Creative Media & Community Trust Corp

Previous wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations, including plans and objectives relating to future growth of our business and availability of funds. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would,” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” “should” or “goal” or the negative thereof or other variations or similar words or phrases. Such forward-looking statements also include, among others, statements about our plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that our management has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the timing, form, and operational effects of our development activities, (ii) our ability to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and continuing higher interest rates on our operations and profitability, (v) general economic, market and other conditions, including the effects of high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth, and (vi) our approach to artificial intelligence (“AI”). Additional important factors that could cause our actual results to differ materially from our expectations are discussed in “Item 1A—Risk Factors” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 10, 2026 (the “2025 Form 10-K”). The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements are reasonabl…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations, including plans and objectives relating to future growth of our business and availability of funds. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would,” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” “should” or “goal” or the negative thereof or other variations or similar words or phrases. Such forward-looking statements also include, among others, statements about our plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that our management has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the timing, form, and operational effects of our development activities, (ii) our ability to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and continuing higher interest rates on our operations and profitability, (v) general economic, market and other conditions, including the effects of high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth, (vi) our approach to artificial intelligence (“AI”) and (vii) the ongoing conflict in the Middle East and related disruptions. Additional important factors that could cause our actual results to differ materially from our expectations are discussed in “Item 1A—Risk Factors” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 10, 2026 (the “2025 Form 10-K”). The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that th…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The following discussion of our financial condition as of March 31, 2026 and results of operations for the three months ended March 31, 2026 and 2025 should be read in conjunction with the 2025 Form 10-K. For a more detailed description of the risks affecting our financial condition and results of operations, see “Risk Factors” in Part I, Item 1A of the 2025 Form 10-K. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-Q, including the notes to the consolidated financial statements contained therein. The terms “we,” “us,” “our” and the “Company” refer to Creative Media & Community Trust Corporation and its subsidiaries.

Current wording

The following discussion of our financial condition as of June 30, 2026 and results of operations for the three and six months ended June 30, 2026 and 2025 should be read in conjunction with the 2025 Form 10-K. For a more detailed description of the risks affecting our financial condition and results of operations, see “Risk Factors” in Part I, Item 1A of the 2025 Form 10-K. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-Q, including the notes to the consolidated financial statements contained therein. The terms “we,” “us,” “our” and the “Company” refer to Creative Media & Community Trust Corporation and its subsidiaries.

Previous wording

The phrase “ADR” represents average daily rate. It is calculated as trailing three-month room revenue divided by the number of rooms occupied. For sold properties, ADR is presented for the Company’s period of ownership only.

Current wording

The phrase “ADR” represents average daily rate. It is calculated as trailing six-month room revenue divided by the number of rooms occupied. For sold properties, ADR is presented for the Company’s period of ownership only.

Previous wording

The phrase “annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, 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.

Current wording

The phrase “annualized rent” represents gross monthly base rent, or gross monthly contractual rent under retail leases, 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.

Previous wording

The phrase “net annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, net of total rent abatements granted in the applicable month, multiplied by 12. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

Current wording

The phrase “net annualized rent” represents gross monthly base rent, or gross monthly contractual rent under retail leases, net of total rent abatements granted in the applicable month, multiplied by 12. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

Previous wording

The phrase “RevPAR” represents revenue per available room. It is calculated as trailing three-month room revenue divided by the number of available rooms. For sold properties, RevPAR is presented for the Company’s period of ownership only.

Current wording

The phrase “RevPAR” represents revenue per available room. It is calculated as trailing six-month room revenue divided by the number of available rooms. For sold properties, RevPAR is presented for the Company’s period of ownership only.

Previous wording

As of March 31, 2026, 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 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. As of March 31, 2026, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 73.1% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $178.71 for the three months ended March 31, 2026 and our five multifamily properties were 89.6% occupied. Additionally, as of March 31, 2026, we had eight development sites (two of which were being used as parking lots).

Current wording

As of June 30, 2026, 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 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. As of June 30, 2026, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 71.9% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $179.59 for the six months ended June 30, 2026 and our five multifamily properties were 93.6% occupied. Additionally, as of June 30, 2026, we had eight development sites (two of which were being used as parking lots).

Previous wording

Established in 1994, 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. 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. The three investment platforms, real estate, infrastructure, and credit leverage in-house expertise to create value within each investment.

