT FFO for items not indicative of operating portfolio performance, such as gains/losses on debt extinguishment, acquisition-related expenses, and costs from the strategic review[32](index=32&type=chunk) - **NOI:** Defined as real estate rental revenue less direct real estate operating expenses, used for assessing property-level performance[35](index=35&type=chunk) [Other Definitions](index=13&type=section&id=Other%20Definitions) Key operational metrics defined include Average Occupancy, Lease Rate Growth, and Same-store Portfolio, providing clarity on performance analysis - **Average Occupancy:** Based on the average daily occupied apartment homes as a percentage of total apartment homes[37](index=37&type=chunk) - **Lease Rate Growth:** The average percentage change in rent for a new or renewed lease compared to the prior lease, with the 'blended' rate being a weighted average of new and renewal growth[41](index=41&type=chunk) - **Same-store Portfolio:** Includes properties owned for the entirety of the years being compared, excluding properties under development, redevelopment, or those recently acquired or sold[45](index=45&type=chunk)

Financial Results - Elme Communities reported a net loss per diluted share of $0.05 for Q1 2025, compared to a loss of $0.04 in Q1 2024 [2][21] - Core FFO per diluted share increased to $0.24 in Q1 2025 from $0.23 in Q1 2024 [2][21] Operational Highlights - Same-store multifamily NOI increased by 5.5% year-over-year, driven by higher rental revenue and successful property tax assessment appeals [7][8] - Average occupancy for the same-store portfolio rose to 94.8%, up 0.5% from the prior year [7][8] - Retention rate during the quarter was 62%, aligning with expectations [7] Balance Sheet - As of March 31, 2025, available liquidity was $324 million, consisting of cash and availability under the revolving credit facility [7] - The annualized Net Debt to Adjusted EBITDA ratio was 5.6x, indicating a strong balance sheet with only $125 million of debt maturing before 2028 [7] Strategic Review - The board of trustees initiated a formal review to evaluate strategic alternatives for maximizing shareholder value, with no set deadline for completion [6] 2025 Guidance - Elme expects Core FFO for 2025 to range from $0.91 to $0.97 per fully diluted share [9][10] - Same-store multifamily revenue growth is projected between 2.1% and 3.6%, with NOI growth expected to be between 1.5% and 3.5% [10] Dividends - Elme Communities paid a quarterly dividend of $0.18 per share on April 3, 2025, and announced another dividend of the same amount to be paid on July 3, 2025 [12]

Group 1 - Elme Communities will release its first quarter earnings results on May 1, 2025, after market close [1] - A conference call to discuss the earnings will take place on May 2, 2025, at 10:00 am ET, with a webcast presentation available [1] - The company operates approximately 9,400 apartment homes in the Washington, DC metro and Atlanta metro regions, along with about 300,000 square feet of commercial space [2] Group 2 - Elme Communities focuses on providing quality, affordable homes to middle-income renters, aiming to elevate their living experience [2] - The company is committed to building long-term value for shareholders by catering to a deep and underserved base of mid-market demand [2]

Group 1 - Elme Communities, previously known as Washington REIT, has undergone a significant transformation since April 2021, shifting its focus from retail and office properties to other asset classes [2] - The company is now positioned to offer sustainable portfolio income, diversification, and inflation hedging through its income-producing asset classes [1] Group 2 - The article emphasizes the importance of due diligence for investors, encouraging them to draw their own conclusions before making investment decisions [4][5]

Core Viewpoint - Elme Communities has appointed Ron D. Sturzenegger as an independent trustee to its Board of Trustees, enhancing the Board's expertise and commitment to shareholder value [1][3][5] Board Composition - Following the appointment of Mr. Sturzenegger, the Board now consists of eight trustees, with seven being independent [1][3] - The Board aims to regularly refresh its composition to maximize value for shareholders [3] Ron D. Sturzenegger's Background - Mr. Sturzenegger has over 30 years of experience in finance and real estate, previously serving as Managing Director and Global Head of Real Estate, Gaming and Lodging Investment Banking at Bank of America [2][7] - He currently holds positions on the Boards of several funds, including KBS REIT III and various StepStone Private Funds [2][7] Strategic Initiatives - Mr. Sturzenegger will serve on the transaction committee of the Board, which is overseeing a formal evaluation of strategic alternatives [3] - The Company has entered into a cooperation agreement with Argosy-Lionbridge Management, LLC, a shareholder, to enhance corporate governance practices [4][5] Corporate Governance - Elme Communities is opting out of the Maryland Unsolicited Takeover Act (MUTA) to improve its corporate governance [5] - The cooperation agreement includes customary standstill and voting provisions [5] Company Overview - Elme Communities is a multifamily real estate investment trust (REIT) that operates approximately 9,400 apartment homes and 300,000 square feet of commercial space in the Washington, DC and Atlanta metro areas [12]

