Medalist Diversified REIT, Inc.
For the period ended Dec 31, 2025. Filed Mar 2, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 2, 2026
MDRR$10.39-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0001558370-25-001807
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-02.
0001104659-26-022253
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (72)
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Overview
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In connection with the revocation of our REIT status, we are transitioning our primary focus to building our DST Program to generate fee income and increase assets under management. We continue to evaluate direct and indirect real estate investments that support our DST Program, including opportunities within our existing portfolio, including selective disposition of our properties from
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our legacy portfolio to generate capital for our DST Program. Our efforts to scale our DST Program will be focused on identifying real estate investments suitable for DST vehicles that offer competitive, risk-adjusted returns. We plan to focus on net lease assets with nationally recognized tenants or those with investment grade credit ratings, in larger metropolitan areas experiencing high levels of growth in the southeast, mountain states, and California. Industry focuses will include, but not be limited to, retail, medical, and single tenant industrial and warehouse uses.
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We may also pursue, in an opportunistic manner, non-real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, indirect investments in real property, such as those that may be obtained in a joint venture, and ownership of crypto assets, other equity investments, including marketable securities, short-duration U.S. treasuries, and other investment-grade marketable securities. Our Board and management believe that our company’s current focus on unlocking its potential value and increasing assets under management and fee income through our DST Program provides an attractive balance of risk and returns and aligns with a measured approach to raising growth capital. We may revise these investment strategies without the approval of our stockholders.
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As of December 31, 2025, our legacy portfolio consisted of the following properties:
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2025 Highlights
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Sales of Investment Properties
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On December 30, 2025, we sold the Buffalo Wild Wings and United Rentals Properties to an unrelated third party for a sale price of $2,507,500 and $2,792,000, respectively, resulting in a loss on disposal of investment properties of $52,760 and $57,079, respectively, reported on our company’s consolidated statement of operations for the year ended December 31, 2025.
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Acquisition of the Tesla Pensacola Property
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On July 18, 2025, we, through a wholly-owned subsidiary, completed the acquisition of a Tesla service, sales and delivery facility consisting of a 45,461 square foot, single story building on 3.498 acres of land located at 312 E. 9 Mile Road, Pensacola, Florida (the “Tesla Pensacola Property”). The total purchase price paid for the Tesla Pensacola Property was $14,544,504 and was purchased from an unaffiliated seller. The acquisition was funded using a line of credit from Farmers and Merchants Bank of Long Beach in the amount of $14,700,000 (the “Farmers Line of Credit”).
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Farmers Line of Credit
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On July 18, 2025, in connection with the completion of the acquisition of the Tesla Pensacola Property discussed above, we, , through our wholly-owned subsidiaries, entered into a loan agreement with Farmers and Merchants Bank of Long Beach (“Farmers”), for the Farmers Line of Credit in the maximum amount of $14,700,000. The Farmers Line of Credit was cross collateralized by the Tesla Pensacola Property, the Citibank Property, the Buffalo Wild Wings Property, and the United Rentals. Amounts outstanding under the Farmers Line of Credit bear interest at a floating rate pegged to the prime rate announced by Farmers.
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On November 7, 2025, in connection with our contribution of the Tesla Pensacola Property to the XXV DST, we repaid $7,350,000 of the Farmers Line of Credit and Farmers released its lien on the Tesla Pensacola Property. During November and December 2025, we made additional principal payments of $2,000,000 and $948,997, respectively. On December 30, 2025, we used $4,401,003 from the proceeds of the sale of the Buffalo Wild Wings and United Rentals Properties to complete the repayment of the Farmers Line of Credit.
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The Farmers Line of Credit was unconditionally guaranteed by us and our Operating Partnership, had a one-year term, maturing on August 10, 2026. Balances outstanding on the Farmers Line of Credit were recorded as liabilities associated with assets held for sale on our consolidated balance sheets. As of December 31, 2025 and 2024, respectively, the balance of the Farmers Line of Credit was $0.