Current wording

Established in 1994, 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. 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. CIM manages assets and pursues opportunities across five platforms: real estate, credit, infrastructure, opportunity zones, and strategic opportunities, with a focus on generating attractive risk-adjusted returns.

Previous wording

We will seek to satisfy our long-term liquidity needs through one or more of the following methods: (i) offerings of shares of Common Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) credit facilities and term loans; (iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (v) the sale of existing assets; and/or (vi) cash flows from operations.

Current wording

We will seek to satisfy our long-term liquidity needs through one or more of the following methods: (i) offerings of shares of Common Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) issuances of Preferred Stock to one or more of our affiliates; (iv) credit facilities and term loans; (v) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (vi) the sale of one or more of our existing assets; and/or (vii) cash flows from operations.

Previous wording

(2)Represents gross monthly base rent under leases commenced as of the specified periods, 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. Annualized rent for certain office properties includes rent attributable to retail. Total abatements, representing lease incentives in the form of free rent, for the twelve months ended March 31, 2026 and 2025 were approximately $1.8 million and $1.0 million, respectively. Giving effect to abatements, net annualized rent per occupied square foot was $55.90 and $58.00 as of March 31, 2026 and 2025, respectively (See Definitions for more detail).

Current wording

(2)Represents gross monthly base rent under leases commenced as of the specified periods, 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. Annualized rent for certain office properties includes rent attributable to retail. Total abatements, representing lease incentives in the form of free rent, for the twelve months ended June 30, 2026 and 2025 were approximately $1.8 million and $1.1 million, respectively. Giving effect to abatements, net annualized rent per occupied square foot was $56.94 and $60.05 as of June 30, 2026 and 2025, respectively (See Definitions for more detail).

Previous wording

(1)Month-to-month tenants occupying a total of 6,168 square feet are included in the expiring leases in the first quarter listed.

Current wording

(1)Month-to-month tenants occupying a total of 5,058 square feet are included in the expiring leases in the first quarter listed.

Previous wording

During the three months ended March 31, 2026, we executed leases with terms longer than 12 months totaling 20,562 square feet. The table below sets forth information on certain of our executed leases during the three months ended March 31, 2026, 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:

Current wording

During the three and six months ended June 30, 2026, we executed leases with terms longer than 12 months totaling 16,176 and 36,738 square feet, respectively. The table below sets forth information on certain of our executed leases during the three and six months ended June 30, 2026, 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:

Previous wording

(1)Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units. This amount reflects total cash rent before concessions. Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,156 and $2,341 as of March 31, 2026 and 2025, respectively.

Current wording

(1)Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units. This amount reflects total cash rent before concessions. Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,286 and $2,284 as of June 30, 2026 and 2025, respectively.

Previous wording

Prior to the divestiture described in this paragraph, we were a national lender that primarily originated loans to small businesses. As previously announced on November 12, 2025, the Company and First Western entered into the Membership Interest Purchase Agreement with the Buyer. The Closing occurred on January 21, 2026. 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 for a purchase price of $44.9 million (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), resulting in proceeds of $31.2 million after the repayment of the Lending Division Revolving Credit Facility, and a net gain of $1.7 million. Subsequent to March 31, 2026, the Company received $1.0 million of escrow proceeds in connection with the Transactions.

Current wording

Prior to the divestiture described in this paragraph, we were a national lender that primarily originated loans to small businesses. As previously announced on November 12, 2025, the Company and First Western entered into the Membership Interest Purchase Agreement with the Buyer. The Closing occurred on January 21, 2026. 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 for a purchase price of $44.9 million (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), resulting in proceeds of $31.2 million after the repayment of the Lending Division Revolving Credit Facility, and a net gain of $1.7 million. The Company received $1.0 million of incremental proceeds held in escrow which was previously contemplated in connection with the Transactions during the three months ended June 30, 2026.

Previous wording

Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 24.0% of our annualized office rental income for the three months ended March 31, 2026.

Current wording

Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 24.3% of our annualized office rental income for the three months ended June 30, 2026.

