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What changed in Creative Media & Community Trust Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Creative Media & Community Trust Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+391 added−526 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-07)

Top changes in Creative Media & Community Trust Corp's 2025 10-K

391 paragraphs added · 526 removed · 319 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeProperty Concentration Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 22.9% of our annualized rental income for the year ended December 31, 2024. No other tenant accounted for greater than 10.0% of our annualized rental income for the year ended December 31, 2024.
Biggest changeIn addition, the hotel industry is cyclical and demand generally follows, on a lagged basis, key macroeconomic factors. Property Concentration Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 23.4% of our annualized rental income for the year ended December 31, 2025.
In addition, CIM Urban agreed to indemnify the Operator against losses, claims, damages or liabilities, and reimburse the Operator for its legal and other expenses, in each case incurred in connection with any action, proceeding or investigation arising out of or in connection with CIM Urban’s business or affairs, except to the extent such losses or expenses result from fraud, gross negligence or willful misconduct of, or a breach of the terms of the Investment Management Agreement by the Operator.
In addition, CIM Urban agreed to indemnify the Operator against losses, claims, damages or liabilities, and reimburse the Operator for its legal and other expenses, in each case incurred in connection with any action, proceeding or investigation arising out of or in connection with CIM Urban’s business or affairs, except to the extent 4 such losses or expenses result from fraud, gross negligence or willful misconduct of, or a breach of the terms of the Investment Management Agreement by the Operator.
We believe that these assets will provide greater returns than similar assets in other markets, as a result of the population growth, public commitment and significant private investment that characterize these areas. 2 Table of Contents Our investments in multifamily and creative office assets may take different forms, including direct equity or preferred investments, real estate development activities, side-by-side investments or co-investments with vehicles managed or owned by CIM Group and/or originating loans that are secured directly or indirectly by properties primarily located in qualified communities (“Qualified Communities”) that meet our strategy.
We believe that these assets will provide greater returns than similar assets in other markets, as a result of the population growth, public commitment and significant private investment that characterize these areas. 2 Our investments in multifamily and creative office assets may take different forms, including direct equity or preferred investments, real estate development activities, side-by-side investments or co-investments with vehicles managed or owned by CIM Group and/or originating loans that are secured directly or indirectly by properties primarily located in qualified communities (“Qualified Communities”) that meet our strategy.
Incentive Fee: An incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of the Company’s “Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows: (i) no Revised Incentive Fee in any quarter in which the Excess Core FFO is $0; (ii) 100% of any 8 Table of Contents Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375%; and (iii) 20% of any Excess Core FFO thereafter.
Incentive Fee: An incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of the Company’s “Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows: (i) no Revised Incentive Fee in any quarter in which the Excess Core FFO is $0; (ii) 100% of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375%; and (iii) 20% of any Excess Core FFO thereafter.
In the Corporate Governance section of our corporate website, we have also posted our Audit Committee Charter, as well as our Governance Principles.
In the Corporate Governance section of our corporate website, we have also posted our Audit Committee Charter, as well as our Governance Principles. 7
Our current reportable segments during the years ended December 31, 2024 and 2023 consist of three types of commercial real estate properties, namely office, hotel and multifamily, as well as a segment for our lending business.
Our current reportable segments during the years ended December 31, 2025 and 2024 consist of three types of commercial real estate properties, namely office, hotel and multifamily, as well as a segment for our lending business.
As of December 31, 2024, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties, and five of which we own through investments in Unconsolidated Joint Ventures.
As of December 31, 2025, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties, and five of which we own through investments in Unconsolidated Joint Ventures.
Other Services CIM Management, Inc. and certain of its affiliates (collectively, the “CIM Management Entities”), all affiliates of CIM REIT and CIM Group, provide property management, leasing, and development services to CIM Urban pursuant to various agreements.
Other Services From time to time, CIM Management, Inc. and certain of its affiliates (collectively, the “CIM Management Entities”), all affiliates of CIM REIT and CIM Group, provide property management, leasing, development and other services to CIM Urban pursuant to various other agreements.
Such services performed by the Administrator and its affiliates may include accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and ongoing support in connection with our registered public offering of our Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”) and Series D Preferred Stock, par value $0.001 per share (“Series D Preferred Stock” and, together with the Series A Preferred Stock and Series L Preferred Stock, “Preferred Stock”).
Such services performed by the Administrator and its affiliates may include accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and ongoing support in connection with our prior registered public offerings of our Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”) and Series D Preferred Stock, par value $0.001 per share (“Series D Preferred Stock” and, together with the Series A Preferred Stock, “Preferred Stock”).
Master Services Agreement CIM Service Provider, LLC, an affiliate of CIM Group (the “Administrator”) provides, or arranges for other service providers to provide, management and administration services (the “Base Services”) to us and our subsidiaries under the terms 7 Table of Contents of a master services agreement, dated as of March 11, 2014, as amended on May 11, 2020 (the “Master Services Agreement”).
Master Services Agreement CIM Service Provider, LLC, an affiliate of CIM Group (the “Administrator”) provides, or arranges for other service providers to provide, management and administration services (the “Base Services”) to us under the terms of a master services agreement, dated as of March 11, 2014, as amended on May 11, 2020 (the “Master Services Agreement”).
We have entered into the Master Services Agreement with the Administrator, an affiliate of CIM Group, pursuant to which the Administrator has agreed to provide, or arrange for other service providers to provide, management and administration services to us and our subsidiaries. Offices We are headquartered in Dallas, Texas.
We have entered into the Master Services Agreement with the Administrator, an affiliate of CIM Group, pursuant to which the Administrator has agreed to provide, or arrange for other service providers to provide, management and administration services to us and our subsidiaries. Offices We are headquartered in Los Angeles, California.
Our Unconsolidated Joint Ventures contain one office property, one multifamily site currently under development, two multifamily properties (one of which has been partially converted from office into multifamily units and is now classified as a multifamily property) and one commercial development site.
Our Unconsolidated Joint Ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now classified as a multifamily property) and one commercial development site.
On June 16, 2022, the Company entered into the Third Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital has been acting as the exclusive dealer manager for the Company’s public offering of its Series A1 Preferred Stock.
On June 16, 2022, the Company entered into the Third Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital acted as the exclusive dealer manager for the Company’s prior public offering of its Series A1 Preferred Stock.
For the year ended December 31, 2024, our office portfolio contributed approximately 43.8% of revenue from our four segments on a combined basis, our hotel segment contributed approximately 31.8%, our multifamily segment contributed approximately 15.7% and our lending segment contributed approximately 8.7%. Strategy We are a Maryland corporation and REIT.
For the year ended December 31, 2025, our office portfolio contributed approximately 43.1% of revenue from our four segments on a combined basis, our hotel segment contributed approximately 35.6%, our multifamily segment contributed approximately 13.6% and our lending segment contributed approximately 7.7%. Strategy We are a Maryland corporation and REIT.
Any such election by the Company will be irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver.
Any such election by the Company will be irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver. 5 The fees payable to the Operator and the Administrator are determined as follows under the Fee Waiver. 1.
As of December 31, 2024, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 70.6% occupied; our one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $135.90 for the year ended December 31, 2024 and our four multifamily properties were 81.7% occupied.
As of December 31, 2025, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 74.8% occupied; our one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $152.70 for the year ended December 31, 2025 and our five multifamily properties were 85.3% occupied.
Additionally, as of December 31, 2024, we had nine development sites (three of which were being used as parking lots).
Additionally, as of December 31, 2025, we had eight development sites (two of which were being used as parking lots).
Our portfolio of investments currently consists of premier multifamily, Class A and creative office real assets in vibrant and improving metropolitan communities throughout the United States. We also own one hotel in northern California and a lending platform that originates loans under the Small Business Administration (“SBA”) 7(a) loan program.
Our portfolio of investments currently consists of premier multifamily, Class A and creative office real assets in vibrant and improving metropolitan communities throughout the United States. We also own one hotel in northern California.
If we do incur material environmental liabilities in the future, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock (as defined in “Item 1A—Risk Factors”) could be materially adversely affected.
If we do incur material environmental liabilities in the future, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock (as defined in “Item 1A—Risk Factors”) could be materially adversely affected. 3 Americans with Disabilities Act of 1990 Under the Americans with Disabilities Act of 1990, as amended (the “ADA”), all public accommodations must meet federal requirements related to access and use by disabled persons.
As a result, in connection with our former, current or future ownership, operation, and development of real properties, or our role as a lender for loans secured directly or indirectly by real estate properties, we may be potentially liable for investigation and cleanup costs, penalties and damages under environmental laws.
For example, some laws impose liability for release of or exposure to asbestos-containing materials. As a result, in connection with our former, current or future ownership, operation, and development of real properties, we may be potentially liable for investigation and cleanup costs, penalties and damages under environmental laws.
The presence of, or contamination resulting from, any of these substances, or the failure to properly remediate them, may adversely affect our ability to sell or rent our property, to borrow using the property as collateral or create lender’s liability for us.
The presence of, or contamination resulting from, any of these substances, or the failure to properly remediate them, may adversely affect our ability to sell or rent our property, to borrow using the property as collateral. In addition, third parties exposed to hazardous or toxic substances may sue for personal injury damages and/or property damages.
Generally, our hotel revenues are greater in the first and second quarters than the third and fourth quarters. This seasonality can be expected to cause quarterly fluctuations in revenues, segment net operating income, net income and cash provided by operating activities. In addition, the hotel industry is cyclical and demand generally follows, on a lagged basis, key macroeconomic factors.
Seasonality Our revenues and expenses for our hotel property are subject to seasonality during the year. Generally, our hotel revenues are greater in the first and second quarters than the third and fourth quarters. This seasonality can be expected to cause quarterly fluctuations in revenues, segment net operating income, net income and cash provided by operating activities.
We believe that our relationship with CIM Group gives us a competitive advantage that allows us to operate more effectively in the markets in which we conduct our business.
We believe that our relationship with CIM Group gives us a competitive advantage that allows us to operate more effectively in the markets in which we conduct our business. CIM Urban Partnership Agreement Our subsidiary, CIM Urban Partners, L.P. (“CIM Urban”), is governed by CIM Urban’s partnership agreement (as amended and restated, the “CIM Urban Partnership Agreement”).
We seek to apply the expertise of CIM Group to the acquisition, development and operation of premier multifamily properties situated in vibrant communities throughout the United States.
Additionally, prior to the sale of our lending business in January 2026, we owned a lending platform that originated loans under the Small Business Administration (“SBA”) 7(a) loan program. We seek to apply the expertise of CIM Group to the acquisition, development and operation of premier multifamily properties situated in vibrant communities throughout the United States.
Human Capital We are operated by affiliates of CIM Group and, as of December 31, 2024, only have five employees. Four of such employees are in our lending segment while one employee spends a substantial portion of the time that he devotes to us on matters relating to the lending segment.
Four of such employees were in our lending segment while one employee spent a substantial portion of the time that he devoted to us on matters relating to the lending segment. As of the date of this Annual Report on Form 10-K, we have no employees.
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CIM Group Operations CIM Group believes that a vast majority of the risks associated with acquiring real estate are mitigated by accumulating local market knowledge of the community where the asset is located. As a result, CIM Group typically spends significant resources over a period of between six months and five years evaluating communities prior to making any acquisitions.
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As previously disclosed, we completed the sale of our lending business on January 21, 2026, and, as a result, our lending business will cease to be one of our reportable segments in future periods.
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The distinct districts that CIM Group identifies through this process as targets for acquisitions are referred to as “Qualified Communities.” Qualified Communities typically have dedicated resources to become, or are currently, vibrant communities where people can live, work, shop and be entertained, all within walking distance or close proximity to public transportation.
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CIM Overview Established in 1994, CIM Group Management, LLC (“CIM”) is a vertically integrated, community-focused real estate and infrastructure owner, operator, lender, and developer of real assets. Through CIM’s vertically integrated structure, CIM is able to leverage in-house expertise across the full life cycle of assets to drive value creation across the process.
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These areas, which include traditional downtown areas and suburban main streets, generally have high barriers to entry, high population density, positive population trends, a propensity for growth and support for investment. CIM Group believes that the critical mass of redevelopment in such Qualified Communities creates positive externalities, which enhance the value of real estate assets in the area.
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CIM has dedicated teams for sourcing/acquisition, credit analysis, development, financing, commercial leasing, onsite property management and distribution. These functions bring alignment of interests and deep expertise, allowing for disciplined business plan underwriting and effective risk management. CIM also seeks to maximize synergies across its vertically integrated platform.
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CIM Group targets acquisitions of diverse types of real estate assets, including retail, residential, office, parking, hotel, signage and mixed-use through CIM Group’s extensive network and its current opportunistic activities. CIM Group seeks to maximize the value of its holdings through active onsite property management and leasing.
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The three investment platforms, real estate, infrastructure, and credit leverage in-house expertise to create value within each investment.
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CIM Group has extensive in-house research, acquisition, credit analysis, development, finance, leasing and onsite property management capabilities, which leverage its deep understanding of metropolitan communities to position properties for multiple uses and to maximize operating income. As a vertically-integrated owner and operator, CIM Group has in-house onsite property management and leasing capabilities.
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Lending Segment Prior to the divestiture described in this paragraph, we were a national lender that primarily originated loans to small businesses.
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Property managers prepare annual capital and operating budgets and monthly operating reports, monitor results and oversee vendor services, maintenance and capital improvement schedules. In addition, they ensure that revenue objectives are met, lease terms are followed, receivables are collected, preventative maintenance programs are implemented, vendors are evaluated and expenses are controlled.
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As previously announced on November 12, 2025, the Company and First Western SBLC, LLC, a Florida limited liability company (formerly known as First Western SBLC, Inc.) and an indirect wholly owned subsidiary of the Company (“First Western”), entered into a membership interest purchase agreement, dated as of November 6, 2025 (the “Membership 6 Interest Purchase Agreement”), with PG FR Holding, LLC, a Delaware limited liability company (the “Buyer”).
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In addition, CIM Group’s real assets management committee (the “Real Assets Management Committee”) reviews and approves strategic decisions related to financing strategies and hold/sell analyses and performance tracking relative to the overall business plan.
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The closing (the “Closing”) of the transactions contemplated by the Membership Interest Purchase Agreement (the “Transactions”) occurred on January 21, 2026.
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CIM Group’s organizational structure provides for continuity through multi-disciplinary teams responsible for an asset from the time of the original investment recommendation, through the implementation of the asset’s business plan, and any repositions or ultimate disposition activities. CIM Group’s Investments and Development teams are separate groups that work very closely together on transactions requiring development or redevelopment.
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At the Closing, pursuant to the Membership Interest Purchase Agreement, and upon the terms and subject to the conditions therein, Buyer purchased from the Company all of the issued and outstanding equity interests of First Western SBLC, LLC for a purchase price of approximately $44.9 million (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), subject to adjustment.
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While the Investments team is ultimately responsible for acquisition analysis, both the Investments and Development teams perform due diligence, evaluate and determine underwriting assumptions and participate in the development management and ongoing asset management of CIM Group’s assets under development. The Development team is also responsible for the oversight and/or execution of securing entitlements and the development/repositioning process.
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At the Closing and upon giving effect to the payment of other debt, transaction expenses and other matters, the Transactions yielded net cash proceeds to the Company of approximately $31.2 million. Following the signing of the Membership Interest Purchase Agreement, the Company classified First Western as held for sale.
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In instances where CIM Group is not the lead developer, CIM Group’s in-house Development team continues to provide development and construction oversight to co-sponsors through a shadow team that oversees the progress of the development from beginning to end to ensure adherence to the budgets, schedules, quality and scope of the project in order to maintain CIM Group’s vision for the final product.
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No other tenant accounted for greater than 10.0% of our annualized rental income for the year ended December 31, 2025. Human Capital We are operated by affiliates of CIM Group and, as of December 31, 2025, only had five employees.
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Both the Investments and Development teams interact as a cohesive team when sourcing, underwriting, acquiring, executing and managing the business plan of an opportunistic acquisition. Competitive Advantages We believe that CIM Group’s experienced team and vertically-integrated and multi-disciplinary organization, coupled with its community-focused and disciplined real estate approach, results in a beneficial competitive advantage.
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Additionally, CIM Group’s community-focused strategy is complemented by a number of other competitive advantages including CIM Group’s prudent use of leverage, underwriting approach, disciplined capital deployment, and strong network of relationships.
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CIM Group’s competitive advantages include: 3 Table of Contents Vertically-Integrated Organization and Team CIM Group is managed by its senior management team, which includes all of its principals and its three founders, Shaul Kuba, Richard Ressler and Avraham Shemesh.
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CIM Group is vertically-integrated and organized into the following functional groups: Real Asset Services (which includes Development, Onsite Property Management, Commercial Leasing and Hospitality Services), Real Asset Management (which includes Investments, Capital Markets, Global Client Group) and Shared Services (which includes Human Resources, Compliance, Operations, Finance, Legal & Risk Management). CIM also has an internal audit team.
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To support CIM Group’s organic growth and related platforms, CIM Group has invested substantial time and resources in building a strong and integrated team of over 1,000 employees and more than 600 professionals as of December 31, 2024. Each of the CIM Group’s vertically-integrated departments is managed by a senior level executive.
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Department heads have been with CIM Group on average 15 or more years. In addition to developing a core team of principals and other senior level executives, CIM Group has proactively managed its growth through career development and mentoring at both the mid and junior staffing levels, and has hired ahead of its needs, thus ensuring appropriate management and staffing.
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As part of this initiative, CIM Group has developed a recruiting program that hires from business schools for its associate vice president positions in the Investments team annually. CIM Group seeks to grow organically and develop and train its investment professionals to progress into senior management roles.
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It has been CIM Group’s practice to grow talent within the company to promotion to principal, rather than to hire from the outside. As a result, CIM has a strong retention rate of senior investment team members who tend to have a long tenure, strong internal network and a track record of success within the organization.
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CIM Group leverages the deep operating and industry experience of its principals and professionals, as well as their extensive relationships, to source and execute opportunistic, value add, core, debt, ground-up development and infrastructure acquisitions.