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Commencement of DST Sponsorship Program
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On November 7, 2025, we completed the contribution of the Tesla Pensacola Property to the XXV DST. Following the contribution, we launched a program to raise capital, through the Operating Partnership, through private placement offerings exempt from registration under the Securities Act, by selling beneficial interests (the “DST Interests”) in specific DSTs holding real properties (the “DST Program”). We expect that the DST Program will provide us with the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for investors who may be seeking like-kind replacement properties to complete tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, reduce our borrowings, repay indebtedness, and for other corporate purposes. In addition, we expect to generate fee-based income, such as acquisition fees, asset management fees, disposition fees, and financing coordination fees, among others, from the DST Program. However, there can be no assurance that we will be successful in our efforts to sell the DST Interests or to generate fee-based income.
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Tesla DST Mortgage and Interest Rate Swap
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On November 7, 2025, in connection with the contribution of the Tesla Pensacola Property to the XXV DST discussed above, the XXV DST entered into the Telsa DST Mortgage with Pinnacle Bank for a principal amount of $7,710,000. The Tesla DST Mortgage is collateralized by the Tesla Pensacola Property. Amounts outstanding under the Tesla DST Mortgage bear interest at a floating rate of one month SOFR plus 2.5%. As of December 31, 2025 and 2024, SOFR was 3.69% and 4.33%, respectively. The Tesla DST Mortgage provides for monthly interest only payments and has a five-year term and matures on November 7, 2030. The XXV DST received $6,932,061 in net proceeds which was used to fund a portion of the total consideration associated with our contribution of the Tesla Pensacola Property to the XXV DST. We used these proceeds, and cash on hand, to make a $7,350,000 principal repayment on the Farmers Line of Credit.
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In connection with the Tesla DST Mortgage, our Operating Partnership agreed to provide a limited guaranty (the “Guaranty”) with respect to certain potential costs, expenses, losses, damages and other sums for which the XXV DST is directly liable under the Tesla DST Mortgage, including losses or damages that may result from certain intentional actions committed by the XXV DST in violation of the Tesla DST Mortgage. Our Operating Partnership also provide a guaranty of the principal balance and any interest or other sums outstanding under the Tesla DST Mortgage in the event of certain bankruptcy or insolvency proceedings involving the XXV DST.
Current report
Concurrent with the Pinnacle Loan closing, the XXV DST entered into an interest rate swap agreement with Pinnacle Bank (the “Swap”) to fix the interest rate at 5%. The Swap has a $7,710,000 notional amount and provides for the XXV DST to make monthly payments to Pinnacle Bank based on a fixed 5% rate and for Pinnacle Bank to make monthly payments to the XXV DST based on a variable amount of one month SOFR plus 2.5%. The XXV DST paid a premium of $417,136 to secure the 5% fixed rate. The Swap matures concurrently with the maturity of the Tesla DST Mortgage, or November 7, 2030. We have not designated the Swap as a hedge and consequently hedge accounting will not apply.
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Subsequent Events
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As of the date of this Annual Report on Form 10-K, the following events have occurred subsequent to the December 31, 2025 effective date of the consolidated financial statements:
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Sale of Greenbrier Business Center Property
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On February 13, 2026, we closed on the sale of the Greenbrier Business Center Property to an unrelated purchaser for $11,000,000 and used $7,000,000 of the proceeds to reduce the outstanding balance of the Wells Fargo Mortgage Facility.
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Termination of REIT Election
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On February 12, 2026, our Board authorized termination of our REIT election effective January 1, 2026.
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Name Change
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On February 17, 2026, we amended our Articles of Incorporation and Bylaws solely to change the corporate name from “Medalist Diversified REIT, Inc.” to “Medalist Diversified, Inc.” effective March 2, 2026.
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Sale of Parkway Property
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On February 27, 2026 we closed on the sale of the Parkway Property to an unrelated purchaser for $7,825,000 and used $4,735,614 of the proceeds to repay the Parkway Mortgage.
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Sale of Beneficial Interests in the XXV DST
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As of March 2, 2026, we have sold 17.2% of the class 1 beneficial interests in the XXV DST which has generated $1,479,670 in net proceeds.
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We have historically financed acquisitions of our investment properties through mortgages. The following table is presented as of December 31, 2025.