Previous wording

We are not aware of any material trends or uncertainties, other than geopolitical conflict and national economic conditions affecting real estate in general, such as the effects of high unemployment rates, continued or renewed inflation, heightened interest rates, and any recession or slowdown in economic growth and any proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners, that may reasonably be expected to have a material impact on our results from operations other than those listed in the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

We are not aware of any material trends or uncertainties, other than geopolitical conflict and national economic conditions affecting real estate in general, such as the ongoing conflict in the Middle East and related disruptions, the effects of high unemployment rates, continued or renewed inflation, heightened interest rates, any recession or slowdown in economic growth and any proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners, that may reasonably be expected to have a material impact on our results from operations other than those listed in the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

The Company had a net loss of $8.4 million for the three months ended March 31, 2026, representing an increase of $2.1 million compared to a net loss of $6.3 million for the three months ended March 31, 2025. The increase in net loss was primarily due to a decrease of $1.9 million in segment net operating income (discussed in more detail below in “Summary Segment Results”).

Current wording

The Company had a net loss of $10.0 million for the three months ended June 30, 2026, representing an increase of $835,000 compared to a net loss of $9.2 million for the three months ended June 30, 2025. The increase in net loss was primarily due to a decrease of $510,000 in segment net operating income (discussed in more detail below in “Summary Segment Results”).

Previous wording

We believe that funds from operations (“FFO”), a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferred stock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”).

Current wording

We believe that funds from operations (“FFO”), a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable Preferred Stock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, casualty losses, net, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”).

Previous wording

During the three months ended March 31, 2026 and 2025, we operated in three segments: office, hotel and multifamily properties. As previously disclosed, the Company completed the sale of its lending business on January 21, 2026, and, as a result, the Company’s lending business ceased to be one of the Company’s reportable segments during the three months ended March 31, 2026. As the lending segment activity was de minimis during the period it remained under the Company’s ownership for the three months ended March 31, 2026, the related amounts are included within non-segment interest and other income, interest expense, and general and administrative, as applicable, in the following table for the three months ended March 31, 2026. Set forth and described below are summary segment results for our operating segments (dollar amounts in thousands).

Current wording

During the three months ended June 30, 2026 and 2025, we operated in three segments: office, hotel and multifamily properties. As previously disclosed, the Company completed the sale of its lending business on January 21, 2026, and, as a result, the Company’s lending business ceased to be one of the Company’s reportable segments (as further discussed in Note 17 to the consolidated financial statements included in this Quarterly Report on Form 10-Q). Set forth and described below are summary segment results for our operating segments (dollar amounts in thousands).

Previous wording

Office Revenue: Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties. Office revenue decreased to $12.6 million for the three months ended March 31, 2026 from $13.1 million for the three months ended March 31, 2025. The change is primarily due to a decrease in tenant reimbursement revenue at an office property in Oakland, California.

Current wording

Office Revenue: Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties. Office revenue increased to $12.5 million for the three months ended June 30, 2026 from $11.9 million for the three months ended June 30, 2025. The change was primarily due to an increase in rental revenue and tenant reimbursement revenue at an office property in Los Angeles, California, in addition to an increase in tenant reimbursement revenue at an office property in Oakland, California.

Previous wording

Multifamily Revenue: Multifamily revenue decreased to $3.9 million for the three months ended March 31, 2026, compared to $4.1 million for the three months ended March 31, 2025. The decrease is primarily due to decreased rent per occupied unit, net of rent concessions, at our multifamily properties during the three months ended March 31, 2026.

Current wording

Multifamily Revenue: Multifamily revenue increased to $4.3 million for the three months ended June 30, 2026, compared to $3.9 million for the three months ended June 30, 2025. The increase was primarily due to an increase in occupancy at our multifamily properties during the three months ended June 30, 2026.

Previous wording

Income (Loss) From Unconsolidated Office Entities: Income from our unconsolidated office entities was $62,000 for the three months ended March 31, 2026, compared to a loss of $29,000 for the three months ended March 31, 2025. The increase was due to an increase in rental revenues at one of our unconsolidated office entities during the three months ended March 31, 2026.

Current wording

(Loss) Income From Unconsolidated Office Entities: Loss from our unconsolidated office entities was $2.2 million for the three months ended June 30, 2026, compared to income from our unconsolidated office entities of $175,000 for the three months ended June 30, 2025. The change was primarily due to fair value adjustments to real estate at two of our unconsolidated office entities during the three months ended June 30, 2026.

Previous wording

Interest Expense: Interest expense, which has not been allocated to our operating segments, was $9.1 million for the three months ended March 31, 2026, consistent with $9.2 million for the three months ended March 31, 2025.