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Each opportunity is typically overseen by a dedicated Investment team, including an oversight Principal, one Senior Investment Professional (vice president level and above), one associate vice president and one associate from the Investments team. The team is assembled based on the expertise needed for the particular transaction.
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Additionally, the team works closely with staff from other departments, such as Development, Onsite Property Management, Capital Markets, Commercial Leasing, Legal and Finance. The team oversees all aspects of the project from acquisition through disposition of the asset.
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The team conducts the underwriting and due diligence for the transaction, presents its findings to the Investment Committee for preliminary and final approvals and oversees the project from inception to disposition. As a result, all investment professionals work across a variety of Qualified Communities and CIM Group’s knowledge base is shared across its offices.
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Community Qualification Since inception, CIM Group’s unique community qualification process has served as the foundation for all of its strategies. CIM Group targets high barrier-to-entry markets and submarkets with high population density and applies rigorous research to qualify each submarket for potential acquisitions.
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Since 1994, CIM Group has qualified 135 communities in high barrier-to-entry markets and has deployed capital in 75 of the communities. The qualification process generally takes between six months and five years and is a critical component of our evaluation of potential acquisitions.
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CIM Group examines the characteristics of a market to determine whether the district justifies the extensive efforts undertaken in reviewing and making potential acquisitions in its Qualified Communities. Qualified Communities generally fall into one of two categories: (i) transitional metropolitan districts and (ii) well-established, thriving metropolitan areas (typically major central business districts(“CBDs”)).
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Once a community is qualified, CIM Group believes it continues to differentiate itself through the following business principles: • Product Non-Specific —CIM Group has extensive experience owning and operating a diverse range of property types, including retail, residential, office, parking, hotel, signage and mixed-use , which gives CIM Group the ability to effectively execute and capitalize on its strategy.
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Successful acquisitions require selecting the right markets coupled with providing the right product. CIM Group's experience with multiple asset types does not predispose CIM Group to select certain asset types, but instead ensures that they deliver a product mix that is consistent with the market's requirements and needs.
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Additionally, there is a growing trend 4 Table of Contents towards developing mixed-use real estate properties in metropolitan markets which requires a diversified platform to successfully execute. • Community-Based Tenanting —CIM Group’s strategy focuses on the entire community and the best use of assets in that community.
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Owning a critical mass of key properties in an area better enables CIM Group to meet the co-tenancy needs of national retailers and office tenants and thus optimize the value of these real estate properties.
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CIM Group believes that its community perspective gives it a significant competitive advantage in attracting tenants to its retail, office and mixed-use properties and creating synergies between the different tenant types. • Local Market Leadership with North American Footprint —CIM Group maintains local market knowledge and relationships, along with a diversified North American presence, through its 135 Qualified Communities (thus, CIM Group has the flexibility to deploy capital in its Qualified Communities only when the market environment meets CIM Group’s underwriting standards).
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CIM Group does not need to acquire assets in a given community or product type at a specific time due to its broad proprietary pipeline of opportunities. • Deploying Capital Across the Capital Stack —CIM Group has extensive experience structuring transactions across the capital stack including equity, preferred equity, senior debt and mezzanine positions, giving it the flexibility to structure transactions in efficient and creative ways.
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Discipline CIM Group’s strategy relies on its sound business plan and value creation execution to produce returns, rather than financial engineering. CIM Group’s underwriting of its potential acquisitions is performed generally both on a leveraged and unleveraged basis. Additionally, with certain exceptions, CIM Group has generally not utilized recourse or cross-collateralized debt due to its conservative underwriting standards.
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CIM Group employs multiple underwriting scenarios when evaluating potential acquisition opportunities. CIM Group generally underwrites potential acquisitions utilizing long-term average exit capitalization rates for similar product types and long-term average interest rates. Where possible, these long-term averages cross multiple market cycles, thereby mitigating the risk of cyclical volatility.
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CIM Group’s “long-term average” underwriting is based on its belief, reinforced by its experience through multiple market cycles, that over the life of any given fund that it manages, such fund should be able to exit its holdings at long-term historical averages.
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CIM Group also underwrites a “current market case” scenario, which generally utilizes current submarket specific exit assumptions and interest rates, in order to reflect anticipated results under current market conditions. CIM Group believes that utilizing multiple underwriting scenarios enables CIM Group to assess potential returns relative to risk within a range of potential outcomes.
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Risk Management As part of its risk management strategy, CIM Group periodically evaluates our assets and actively manages the risks involved in our business strategies.
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CIM Group’s Investments and Portfolio Oversight teams share asset management responsibilities, setting the strategy for and monitoring the performance of our assets relative to market and industry benchmarks and internal underwriting assumptions using direct knowledge of local markets provided by CIM Group’s in-house onsite property management, and leasing professionals.
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In-house onsite property management capabilities include monthly and annual budgeting and reporting as well as vendor services management, property maintenance and capital expenditures management. Property management seeks to ensure that revenue objectives are met, lease terms are followed, receivables are collected, preventative maintenance programs are implemented, vendors are evaluated and expenses are controlled.
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The Real Assets Management Committee is responsible for overseeing the asset management of CIM’s assets. The Real Assets Management Committee reviews and approves strategic decisions related to financing strategies and hold/sell analyses and tracks performance relative to overall business plan execution.
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The Real Assets Management Committee is comprised of CIM’s founding principals, Mukya Porter (Principal, Chief Compliance Officer), Robert Dupree (Principal, Co-Head of Investments), Jason Schreiber (Principal, Co-Head of Investments) and is chaired by Richard Ressler. The Real Assets Management Committee meets monthly to review updates across the various strategies.
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In addition to reviewing specific property-level conditions and recommendations, the Real Assets Management Committee reviews real estate and related capital market 5 Table of Contents conditions, considers current market trends and monitors fund strategies and portfolio composition. See “Item 1C—Cybersecurity” for information on our cybersecurity risk management, strategy and governance.
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The Real Assets Management Committee acts by a majority vote of the members of the Real Assets Management Committee at any meeting at which a quorum (majority of members) is present. The size, composition, and policies of the Real Assets Management Committee may change from time to time.
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In addition, third parties exposed to hazardous or toxic substances may sue for personal injury damages and/or property damages. For example, some laws impose liability for release of or exposure to asbestos-containing materials.
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Americans with Disabilities Act of 1990 Under the Americans with Disabilities Act of 1990, as amended (the “ADA”), all public accommodations must meet federal requirements related to access and use by disabled persons.
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Overview and History of CIM Group CIM Group was founded in 1994 by Shaul Kuba, Richard Ressler and Avraham Shemesh and has approximately $30.2 billion of assets owned and operated across its vehicles as of September 30, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

156 edited+18 added−75 removed403 unchanged
Biggest changeOur charter contains restrictions on ownership and transfer of the Preferred Stock and Common Stock that are intended to assist us in maintaining our qualification as a REIT for federal income tax purposes as described in the risk factor “The share transfer and ownership restrictions applicable to REITs and contained in our charter may inhibit market activity in our shares of stock and restrict our business combination opportunities.” Additionally, the agreement governing the Series A Preferred Warrants provides that such Series A Preferred Warrants may not be exercised to the extent such exercise would result in the holder’s beneficial or constructive ownership of more than 6.25%, in number or value, whichever is more restrictive, of our outstanding shares of Common Stock immediately after giving effect to the issuance of such shares.
Biggest changeOur charter contains restrictions on ownership and transfer of the Preferred Stock and Common Stock that are intended to assist us in maintaining our qualification as a REIT for federal income tax purposes as described in the risk factor “The share 38 transfer and ownership restrictions applicable to REITs and contained in our charter may inhibit market activity in our shares of stock and restrict our business combination opportunities.” The terms of our Preferred Stock do not contain any financial covenants.
Unless full cumulative dividends on shares of our Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our Common Stock for any period.
Unless full cumulative dividends on shares of our Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our Common Stock for any period.
Any adverse developments in the economy or real estate markets in California, any decrease in demand for office and hotel space resulting from the California regulatory or business environments or any reduced need for apartment units resulting from increased relocation out of California could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Any adverse developments in the economy or real estate markets in California, any decrease in demand for office and hotel space resulting from the California regulatory or business environments or any reduced need for apartment units resulting from increased relocation out of California could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Any losses sustained as a result of our hedging transactions would be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Any losses sustained as a result of our hedging transactions would be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
If the property taxes we pay increase and if any such increase is not reimbursable under the terms of our lease, then our cash flows will be impacted, which in turn could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
If the property taxes we pay increase and if any such increase is not reimbursable under the terms of our lease, then our cash flows will be impacted, which in turn could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Accordingly, if we cannot service our indebtedness, we may have to take actions such as seeking additional equity, or delaying any strategic acquisitions and alliances or capital expenditures, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Accordingly, if we cannot service our indebtedness, we may have to take actions such as seeking additional equity, or delaying any strategic acquisitions and alliances or capital expenditures, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Our ability to dispose of properties on advantageous terms or at all depends on certain factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. We cannot predict the various market conditions affecting real estate assets which will exist at any particular time in the future.
Our ability to dispose of properties on advantageous terms or at all depends on certain factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of 23 our properties. We cannot predict the various market conditions affecting real estate assets which will exist at any particular time in the future.
Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made.
Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the 35 first year for which a REIT election is made.
If one or more of our properties or future properties are not in compliance with the ADA, we might be required to take remedial action, which would require us to incur additional costs to bring the property into compliance. Noncompliance with the ADA could also result in imposition of fines or an award of damages to private litigants.
If one or more of our properties or future properties are not in compliance with the 27 ADA, we might be required to take remedial action, which would require us to incur additional costs to bring the property into compliance. Noncompliance with the ADA could also result in imposition of fines or an award of damages to private litigants.
Gain recognized by a non-U.S. stockholder upon the sale or exchange of shares of our capital stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a “U.S. real property interest” (“USRPI”) under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”).
Gain recognized by a non-U.S. stockholder upon the sale or exchange of shares of our capital stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a “U.S. real property interest” (“USRPI”) under the 34 Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”).
The departure of any of these individuals, or of a significant number of the investment professionals or principals of CIM Group, could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
The departure of any of these individuals, or of a significant number of the investment professionals or principals of CIM Group, could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
If we incur substantial costs to comply with the ADA or any other regulatory requirements, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock could be materially adversely affected.
If we incur substantial costs to comply with the ADA or any other regulatory requirements, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock could be materially adversely affected.
If any property is not fully occupied or if rents are payable (or are being paid) in an amount that is insufficient to cover operating expenses that are our responsibility under the lease, we could be required to expend funds in excess of such rents with respect to that property for operating expenses.
If any property is not fully occupied or if rents are payable (or are being paid) in an amount that is insufficient to 24 cover operating expenses that are our responsibility under the lease, we could be required to expend funds in excess of such rents with respect to that property for operating expenses.
We must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If our projections are inaccurate or we pay too much for a property, our return on our assets could suffer.
We must rely on rental income and expense projections and estimates of the fair market value of property upon 25 completion of construction when agreeing upon a price at the time we acquire the property. If our projections are inaccurate or we pay too much for a property, our return on our assets could suffer.
Risks Related to Debt Financing • We have incurred significant indebtedness and may incur significant additional indebtedness on a consolidated basis. • We intend to rely in part on external sources of capital to fund future capital needs and, if we encounter difficulty in obtaining such capital, we may not be able to meet maturing obligations or make additional acquisitions. • Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions on our Common Stock or Preferred Stock. • We may not be able to generate sufficient cash flow to meet our debt service obligations. • Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions on our Common Stock or Preferred Stock.
Risks Related to Debt Financing • We have incurred significant indebtedness and may incur significant additional indebtedness on a consolidated basis. • We intend to rely in part on external sources of capital to fund future capital needs and, if we encounter difficulty in obtaining such capital, we may not be able to meet maturing obligations or make additional acquisitions. • Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions on our Preferred Stock or any renewed distributions on our Common Stock. • We may not be able to generate sufficient cash flow to meet our debt service obligations. • Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions on our Preferred Stock or any renewed distributions on our Common Stock.
For example, the spread of COVID-19 in the United States and the resulting restrictions on and cancellations of travel, meetings and social gatherings negatively impacted the operations of our hotel in Sacramento, California in 2021 and part of 2022. The seasonality of the lodging industry may cause quarterly fluctuations in our revenues.
For example, the spread of COVID-19 in the United States and the resulting restrictions on and cancellations of travel, meetings and social gatherings negatively impacted the operations of our hotel in Sacramento, California in 2020, 2021 and part of 2022. The seasonality of the lodging industry may cause quarterly fluctuations in our revenues.
Our stockholders are urged to consult with their tax advisors with respect to the impact of recent legislation on their investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares or on our ability to continue to qualify as a REIT.
Our stockholders are urged to consult with their tax advisors with respect to the impact of recent legislation on their investment in 33 our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares or on our ability to continue to qualify as a REIT.
The departure of any of these officers or key personnel could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
The departure of any of these officers or key personnel could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
The amount of cash available for distributions is affected by many factors, including the performance of our existing assets, including the selection of tenants and the amount of rental income, our operating expense levels, opportunities for acquisition identified by our Operator, the availability of financing arrangements as well as many other variables.
The amount of cash available for distributions is affected by many factors, including the performance of our existing assets, including the selection of tenants and the amount of rental income, our operating expense 40 levels, opportunities for acquisition identified by our Operator, the availability of financing arrangements as well as many other variables.
Any shortfall resulting from the bankruptcy of one or more of our tenants could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Any shortfall resulting from the bankruptcy of one or more of our tenants could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
As a result of any of the foregoing factors, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock may be materially adversely affected.
As a result of any of the foregoing factors, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock may be materially adversely affected.
If interest rates are high when we desire to mortgage our assets or when existing loans come due and the assets need to be refinanced, we may not be able to, or may choose not to, finance the assets and we would be required to use cash to purchase or repay outstanding obligations.
If interest rates are high when we desire to 30 mortgage our assets or when existing loans come due and the assets need to be refinanced, we may not be able to, or may choose not to, finance the assets and we would be required to use cash to purchase or repay outstanding obligations.
Any of the factors described above could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Any of the factors described above could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Co-investments involve risks generally not otherwise present with an investment in other real estate assets, such as the following: • the risk that a co-owner may at any time have economic or business interests or goals that are or become inconsistent with our business interests or goals; • the risk that a co-owner may be in a position to take action contrary to our instructions or requests or contrary to our policies, objectives or status as a REIT; • the possibility that an individual co-owner might become insolvent or bankrupt, or otherwise default under the applicable mortgage loan financing documents, which may constitute an event of default under all of the applicable mortgage loan financing documents, result in a foreclosure and the loss of all or a substantial portion of the investment made by the co-owner, or allow the bankruptcy court to reject the agreements entered into by the co-owners owning interests in the property; 31 Table of Contents • the possibility that a co-owner might not have adequate liquid assets to make cash advances that may be required in order to fund operations, maintenance and other expenses related to the property, which could result in the loss of current or prospective tenants and may otherwise adversely affect the operation and maintenance of the property, and could cause a default under the applicable mortgage loan financing documents and may result in late charges, penalties and interest, and may lead to the exercise of foreclosure and other remedies by the lender; • the risk that a co-owner could breach agreements related to the property, which may cause a default under, and possibly result in personal liability in connection with, any mortgage loan financing documents applicable to the property or result in a foreclosure or otherwise adversely affect the property and the co-investment; • the risk that we could have limited control and rights, with management decisions made entirely by a third party; and • the possibility that we will not have the right to sell the property at a time that otherwise could result in the property being sold for its maximum value.
Co-investments involve risks generally not otherwise present with an investment in other real estate assets, such as the following: • the risk that a co-owner may at any time have economic or business interests or goals that are or become inconsistent with our business interests or goals; • the risk that a co-owner may be in a position to take action contrary to our instructions or requests or contrary to our policies, objectives or status as a REIT; 28 • the possibility that an individual co-owner might become insolvent or bankrupt, or otherwise default under the applicable mortgage loan financing documents, which may constitute an event of default under all of the applicable mortgage loan financing documents, result in a foreclosure and the loss of all or a substantial portion of the investment made by the co-owner, or allow the bankruptcy court to reject the agreements entered into by the co-owners owning interests in the property; • the possibility that a co-owner might not have adequate liquid assets to make cash advances that may be required in order to fund operations, maintenance and other expenses related to the property, which could result in the loss of current or prospective tenants and may otherwise adversely affect the operation and maintenance of the property, and could cause a default under the applicable mortgage loan financing documents and may result in late charges, penalties and interest, and may lead to the exercise of foreclosure and other remedies by the lender; • the risk that a co-owner could breach agreements related to the property, which may cause a default under, and possibly result in personal liability in connection with, any mortgage loan financing documents applicable to the property or result in a foreclosure or otherwise adversely affect the property and the co-investment; • the risk that we could have limited control and rights, with management decisions made entirely by a third party; and • the possibility that we will not have the right to sell the property at a time that otherwise could result in the property being sold for its maximum value.
If any one of these events occurs, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock may be materially adversely affected.
If any one of these events occurs, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock may be materially adversely affected.
The rights of the holders of shares of our Common Stock upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company also rank junior to the rights of the holders of our Preferred Stock. We have the option to redeem shares of Preferred Stock under certain circumstances without the consent of their holders.
The rights of the holders of shares of our Common Stock upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company also rank junior to the rights of the holders of our Preferred Stock. 37 We have the option to redeem shares of Preferred Stock under certain circumstances without the consent of their holders.
If we are delisted from Nasdaq and we are not able to list our Common Stock on another exchange, our Common Stock may be quoted on the OTC Markets or on the “pink sheets.” As a result, we could face significant adverse consequences including, among others: • a limited availability of market quotations for our securities; • a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; 48 Table of Contents • a limited amount of news and little or no analyst coverage of our Company; • we would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; • a decreased ability to issue additional securities or obtain additional financing in the future; and • limit our ability to redeem shares of our Preferred Stock in Common Stock Item 1B.
If we are delisted from Nasdaq and we are not able to list our Common Stock on another exchange, our Common Stock may be quoted on the OTC Markets or on the “pink sheets.” As a result, we could face significant adverse consequences including, among others: • a limited availability of market quotations for our securities; • a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and little or no analyst coverage of our Company; • we would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; • a decreased ability to issue additional securities or obtain additional financing in the future; and • limit our ability to redeem shares of our Preferred Stock in Common Stock Item 1B.