Financial Data and Key Metrics Changes - The company announced a formal review to evaluate strategic alternatives due to shares trading at a discount to the estimated private market value [7][9] - Same-store blended lease rate growth averaged 1.3% in Q4 2024 and 1.8% in January 2025 [18] - Same-store occupancy averaged 95% during Q4 2024, up 20 basis points sequentially [19] Business Line Data and Key Metrics Changes - The company completed about 500 full renovations in 2024 at an average cost of $17,000 per unit, achieving an average renovation ROI of approximately 17% [20] - In 2025, the company expects to complete another 500 full renovations at similar costs, targeting a 17% ROI [20][21] Market Data and Key Metrics Changes - The Washington Metro area was a top-performing market in 2024, with solid demand trends and low net inventory ratios [14] - Elme submarkets are projected to face less supply pressure than the U.S. and Sunbelt markets, with average annual net inventory growth of 2.2% [16] Company Strategy and Development Direction - The company is focused on maximizing shareholder value through strategic reviews and operational initiatives [6][9] - The company aims to capture additional NOI growth from managed Wi-Fi initiatives, expecting $300,000 to $600,000 in 2025 from Phase 1 [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects of the Washington Metro portfolio, citing a highly skilled workforce and advanced technology infrastructure [15] - The company anticipates same-store multifamily revenue growth to range from 2.1% to 3.6% in 2025 [23] Other Important Information - The company has no debt maturing before 2028 and maintains a strong balance sheet with an annualized adjusted net debt to EBITDA of 5.7 times [27] - Non-controllable expenses are projected to grow by 2% to 3%, while controllable expenses are expected to grow between 4% and 5% [25] Q&A Session Summary Question: Impact of new administration on leasing or rents - Management noted that past government changes had significant impacts, but current growth is driven by the private sector, particularly in Northern Virginia [35][37] Question: Market cap rates for typical assets - Management indicated that core deals are seeing cap rates between 4.5% to 5%, with value-add deals around 5% to 5.5% [42][43] Question: Seasonal growth outlook - Management expects normal seasonal growth in the Washington D.C. area, with peak leasing during spring and summer [53] Question: Update on Watergate leasing prospects - Management is optimistic about leasing activity at Watergate and is in discussions with tenants for renewals [61][63] Question: Indicators of leasing decisions amid uncertainty - Management reported normal seasonal leasing trends without atypical impacts on traffic or leasing metrics [79] Question: Sequential growth rate in Atlanta - Management confirmed that half of the sequential growth in Atlanta was due to bad debt improvement, with the other half from business interruption insurance proceeds [82]

Capital Improvements and Sustainability - The company is committed to ongoing capital improvements to maintain and increase property value and income, with major renovations discussed in the Management's Discussion and Analysis section[30]. - In 2024, the company completed recertification of eight properties using the BREEAM In-Use Assessment, demonstrating its commitment to sustainable practices[32]. - The company aims for net zero carbon operation by 2050 and joined the U.S. Department of Energy Better Climate Challenge in 2023 to align greenhouse gas emission reduction goals[33]. Employee Development and Well-being - The company employs 255 individuals, with 188 in community management functions, reflecting its focus on internalizing management operations[41]. - The company supports employee growth through ongoing training and development opportunities, including financial support for industry-specific training[42]. - The company has implemented a wellness program that encourages employees to improve their physical, mental, and financial well-being[45]. - The company is committed to diversity, equity, inclusion, and accessibility, promoting an environment where all employees feel comfortable being their authentic selves[47]. Financial Risk Management - The principal financial market risk faced by the company is interest rate risk, primarily related to refinancing long-term fixed-rate obligations[247]. - The company uses interest rate swap arrangements to mitigate exposure to variability in future cash flows due to changes in interest rates[247]. - The company has a total unsecured fixed rate debt principal of $525 million, with interest payments totaling $104.842 million over the debt maturities[249]. - The interest rate on the unsecured fixed rate debt ranges from 4.1% to 5.7%, with an average rate of 4.7%[249]. - The company has $176 million in unsecured variable rate debt, with a variable interest rate of 5.3%[249]. - The company entered into interest rate swap arrangements to hedge against interest rate fluctuations, with a notional amount of $75 million at a fixed rate of 3.677%[250]. - As of December 31, 2024, the fair value of the interest rate swap contracts was $(913,000), compared to $1.234 million as of December 31, 2023[250]. - The company exercised a one-year extension option on a $125 million term loan, extending its maturity to January 10, 2026[249]. - The company aims to minimize credit risk by dealing with major, creditworthy financial institutions for its derivative instruments[249]. - The company’s debt obligations primarily support general corporate purposes, including real estate acquisitions and working capital needs[250]. - The company has two interest rate swaps effective from January 10, 2025, with fixed rates of 4.719% and 4.720%[250]. - The company monitors the credit ratings of counterparties to minimize credit risk concentration[249].