Current wording

Interest and Other Income: Interest and other income, which has not been allocated to our operating segments, was $144,000 for the three months ended June 30, 2026, consistent with $143,000 for the three months ended June 30, 2025.

Previous wording

Multifamily Expenses: Multifamily expenses decreased to $3.0 million for the three months ended March 31, 2026, compared to $3.6 million for the three months ended March 31, 2025. The decrease was primarily due to a decrease in real estate tax expenses at multifamily properties in Oakland, California for the three months ended March 31, 2026, compared to the prior period.

Current wording

Multifamily Expenses: Multifamily expenses decreased to $2.6 million for the three months ended June 30, 2026, compared to $3.1 million for the three months ended June 30, 2025. The decrease was primarily due to a decrease in real estate taxes at our multifamily properties in Oakland, California for the three months ended June 30, 2026, compared to the prior period.

Previous wording

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 increased to $584,000 for the three months ended March 31, 2026, compared to $360,000 for the three months ended March 31, 2025. The change was a result of an increase in asset management fees driven by an increase in our net asset value attributable to common stockholders resulting from the issuance of additional shares of Common Stock during the three months ended March 31, 2026.

Current wording

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 increased to $859,000 for the three months ended June 30, 2026, compared to $349,000 for the three months ended June 30, 2025. The change was a result of an increase in asset management fees driven by an increase in our net asset value attributable to common stockholders resulting from the issuance of additional shares of Common Stock, primarily during the first quarter of 2026.

Previous wording

Depreciation and Amortization Expense: Depreciation and amortization expense increased to $7.7 million for the three months ended March 31, 2026, compared to $6.6 million for the three months ended March 31, 2025. The increase was primarily due to an increase in tenant improvement amortization at an office property located in Beverly Hills, California, as well as an increase at our hotel property due to renovation projects which have increased depreciable assets.

Current wording

Depreciation and Amortization Expense: Depreciation and amortization expense increased to $7.1 million for the three months ended June 30, 2026, compared to $6.3 million for the three months ended June 30, 2025. The increase was primarily due to an increase in tenant improvement amortization at an office property located in Beverly Hills, California, as well as an increase at our hotel property due to renovation projects which have increased depreciable assets.

Previous wording

Provision for Income Taxes: There was no provision for income taxes for the three months ended March 31, 2026, compared to a provision for income taxes of $121,000 for the three months ended March 31, 2025. The decrease is primarily due to the sale of First Western, one of our taxable REIT subsidiaries, on January 21, 2026.

Current wording

Provision for Income Taxes: There was no provision for income taxes for the three months ended June 30, 2026, compared to a provision for income taxes of $158,000 for the three months ended June 30, 2025. The decrease was primarily due to the sale of First Western, one of our taxable REIT subsidiaries, in January 2026.

Previous wording

(1)During the three months ended March 31, 2026 and 2025, we recognized $22.2 million and $300,000, respectively, of redeemable preferred stock redemptions. Such amounts are included in, and have the effect of increasing, net loss attributable to common stockholders and FFO attributable to common stockholders because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT.

Current wording

(1)During the six months ended June 30, 2026 and 2025, we recognized $22.3 million and $300,000, respectively, of redeemable Preferred Stock redemptions. 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.

Previous wording

FFO attributable to common stockholders, which is a non-GAAP measure, was $(28.8) million for the three months ended March 31, 2026, a decrease of $(23.4) million compared to $(5.4) million for the three months ended March 31, 2025. The decrease in FFO was primarily attributable to an increase in redeemable preferred stock redemptions of $21.9 million, a decrease of $1.9 million in segment net operating income (discussed in more detail below in “Summary Segment Results”) and an increase of $705,000 in loss on early extinguishment of debt, partially offset by a decrease in redeemable preferred stock dividends of $1.3 million.

Current wording

FFO attributable to common stockholders, which is a non-GAAP measure, was $(32.3) million for the six months ended June 30, 2026, a decrease of $(19.0) million compared to $(13.3) million for the six months ended June 30, 2025. The decrease in FFO was primarily attributable to an increase in redeemable Preferred Stock redemptions of $22.0 million and a decrease of $2.4 million in segment net operating income (discussed in more detail below in “Summary Segment Results”), partially offset by a decrease in redeemable Preferred Stock dividends of $5.6 million.