If we cannot obtain additional funding for our long-term liquidity needs, our assets may generate lower cash flow or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so and could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
If we cannot obtain additional funding for our long-term liquidity needs, our assets may generate lower cash flow or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so and could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
These events include, but are not limited to: • adverse changes in economic and socioeconomic conditions (including as a result of the emergence of any pandemic); • vacancies or our inability to rent space on favorable terms; • adverse changes in financial conditions of buyers, sellers and tenants of properties; • inability to collect rent from tenants; • competition from real estate investors with significant capital, including but not limited to real estate operating companies, publicly-traded REITs and institutional investment funds; • reductions in the level of demand for office and hotel space and changes in the relative popularity of properties; • increases in the supply of office and hotel space; • fluctuations in interest rates and the availability of credit, which could adversely affect our ability, or the ability of buyers and tenants of properties, to obtain financing on favorable terms or at all; • dependence on third parties to provide leasing, brokerage, onsite property management and other services with respect to certain of our assets; • increases in expenses, including insurance costs, labor costs, utility prices, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies, and our inability to pass on some or all of these increases to our tenants; and 21 Table of Contents • changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning, real estate tax, federal and state laws, governmental fiscal policies and the ADA.
These events include, but are not limited to: • adverse changes in economic and socioeconomic conditions (including as a result of the emergence of any pandemic); • vacancies or our inability to rent space on favorable terms; • adverse changes in financial conditions of buyers, sellers and tenants of properties; • inability to collect rent from tenants; • competition from real estate investors with significant capital, including but not limited to real estate operating companies, publicly-traded REITs and institutional investment funds; • reductions in the level of demand for office and hotel space and changes in the relative popularity of properties; • increases in the supply of office and hotel space; • fluctuations in interest rates and the availability of credit, which could adversely affect our ability, or the ability of buyers and tenants of properties, to obtain financing on favorable terms or at all; • dependence on third parties to provide leasing, brokerage, onsite property management and other services with respect to certain of our assets; • increases in expenses, including insurance costs, labor costs, utility prices, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies, and our inability to pass on some or all of these increases to our tenants; and 18 • changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning, real estate tax, federal and state laws, governmental fiscal policies and the ADA.
In the event that a tenant occupying a significant portion of one or more of our properties or whose rental income represents a significant portion of the rental revenue at such property or properties were to experience financial weakness or file bankruptcy, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
In the event that a tenant occupying a significant portion of one or more of our properties or whose rental income represents a significant portion of the rental revenue at such property or properties were to experience financial weakness or file bankruptcy, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Because our Board of Directors has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any class or series of preferred stock preferences, powers, and rights senior to the rights of holders of our Preferred Stock or Common Stock.
Because our Board of Directors has the power to establish the preferences and rights of each 39 class or series of preferred stock, it may afford the holders of any class or series of preferred stock preferences, powers, and rights senior to the rights of holders of our Preferred Stock or Common Stock.
If we are subject to below-market lease rates on a significant number of our properties pursuant to long-term leases and our operating and other expenses are increasing faster than anticipated, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock could be materially adversely affected.
If we are subject to below-market lease rates on a significant number of our properties pursuant to long-term leases and our operating and other expenses are increasing faster than anticipated, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock could be materially adversely affected.
We are dependent on the California real estate market and economy, and are therefore susceptible to risks of events in the California market that could adversely affect our business, such as adverse market conditions, changes in local laws or regulations and natural disasters. • Tenant concentration increases the risk that cash flow could be interrupted. • If a major tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which could have a material adverse effect on our financial condition and ability to pay distributions on our Common Stock or Preferred Stock. • We may be unable to renew leases or lease vacant office space. 11 Table of Contents • A significant portion of our net operating income is expected to come from our hotel and, as a result, our operating performance is subject to the cyclical nature of the lodging industry. • The outbreak of a highly infectious, contagious or widespread disease, such as COVID-19, can result (and has resulted) in reductions in travel and adversely affect demand for our hotel. • We may be unable to renew leases or release apartment units as leases expire, or the terms of renewals or new leases may be less favorable than current leases. • Income from our long-term leases at our office properties is an important source of our cash flow from operations and is subject to risks related to increases in expenses and inflation. • Real estate-related taxes may increase, and if these increases are not passed on to tenants, our income will be reduced. • We face risks associated with development, redevelopment, repositioning or construction of real estate projects. • Inflation may adversely affect our real estate operations. • Supply chain disruption and increased costs in labor and materials may adversely affect our real estate operations. • Our real estate business is subject to risks from climate change.
We are dependent on the California real estate market and economy, and are therefore susceptible to risks of events in 8 the California market that could adversely affect our business, such as adverse market conditions, changes in local laws or regulations and natural disasters. • Tenant concentration increases the risk that cash flow could be interrupted. • If a major tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which could have a material adverse effect on our financial condition and ability to pay distributions on our Preferred Stock or any renewed distributions on our Common Stock. • We may be unable to renew leases or lease vacant office space. • A significant portion of our net operating income is expected to come from our hotel and, as a result, our operating performance is subject to the cyclical nature of the lodging industry. • The outbreak of a highly infectious, contagious or widespread disease, such as COVID-19, can result (and has resulted) in reductions in travel and adversely affect demand for our hotel. • We may be unable to renew leases or release apartment units as leases expire, or the terms of renewals or new leases may be less favorable than current leases. • Income from our long-term leases at our office properties is an important source of our cash flow from operations and is subject to risks related to increases in expenses and inflation. • Real estate-related taxes may increase, and if these increases are not passed on to tenants, our income will be reduced. • We face risks associated with development, redevelopment, repositioning or construction of real estate projects. • Inflation may adversely affect our real estate operations. • Supply chain disruption and increased costs in labor and materials may adversely affect our real estate operations. • Our real estate business is subject to risks from climate change.
Any such corporate tax liability could be substantial and would reduce our cash available for, among other things, our operations and distributions on our Common Stock or Preferred Stock.
Any such corporate tax liability could be substantial and would reduce our cash available for, among other things, our operations and distributions on our Preferred Stock or or any renewed distributions on our Common Stock.
Under applicable Maryland law, a corporation may redeem, or pay distributions on, stock as long as, after giving effect to the redemption or distribution, the corporation is able to pay its debts as they become due in the usual course (the equity solvency test) and its total assets exceed the sum of its total liabilities plus, unless its charter permits otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the redemption or distribution, to satisfy the preferential 44 Table of Contents rights upon dissolution of stockholders when preferential rights on dissolution are superior to those whose stock is being redeemed or on which the distributions are being paid (the balance sheet solvency test).
Under applicable Maryland law, a corporation may redeem, or pay distributions on, stock as long as, after giving effect to the redemption or distribution, the corporation is able to pay its debts as they become due in the usual course (the equity solvency test) and its total assets exceed the sum of its total liabilities plus, unless its charter permits otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the redemption or distribution, to satisfy the preferential rights upon dissolution of stockholders when preferential rights on dissolution are superior to those whose stock is being redeemed or on which the distributions are being paid (the balance sheet solvency test).
If we are unsuccessful in expanding into new real estate activities or our changes in strategies or future deployment of our capital turn out to be unsuccessful, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
If we are unsuccessful in expanding into new real estate activities or our changes in strategies or future deployment of our capital turn out to be unsuccessful, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
If we fail to qualify as a REIT, we could face serious tax consequences that could substantially reduce our funds available for payment of distributions on our Common Stock or Preferred Stock for each of the years involved because: • we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates; • we also could be subject to increased state and local taxes; and • unless we are entitled to relief under statutory provisions, we could not elect to be subject to be taxed as a REIT for four taxable years following the year during which we are disqualified.
If we fail to qualify as a REIT, we could face serious tax consequences that could substantially reduce our funds available for payment of distributions on our Preferred Stock or any renewed distributions on our Common Stock for each of the years involved because: 32 • we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates; • we also could be subject to increased state and local taxes; and • unless we are entitled to relief under statutory provisions, we could not elect to be subject to be taxed as a REIT for four taxable years following the year during which we are disqualified.
Inflation has caused and will likely continue to cause our construction costs, maintenances costs, operating and general and administrative expenses and interest expenses to rise, which in turn could materially adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Inflation has caused and will likely continue to cause our construction costs, maintenances costs, operating and general and administrative expenses and interest expenses to rise, which in turn could materially adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
As a result, increases in interest rates will increase the amounts payable under such indebtedness, which will reduce our operating cash flows and could materially adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
As a result, increases in interest rates will increase the amounts payable under such indebtedness, which will reduce our operating cash flows and could materially adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Risk Factors This section sets forth certain factors that make an investment in our Company speculative or risky, including the following: Risks Related to Our Business • Uninsured losses or losses in excess of our insurance coverage could materially adversely affect our financial condition and cash flows, and there can be no assurance as to future costs and the scope of coverage that may be available under insurance policies. 10 Table of Contents • Cybersecurity risks and cybersecurity incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
Risk Factors This section sets forth certain factors that make an investment in our Company speculative or risky, including the following: Risks Related to Our Business • Uninsured losses or losses in excess of our insurance coverage could materially adversely affect our financial condition and cash flows, and there can be no assurance as to future costs and the scope of coverage that may be available under insurance policies. • Cybersecurity risks and cybersecurity incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
The incurrence of substantial outstanding indebtedness, and the limitations imposed by our debt agreements, could have significant other adverse consequences, including the following: 32 Table of Contents • our cash flows may be insufficient to meet our required principal and interest payments; • we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our liquidity for acquisitions or operations; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our existing indebtedness; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms; • we may violate restrictive covenants in our debt documents, which would entitle the lenders to accelerate our debt obligations; • we may default on our obligations and the lenders or mortgagees may foreclose on our properties and take possession of any collateral that secures their loans; and • our default under any of our indebtedness with cross-default provisions could result in a default on other indebtedness.
The incurrence 29 of substantial outstanding indebtedness, and the limitations imposed by our debt agreements, could have significant other adverse consequences, including the following: • our cash flows may be insufficient to meet our required principal and interest payments; • we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our liquidity for acquisitions or operations; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our existing indebtedness; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms; • we may violate restrictive covenants in our debt documents, which would entitle the lenders to accelerate our debt obligations; • we may default on our obligations and the lenders or mortgagees may foreclose on our properties and take possession of any collateral that secures their loans; and • our default under any of our indebtedness with cross-default provisions could result in a default on other indebtedness.
The decisions of the Administrator and the Operator could therefore result in losses or returns that are substantially below our expectations, which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
The decisions of the Administrator and the Operator could therefore result in losses or returns that are substantially below our expectations, which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
No assurances can be given that the capital and credit market conditions will not have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
No assurances can be given that the capital and credit market conditions will not have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
An adverse change in lodging fundamentals could result in returns that are substantially below our expectations or result in losses, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
An adverse change in lodging fundamentals could result in returns that are substantially below our expectations or result in losses, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Accordingly, we may be unable to adjust our portfolio promptly in response to economic, market or other conditions, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Accordingly, we may be unable to adjust our portfolio promptly in response to economic, market or other conditions, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
If we are unable to lease properties on terms that require the tenants to pay all or some of the properties’ operating expenses, if our tenants fail to pay these expenses as required or if expenses we are required to pay exceed our expectations, we could have less funds available for future acquisitions or cash available for distributions on our Common Stock or Preferred Stock.
If we are unable to lease properties on terms that require the tenants to pay all or some of the properties’ operating expenses, if our tenants fail to pay these expenses as required or if expenses we are required to pay exceed our expectations, we could have less funds available for future acquisitions or cash available for distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions on our Common Stock or Preferred Stock. In connection with providing us financing, a lender could impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions on our Preferred Stock or any renewed distributions on our Common Stock. In connection with providing us financing, a lender could impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt.
Such delays, which may be caused by a number of factors, including competition in the market for the same real estate opportunities, may adversely affect our ability to pay distributions on our Common Stock or Preferred Stock and/or the value of their overall returns on investment in our securities.
Such delays, which may be caused by a number of factors, including competition in the market for the same real estate opportunities, may adversely affect our ability to pay distributions on our Preferred Stock or any renewed distributions on our Common Stock and/or the value of their overall returns on investment in our securities.
This may result in us having to expend significant funds, which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
This may result in us having to expend significant funds, which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
If the magnitude of such unknown liabilities is high, either singly or in the aggregate, it could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
If the magnitude of such unknown liabilities is high, either singly or in the aggregate, it could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
As a result, we may have to enter into short-term borrowings in certain quarters in order to make distributions on our Common Stock or Preferred Stock, and we can provide no assurances that such borrowings will be available on favorable terms, if at all.
As a result, we may have to enter into short-term borrowings in certain quarters in order to make distributions on our Preferred Stock or any renewed distributions on our Common Stock, and we can provide no assurances that such borrowings will be available on favorable terms, if at all.
If we are unsuccessful in expanding into new markets, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
If we are unsuccessful in expanding into new markets, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
A cybersecurity incident involving our Operator’s or Administrator’s IT networks and related systems could materially adversely impact our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
A cybersecurity incident involving our Operator’s or Administrator’s IT networks and related systems could materially adversely impact our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
If we cannot operate our properties so as to meet our financial expectations, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock may be negatively impacted.
If we cannot operate our properties so as to meet our financial expectations, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock may be negatively impacted.
Consequently, volatility in our financial performance resulting from the seasonality of the lodging industry could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Consequently, volatility in our financial performance resulting from the seasonality of the lodging industry could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
As a result of these factors, our failure to qualify as a REIT could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
As a result of these factors, our failure to qualify as a REIT could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Tax increases not passed through to tenants could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Tax increases not passed through to tenants could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Any federal, state or local taxes we pay will reduce our cash available for distribution on our Common Stock or Preferred Stock. Moreover, as discussed above, our TRSs are generally subject to corporate income taxes and excise taxes in certain cases.
Any federal, state or local taxes we pay will reduce our cash available for distribution on our Preferred Stock or any renewed distributions on our Common Stock. Moreover, as discussed above, our TRSs are generally subject to corporate income taxes and excise taxes in certain cases.
Compliance with the ADA and fire, safety and other regulations may require us to make unanticipated expenditures and/or increase our operating costs that could significantly reduce the cash available for distributions on our Common Stock or Preferred Stock.
Compliance with the ADA and fire, safety and other regulations may require us to make unanticipated expenditures and/or increase our operating costs that could significantly reduce the cash available for distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Our Board of Directors is authorized, without stockholder approval, to cause us to issue additional shares of Common Stock or to raise capital through the issuance of shares of preferred stock and equity or debt securities convertible into Common Stock, preferred stock, options, warrants and other rights, on such terms and for such consideration as our Board of Directors in 45 Table of Contents its sole discretion may determine.
Our Board of Directors is authorized, without stockholder approval, to cause us to issue additional shares of Common Stock or to raise capital through the issuance of shares of preferred stock and equity or debt securities convertible into Common Stock, preferred stock, options, warrants and other rights, on such terms and for such consideration as our Board of Directors in its sole discretion may determine.
With the approval of our Board of Directors, we may provide such indemnification and advance for expenses to any individual who served a predecessor of the Company in any of the capacities described above and any employee or agent of the Company or a predecessor of the Company. 20 Table of Contents We also are permitted to purchase and we currently maintain insurance or provide similar protection on behalf of any directors, officers, employees and agents, including our Administrator and its affiliates, against any liability asserted which was incurred in any such capacity with us or arising out of such status.
With the approval of our Board of Directors, we may provide such indemnification and advance for expenses to any individual who served a predecessor of the Company in any of the capacities described above and any employee or agent of the Company or a predecessor of the Company. 17 We also are permitted to purchase and we currently maintain insurance or provide similar protection on behalf of any directors, officers, employees and agents, including our Administrator and its affiliates, against any liability asserted which was incurred in any such capacity with us or arising out of such status.
Their loyalties to other affiliated entities could result in actions or inactions that are detrimental to our business, strategy and opportunities. 17 Table of Contents The business of CIM Urban is managed by Urban GP Administrator and we agreed in the Master Services Agreement to appoint an affiliate of CIM Group as the manager of the general partner of CIM Urban, and the general partner of CIM Urban may only be removed from such position under limited circumstances as provided in the CIM Urban Partnership Agreement .
Their loyalties to other affiliated entities could result in actions or inactions that are detrimental to our business, strategy and opportunities. 14 The business of CIM Urban is managed by Urban GP Administrator and we agreed in the Master Services Agreement to appoint an affiliate of CIM Group as the manager of the general partner of CIM Urban, and the general partner of CIM Urban may only be removed from such position under limited circumstances as provided in the CIM Urban Partnership Agreement .
Our properties are subject to increases in tax rates, utility costs, insurance costs, repairs and maintenance costs, administrative costs and other operating and ownership expenses. Our property leases may not require the tenants to pay all or a portion of these expenses, in which event we may be responsible for these 27 Table of Contents costs.
Our properties are subject to increases in tax rates, utility costs, insurance costs, repairs and maintenance costs, administrative costs and other operating and ownership expenses. Our property leases may not require the tenants to pay all or a portion of these expenses, in which event we may be responsible for these costs.
Accordingly, our Operator, Administrator and their respective affiliates may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. 14 Table of Contents If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results.
Accordingly, our Operator, Administrator and their respective affiliates may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. 11 If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results.
Any failure to maintain effective internal controls, or implement any necessary improvements in a timely manner, could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock, or cause us to not meet our reporting obligations, which could affect our ability to maintain our listing of Common Stock on Nasdaq and the TASE.
Any failure to maintain effective internal controls, or implement any necessary improvements in a timely manner, could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock, or cause us to not meet our reporting obligations, which could affect our ability to maintain our listing of Common Stock on Nasdaq.
Payments of principal and interest on our borrowings may leave us with insufficient cash resources to operate our properties and/or pay distributions on our Common Stock or Preferred Stock.