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On October 23, 2025, we sold the Salisbury Marketplace Property and used $5,145,479 of the net proceeds of the sale to reduce the principal balance of the Wells Fargo Mortgage Facility in exchange for Wells Fargo releasing its security interest in the Salisbury Marketplace Property. As of December 31, 2025, the remaining outstanding balance, the monthly payment (which remains unchanged) and the remaining unamortized loan issuance costs related to the Wells Fargo Mortgage Facility are allocated, for reporting purposes, among the Lancer Center Property and Greenbrier Business Center Property, based on each property's proportionate share of the total combined appraised value at the time the Wells Fargo Mortgage Facility was originated. The portion allocated to the Lancer Center Property is reported in Mortgages payable, net, on our consolidated balance sheets, while the portion allocated to the Greenbrier Business Center Property, representing the estimated paydown amount upon its anticipated sale, is included in mortgages payable, net, associated with assets held for sale on our consolidated balance sheets.
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misrepresentation, gross negligence, physical waste and other similar acts or omissions. Under the terms of the Tesla DST Mortgage, the failure of the borrower to maintain a minimum debt service coverage ratio (“DSCR”) of 1.25 constitutes a “trigger event” under which borrower would be required to establish a cash management account to which all rents and profits would be deposited and remain under the control of the lender until the trigger event is terminated. As of December 31, 2025, we believe we are compliant with the DSCR requirement.
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The non-cash financing activity for the year ended December 31, 2025, that did not affect our cash provided by financing activities was $2,576,485 related to the exchange of Common Shares for OP Units, the transfer of other assets $133,950 of other assets to offering costs, and the transfer of $16,320,481 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale. There was no non-cash financing activity for the year ended December 31, 2024.
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We expect these resources will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months and beyond. There can be no assurance that we will continue to generate cash flows at or above current levels.
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Factors That May Influence our Results of Operations
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Economic Conditions
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Rental revenues from our remaining investment properties are our only source of income and are directly affected by a number of factors, including occupancy rates, lease structures, and tenant credit quality, as well as broader economic and policy developments that affect consumer sentiment. Our revenues can be significantly impacted by trends in consumer spending, interest rates, and market confidence, all of which shape demand for our tenants’ goods and services and, in turn, for occupancy in our investment properties.
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Company Overview
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Our company was formed to acquire, reposition, renovate, lease and manage income-producing properties. Our current primary focus is on (i) managing our legacy portfolio consisting of retail and flex-industrial properties in secondary and tertiary markets in Virginia, North Carolina, and South Carolina, and (ii) managing and expanding our STNL property portfolio in geographic markets across the United States. We may also pursue, in an opportunistic manner, other real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, and indirect investments in real property, such as those that may be obtained in a joint venture. While these types of investments are not intended to be a primary focus, we may make such investments in our discretion.
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As of December 31, 2024, we owned four retail properties, three flex properties and three STNL properties. As of December 31, 2024, our retail center properties consisted of (i) the Shops at Franklin Square, a 134,239 square foot retail property located in Gastonia, North Carolina (the “Franklin Square Property”), (ii) the Ashley Plaza Shopping Center, a 156,012 square foot retail property located in Goldsboro, North Carolina (the “Ashley Plaza Property”), (iii) the Lancer Center, a 181,590 square foot retail
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property located in Lancaster, South Carolina (the “Lancer Center Property”), and (iv) the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”). On March 13, 2024, our company, and its tenant in common partner, sold the Shops at Hanover Square North, a 73,440 square foot retail property located in Mechanicsville, Virginia (the “Hanover Square Shopping Center Property”). Our company owned 84% of the Hanover Square Shopping Center Property as a tenant in common with a noncontrolling owner which owned the remaining 16% interest. Our company and its tenant in common partner retained ownership of the 0.86 acre outparcel (the “Hanover Square Outparcel”). On March 25, 2024, our company purchased its tenant in common partner’s 16% interest in the Hanover Square Outparcel (see Note 3 of the accompanying notes to the condensed consolidated financial statements).
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As of December 31, 2024, our three flex properties consisted of (i) Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), (ii) the Greenbrier Business Center, an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property”), and (iii) the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the “Parkway Property”), in which our company owns an 82% tenant in common interest with a noncontrolling owner which owns the remaining 18% interest.