Previous wording

Lending Revenue: Lending revenue represented interest income on loans and other loan-related fee income from our lending business (First Western), which was sold on January 21, 2026. The Company recorded no lending revenue for the three months ended March 31, 2026, compared to $2.4 million for the three months ended March 31, 2025. Lending revenue for the period First Western was still under ownership during the three months ended March 31, 2026 was recorded to interest and other income not allocated to any of our operating segments.

Current wording

Lending Revenue: Lending revenue represented interest income on loans and other loan-related fee income from our lending business (First Western), which was sold on January 21, 2026. The Company recorded no revenue for the six months ended June 30, 2026, compared to $4.5 million for the six months ended June 30, 2025. Lending revenue for the period First Western was still under ownership during the six months ended June 30, 2026 was recorded to interest and other income not allocated to any of our operating segments.

Previous wording

Loss From Unconsolidated Multifamily Entities: The loss from our unconsolidated multifamily entities increased to $1.4 million for the three months ended March 31, 2026, compared to $1.1 million for the three months ended March 31, 2025. The increase is due to an increase in the unrealized loss on investments in real estate at one of our unconsolidated multifamily entities during the three months ended March 31, 2026, partially offset by an increase in rental revenues at the property.

Current wording

Loss From Unconsolidated Multifamily Entities: Loss from our unconsolidated multifamily entities was $2.4 million for the six months ended June 30, 2026, compared to a loss of $1.7 million for the six months ended June 30, 2025. The change was primarily due to an increase in the unrealized loss on investments in real estate at our unconsolidated multifamily entities, partially offset by an increase in rental revenues during the six months ended June 30, 2026, compared to the prior year period.

Previous wording

Interest and Other Income: Interest and other income, which has not been allocated to our operating segments, was $591,000 for the three months ended March 31, 2026, compared to $91,000 for the three months ended March 31, 2025. The increase is primarily due the Company recording lending revenue for the period First Western was still under ownership during the three months ended March 31, 2026 to interest and other income.

Current wording

Interest and Other Income: Interest and other income, which has not been allocated to our operating segments, increased to $735,000 for the six months ended June 30, 2026, compared to $234,000 for the six months ended June 30, 2025. The increase was primarily due to the Company recording lending revenue for the period First Western was still under ownership during the six months ended June 30, 2026 to interest and other income.

Previous wording

Lending Expenses: Lending expenses included interest expense, general and administrative expenses and fees to related parties from our lending business (First Western), which was sold on January 21, 2026. The Company recorded no lending expenses for the three months ended March 31, 2026, compared to $1.8 million for the three months ended March 31, 2025. Lending expenses for the period First Western was still under ownership during the three months ended March 31, 2026 were recorded to general and administrative expenses and interest expense not allocated to any of our operating segments.

Current wording

Lending Expenses: Lending expenses included interest expense, general and administrative expenses and fees to related parties from our lending business (First Western), which was sold on January 21, 2026. As such, the Company recorded no lending expenses for the six months ended June 30, 2026, compared to $3.9 million for the six months ended June 30, 2025. Lending expenses for the period First Western was still under ownership during the six months ended June 30, 2026 were recorded to general and administrative expenses and interest expense not allocated to any of our operating segments.

Previous wording

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 $875,000 for the three months ended March 31, 2026, compared to $626,000 for the three months ended March 31, 2025. The change was primarily due to an increase in expense allocation as well as an increase in legal services.

Current wording

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 $1.7 million for the six months ended June 30, 2026, an increase from $1.5 million for the six months ended June 30, 2025. The increase was primarily attributable to an increase in legal services.

Previous wording

General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $1.6 million for the three months ended March 31, 2026, compared to $1.2 million for the three months ended March 31, 2025. The increase is primarily due the Company recording lending general and administrative expenses for the period First Western was still under ownership during the three months ended March 31, 2026 to general and administrative expenses not allocated to any of our operating segments.

Current wording

General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $2.7 million for the six months ended June 30, 2026, compared to $2.0 million for the six months ended June 30, 2025. The increase was primarily due to the Company recording lending general and administrative expenses for the period First Western was still under ownership during the six months ended June 30, 2026 to general and administrative expenses not allocated to any of our operating segments, in addition to legal fees normalizing from below-average levels when compared to the prior year period.