Payments of principal and interest on our borrowings may leave us with insufficient cash resources to operate our properties and/or pay distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Control shares are voting shares of stock that, if aggregated with all other shares of stock owned by the acquiror or in respect of which 18 Table of Contents the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: • one-tenth or more but less than one-third; • one-third or more but less than a majority; or • a majority or more of all voting power.
Control shares are voting shares of stock that, if aggregated with all other shares of stock owned by the acquiror or in respect of which 15 the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: • one-tenth or more but less than one-third; • one-third or more but less than a majority; or • a majority or more of all voting power.
In certain circumstances, we may be subject to certain federal, state and local taxes as a REIT, which would reduce our cash available for distribution on our Common Stock or Preferred Stock. Even if we qualify and maintain our status as a REIT, we may be subject to certain federal, state and local taxes.
In certain circumstances, we may be subject to certain federal, state and local taxes as a REIT, which would reduce our cash available for distribution on our Preferred Stock or any renewed distributions on our Common Stock. Even if we qualify and maintain our status as a REIT, we may be subject to certain federal, state and local taxes.
Together, these limitations are referred to as the “ownership limit.” Stock acquired or held in violation of the ownership limit will be transferred automatically to a trust for the benefit of a designated charitable beneficiary, and the intended acquirer of the stock in violation of the ownership limit will not be entitled to vote those shares of stock or to receive the economic benefits of owning shares of our 19 Table of Contents stock in excess of the ownership limit.
Together, these limitations are referred to as the “ownership limit.” Stock acquired or held in violation of the ownership limit will be transferred automatically to a trust for the benefit of a designated charitable beneficiary, and the intended acquirer of the stock in violation of the ownership limit will not be entitled to vote those shares of stock or to receive the economic benefits of owning shares of our 16 stock in excess of the ownership limit.
High interest rates may make it difficult for us to finance or refinance assets, which could reduce the number of properties we can acquire and the amount of cash distributions we can make. Interest rates may remain high in 2025 relative to historical levels.
High interest rates may make it difficult for us to finance or refinance assets, which could reduce the number of properties we can acquire and the amount of cash distributions we can make. Interest rates may remain elevated in 2026 relative to historical levels.
The factors described above could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
The factors described above could have a material adverse 20 effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
All of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flow our or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock. 15 Table of Contents Risks Related to Conflicts of Interest Neither the Master Services Agreement nor the Investment Management Agreement may be terminated by us (except in limited circumstances for cause in the case of the Master Services Agreement) and the Master Services Agreement may be assigned by the Administrator in certain circumstances without our consent, either or both of which may have a material adverse effect on us.
All of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flow our or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock. 12 Risks Related to Conflicts of Interest Neither the Master Services Agreement nor the Investment Management Agreement may be terminated by us (except in limited circumstances for cause in the case of the Master Services Agreement) and the Master Services Agreement may be assigned by the Administrator in certain circumstances without our consent, either or both of which may have a material adverse effect on us.
Any such loss of funds on deposit, lack of access to funds held at banks or inability to borrow from any of our lenders could adversely impact our short-term liquidity and ability to meet our operating expenses or working capital needs. 22 Table of Contents Tenant concentration increases the risk that cash flow could be interrupted.
Any such loss of funds on deposit, lack of access to funds held at banks or inability to borrow from any of our lenders could adversely impact our short-term liquidity and ability to meet our operating expenses or working capital needs. 19 Tenant concentration increases the risk that cash flow could be interrupted.
Increased payments and substantial principal or balloon payments will reduce the funds available for distribution on our Common Stock or Preferred Stock because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.
Increased payments and substantial principal or balloon payments will reduce the funds available for distributions on our Preferred Stock or any renewed distributions on our Common Stock because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.
Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward, placed on negative outlook or withdrawn entirely at the discretion of the issuing rating agency if, in its 42 Table of Contents judgment, circumstances so warrant.
Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward, placed on negative outlook or withdrawn entirely at the discretion of the issuing rating agency if, in its judgment, circumstances so warrant.
The market environment may adversely affect our operating results, financial condition and ability to pay distributions on our Common Stock or Preferred Stock.
The market environment may adversely affect our operating results, financial condition and ability to pay distributions on our Preferred Stock or any renewed distributions on our Common Stock.
The remainder of our investment in securities (other than government securities, qualified real estate assets and stock 40 Table of Contents of a TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The remainder of our investment in securities (other than government securities, qualified real estate assets and stock of a TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
Accordingly, the extent to 26 Table of Contents which our stockholders will receive cash distributions and realize potential appreciation on our real estate assets will depend upon fluctuating market conditions. Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold.
Accordingly, the extent to which our stockholders will receive cash distributions and realize potential appreciation on our real estate assets will depend upon fluctuating market conditions. Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold.
From and after the fifth anniversary of the date of original issuance of any share of our Preferred Stock, we have the right (but not the obligation) to redeem such share at a redemption price equal to 100% of the stated value of such share, plus any accrued but unpaid dividends in respect of such share as of the effective date of the redemption.
From and after the fifth anniversary of the date of original issuance of any share of our Series A Preferred Stock and Series D Preferred Stock and from and after the second anniversary of the date of original issuance of any share of our Series A1 Preferred Stock, we have the right (but not the obligation) to redeem such share at a redemption price equal to 100% of the stated value of such share, plus any accrued but unpaid dividends in respect of such share as of the effective date of the redemption.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Committee consists of CIM Group’s Chief Technology Officer (the “CTO”), CIM Group’s Chief Compliance Officer (the “CCO”) and representatives from CIM Group’s operations, compliance and accounting departments. The Committee is responsible for CIM Group’s cybersecurity policy and overseeing the activities of CIM Group’s cybersecurity practices, including assessing CIM Group’s risks and controls.
Biggest changeThe Committee consists of CIM Group’s Head of Enterprise Technology, CIM Group’s Chief Compliance Officer (the “CCO”), CIM Group’s Head of Transformation and representatives from CIM Group’s operations, technology, and compliance departments as needed. The Committee is responsible for CIM Group’s cybersecurity policy and overseeing the activities of CIM Group’s cybersecurity practices, including assessing CIM Group’s risks and controls.
We believe that the processes, policies and procedures established by the Committee and the Subcommittee provide guidance for consistent and effective incident handling and response and set standards for internal notifications and escalations, as well as external notification considerations with respect to a cybersecurity event or incident requiring disclosure or notification in accordance with applicable laws.
We believe that the processes, policies and procedures established by the Committee provide guidance for consistent and effective incident handling and response and set standards for internal notifications and escalations, as well as external notification considerations with respect to a cybersecurity event or incident requiring disclosure or notification in accordance with applicable laws.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
This oversight includes briefing and a report by the CTO or CIM Group’s Head of Transformation, as well as a discussion of any cybersecurity breaches detected by CIM Group and a summary of, among other things, the current cybersecurity threat landscape, defensibility measures implemented by CIM Group, the health of CIM Group’s information security system, effectiveness of CIM Group’s cybersecurity controls and recoverability and business continuity testing.
This oversight includes briefing and a report by CIM Group’s Head of Transformation or CIM Head of Enterprise Technology, as well as a discussion of any cybersecurity breaches detected by CIM Group and a summary of, among other things, the current cybersecurity threat landscape, defensibility measures implemented by CIM Group, the health of CIM Group’s information security system, effectiveness of CIM Group’s cybersecurity controls and recoverability and business continuity testing.
The Subcommittee is tasked with assisting CIM Group-managed public companies (that are subject to the SEC’s cybersecurity rules adopted in 2023), including us, in complying with such cybersecurity rules.
The Cybersecurity Committee is tasked with assisting CIM Group-managed public companies (that are subject to the SEC’s cybersecurity rules adopted in 2023), including us, in complying with such cybersecurity rules.
Pursuant to the Company’s cybersecurity policy, the Audit Committee will be promptly notified of any material cybersecurity incident required to be disclosed under Item 1.05 on a Current Report on Form 8-K and shall oversee the Company’s response to such matter. 50 Table of Contents
Pursuant to the Company’s cybersecurity policy, the Audit Committee will be promptly notified of any material cybersecurity incident required to be disclosed under Item 1.05 on a Current Report on Form 8-K and shall oversee the Company’s response to such matter. 43
The Committee and Subcommittee each conduct both regular quarterly and as-needed meetings throughout the year during which members of the CIM Group’s IT Department provide updates and report on meaningful cybersecurity risks, threats, incidents and vulnerabilities in accordance with the Committee’s and the Subcommittee’s respective reporting frameworks, as well as related priorities, mitigation and remediation activities, financial and employee resource levels, 49 Table of Contents regulatory compliance, technology trends and third-party provider risks.
The Committee conducts both regular quarterly and as-needed meetings throughout the year during which members of the CIM Group’s IT Department provide updates and report on meaningful cybersecurity risks, threats, incidents and vulnerabilities in accordance with the Committee’s respective reporting frameworks, as well as related priorities, mitigation and remediation activities, financial and employee resource levels, regulatory compliance, technology trends and third-party provider risks.
The Committee is chaired by the CTO and has more than 30 years of experience in the fields of information technology, cybersecurity and adjacent roles, including serving on cybersecurity advisory councils. In addition, members of the Committee has relevant industry experience in enterprise risk management and compliance.
The Committee is chaired by CIM’s Head of Enterprise Technology and collectively the group has 42 more than 30 years of experience in the fields of information technology, cybersecurity and adjacent roles, including serving on cybersecurity advisory councils. In addition, members of the Committee have relevant industry experience in enterprise risk management and compliance.
Removed
The team responsible for developing and implementing our cybersecurity program collectively holds an MS in Cybersecurity and Information Assurance and have multiple cybersecurity certifications, including CRISC, CISM, CISA, NCSP-NIST, CISSP, CASP+, CySA+ and Security+. The Committee has established a Cybersecurity Subcommittee (the “Subcommittee”).
Removed
The Subcommittee consists of, among other individuals, the CCO, the CTO, the chief financial officers of public companies that are subject to the SEC’s cybersecurity rule adopted in 2023 and are managed by CIM Group, including our Chief Financial Officer.

Item 2. Properties

Properties — owned and leased real estate

27 edited+3 added−3 removed1 unchanged
Biggest changeOffice Portfolio—Diversification by Industry as of December 31, 2024 Annualized % of Rentable Rent Annualized Square % of Rentable Industry (in thousands) Rent Feet Square Feet Health Care and Social Assistance $ 19,216 34.6 % 343,954 26.6 % Professional, Scientific, and Technical Services 9,311 16.8 % 151,465 11.7 % Finance and Insurance 6,439 11.6 % 65,599 5.1 % Arts, Entertainment, and Recreation 6,280 11.3 % 88,457 6.8 % Other Services (except Public Administration) 3,986 7.2 % 51,885 4.0 % Real Estate and Rental and Leasing 2,098 3.8 % 41,667 3.2 % Information 1,944 3.5 % 34,313 2.6 % Public Administration 1,741 3.1 % 35,046 2.7 % Retail Trade 1,728 3.1 % 38,184 2.9 % Other 2,709 5.0 % 66,278 5.0 % Vacant — — % 381,904 29.4 % Total Office $ 55,452 100.0 % 1,298,752 100.0 % Note: Represents 100% of the consolidated and unconsolidated office portfolios, regardless of our ownership percentage. 54 Table of Contents Office Portfolio—Lease Expiration as of December 31, 2024 Square Feet % of Square Annualized % of Annualized Annualized Rent Year of Lease of Expiring Feet Rent Rent Per Occupied Expiration Leases Expiring (in thousands) Expiring Square Foot 2025 (1) 110,325 11.9 % 6,934 12.6 % 62.85 2026 134,844 14.7 % 8,393 15.1 % 62.24 2027 (2) 75,989 8.3 % 4,440 8.0 % 58.43 2028 338,520 36.9 % 18,457 33.3 % 54.52 2029 (3) 61,979 6.8 % 6,148 11.1 % 99.19 2030 (4) 103,485 11.3 % 4,627 8.3 % 44.71 2031 26,409 2.9 % 1,240 2.2 % 46.95 2032 (5) 26,777 2.9 % 1,551 2.8 % 57.92 2034 12,383 1.4 % 714 1.3 % 57.66 Thereafter (6) 26,137 2.9 % 2,948 5.3 % 112.79 Total Occupied 916,848 100.0 % $ 55,452 100.0 % $ 60.48 Vacant 381,904 Total Office 1,298,752 Note: Represents 100% of the consolidated and unconsolidated office portfolios, regardless of our ownership percentage.
Biggest changeOffice Portfolio—Diversification by Industry as of December 31, 2025 Annualized % of Rentable Rent Annualized Square % of Rentable Industry (in thousands) Rent Feet Square Feet Health Care and Social Assistance $ 21,101 36.9 % 362,352 27.9 % Professional, Scientific, and Technical Services 7,109 12.4 % 135,183 10.5 % Finance and Insurance 6,522 11.4 % 62,445 4.8 % Arts, Entertainment, and Recreation 6,512 11.4 % 88,457 6.8 % Other Services (except Public Administration) 4,201 7.3 % 55,336 4.2 % Public Administration 2,173 3.8 % 43,524 3.3 % Real Estate and Rental and Leasing 1,829 3.2 % 41,667 3.2 % Retail Trade 1,684 2.9 % 38,184 2.9 % Information 1,668 2.9 % 30,784 2.4 % Other 4,417 7.8 % 115,414 8.8 % Vacant — — % 328,761 25.2 % Total Office $ 57,216 100.0 % 1,302,107 100.0 % Note: Represents 100% of the consolidated and unconsolidated office portfolios, regardless of our ownership percentage. 47 Office Portfolio—Lease Expiration as of December 31, 2025 Square Feet % of Square Annualized % of Annualized Annualized Rent Year of Lease of Expiring Feet Rent Rent Per Occupied Expiration Leases Expiring (in thousands) Expiring Square Foot 2026 (1) 107,814 11.1 % $ 5,606 9.8 % 52.00 2027 (2) 133,710 13.7 % 8,814 15.4 % 65.92 2028 336,509 34.6 % 18,632 32.6 % 55.37 2029 (3) 78,428 8.1 % 7,215 12.6 % 92.00 2030 (4) 129,744 13.3 % 6,285 11.0 % 48.44 2031 (5) 69,689 7.2 % 3,182 5.6 % 45.66 2032 (6) 31,993 3.3 % 1,681 2.9 % 52.54 2033 2,907 0.3 % 181 0.3 % 62.26 2034 12,383 1.3 % 741 1.3 % 59.84 Thereafter (7) 70,169 7.1 % 4,879 8.5 % 69.53 Total Occupied 973,346 100.0 % $ 57,216 100.0 % $ 58.78 Vacant 328,761 Total Office 1,302,107 Note: Represents 100% of the consolidated and unconsolidated office portfolios, regardless of our ownership percentage.
The Company is currently working on designs for the renovation of Sheraton Grand Hotel’s lobbies and common areas (the “Lobby Renovation Project”). The Company has not approved a budget for the Lobby Renovation Project but intends to complete the project in 2025. (3) Based on leases commenced as of December 31, 2024.
The Company is currently working on designs for the renovation of Sheraton Grand Hotel’s lobbies and common areas (the “Lobby Renovation Project”). The Company has not approved a budget for the Lobby Renovation Project but intends to complete the project in 2025. (3) Based on leases commenced as of December 31, 2025.
Item 2. Properties As of December 31, 2024, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures.
Item 2. Properties As of December 31, 2025, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures.
(2) The Sheraton Grand Hotel is part of the Sheraton franchise and is managed by Sheraton Operating Corporation, a subsidiary of Marriott International, Inc. The renovation of the Sheraton Grand Hotel’s guest rooms and corridors is substantially completed (the “Rooms Renovation Project”) with a total cost of approximately $20.9 million.
(2) The Sheraton Grand Hotel is part of the Sheraton franchise and is managed by Sheraton Operating Corporation, a subsidiary of Marriott International, Inc. The renovation of the Sheraton Grand Hotel’s guest rooms and corridors is substantially completed (the “Rooms Renovation Project”) with a total cost of approximately $21.2 million.
(6) CMCT and a CIM-managed separate account purchased the property in February 2022 through a joint venture. CMCT owns approximately 44% of the property. The amounts shown in the table represent 100% of the property. (7) 2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot.
(6) CMCT and a CIM-managed separate account purchased the property in February 2022 through a joint venture (the “1910 Sunset JV”). CMCT owns 44.2% of the property. The amounts shown in the table represent 100% of the property. (7) 2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot.
The amounts shown in the table represent 100% of the property. The property is a 75-unit four-story building. (3) We sold 80% of our interest in 4750 Wilshire Boulevard to three co-investors (the “4750 Wilshire JV Partners”) in February 2023, with our remaining 20% interest now invested in a newly-formed joint venture with the JV Partners (the “4750 Wilshire JV”).
The amounts shown in the table represent 100% of the property. (3) We sold 80% of our interest in 4750 Wilshire Boulevard to three co-investors (the “4750 Wilshire JV Partners”) in February 2023, with our remaining 20% interest now invested in a newly-formed joint venture with the JV Partners (the “4750 Wilshire JV”).
(5) Includes 25,845 square feet (approximately 2.8% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2032.
(6) Includes 25,845 square feet (approximately 2.7% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2032.
Our Unconsolidated Joint Ventures contain one office property, one multifamily site currently under development, two multifamily properties (one of which has been partially converted from office into multifamily units and is now being classified as a multifamily property) and one commercial development site.
Our Unconsolidated Joint Ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now classified as a multifamily property) and one commercial development site.
(9) The Company is evaluating the property for potential future multifamily development. (10) Net of rent concessions granted in the specified period, monthly rent per occupied unit for the total portfolio was $2,319.
The Company is evaluating future development options, including hotel development. (9) The Company is evaluating the property for potential future multifamily development. (10) Net of rent concessions granted in the specified period, monthly rent per occupied unit for the total portfolio was $2,127.
(4) The Company is evaluating the property for potential future development options including multifamily development over the existing parking garage. 53 Table of Contents Office Portfolio—Top 5 Tenants by Annualized Rental Revenue as of December 31, 2024 Credit Rating % of (S&P / Annualized % of Rentable Rentable Moody’s / Lease Rent Annualized Square Square Tenant Property Fitch) Expiration (in thousands) Rent Feet Feet Kaiser Foundation Health Plan, Inc. 1 Kaiser Plaza AA- / - / AA- 2028 $ 12,694 22.9 % 236,692 18.2 % U.S.