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As of December 31, 2024, our three STNL properties consisted of (i) the Citibank Property, a 4,350 square foot single tenant building on 0.45 acres located in Chicago, Illinois, (ii) the East Coast Wings building, a 5,000 square foot single tenant building on approximately 0.89 acres located in Goldsboro, North Carolina (the “East Coast Wings Property”), and (iii) the T-Mobile building, a 3,000 square foot single tenant building on approximately 0.78 acres located in Goldsboro, North Carolina (the “T-Mobile Property”). The East Coast Wings Property and the T-Mobile Property are both located on outparcels adjacent to our company’s Ashley Plaza Property. Prior to January 1, 2024, our company included the East Coast Wings Property and the T-Mobile Property as part of the Ashley Plaza Property.
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For all periods prior to July 18, 2023, our company was externally managed by the Manager. On July 18, 2023, our company entered into a termination agreement with the Manager and William R. Elliott and Thomas E. Messier (the “Termination Agreement”), which provided for the immediate termination of the Management Agreement. Until the termination of the Management Agreement, the Manager made all investment decisions for our company. The Manager oversaw our company’s overall business and affairs and had broad discretion to make operating decisions on behalf of our company and to make investment decisions. Since the termination of the Management Agreement, and for the full year ended December 31, 2024, our company has been managed internally as directed by the Board. Our company’s stockholders are not involved in its day-to-day affairs.
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Recent Trends and Activities
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Private Placement of Common Shares
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On December 13, 2024, our company entered into a series of subscription agreements with certain investors, including our company’s Chief Financial Officer and two directors, for the issuance and sale of 230,000 Common Shares, in a private placement (the “Private Placement”), at a purchase price of $12.50 per share for total consideration of $2,875,000. The Private Placement was exempt from the registration requirements of the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Rule 506(b) under Regulation D of the Securities Act.
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Redemption of Mandatorily Redeemable Preferred Stock
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On November 25, 2024, our company completed a partial redemption of 140,000 shares of its mandatorily redeemable preferred stock. The redemption price was $25.00 per share, plus $0.05 per share of accrued dividends. Our company used proceeds from the private placement of OP Units (see below) and cash on hand to fund the $3,527,160 for the partial redemption and accrued dividends. On January 10, 2025, our company completed the final redemption of the remaining 60,000 shares of its mandatorily redeemable preferred stock. The redemption price was $25.00 per share, plus $0.44 per share of accrued dividends. Our company used proceeds from the private placement of common shares to fund the $1,526,500 for the final redemption and accrued dividends.
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Private Placement of Operating Partnership Units
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On October 11, 2024, our company’s operating partnership entered into a subscription agreement with Francis P. Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board, for the sale by the Operating Partnership in a private placement of 160,000 units of partnership interest in the Operating Partnership at a purchase price of $12.50 per unit for total consideration of $2,000,000.
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Reverse 1-for-10 Stock Split and Forward 5-for-1 Stock Split
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On July 2, 2024, our company completed a reverse stock split of its Common Shares, and a corresponding adjustment to the outstanding common units of the Operating Partnership, at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split took effect at 5:00 p.m. Eastern Time on July 2, 2024 (the “Effective Time”) and automatically converted every ten Common Shares outstanding at that time into one Common Share. The Reverse Stock Split was intended to lower certain recordkeeping and compliance costs by reducing the number of stockholders who held less than 10 shares and to enable our company’s small stockholders (those holding fewer than 10 Common Shares) to liquidate their holdings in the company’s Common Shares without incurring brokerage commissions. On July 3, 2024, immediately following the Reverse Stock Split, our company completed a forward stock split of our Common Shares at a ratio of 5-for-1 (the “Forward Stock Split”). The Forward Stock Split took effect at 5:01 pm Eastern Time on July 2, 2024 and automatically converted every Common Share outstanding at the time into five Common Shares. The Forward Stock Split was intended to help our company maintain compliance with Nasdaq Listing Rule 5550(a)(4) (the “Publicly Held Shares Requirement”). Collectively, the Reverse Stock Split and the Forward Stock Split are referenced herein as the “2024 Stock Splits.”