Previous wording

Gain on sale of First Western: Gain on sale of First Western was $1.7 million for the three months ended March 31, 2026, related to the sale of First Western in January 2026. There were no such amounts recorded for the three months ended March 31, 2025.

Current wording

Gain on sale of First Western: Gain on sale of First Western was $1.7 million for the six months ended June 30, 2026 as a result of the sale of First Western in January 2026. There were no such amounts recorded for the six months ended June 30, 2025.

Previous wording

Our cash flows from operating activities are primarily dependent upon the real estate assets owned, occupancy level of our real estate assets, the rental rates achieved through our leases, the occupancy and ADR of our hotel, the collectability of rent and recoveries from our tenants, and prior to the sale of our lending division, First Western, in January 2026, loan-related activity. Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash used in operating activities was $26.0 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $1.2 million for the three months ended March 31, 2025. The decrease is primarily due to changes in working capital, including the timing of cash payments related to amounts due to related parties, as well as, an increase in net loss, adjusted for depreciation and amortization expense and other non-cash items of $2.4 million.

Current wording

Our cash flows from operating activities are primarily dependent upon the real estate assets owned, occupancy level of our real estate assets, the rental rates achieved through our leases, the occupancy and ADR of our hotel, the collectability of rent and recoveries from our tenants, and prior to the sale of our lending division, First Western, in January 2026, loan-related activity. Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash used in operating activities was $22.5 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $1.3 million for the six months ended June 30, 2025. The increase is primarily due to changes in working capital, including the timing of cash payments related to amounts due to related parties.

Previous wording

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, prior to the sale of First Western in January 2026, cash flows associated with loans originated at our lending segment. Net cash provided by investing activities was $41.4 million for the three months ended March 31, 2026, compared to net cash used in investing activities of $5.2 million for the three months ended March 31, 2025. The change was primarily due to $44.6 million of proceeds from the sale of assets held for sale, net, in connection with the sale of First Western, as further discussed in Note 5 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, as well as a $2.3 million decrease in capital expenditures, partially offset by a decrease in proceeds from principal loan collections, net of loans funded, of $2.0 million during the three months ended March 31, 2026 as compared to the same period in 2025.

Current wording

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, prior to the sale of First Western in January 2026, cash flows associated with loans originated at our lending segment. Net cash provided by investing activities was $40.1 million for the six months ended June 30, 2026, compared to net cash used in investing activities of $10.2 million for the six months ended June 30, 2025. The change was primarily due to $45.6 million of proceeds from the sale of assets held for sale, net, in connection with the sale of First Western, as further discussed in Note 5 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, as well as $6.4 million decrease in capital expenditures, partially offset by a decrease in proceeds from principal loan collections, net of loans funded, of $3.7 million during the six months ended June 30, 2026 as compared to the same period in 2025.

Previous wording

Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash used in financing activities for the three months ended March 31, 2026 was $15.4 million, compared to net cash provided by financing activities of $206,000 for the three months ended March 31, 2025. The change was primarily due to net repayments on debt of $10.3 million during the three months ended March 31, 2026, as compared to net proceeds from debt of $6.4 million during the three months ended March 31, 2025. The change was partially offset by a $1.0 million decrease in preferred stock dividends paid during three months ended March 31, 2026, as compared to the same period in 2025.

Current wording

Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash used in financing activities for the six months ended June 30, 2026 was $18.5 million, compared to net cash provided by financing activities of $16.5 million for the six months ended June 30, 2025. The change was primarily due to net repayments on debt of $12.2 million during the six months ended June 30, 2026, as compared to net proceeds from debt of $30.3 million during the six months ended June 30, 2025. The change was partially offset by a $5.4 million decrease in Preferred Stock dividends paid and a $2.0 million decrease in deferred cost paid during six months ended June 30, 2026, as compared to the same period in 2025.

Previous wording

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. We may finance our future activities through one or more of the following methods: (i) offerings of shares of Common Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) credit facilities and term loans; (iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (v) the sale of existing assets; and/or (vi) cash flows from operations.

Current wording

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), re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, funding redemptions of our Preferred Stock, and paying distributions on our Preferred Stock. We may finance our future activities through one or more of the following methods: (i) offerings of shares of Common Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) issuances of Preferred Stock to one or more of our affiliates; (iv) credit facilities and term loans; (v) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (vi) the sale of one or more of our existing assets; and/or (vii) cash flows from operations.