(4) The Company is evaluating the property for potential future development options including multifamily development over the existing parking garage. 46 Office Portfolio—Top 5 Tenants by Annualized Rental Revenue as of December 31, 2025 Credit Rating % of (S&P / Annualized % of Rentable Rentable Moody’s / Lease Rent Annualized Square Square Tenant Property Fitch) Expiration (in thousands) Rent Feet Feet Kaiser Foundation Health Plan, Inc. 1 Kaiser Plaza AA- / - / AA- 2028 $ 13,405 23.4 % 236,692 18.2 % U.S.
(2) CMCT owns 44.2% of these properties through its investment the 1910 Sunset JV. The outstanding principal balance shown here represents 100% of the 1910 Sunset JV’s balance. (3) CMCT owns 20.0% of the property through its investment in the 4750 Wilshire JV. The outstanding principal balance shown here represents 100% of the 4750 Wilshire JV’s balance.
(2) Includes three one-year extension options. (3) CMCT owns 44.2% of these properties through its investment the 1910 Sunset JV. The outstanding principal balance shown here represents 100% of the 1910 Sunset JV’s balance. (4) CMCT owns 20.0% of the property through its investment in the 4750 Wilshire JV.
There is no planned start date for such development. (5) The Company intends to redevelop approximately seven commercial units totaling 5,635 rentable square feet and six parking stalls. There is no planned start date for such redevelopment. (6) The Company owns 100% of the 4750 Wilshire Boulevard backlot land parcel.
(6) The Company intends to redevelop approximately seven commercial units totaling 5,635 rentable square feet and six parking stalls. There is no planned start date for such redevelopment. (7) The Company owns 100% of the 4750 Wilshire Boulevard backlot land parcel. The site is being evaluated for potential multifamily development. (8) Currently being utilized as a parking lot.
As of December 31, 2024, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 70.6% occupied, and our one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $135.90 for the year ended December 31, 2024, and our four multifamily properties were 81.7% occupied.
As of December 31, 2025, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 74.8% occupied, and our one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $152.70 for the year ended December 31, 2025, and our five multifamily properties were 85.3% occupied.
Western Avenue (4) Jefferson Park N/A N/A N/A N/A 3022 S. Western Avenue (4) Jefferson Park N/A N/A N/A N/A 3109 S.
Western Avenue (5) Jefferson Park N/A N/A N/A N/A 3022 S. Western Avenue (6) Jefferson Park N/A N/A N/A N/A 3109 S.
Hotel Portfolio Summary as of December 31, 2024 Revenue Per % Available Property Market Rooms Occupied (1) Room Sheraton Grand Hotel (2) Sacramento, CA 505 67.2 % $ 135.90 Total Hotel (1 Property) 505 67.2 % $ 135.90 Other Ancillary Property within Hotel Portfolio Rentable Annualized Square % % Rent (Parking Feet Occupied Leased and Retail) Property Market (Retail) (Retail) (Retail) (3) (in thousands) Sheraton Grand Hotel Parking Garage & Retail (4) Sacramento, CA 9,453 68.9 % 68.9 % $ 567 Total Ancillary Property (1 Property) 9,453 68.9 % 68.9 % $ 567 (1) Represents trailing 12-month occupancy as of December 31, 2024, calculated as the number of occupied rooms divided by the number of available rooms.
Hotel Portfolio Summary as of December 31, 2025 Revenue Per % Available Property Market Rooms Occupied (1) Room Sheraton Grand Hotel (2) Sacramento, CA 505 72.5 % $ 152.70 Total Hotel (1 Property) 505 72.5 % $ 152.70 Other Ancillary Property within Hotel Portfolio Rentable Annualized Square % % Rent (Parking Feet Occupied Leased and Retail) Property Market (Retail) (Retail) (Retail) (3) (in thousands) Sheraton Grand Hotel Parking Garage & Retail (4) Sacramento, CA 8,928 79.8 % 79.8 % $ 1,202 Total Ancillary Property (1 Property) 8,928 79.8 % 79.8 % $ 1,202 (1) Represents trailing 12-month occupancy as of December 31, 2025, calculated as the number of occupied rooms divided by the number of available rooms.
(3) 3601 S Congress Avenue consists of twelve buildings. The Company is evaluating different development options including multifamily development. (4) The Company is evaluating different development options including multifamily development. (5) The property is located on a land site of approximately 7,450 square feet. The Company intends to complete pre-development and entitlement work to provide optionality for future multifamily development.
(3) 3601 S Congress Avenue consists of twelve buildings. The Company is evaluating different development options including multifamily development. (4) The Company is evaluating different development options including multifamily development. (5) The property is located on a land site of approximately 7,450 square feet.
Additionally, as of December 31, 2024, we had nine development sites (three of which were being used as parking lots).
Additionally, as of December 31, 2025, we had eight development sites (two of which were being used as parking lots).
(3) Includes 3,572 square feet (approximately 0.4% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2029. (4) Includes 2,313 square feet (approximately 0.3% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2030 .
(4) Includes 5,154 square feet (approximately 0.5% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2030. (5) Includes 4,654 square feet (approximately 0.5% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2031.
(6) Includes 7,980 square feet (approximately 0.9% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2035. 55 Table of Contents Property Indebtedness as of December 31, 2024 Outstanding Balance Due Principal At Maturity Balance Interest Maturity Date Property (in thousands) Rate Date (in thousands) 1 Kaiser Plaza (1) $ 97,100 4.14% 7/1/2026 $ 97,100 Channel House 87,000 SOFR + 3.36% 7/7/2025 87,000 1150 Clay 67,000 6.25% 6/7/2025 67,000 Sheraton Grand Hotel 84,346 SOFR + 4.35% 1/1/2027 84,346 9460 Wilshire Boulevard, 11620 Wilshire Boulevard, 11600 Wilshire Boulevard 105,000 7.41% 1/11/2030 105,000 1910 Sunset Boulevard (2) 23,925 SOFR + 2.95% 9/13/2025 23,925 1915 Park Avenue (2) 658 SOFR + 3.00% 12/21/2026 658 4750 Wilshire Boulevard (3) 36,864 SOFR + 3.11% 4/1/2026 36,864 Total $ 501,893 $ 501,893 (1) Loan is generally not prepayable prior to April 1, 2026.
(7) Includes 38,801 square feet (approximately 4.0% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2037. 48 Property Indebtedness as of December 31, 2025 Outstanding Balance Due Principal At Maturity Balance Interest Maturity Date Property (in thousands) Rate Date (in thousands) 1 Kaiser Plaza (1) $ 97,100 4.14% 7/1/2026 $ 97,100 Channel House 81,000 SOFR + 3.36% 1/31/2027 81,000 1150 Clay 66,304 6.25% 6/7/2026 66,304 Sheraton Grand Hotel (2) 90,955 SOFR + 4.35% 1/1/2027 90,955 9460 Wilshire Boulevard, 11620 Wilshire Boulevard, 11600 Wilshire Boulevard 105,000 7.41% 1/11/2030 105,000 1910 Sunset Boulevard (3) 23,925 SOFR + 2.95% 3/13/2026 23,925 1915 Park Avenue (3) 6,819 SOFR + 3.11% 12/21/2026 6,819 4750 Wilshire Boulevard (4) 37,901 SOFR + 3.11% 4/1/2026 37,901 3601 S Congress Avenue 31,600 SOFR + 2.95% 4/3/2028 31,600 8944 Lindblade Street 5,000 SOFR + 3.00% 2/14/2027 5,000 Total $ 545,604 $ 545,604 (1) Loan is generally not prepayable prior to April 1, 2026.
Western Avenue (5) Jefferson Park N/A N/A N/A N/A 4750 Wilshire Boulevard (Backlot) (6) Mid-Wilshire N/A N/A N/A N/A 1915 Park Avenue - 44% (7) Echo Park N/A N/A N/A N/A Oakland, CA F3 Land Site (8) Jack London District N/A N/A N/A N/A 466 Water Street Land Site (9) Jack London District N/A N/A N/A N/A Total Multifamily and Development Portfolio 764 81.7 % $ 18,478 $ 2,468 (1) Represents gross monthly base rent under leases commenced as of December 31, 2024, divided by occupied units. 52 Table of Contents (2) The Company owns 25.5% of the property.
Western Avenue (6) Jefferson Park N/A N/A N/A N/A 4750 Wilshire Boulevard (Backlot) (7) Mid-Wilshire N/A N/A N/A N/A Oakland, CA F3 Land Site (8) Jack London District N/A N/A N/A N/A 466 Water Street Land Site (9) Jack London District N/A N/A N/A N/A Total Multifamily and Development Portfolio 801 85.3 % $ 20,461 $ 2,497 (1) Represents gross monthly base rent under leases commenced as of December 31, 2025, divided by occupied units. 45 (2) The Company owns 25.5% of the property through an Unconsolidated Joint Venture.
Office Portfolio Detail by Classification, Address, Market, and Submarket as of December 31, 2024 Classification / Market / Address Sub-Market Rentable Square Feet % Occupied % Leased (1) Annualized Rent (in thousands) Annualized Rent Per Occupied Square Foot (9) Consolidated Office Portfolio Oakland, CA 1 Kaiser Plaza Lake Merritt 537,339 55.9 % 55.9 % $ 16,627 $ 55.34 San Francisco, CA 1130 Howard Street South of Market 21,194 61.1 % 61.1 % 1,205 93.09 Los Angeles, CA 11620 Wilshire Boulevard West Los Angeles 196,928 78.9 % 80.3 % 7,857 50.57 11600 Wilshire Boulevard West Los Angeles 56,881 73.4 % 73.4 % 2,588 62.02 9460 Wilshire Boulevard Beverly Hills 97,655 91.6 % 91.6 % 10,901 121.88 8944 Lindblade Street (2) West Los Angeles 7,980 100.0 % 100.0 % 578 72.43 8960 & 8966 Washington Boulevard (2) West Los Angeles 24,448 100.0 % 100.0 % 1,559 63.77 1037 N Sycamore Avenue Hollywood 5,031 100.0 % 100.0 % 336 66.79 Austin, TX 3601 S Congress Avenue (3) South 231,240 78.1 % 78.1 % 8,709 48.23 1021 E 7th Street (4) East 11,180 100.0 % 100.0 % 664 59.39 1007 E 7th Street (5) East 1,352 — % — % — — Total Consolidated Office Portfolio 1,191,228 69.6 % 69.8 % 51,024 61.54 Unconsolidated Office Portfolio Los Angeles, CA 1910 Sunset Boulevard - 44% (6) Echo Park 107,524 81.6 % 84.0 % 4,428 50.48 Total Unconsolidated Office Portfolio 107,524 81.6 % 84.0 % 4,428 50.48 Total Office Portfolio 1,298,752 70.6 % 71.0 % 55,452 60.48 Total Office Portfolio - CMCT Share of Annualized Rent $ 52,979 Development Pipeline Properties Oakland, CA 2 Kaiser Plaza (7) Lake Merritt N/A N/A N/A N/A N/A Los Angeles, CA 1015 Mansfield - 29% (8) Hollywood N/A N/A N/A N/A N/A Total Development Pipeline Properties N/A N/A N/A N/A N/A Total Office and Development Portfolio 1,298,752 70.6 % 71.0 % $ 55,452 $ 60.48 (1) Based on leases signed as of December 31, 2024. 51 Table of Contents (2) The three buildings making up 8960 & 8966 Washington Boulevard and 8944 Lindblade Street were formerly known as Lindblade Media Center.
Office Portfolio Detail by Classification, Address, Market, and Submarket as of December 31, 2025 Classification / Market / Address Sub-Market Rentable Square Feet % Occupied % Leased (1) Annualized Rent (in thousands) Annualized Rent Per Occupied Square Foot (9) Consolidated Office Portfolio Oakland, CA 1 Kaiser Plaza Lake Merritt 537,929 55.2 % 55.2 % $ 16,791 $ 56.50 San Francisco, CA 1130 Howard Street South of Market 21,194 100.0 % 100.0 % 549 25.90 Los Angeles, CA 11620 Wilshire Boulevard West Los Angeles 197,054 90.0 % 90.0 % 8,862 49.95 11600 Wilshire Boulevard West Los Angeles 56,881 79.0 % 79.0 % 2,822 62.80 9460 Wilshire Boulevard Beverly Hills 97,655 94.5 % 94.5 % 11,554 125.21 8944 Lindblade Street (2) West Los Angeles 7,980 100.0 % 100.0 % 630 78.95 8960 & 8966 Washington Boulevard (2) West Los Angeles 24,448 — % — % — — 1037 N Sycamore Avenue Hollywood 5,031 100.0 % 100.0 % 351 69.77 Austin, TX 3601 S Congress Avenue (3) South 233,579 92.4 % 92.4 % 9,888 45.81 1021 E 7th Street (4) East 11,180 100.0 % 100.0 % 689 61.63 1007 E 7th Street (5) East 1,352 100.0 % 100.0 % 50 36.98 Total Consolidated Office Portfolio 1,194,283 73.2 % 73.2 % 52,186 59.69 Unconsolidated Office Portfolio Los Angeles, CA 1910 Sunset Boulevard - 44.2% (6) Echo Park 107,824 91.8 % 91.8 % 5,030 50.84 Total Unconsolidated Office Portfolio 107,824 91.8 % 91.8 % 5,030 50.84 Total Office Portfolio 1,302,107 74.8 % 74.8 % 57,216 58.78 Total Office Portfolio - CMCT Share of Annualized Rent $ 54,407 Development Pipeline Properties Oakland, CA 2 Kaiser Plaza (7) Lake Merritt N/A N/A N/A N/A N/A Los Angeles, CA 1015 Mansfield - 29% (8) Hollywood N/A N/A N/A N/A N/A Total Development Pipeline Properties N/A N/A N/A N/A N/A Total Office and Development Portfolio 1,302,107 74.8 % 74.8 % $ 57,216 $ 58.78 (1) Based on leases signed as of December 31, 2025. 44 (2) The three buildings making up 8960 & 8966 Washington Boulevard and 8944 Lindblade Street were formerly known as Lindblade Media Center.
(1) Includes 4,371 square feet of month-to-month leases as of December 31, 2024. (2) Includes 6,524 square feet (approximately 0.7% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2027.
(1) Includes 4,193 square feet of month-to-month leases as of December 31, 2025. Includes 178 square feet (less than 0.1% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2026.
Bank, N.A. 9460 Wilshire Boulevard A+ / Aa3 / A+ 2029 4,167 7.5 % 27,569 2.1 % 3 Arts Entertainment, Inc. 9460 Wilshire Boulevard - / - / - 2026 3,037 5.5 % 27,112 2.1 % F45 Training Holdings, Inc. 3601 S Congress Avenue - / - / - 2030 2,418 4.4 % 44,171 3.4 % O'Gara Coach Company, L.L.C. 9460 Wilshire Boulevard - / - / - 2043 2,370 4.3 % 18,157 1.4 % Total for Top Five Tenants 24,686 44.6 % 353,701 27.2 % All Other Tenants 30,766 55.4 % 563,147 43.4 % Vacant — — % 381,904 29.4 % Total Office Portfolio $ 55,452 100.0 % 1,298,752 100.0 % Note: Represents 100% of the consolidated and unconsolidated office portfolios, regardless of our ownership percentage.
Bank, N.A. 9460 Wilshire Boulevard A+ / Aa3 / A+ 2029 4,324 7.6 % 27,569 2.1 % 3 Arts Entertainment, Inc. 9460 Wilshire Boulevard - / - / - 2027 3,161 5.5 % 27,112 2.1 % O'Gara Coach Company, L.L.C. 9460 Wilshire Boulevard - / - / - 2043 2,512 4.4 % 18,157 1.4 % F45 Training Holdings, Inc. 3601 S Congress Avenue - / - / - 2030 2,485 4.3 % 44,171 3.4 % Total for Top Five Tenants 25,887 45.2 % 353,701 27.2 % All Other Tenants 31,329 54.8 % 619,645 47.6 % Vacant — — % 328,761 25.2 % Total Office Portfolio $ 57,216 100.0 % 1,302,107 100.0 % Note: Represents 100% of the consolidated and unconsolidated office portfolios, regardless of our ownership percentage.
Following the substantial completion of the 4750 Wilshire Project, the Company has reclassified its investment in the 4750 Wilshire JV as a multifamily investment. The 4750 Wilshire JV refers to the multifamily portion of the building as “701 S Hudson”. (4) The Company intends to develop a total of approximately 160 residential units across both properties.
Following the substantial completion of the 4750 Wilshire Project, the Company has reclassified its investment in the 4750 Wilshire JV as a multifamily investment. The 4750 Wilshire JV refers to the multifamily portion of the building as “701 S Hudson”. (4) The Company owns 44.2% of the property through the 1910 Sunset JV.
Multifamily Portfolio Detail by Classification, Address, Market, and Submarket as of December 31, 2024 Classification / Market / Address Sub-Market Units % Occupied Annualized Rent (in thousands) Monthly Rent Per Occupied Unit (1) (10) Consolidated Multifamily Portfolio Oakland, CA Channel House Jack London District 333 89.5 % $ 9,373 $ 2,621 1150 Clay Downtown 288 85.1 % $ 7,172 $ 2,439 Total Consolidated Multifamily Portfolio 621 87.4 % $ 16,545 $ 2,539 Unconsolidated Multifamily Portfolio Los Angeles, CA 1902 Park Avenue - 25.5% (2) Echo Park 75 88.0 % $ 1,482 $ 1,871 701 S Hudson - 20% (3) Mid-Wilshire 68 22.1 % $ 451 $ 2,507 Total Unconsolidated Multifamily Portfolio 143 56.6 % $ 1,933 $ 1,988 Total Multifamily Portfolio 764 81.7 % $ 18,478 $ 2,468 Total Multifamily Portfolio - CMCT Share of Annualized Rent $ 17,013 Development Pipeline Properties Los Angeles, CA 3101 S.
Multifamily Portfolio Detail by Classification, Address, Market, and Submarket as of December 31, 2025 Classification / Market / Address Sub-Market Units % Occupied Annualized Rent (in thousands) Monthly Rent Per Occupied Unit (1) (10) Consolidated Multifamily Portfolio Oakland, CA Channel House Jack London District 333 89.5 % $ 9,145 $ 2,557 1150 Clay Downtown 288 87.2 % $ 7,190 $ 2,387 Total Consolidated Multifamily Portfolio 621 88.4 % $ 16,335 $ 2,480 Unconsolidated Multifamily Portfolio Los Angeles, CA 1902 Park Avenue - 25.5% (2) Echo Park 76 93.4 % $ 1,680 $ 1,972 701 S Hudson - 20% (3) Mid-Wilshire 68 83.8 % $ 2,349 $ 3,434 1915 Park Avenue - 44.2% (4) Echo Park 36 16.7 % $ 97 $ 1,352 Total Unconsolidated Multifamily Portfolio 180 74.4 % $ 4,126 $ 2,480 Total Multifamily Portfolio 801 85.3 % $ 20,461 $ 2,497 Total Multifamily Portfolio - CMCT Share of Annualized Rent $ 17,276 Development Pipeline Properties Los Angeles, CA 3101 S.
The site is being evaluated for different development options, including creative office space or other commercial space. (9) Giving effect to abatements, net annualized rent per occupied square foot for the total portfolio was $59.93.
The property has a site area of approximately 44,141 square feet and currently contains a parking garage which is being leased to a third party. The site is being evaluated for different development options, including creative office space or other commercial space. (9) Giving effect to abatements, net annualized rent per occupied square foot for the total portfolio was $54.90.
We are entitled to develop an office building with a maximum of 800,000 rentable square feet. Alternatively, we are also evaluating a multifamily development. (8) The Company owns approximately 29% of the property. The property has a site area of approximately 44,141 square feet and currently contains a parking garage which is being leased to a third party.
We are entitled to develop an office building with a maximum of 800,000 rentable square feet. Alternatively, we are also evaluating a multifamily development. (8) The Company owns approximately 29% of the property through an Unconsolidated Joint Venture. The amounts shown in the table represent 100% of the property.
Removed
The site is being evaluated for potential multifamily development and currently is being utilized as a surface parking lot. (7) The Company owns approximately 44% of the property through a joint venture partnership (the “1910 Sunset JV”).
Added
The amounts shown in the table represent 100% of the property. The property is a 36-unit multifamily apartment building which was completed and began leasing during the fourth quarter of 2025. (5) The Company intends to develop a total of approximately 160 residential units across both properties. There is no planned start date for such development.
Removed
The 1910 Sunset JV has begun construction to build 36 multifamily units on the 1915 Park Avenue land parcel adjacent to the office building (the “1915 Park Project”).
Added
(2) Includes 924 square feet (approximately 0.1% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2027. (3) Includes 5,864 square feet (approximately 0.6% of total portfolio occupied square footage) of leases with tenant-controlled early termination options to terminate prior to 2029.
Removed
The 1915 Park Project is expected to be completed by the third quarter of 2025 and to cost approximately $14.7 million (excluding the land acquisition cost), the Company’s share of which is expected to be $6.5 million. (8) Currently being utilized as a parking lot. The Company is evaluating future development options, including hotel development.
Added
The outstanding principal balance shown here represents 100% of the 4750 Wilshire JV’s balance.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed2 unchanged
Biggest changeWhile the outcome of these legal actions and proceedings cannot be predicted with certainty, in management’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Biggest changeWhile the outcome of these legal actions and proceedings cannot be predicted with certainty, in management’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.
Item 4. Mine Safety Disclosures Not applicable. 56 Table of Contents PART II
Item 4. Mine Safety Disclosures Not applicable. 49 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePlan Category Number of shares of Common Stock to be issued upon exercise of outstanding options Weighted average exercise price of outstanding options Number of shares of Common Stock remaining available for future issuances under equity compensation plans (all in restricted shares of Common Stock) Equity incentive plan — N/A 262,058 Recent Sales of Unregistered Securities and Use of Proceeds On December 20, 2022, we issued to the Operator an aggregate of 36,663 shares of our Series A1 Preferred Stock as payment, in lieu of cash, for $916,575 of asset management fees owed to the Operator under the Investment Management Agreement for the third quarter of 2022.
Biggest changePlan Category Number of shares of Common Stock to be issued upon exercise of outstanding options Weighted average exercise price of outstanding options Number of shares of Common Stock remaining available for future issuances under equity compensation plans (all in restricted shares of Common Stock) Equity incentive plan — N/A 227,414 Recent Sales of Unregistered Securities and Use of Proceeds During the years ended December 31, 2025 and 2024, we redeemed, at our option, 0 and 2,589,606 shares of Series A1 Preferred Stock, respectively, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of the applicable redemption date and, in addition, we redeemed 536,737 and 181,912 shares of Series A1 Preferred Stock at the option of the holders during the years ended December 31, 2025 and 2024, respectively, that were paid in shares of Common Stock, including all accrued and unpaid dividends as of the applicable redemption date (collectively, the “Series A1 In-Kind Redemptions”).
Shares of Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock may be redeemed at our option or at the option of the holder for a redemption price payable in cash or shares of Common Stock, at our election, as described in Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K.
Shares of Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock may be redeemed at our option or at the option of 50 the holder for a redemption price payable in cash or shares of Common Stock, at our election, as described in Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K.
Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information as of December 31, 2024 with respect to shares of our Common Stock, either under options or in respect of restricted stock awards that may be issued under existing equity compensation plans, all of which have been approved by our stockholders.
Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information as of December 31, 2025 with respect to shares of our Common Stock, either under options or in respect of restricted stock awards that may be issued under existing equity compensation plans, all of which have been approved by our stockholders.
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Marketplace Designation, Sales Price Information and Holders Shares of our Common Stock trade on Nasdaq, under the ticker symbol “CMCT”, and on the TASE, under the ticker symbol “CMCT.” On February 25, 2025, there were approximately 304 holders of record of our Common Stock, excluding stockholders whose shares were held by brokerage firms, depositories and other institutional firms in “street name” for their customers.
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Marketplace Designation, Sales Price Information and Holders Shares of our Common Stock trade on Nasdaq, under the ticker symbol “CMCT.” On March 2, 2026, there were approximately 128 holders of record of our Common Stock, excluding stockholders whose shares were held by brokerage firms, depositories and other institutional firms in “street name” for their customers.
Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor. There can be no assurance that the future dividends declared by our Board of Directors will not differ materially from historical dividend levels.
Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor. There can be no assurance as to the future level of dividends declared by our Board of Directors on our Common Stock, if any.
For each of these 57 Table of Contents issuances, the number of shares of Common Stock issued was based on volume-weighted average price (calculated in accordance with our charter) of the Common Stock as of each applicable redemption date.
The Series D In-Kind Redemptions resulted in the aggregate issuance of 11,556 shares of Common Stock. For each of these issuances, the number of shares of Common Stock issued was based on volume-weighted average price (calculated in accordance with our charter) of the Common Stock as of each applicable redemption date.
The closing price of our Common Stock on February 25, 2025 was $0.70 as reported on Nasdaq. Approximately 90.3% of our Common Stock as of February 25, 2025 was held by stockholders that are not our affiliates.
The closing price of our Common Stock on March 2, 2026 was $2.33 as reported on Nasdaq. Approximately 96.8% of our Common Stock as of March 2, 2026 was held by stockholders that are not our affiliates.
During the quarter ended September 30, 2024 and December 31, 2024, we redeemed 1,010 and 180,902 shares of Series A1 Preferred Stock in shares of Common Stock at the option of the holders, respectively, resulting in issuance of 2,590 and 1,517,599 shares of Common Stock, respectively.
The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 1,010,063 and 192,698 shares of Common Stock during the years ended December 31, 2025 and 2024, respectively.
During the quarter ended December 31, 2024, we redeemed 214,713 shares of Series A1 Preferred Stock in shares of Common Stock at the option of the holders resulting in issuance of 1,645,869 shares of Common Stock.
During the years ended December 31, 2025 and 2024, we redeemed, at our option, 0 and 2,150,076 shares of Series A Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of the applicable redemption date and, in addition, we redeemed 456,345 and 214,713 shares at the option of the holders during the years ended December 31, 2025 and 2024, respectively, that were paid in shares of Common Stock, including all accrued and unpaid dividends as of the applicable redemption date (collectively, the “Series A In-Kind Redemptions”).
Removed
Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Added
The Series A In-Kind Redemptions resulted in the aggregate issuance of 1,177,243 and 175,167 shares of Common Stock, respectively.
Removed
Shares of Series A1 Preferred Stock may be redeemed at our option or at the option of the holder for a redemption price payable in cash or shares of Common Stock as described in Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K.
Added
During the year ended December 31, 2025, we redeemed 4,122 shares of Series D Preferred Stock that were paid in shares of Common Stock, including all accrued and unpaid dividends as of the applicable redemption date (collectively, the “Series D In-Kind Redemptions”). All such redemptions were redeemed at the option of the holders.
Removed
In December 2022, the Company announced the redemption of all outstanding shares of its Series L Preferred Stock.
Removed
In January 2023, the Company completed such previously-announced redemption of all outstanding shares of its Series L Preferred Stock in cash at its stated value of $28.37 per share (plus accrued and unpaid dividends of $1.56 per share, or $4.6 million in the aggregate).
Removed
The total cost to complete the Series L Redemption, including transaction costs of $93,000 (or $0.03 per share), was $83.8 million. During the quarter ended September 30, 2024, we redeemed, at the option of the Company, 2,589,606 shares of Series A1 Preferred Stock in shares of Common Stock, resulting in issuance of 3,297,298 shares of Common Stock.
Removed
During the quarter ended September 30, 2024, we redeemed, at the option of the Company, 2,150,076 shares of Series A Preferred Stock in shares of Common Stock, resulting in issuance of 2,733,230 shares of Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Change 2024 2023 $ % (dollars in thousands) Revenues: Office $ 54,283 $ 55,033 $ (750) (1.4) % Hotel $ 39,407 $ 41,096 $ (1,689) (4.1) % Multifamily $ 19,515 $ 11,224 $ 8,291 73.9 % Lending $ 10,756 $ 11,458 $ (702) (6.1) % Expenses: Office $ 27,327 $ 26,075 $ 1,252 4.8 % Hotel $ 27,955 $ 27,992 $ (37) (0.1) % Multifamily $ 13,715 $ 9,464 $ 4,251 44.9 % Lending $ 7,556 $ 7,899 $ (343) (4.3) % Income (Loss) From Unconsolidated Entities Office $ 462 $ (582) $ 1,044 NM* Multifamily $ (1,268) $ 155 $ (1,423) NM* Non-Segment Revenue and Expenses: Interest and other income $ 551 $ 447 $ 104 23.3 % Asset management and other fees to related parties $ (1,797) $ (2,627) $ 830 (31.6) % Expense reimbursements to related parties—corporate $ (2,281) $ (2,342) $ 61 (2.6) % Interest expense $ (33,589) $ (31,406) $ (2,183) 7.0 % General and administrative $ (4,267) $ (5,453) $ 1,186 (21.7) % Transaction costs $ (1,382) $ (4,421) $ 3,039 (68.7) % Depreciation and amortization $ (27,373) $ (52,484) $ 25,111 (47.8) % Loss on early extinguishment of debt $ (1,416) $ — $ (1,416) NM* Gain on sale of real estate $ — $ 1,104 $ (1,104) (100.0) % Provision for income taxes $ (798) $ (1,228) $ 430 (35.0) % ______________________ (*) Percentage changes in excess of 100% are deemed to be not meaningful (“NM”) Revenues Office Revenue: Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties.
Biggest changeYear Ended December 31, Change 2025 2024 $ % (dollars in thousands) Revenues: Office $ 50,140 $ 54,283 $ (4,143) (7.6) % Hotel $ 41,341 $ 39,407 $ 1,934 4.9 % Multifamily $ 15,783 $ 19,515 $ (3,732) (19.1) % Lending $ 8,960 $ 10,756 $ (1,796) (16.7) % Expenses: Office $ 25,804 $ 27,327 $ (1,523) (5.6) % Hotel $ 29,598 $ 27,955 $ 1,643 5.9 % Multifamily $ 12,786 $ 13,715 $ (929) (6.8) % Lending $ 4,838 $ 7,556 $ (2,718) (36.0) % Income (Loss) From Unconsolidated Entities Office $ (254) $ 462 $ (716) NM* Multifamily $ (3,506) $ (1,268) $ (2,238) NM* Non-Segment Revenue and Expenses: Interest and other income $ 445 $ 551 $ (106) (19.2) % Asset management and other fees to related parties $ (1,356) $ (1,797) $ 441 (24.5) % Expense reimbursements to related parties—corporate $ (3,496) $ (2,281) $ (1,215) 53.3 % Interest expense $ (37,720) $ (33,589) $ (4,131) 12.3 % General and administrative $ (4,434) $ (4,267) $ (167) 3.9 % Transaction-related costs $ (1,475) $ (1,382) $ (93) 6.7 % Depreciation and amortization $ (27,081) $ (27,373) $ 292 (1.1) % Loss on early extinguishment of debt $ (88) $ (1,416) $ 1,328 (93.8) % Impairment of real estate $ (3,692) $ — $ (3,692) N/A Loss on assets held for sale $ (298) $ — $ (298) N/A Gain on sale of real estate $ 679 $ — $ 679 N/A Provision for income taxes $ (497) $ (798) $ 301 (37.7) % ______________________ (*) Percentage changes in excess of 100% are deemed to be not meaningful (“NM”) Revenues Office Revenue: Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties.
The timing and amount of dividends declared and paid on our Preferred Stock will be determined by our Board of Directors, in its sole discretion, and may vary from time to time.
The timing and amount of dividends declared and paid on our Preferred Stock will be determined by our Board of Directors, in its sole discretion, and may vary from time to time.
FINRA Estimated Per Share Value We have prepared an estimate of the per share value of each of our Series A Preferred Stock, Series A1 Preferred Stock and Series D Preferred Stock as of December 31, 2024 in order to assist broker-dealers that are participating in our public offering of Series A1 Preferred Stock and broker-dealers that participated in our public offering of Series A Preferred Stock and Series D Preferred Stock in meeting their obligations under applicable FINRA rules.
FINRA Estimated Per Share Value We have prepared an estimate of the per share value of each of our Series A Preferred Stock, Series A1 Preferred Stock and Series D Preferred Stock as of December 31, 2025 in order to assist broker-dealers that are participating in our public offering of Series A1 Preferred Stock and broker-dealers that participated in our public offering of Series A Preferred Stock and Series D Preferred Stock in meeting their obligations under applicable FINRA rules.
Specifically, we divided (i) the fair values of our investments in real estate and certain lending assets and the carrying amounts of our other assets less the carrying amounts of our liabilities, in each case as of December 31, 2024, by (ii) the number of shares of Series A Preferred Stock, Series A1 Preferred Stock and Series D Preferred Stock outstanding as of that date.
Specifically, we divided (i) the fair values of our investments in real estate and certain lending assets and the carrying amounts of our other assets less the carrying amounts of our liabilities, in each case as of December 31, 2025, by (ii) the number of shares of Series A Preferred Stock, Series A1 Preferred Stock and Series D Preferred Stock outstanding as of that date.
Accordingly, although the estimated value of the Series A Preferred Stock, Series A1 Preferred Stock and Series D Preferred Stock, calculated based on the Calculated Assets and Liabilities as described above, exceeded the Maximum Value, we determined that the estimated value of each of the Series A Preferred Stock, the Series A1 Preferred Stock and Series D Preferred Stock, as of December 31, 2024, was equal to $25.00 per share, plus accrued and unpaid dividends.
Accordingly, although the estimated value of the Series A Preferred Stock, Series A1 Preferred Stock and Series D Preferred Stock, calculated based on the Calculated Assets and Liabilities as described above, exceeded the Maximum Value, we determined that the estimated value of each of the Series A Preferred Stock, the Series A1 Preferred Stock and Series D Preferred Stock, as of December 31, 2025, was equal to $25.00 per share, plus accrued and unpaid dividends.
(2) Represents gross monthly base rent, as of December 31, 2024, under leases expiring during the periods above, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.
(2) Represents gross monthly base rent, as of December 31, 2025, under leases expiring during the periods above, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.
This estimate utilizes the fair values of our investments in real estate and certain lending assets as well as the carrying amounts of our other assets and liabilities, in each case as of December 31, 2024 (the “Calculated Assets and Liabilities”).
This estimate utilizes the fair values of our investments in real estate and certain lending assets as well as the carrying amounts of our other assets and liabilities, in each case as of December 31, 2025 (the “Calculated Assets and Liabilities”).
Holders of Preferred Stock are entitled to receive, if, as and when authorized by our Board of Directors, and declared by us out of legally available funds, cumulative cash dividends as follows: Annual Rate of Dividend (as a % of stated value) Series A1 Preferred Stock (1) 6.00% Series A Preferred Stock 5.50% Series D Preferred Stock 5.65% Series L Preferred Stock 5.50% 70 Table of Contents (1) The terms of the Series A1 Preferred Stock provide for cumulative cash dividends (if, as and when authorized by the Board of Directors) on each share of Series A1 Preferred Stock at a quarterly rate of the greater of (i) an annual rate of 6.00% of the Series A1 Stated Value, divided by four (4) and (ii) the Federal Funds (Effective) Rate on the dividend determination date, plus 2.50%, of the Series A1 Stated Value, divided by four (4), up to a maximum of 2.50% of the Series A1 Stated Value per quarter.
Holders of Preferred Stock are entitled to receive, if, as and when authorized by our Board of Directors, and declared by us out of legally available funds, cumulative cash dividends as follows: Annual Rate of Dividend (as a % of stated value) Series A1 Preferred Stock (1) 6.00% Series A Preferred Stock 5.50% Series D Preferred Stock 5.65% (1) The terms of the Series A1 Preferred Stock provide for cumulative cash dividends (if, as and when authorized by the Board of Directors) on each share of Series A1 Preferred Stock at a quarterly rate of the greater of (i) an annual rate of 6.00% of the Series A1 Stated Value, divided by four (4) and (ii) the Federal Funds (Effective) Rate on the dividend determination date, plus 2.50%, of the Series A1 Stated Value, divided by four (4), up to a maximum of 2.50% of the 63 Series A1 Stated Value per quarter.
Properties As of December 31, 2024, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures.
Properties As of December 31, 2025, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures.
Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, or re-leasing of space in existing properties, capital expenditures, paying interest and principal on debt financings, refinancing of indebtedness, SBA 7(a) loan originations, paying distributions on our Preferred Stock or any other preferred stock we may issue, any future repurchase of Common Stock and/or redemption of our Preferred Stock (if we choose, or are required, to pay the redemption price in cash instead of in shares of our Common Stock) and distributions on our Common Stock.
Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, or re-leasing of space in existing properties, capital expenditures, paying interest and principal on debt financings, refinancing of indebtedness, paying distributions on our Preferred Stock or any other preferred stock we may issue, any future repurchase of Common Stock and/or redemption of our Preferred Stock (if we choose, or are required, to pay the redemption price in cash instead of in shares of our Common Stock) and any renewed distributions on our Common Stock.
Multifamily Statistics: The following table sets forth occupancy rates and the monthly rent per occupied unit across our multifamily portfolio for the specified periods (includes 100% of our properties partially owned through an Unconsolidated Joint Venture): As of December 31, 2024 2023 Occupancy 81.7 % 79.3 % Monthly rent per occupied unit (1) $ 2,468 $ 2,805 ______________________ (1) Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units.
Multifamily Statistics: The following table sets forth occupancy rates and the monthly rent per occupied unit across our multifamily portfolio for the specified periods (includes 100% of our properties partially owned through an Unconsolidated Joint Venture): As of December 31, 2025 2024 Occupancy 85.3 % 81.7 % Monthly rent per occupied unit (1) $ 2,497 $ 2,468 ______________________ (1) Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units.
If the undiscounted cash flows are less than the carrying amount of the assets, an impairment is recognized to the extent the carrying amount of the assets exceeds the estimated 69 Table of Contents fair value of the assets. Assets held for sale are reported at the lower of the asset’s carrying amount or fair value, less cost to sell.
If the undiscounted cash flows are less than the carrying amount of the assets, an impairment is recognized to the extent the carrying amount of the assets exceeds the estimated 62 fair value of the assets. Assets held for sale are reported at the lower of the asset’s carrying amount or fair value, less cost to sell.
Our Unconsolidated Joint Ventures contain one office property, one multifamily site currently under development, two multifamily properties (one of which has been partially converted from office into multifamily units and is now being classified as a multifamily property) and one commercial development site.
Our Unconsolidated Joint Ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now being classified as a multifamily property) and one commercial development site.
This amount reflects total cash rent before concessions. Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,319 and $2,074 as of December 31, 2024 and 2023, respectively.
This amount reflects total cash rent before concessions. Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,127 and $2,319 as of December 31, 2025 and 2024, respectively.
Liquidity and Capital Resources General On a short-term basis, our principal demands for funds will be for the acquisition of assets, development or repositioning of properties (as further described below) (including pre-construction costs such as obtaining entitlements and permits and architectural work), or re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, SBA 7(a) loan originations, paying distributions on our Preferred Stock and Common Stock and making redemption payments on our Preferred Stock.
Liquidity and Capital Resources General On a short-term basis, our principal demands for funds will be for the acquisition of assets, development or repositioning of properties (as further described below) (including pre-construction costs such as obtaining entitlements and permits and architectural work), or re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, and paying distributions on our Preferred Stock.
The increase is due to changes in the valuation of investments in real estate at our unconsolidated office entities, which recognized a net unrealized gain during the year ended December 31, 2024, compared to a net unrealized loss for the year ended December 31, 2023.
The decrease is due to changes in the valuation of investments in real estate at our unconsolidated office entities, which recognized a net unrealized loss during the year ended December 31, 2025, compared to a net unrealized gain during the year ended December 31, 2024.
As of December 31, 2024, we had issued 12,040,878 shares of Series A1 Preferred Stock, 8,251,657 shares of Series A Preferred Stock and 56,857 shares of Series D Preferred Stock and received aggregate net proceeds of $459.1 million after commissions, fees and allocated costs.
We have suspended our offering of Series A1 Preferred Stock. As of December 31, 2025, we had issued 12,040,878 shares of Series A1 Preferred Stock, 8,251,657 shares of Series A Preferred Stock and 56,857 shares of Series D Preferred Stock and received aggregate net proceeds of $459.1 million after commissions, fees and allocated costs.
Additionally, as of December 31, 2024, we had nine development sites (three of which were being used as parking lots). 58 Table of Contents Rental Rate Trends Office Statistics: The following table sets forth occupancy rates and annualized rent per occupied square foot across our office portfolio as of the specified periods (includes 100% of our properties partially owned through Unconsolidated Joint Ventures): As of December 31, 2024 2023 Occupancy (1) 70.6 % 83.8 % Annualized rent per occupied square foot (1)(2) $ 60.48 $ 57.17 (1) The information presented in this table represents historical information as of the date indicated without giving effect to any property sales occurring thereafter.
Additionally, as of December 31, 2025, we had eight development sites (two of which were being used as parking lots). 51 Rental Rate Trends Office Statistics: The following table sets forth occupancy rates and annualized rent per occupied square foot across our office portfolio as of the specified periods (includes 100% of our properties partially owned through Unconsolidated Joint Ventures): As of December 31, 2025 2024 Occupancy (1) 74.8 % 70.6 % Annualized rent per occupied square foot (1)(2) $ 58.78 $ 60.48 (1) The information presented in this table represents historical information as of the date indicated without giving effect to any property sales occurring thereafter.
Asset Management and Other Fees to Related Parties: Asset management fees and other fees to related parties, which have not been allocated to our operating segments decreased to $1.8 million for the year ended December 31, 2024, compared to $2.6 million for the year ended December 31, 2023.
Asset Management and Other Fees to Related Parties: Asset management fees and other fees to related parties, which have not been allocated to our operating segments decreased to $1.4 million for the year ended December 31, 2025, compared to $1.8 million for the year ended December 31, 2024.
If we cannot obtain funding for our long-term liquidity needs, our assets may generate lower cash flows or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
If we cannot obtain funding for our long-term liquidity needs, our assets may generate lower cash flows or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock. 59 We must meet certain financial and liquidity criteria to maintain the listing of our Common Stock on Nasdaq.
The decrease was a result of a reduction in asset management fees related to a decrease in our net asset value, primarily resulting from a reduction in the fair value of our investments in real estate as of the end of 2023.
The decrease was a result of a reduction in asset management fees related to a decrease in our net asset value, primarily resulting from a reduction in the fair value of our investments in real estate as of the end of both 2024 and 2025.
Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash provided by operating activities increased by $5.0 million for the year ended December 31, 2024 as compared to the same period in 2023.
Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash provided by operating activities was $5.8 million for the year ended December 31, 2025 as compared to $17.0 million during the same period in 2024.
Of the 4,694,975 shares of Series A Preferred Stock that have been redeemed, the redemption of 2,330,186 shares of Series A Preferred Stock were paid in cash (2,313,106 of which were redeemed at the option of the holders and 17,080 of which were redeemed at the option of the Company).
Of the 5,151,320 shares of Series A Preferred Stock that have been redeemed, the redemption of 2,330,186 shares of Series A Preferred Stock were paid in cash, 2,313,106 of which were redeemed at the option of the holders and 17,080 of which were redeemed at the option of the Company.
Total abatements, representing lease incentives in the form of free rent, for the twelve months ended December 31, 2024 and 2023 were approximately $1.1 million and $3.0 million, respectively. Giving effect to abatements, net annualized rent per occupied square foot was $59.93 and $55.95 as of December 31, 2024 and 2023, respectively (See Definitions for more detail).
Total abatements, representing lease incentives in the form of free rent, for the twelve months ended December 31, 2025 and 2024 were approximately $1.6 million and $1.1 million, respectively. Giving effect to abatements, net annualized rent per occupied square foot was $54.90 and $59.93 as of December 31, 2025 and 2024, respectively (See Definitions for more detail).
Income (Loss) From Unconsolidated Office Entities: Income from our office Unconsolidated Joint Ventures included in office segment net operating income increased to income of $462,000 for the year ended December 31, 2024, compared to a loss of $582,000 for the year ended December 31, 2023.
Income (Loss) From Unconsolidated Office Entities: Income from our office Unconsolidated Joint Ventures included in office segment net operating income decreased to a loss of $254,000 for the year ended December 31, 2025, compared to income of $462,000 for the year ended December 31, 2024.
To regain compliance, the closing bid price of our Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days prior to May 6, 2025.
To regain compliance, the closing bid price of our Common Stock had to be a minimum of $1.00 per share for a minimum of ten consecutive business days prior to May 6, 2025.
Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash provided by financing activities for the year ended December 31, 2024 was $13.9 million, compared to cash provided by financing activities of $63.4 million for the year ended December 31, 2023.
Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash used in financing activities for the year ended December 31, 2025 was $4.6 million, compared to cash provided by financing activities 58 of $13.9 million for the year ended December 31, 2024.
The annual rate of dividend of the Series A1 Preferred Stock during the first quarter of 2025 is 7.83%. Dividends on each share of Preferred Stock begin accruing on, and are cumulative from, the date of issuance.
The annual rate of dividend of the Series A1 Preferred Stock during the first quarter of 2026 is 6.39%. Dividends on each share of Preferred Stock begin accruing on, and are cumulative from, the date of issuance.
(Loss) Income From Unconsolidated Multifamily Entity: The income from our Unconsolidated Joint Venture included in multifamily segment net operating income decreased to a loss of $1.3 million for the year ended December 31, 2024, compared to income of $155,000 for the year ended December 31, 2023.
(Loss) Income From Unconsolidated Multifamily Entity: The loss from our Unconsolidated Joint Venture included in multifamily segment net operating income increased to a loss of $3.5 million for the year ended December 31, 2025, compared to a loss of $1.3 million for the year ended December 31, 2024.
During the tenure of the offering, we issued 4,603,287 Series A Preferred Stock and Series A Preferred Warrants and received aggregate net proceeds of $105.2 million after commissions, fees and allocated costs.
During the tenure of the offering, we issued 4,603,287 Series A Preferred Stock and Series A Preferred Warrants and received aggregate net proceeds of $105.2 million after commissions, fees and allocated costs. As of December 31, 2025, all of the Series A Preferred Warrants had expired.
The table below sets forth information on certain of our executed leases during the year ended December 31, 2024, excluding space that was vacant for more than one year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party: New Cash Expiring Cash Number of Rentable Rents per Square Rents per Square Leases (1) Square Feet Foot (2) Foot (2) Twelve Months Ended December 31, 2024 26 260,796 $ 52.74 $ 53.92 (1) Based on the number of tenants that signed leases.
The table below sets forth information on certain of our executed leases during the year ended December 31, 2025, excluding space that was vacant for more than one year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party: New Cash Expiring Cash Number of Rentable Rents per Square Rents per Square Leases (1) Square Feet Foot (2) Foot (2) Year Ended December 31, 2025 26 93,931 $ 45.04 $ 60.51 (1) Based on the number of tenants that signed leases.
From June 2022 through September 2024, we conducted a public offering with respect to shares of our Series A1 Preferred Stock. We used the net proceeds from the offerings for general corporate purposes. We have suspended our offering of Series A1 Preferred Stock.
From February 2020 through June 2022, we conducted a continuous public offering of our Series A Preferred Stock and Series D Preferred Stock. From June 2022 through September 2024, we conducted a public offering with respect to shares of its Series A1 Preferred Stock. We used the net proceeds from the offerings for general corporate purposes.
In September 2024, the Company (at its option) redeemed 2,589,606 shares of Series A1 Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, from September through December 2024, 181,912 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively the “Series A1 In-Kind Redemptions”).
As of December 31, 2025, the Company, at its option, redeemed 2,589,606 shares of Series A1 Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date, and in addition, as of December 31, 2025, 718,649 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series A1 In-Kind Redemptions”).
In September 2024, the Company (at its option) redeemed 2,150,076 shares of Series A Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, from September through December 2024, 214,713 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively the “Series A In-Kind Redemptions”).
As of December 31, 2025, the Company, at its option, redeemed 2,150,076 shares of Series A Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date, and in addition, as of 671,058 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series A In-Kind Redemptions”).
The decrease is due to changes in the valuation of investments in real estate at our unconsolidated multifamily entities, which recognized a net unrealized loss during the year ended December 31, 2024, compared to a net unrealized gain for the year ended December 31, 2023.
The increase is due to changes in the valuation of investments in real estate at our unconsolidated multifamily entities, which recognized a larger unrealized loss during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Lending Expenses: Lending expenses represent expenses from our lending subsidiaries, including interest expense, general and administrative expenses and fees to related parties. Lending expenses decreased to $7.6 million for the year ended December 31, 2024, compared to $7.9 million for the year ended December 31, 2023.
Lending Expenses: Lending expenses represent expenses from our lending subsidiaries, including interest expense, general and administrative expenses and fees to related parties. Lending expenses were $4.8 million for the year ended December 31, 2025, compared with $7.6 million for the year ended December 31, 2024.
During the year ended December 31, 2024, we executed leases with terms longer than 12 months totaling 269,811 square feet.
During the year ended December 31, 2025, we executed leases with terms longer than 12 months totaling 182,120 square feet.
As of December 31, 2024, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 70.6% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $135.90 for the year ended December 31, 2024 and our four multifamily properties were 81.7% occupied.
As of December 31, 2025, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 74.8% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $152.70 for the year ended December 31, 2025 and our five multifamily properties were 85.3% occupied.
Critical Accounting Policies and Estimates and Recently Issued Accounting Pronouncements The discussion and analysis of our historical financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Off Balance Sheet Arrangements As of December 31, 2025, we did not have any off-balance sheet arrangements. Critical Accounting Policies and Estimates and Recently Issued Accounting Pronouncements The discussion and analysis of our historical financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 4,817,486 shares of Common Stock.
The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 1,202,761 shares of Common Stock.
Securities Offerings We conducted a continuous public offering of Series A Preferred Stock from October 2016 through January 2020, where one Series A Preferred Warrant was issued along with each issued share of Series A Preferred Stock.
The aggregate principal balance of the junior subordinated notes was $27.1 million as of December 31, 2025. Securities Offerings We conducted a continuous public offering of Series A Preferred Stock from October 2016 through January 2020, where one Series A Preferred Warrant was issued along with each issued share of Series A Preferred Stock.
Provision for Income Taxes: Provision for income taxes decreased to $798,000 for the year ended December 31, 2024, compared to $1.2 million for the year ended December 31, 2023. The decrease is primarily due to lower taxable income at our taxable REIT subsidiaries during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The decrease is primarily due to lower taxable income at our taxable REIT subsidiaries during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Over the next four quarters, we expect to see expiring cash rents as set forth in the table below (includes 100% of our properties partially owned through Unconsolidated Joint Ventures): For the Three Months Ended March 31, June 30, September 30, December 31, 2025 2025 2025 2025 Expiring Cash Rents: Expiring square feet (1) 44,273 29,537 32,658 3,857 Expiring rent per square foot (2) $ 61.41 $ 73.47 $ 57.11 $ 46.67 (1) Month-to-month tenants occupying a total of 4,371 square feet are included in the expiring leases in the first quarter listed.
Over the next four quarters, we expect to see expiring cash rents as set forth in the table below (includes 100% of our properties partially owned through Unconsolidated Joint Ventures): For the Three Months Ended March 31, 2026 June 30, 2026 September 30, 2026 December 31, 2026 Expiring Cash Rents: Expiring square feet (1) 20,003 35,226 30,978 21,607 Expiring rent per square foot (2) $ 44.49 $ 56.38 $ 49.26 $ 55.77 (1) Month-to-month tenants occupying a total of 4,193 square feet are included in the expiring leases in the first quarter listed.
The increase is primarily due to higher occupancy and increased rent per occupied unit, net of rent concessions, at our consolidated multifamily properties during the year ended December 31, 2024. Lending Revenue: Lending revenue represents revenue from our lending subsidiaries, including interest income on loans and other loan related fee income.
The decrease was primarily attributed to lower occupancy and decreased monthly rent per occupied unit, net of rent concessions during the year ended December 31, 2025 as compared to year ended December 31, 2024. Lending Revenue: Lending revenue represents revenue from our lending subsidiaries, including interest income on loans and other loan related fee income.
Therefore, we cannot give any assurance that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates. 59 Table of Contents Additionally, decreased demand and other negative trends or unforeseeable events that impair our ability to timely renew or re lease space could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Additionally, decreased demand and other negative trends or unforeseeable events that impair our ability to timely renew or re 52 lease space could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or renew dividends on our Common Stock.
Expenses Office Expenses: Office expenses increased to $27.3 million for the year ended December 31, 2024, compared to $26.1 million for the year ended December 31, 2023.
Expenses Office Expenses: Office expenses decreased to $25.8 million for the year ended December 31, 2025, compared to $27.3 million for the year ended December 31, 2024.
Seasonality Our revenues and expenses for our hotel property are subject to seasonality during the year. Generally, our hotel revenues are greater in the first and second quarters than the third and fourth quarters. This seasonality can be expected to cause quarterly fluctuations in revenues, segment net operating income, net income and cash provided by operating activities.
Generally, our hotel revenues are greater in the first and second quarters than the third and fourth quarters. This seasonality can be expected to cause quarterly fluctuations in revenues, segment net operating income, net income and cash provided by operating activities. In addition, the hotel industry is cyclical and demand generally follows, on a lagged basis, key macroeconomic factors.
Our cash flows from investing activities are primarily related to property acquisitions and dispositions, expenditures for the development or repositioning of properties, capital expenditures and cash flows associated with loans originated at our lending segment.
The decrease is primarily due to an increase in net loss adjusted for depreciation and amortization expense and other non-cash items of $11.9 million. Our cash flows from investing activities are primarily related to property acquisitions and dispositions, expenditures for the development or repositioning of properties, capital expenditures and cash flows associated with loans originated at our lending segment.
Depreciation and Amortization Expense: Depreciation and amortization expense decreased to $27.4 million for the year ended December 31, 2024, compared to $52.5 million for the year ended December 31, 2023.
Transaction-Related Costs: Transaction-related costs were $1.5 million for the year ended December 31, 2025, generally consistent with $1.4 million for the year ended December 31, 2024. Depreciation and Amortization Expense: Depreciation and amortization expense decreased to $27.1 million for the year ended December 31, 2025, compared to $27.4 million for the year ended December 31, 2024.
Net cash used in investing activities decreased by $66.4 million to $22.3 million for the year ended December 31, 2024, compared to $88.7 million for the year ended December 31, 2023.
Net cash used in investing activities was $12.0 million for the year ended December 31, 2025, compared to $22.3 million for the year ended December 31, 2024.
The following table sets forth a historical reconciliation of net (loss) attributable to common stockholders to FFO attributable to holders of common stockholders: Year Ended December 31, 2024 2023 (in thousands) Net loss attributable to common stockholders (1) $ (73,343) $ (75,727) Depreciation and amortization 27,373 52,484 Noncontrolling interests’ proportionate share of depreciation and amortization (306) (2,090) Gain on sale of real estate — (1,104) FFO attributable to common stockholders (1) $ (46,276) $ (26,437) (1) During the years ended December 31, 2024 and 2023, we recognized $17.7 million and $1.5 million, respectively, of redeemable preferred stock redemptions on our consolidated statements of operations and $755,000 and $0 respectively, of redeemable preferred stock deemed dividends on our consolidated statements of operations.
The following table sets forth a historical reconciliation of net (loss) attributable to common stockholders to FFO attributable to holders of common stockholders: Year Ended December 31, 2025 2024 (in thousands) Net loss attributable to common stockholders (1) $ (61,648) $ (73,343) Depreciation and amortization 27,081 27,373 Noncontrolling interests’ proportionate share of depreciation and amortization (233) (306) Impairment of real estate 3,692 — Loss on assets held for sale 298 — Gain on sale of real estate (679) — FFO attributable to common stockholders (1) $ (31,489) $ (46,276) 54 (1) During the years ended December 31, 2025 and 2024, we recognized $1.4 million and $17.7 million, respectively, of redeemable preferred stock redemptions.
Dividends on Common Stock Holders of our Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by us out of legally available funds.
All such redemptions were redeemed at the option of the holders. The Series D In-Kind Redemptions resulted in the aggregate issuance of 11,556 shares of Common Stock. Dividends on Common Stock Holders of our Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by us out of legally available funds.
Of the 2,954,599 shares of Series A1 Preferred Stock that have been redeemed, the redemption of 183,081 shares of Series A1 Preferred Stock were paid in cash (all of which were redeemed at the option of the holders).
The Series A In-Kind Redemptions resulted in the aggregate issuance of 1,352,410 shares of Common Stock. Of the 3,491,336 shares of Series A1 Preferred Stock that have been redeemed, the redemption of 183,081 shares of Series A1 Preferred Stock were paid in cash (all of which were redeemed at the option of the holders).
General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $4.3 million for the year ended December 31, 2024, compared to $5.5 million for the year ended December 31, 2023. The decrease was primarily due to decreases in legal fees and consulting services.
General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $4.4 million for the year ended December 31, 2025, generally consistent with $4.3 million for the year ended December 31, 2024.
If the Company and the lender under the Channel House Mortgage cannot agree on a modification of the mortgage and the Company fails to exercise its extension option, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, declare principal and interest under the mortgage loan to be immediately due and payable.
If the Company and the lender under the Channel House Mortgage cannot agree on an extension of the mortgage and the Company fails to repay the loan in full upon its contractual maturity date, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, take possession of the property.
The decrease was primarily due to a decrease of $25.1 million in depreciation and amortization expense (discussed in more detail below in “Summary Segment Results”) and a decrease in transaction costs of $3.0 million, partially offset by an increase in interest expense not allocated to our operating segments of $2.2 million and a loss on extinguishment of debt of $1.4 million.
The increase was primarily due to a decrease of $7.2 million in segment net operating income (discussed in more detail below in “Summary Segment Results”), an increase in interest expense not allocated to our operating segments of $4.1 million, an increase in impairment of real estate of $3.7 million, and an increase in expense reimbursements to related parties - corporate of $1.2 million.
Expense Reimbursements to Related Parties—Corporate : The Administrator receives compensation and/or reimbursement for performing certain services for the Company and its subsidiaries.
Expense Reimbursements to Related Parties—Corporate : The Administrator receives compensation and/or reimbursement for performing certain services for the Company and its subsidiaries. Expense reimbursements to related parties—corporate were $3.5 million for the year ended December 31, 2025, an increase from $2.3 million for the year ended 57 December 31, 2024.
During the year ended December 31, 2024, at our option, we redeemed 2,589,606 and 2,150,076 shares of Series A1 Preferred Stock and Series A Preferred Stock, respectively, in shares of Common Stock and, additionally, from September 2024 through December 2024, we paid holder-requested redemptions of 181,912 and 214,713 shares of Series A1 Preferred Stock and Series A Preferred Stock, respectively, in shares of Common Stock.
From and after September 2024, at our option, we redeemed 2,589,606 and 2,150,076 shares of Series A1 Preferred Stock and Series A Preferred Stock, respectively, in shares of Common Stock and we have paid holder-requested redemptions of 718,649, 671,058, and 4,122 shares of Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock respectively, in shares of Common Stock.
The redemption price in respect of any share of Preferred Stock, whether redeemed at our option or at the option of a holder, may be paid in cash or in shares of Common Stock in our sole discretion. 68 Table of Contents Through December 31, 2024, we redeemed 4,694,975 shares of Series A Preferred Stock, 2,954,599 shares of Series A1 Preferred Stock, and 8,410 of Series D Preferred Stock.
The redemption price in respect of any share of Preferred Stock, whether redeemed at our option or at the option of a holder, may be paid in cash or in shares of Common Stock in our sole discretion.
Expense reimbursements to related parties—corporate were $2.3 million for the year ended December 31, 2024, consistent with $2.3 million for the year ended December 31, 2023. 63 Table of Contents Interest Expense: Interest expense, which has not been allocated to our operating segments, increased to $33.6 million for the year ended December 31, 2024, compared to $31.4 million for the year ended December 31, 2023.
Interest Expense: Interest expense, which has not been allocated to our operating segments, increased to $37.7 million for the year ended December 31, 2025, compared to $33.6 million for the year ended December 31, 2024.
The decrease in FFO was primarily attributable to an increase in redeemable preferred stock redemptions of $16.2 million, an increase in redeemable preferred stock dividends of $4.0 million, an increase in interest expense not allocated to our operating segments of $2.2 million and a loss on extinguishment of debt of $1.4 million, these were partially offset by a decrease in transaction costs of $3.0 million.
The increase in FFO was primarily attributable to a decrease in redeemable preferred stock redemptions of $16.3 million, a decrease in redeemable preferred stock dividends of $8.5 million and a decrease in loss on early extinguishment of debt of $1.3 million.
Dividends As of December 31, 2024, there were 12,240,878 and 9,286,279 shares of Series A1 Preferred Stock issued and outstanding, respectively, 8,820,338 and 4,125,363 shares of Series A Preferred Stock issued and outstanding, respectively, 56,857 and 48,447 shares of Series D Preferred Stock issued and outstanding, respectively, and 11,654,506 shares of Common Stock issued and outstanding.
Dividends As of December 31, 2025, there were 12,240,878 and 8,749,542 shares of Series A1 Preferred Stock issued and outstanding, respectively, 8,820,338 and 3,669,018 shares of Series A Preferred Stock issued and outstanding, respectively, 56,857 and 44,325 shares of Series D Preferred Stock issued and outstanding, respectively, and 2,699,686 shares of Common Stock issued and outstanding.
Loss on Early Extinguishment of Debt: Loss on early extinguishment of debt of $1.4 million for the year ended December 31, 2024 was related to paydowns made on our 2022 Credit Facility Revolver. There was no loss on early extinguishment of debt during the year ended December 31, 2023.
Loss on Early Extinguishment of Debt: Loss on early extinguishment of debt of decreased to $88,000 for the year ended December 31, 2025, compared to $1.4 million for the year ended December 31, 2024. The decrease was due to larger amounts that were recognized related to the payoff of the 2022 Credit Facility during year ended December 31, 2024.
We may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of our long-term cash requirements.
These actions are also intended to better position the Company to take advantage of opportunities that are expected to arise in a recovering real estate market. We may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of our long-term cash requirements.
Such amounts are included in, and have the effect of increasing the net loss attributable to common stockholders and FFO attributable to common stockholders because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT. 61 Table of Contents FFO attributable to common stockholders, which is a non-GAAP measure, was $(46.3) million for the year ended December 31, 2024, a decrease of $19.8 million compared to $(26.4) million for the year ended December 31, 2023.
Such amounts are included in, and have the effect of increasing, net loss attributable to common stockholders and decreasing FFO attributable to common stockholders because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT.
This was partially offset by higher rental revenues at an office property in Beverly Hills, 62 Table of Contents California due to increased rental rates and higher rental revenues at an office property in Los Angeles, California from increased occupancy.
The decrease was primarily due to a decrease in rental revenues at office properties in Oakland, California, Los Angeles, California, and San Francisco, California as a result of lower occupancies, partially offset by an increase in rental revenues at office properties in Beverly Hills, California and Austin, Texas as a result of increased occupancy and rental rates.
Hotel Revenue: Hotel revenue decreased to $39.4 million for the year ended December 31, 2024, compared to $41.1 million for the year ended December 31, 2023. The decrease is due to a decrease in occupancy during 2024 as compared to the prior year.
Hotel Revenue: Hotel revenue increased to $41.3 million for the year ended December 31, 2025, compared to $39.4 million for the year ended December 31, 2024.
Lending revenue decreased to $10.8 million for the year ended December 31, 2024, compared to $11.5 million for the year ended December 31, 2023.
Multifamily Expenses: Multifamily expenses decreased to $12.8 million for the year ended December 31, 2025, compared to $13.7 million for the year ended December 31, 2024.
Hotel Expenses: Hotel expenses were $28.0 million for the year ended December 31, 2024, consistent with $28.0 million for the year ended December 31, 2023. Multifamily Expenses: Multifamily expenses increased to $13.7 million for the year ended December 31, 2024, compared to $9.5 million for the year ended December 31, 2023.
Hotel Expenses: Hotel expenses were $29.6 million for the year ended December 31, 2025, compared with $28.0 million for the year ended December 31, 2024. The increase is due to increased occupancy during the year ended December 31, 2025 compared to the prior year period.
We reflect the SBA 7(a) loans receivable as assets on our consolidated balance sheet and the SBA 7(a) loan-backed notes as debt on our consolidated balance sheet. We have junior subordinated notes with a variable interest rate that resets quarterly based on the three-month SOFR plus 3.51%, with quarterly interest‑only payments.
Other Financing Activity We have junior subordinated notes with a variable interest rate that resets quarterly based on the three-month SOFR plus 3.51%, with quarterly interest‑only payments. The junior subordinated balance is due at maturity on March 30, 2035. The junior subordinated notes may be redeemed at par at our option.
The Series A In-Kind Redemptions resulted in the aggregate issuance of 4,379,099 shares of Common Stock. Of the 8,410 shares of Series D Preferred Stock that have been redeemed, all such redemptions were paid in cash and were redeemed at the option of the holder.
Of the 12,532 shares of Series D Preferred Stock that have been redeemed, the redemption of 8,410 shares of Series D Preferred Stock were paid in cash and 4,122 shares of Series D Preferred Stock were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series D In-Kind Redemptions”).
Sources and Uses of Funds Mortgages We have mortgage loan agreements with outstanding balances of $440.4 million as of December 31, 2024.
Sources and Uses of Funds Mortgages We have mortgage loan agreements with outstanding balances of $477.0 million as of December 31, 2025. Our mortgage loans mature on various dates from June 7, 2026 through January 11, 2030.
Hotel Statistics: The following table sets forth the occupancy, ADR and RevPAR for our hotel in Sacramento, California for the specified periods: For the Year Ended December 31, 2024 2023 Occupancy (1) 67.2 % 75.1 % ADR $ 202.26 $ 194.12 RevPAR $ 135.90 $ 145.80 ______________________ (1) Hotel occupancy in 2024 was negatively impacted by ongoing construction related to the Rooms Renovation Project from September 2024 through December 2024.
Hotel Statistics: The following table sets forth the occupancy, ADR and RevPAR for our hotel in Sacramento, California for the specified periods: For the Year Ended December 31, 2025 2024 Occupancy 72.5 % 67.2 % ADR $ 210.54 $ 202.26 RevPAR $ 152.70 $ 135.90 Seasonality Our revenues and expenses for our hotel property are subject to seasonality during the year.
On November 7, 2024, we received written notice from the Listing Qualifications Department of Nasdaq indicating that, because the closing bid price for our Common Stock had fallen below $1.00 per share for 30 consecutive business days, we no longer comply with the Bid Price Requirement.
If we violate Nasdaq’s listing requirements or fail to meet its listing standards, our Common Stock may be delisted. On November 7, 2024, we received written notice from the Listing Qualifications Department of Nasdaq indicating that we had fallen out of compliance with the Bid Price Requirement.
Gain on Sale of Real Estate: Gain on sale of real estate of $1.1 million for the year ended December 31, 2023 was related to the sale of 80% of our interest in an office property in Los Angeles, California. There were no dispositions during the year ended December 31, 2024.
Gain on Sale of Real Estate: The Company recognized a gain on sale of real estate of $679,000 for the year ended December 31, 2025, resulting from the sale of a land parcel in Oakland, California. There were no dispositions during the year ended December 31, 2024.
The decrease was primarily due to a decrease in premium income and a decrease in interest income as a result of lower loan originations and loan sale volume during the year ended December 31, 2024, compared to the year ended December 31, 2023.
Lending revenue decreased to $9.0 million for the year ended December 31, 2025, compared to $10.8 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in interest income due to loan payoffs and a decrease in interest rates as well as loans funded.
Summary Segment Results During the years ended December 31, 2024 and 2023, we operated in four segments: office, hotel and multifamily properties and lending. Set forth and described below are summary segment results for our operating segments.
Set forth and described below are summary segment results for our operating segments.
Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor.
Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor. We have not paid dividends on our Common Stock since 2024, and we cannot predict with certainty if or when we may be able to resume paying such dividends on our Common Stock.
Partially offsetting the decrease in net cash used in investing activities are $32.2 million in proceeds from the sale of a property to the 4750 Wilshire JV during the year ended December 31, 2023 and a $9.9 million increase in capital expenditures during the year ended December 31, 2024.
The decrease in cash used in investing activities was primarily due to a $2.5 million decrease in capital expenditures, an increase in the receipt of key money of $4.7 million, and a decrease in cash used to fund loans of $3.3 million during the year ended December 31, 2025.
Construction has been substantially completed on the Rooms Renovation Project at our Sheraton Grand Hotel in Sacramento, California, with a total cost of approximately $20.9 million, of which approximately $16.6 million had been paid as of December 31, 2024. We are currently working on designs for the renovation of Sheraton Grand Hotel’s lobbies and common areas (the “Lobby Renovation Project”).
We also started our renovation of Sheraton Grand Hotel’s lobbies and common areas (the “Lobby Renovation Project”) during the third quarter of 2025. The estimated cost for the Lobby Renovation Project is approximately $11.6 million, of which $7.4 million had been incurred as of December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024 and 2023 (excluding our variable rate mortgages payable subject to interest rate cap agreements as well as premiums, discounts and deferred loan costs), $71.3 million (or 13.9%) and $224.7 million (or 47.3%), respectively, was floating rate borrowings.
Biggest changeAs of December 31, 2025 and 2024 (excluding debt reclassified as held for sale and excluding our variable rate mortgages payable subject to interest rate cap agreements as well as premiums, discounts and deferred loan costs), $74.1 million (or 14.4%) and $71.3 million (or 13.9%), respectively, was floating rate borrowings.
As of December 31, 2024, an increase or decrease of 50 basis points in interest rates would not result in a significant change to the fair value of the derivative asset. Item 8. Financial Statements and Supplementary Data The information required by this Item is incorporated herein by reference to the Financial Statements and Auditors’ Report beginning on page F-1.
As of December 31, 2025, an increase or decrease of 50 basis points in interest rates would not result in a significant change to the fair value of the derivative asset. Item 8. Financial Statements and Supplementary Data The information required by this Item is incorporated herein by reference to the Financial Statements and Auditors’ Report beginning on page F-1.
Based on the level of floating rate debt outstanding as of December 31, 2024 and 2023, a 50 basis point change in SOFR would result in an annual impact to our earnings of approximately $356,000 and $1.1 million, respectively. We calculate interest rate sensitivity by multiplying the amount of floating rate debt by the respective change in rate.
Based on the level of floating rate debt outstanding as of December 31, 2025 and 2024, a 50 basis point change in SOFR would result in an annual impact to our earnings of approximately $371,000 and $356,000, respectively. We calculate interest rate sensitivity by multiplying the amount of floating rate debt by the respective change in rate.
As of December 31, 2024 and 2023 (including our variable rate mortgages payable subject to interest rate cap agreements and excluding premiums, discounts, and deferred loan costs), $440.4 million (or 86.1%) and $250.7 million (or 52.7%) of our debt, respectively, was fixed rate borrowings.
As of December 31, 2025 and 2024 (including our variable rate mortgages payable subject to interest rate cap agreements and excluding premiums, discounts, and deferred loan costs), $440.4 million (or 85.6%) and $440.4 million (or 86.1%) of our debt, respectively, was fixed rate borrowings.
As of December 31, 2024, we had two interest rate cap agreements outstanding with an aggregate notional amount of $171.3 million and an aggregate fair value of the net derivative assets of $107,000.
As of December 31, 2025, we had two interest rate cap agreements outstanding with an aggregate notional amount of $172.0 million and an aggregate fair value of the net derivative assets of $3,000.

Other CMCT 10-K year-over-year comparisons