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Acquisition of the Citibank Property
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On March 28, 2024, our company completed its acquisition of the Citibank Property, a 4,350 square foot single tenant building on 0.45 acres located in Chicago, Illinois, through a wholly-owned subsidiary. The Citibank Property, built in 1954 and subsequently renovated, was 100% leased to Citibank, NA. The purchase price for the Citibank Property was $2,400,000 paid through the issuance of 208,695 OP Units at a price of $11.50 per Operating Partnership Unit. Our company’s total investment was $2,444,454. Our company incurred $44,454 of closing costs which were capitalized and added to the tangible assets acquired. Thesole manager and member of the seller of the Citibank Property was CWS BET Seattle, LP, a company controlled and owned by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. Pursuant to the Related Person Transaction Policy, our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.
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Acquisition of the 16% Noncontrolling Interest in the Hanover Square Outparcel
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On March 25, 2024, our company completed the acquisition of its tenant in common partner’s 16% ownership interest in the Hanover Square Outparcel through a wholly-owned subsidiary. The purchase price for the 16% interest in the Hanover Square Outparcel was $98,411 paid in cash. Our company’s total investment was $100,891. Our company incurred $2,480 of closing costs which were capitalized and added to the tangible assets acquired.
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Wells Fargo Line of Credit
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On June 13, 2022, our company, through its wholly-owned subsidiaries, entered into a loan agreement with Wells Fargo Bank, National Association for a $1,500,000 line of credit (the “Original Wells Fargo Line of Credit”). On May 2, 2023, our company and Wells Fargo Bank, National Association entered into the First Amendment to the Revolving Line of Credit Note which extended the maturity date of the Original Wells Fargo Line of Credit to June 9, 2024. On June 5, 2024, our company and Wells Fargo Bank, National Association entered into the Second Amendment to the Revolving Line of Credit Note which further extended the maturity date of the Original Wells Fargo Line of Credit to October 7, 2024. As of December 31, 2024 and December 31, 2023, the Original Wells Fargo Line of Credit had an outstanding balance of $0 and $1,000,000, respectively. Outstanding balances on the Original Wells Fargo Line of Credit bore interest at a floating rate of 2.25% above daily SOFR. As of December 31, 2024 and December 31, 2023, SOFR was 4.33% and 5.35%, respectively. The Original Wells Fargo Line of Credit was secured by the Lancer Center Property, the Greenbrier Business Center Property and the Salisbury Marketplace Property, was unconditionally guaranteed by our company, and any outstanding balances would have been due on the October 7, 2024 maturity date.
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On October 2, 2024, our company, through its wholly-owned subsidiaries, entered into an amended and restated Revolving Line of Credit Note with Wells Fargo Bank, National Association that increases the line of credit from $1,500,000 to $4,000,000 (the “Expanded Wells Fargo Line of Credit”). Outstanding balances on the Expanded Wells Fargo Line of Credit will bear interest at a floating rate of 3.10% above Daily Simply SOFR, which, with respect to any day (a “SOFR Rate Day”) means a rate per annum equal to SOFR for the day that is two U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, subject to certain exceptions. A U.S. Government Securities Business Day is any day except for Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association, or any successor thereto, recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. The Expanded Wells Fargo Line of Credit is secured by the Lancer Center Property, the Greenbrier Business Center Property, the Salisbury Marketplace Property and the Citibank Property, is unconditionally guaranteed by our company, and any outstanding balances will be due on the September 30, 2026 maturity date. The terms of the Expanded Wells Fargo Line of Credit prohibit our company from using proceeds to directly or indirectly fund the redemption of our company’s mandatorily redeemable preferred stock.
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Common stock grants under the 2018 Equity Incentive Plan
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On January 15, 2025, the Compensation Committee approved a grant of 5,195 Common Shares to our company’s five independent directors, a grant of 2,000 Common Shares to the President and CEO of our company, 2,000 Common Shares to the Chief Financial Officer of our company and 2,000 Common Shares to non-executive staff of our company. In addition, our company’s President and CEO and Chief Financial Officer agreed to accept a portion of their 2025 compensation in the form of Common Shares and OP Units. Accordingly, the Compensation Committee authorized the issuance of 14,547 OP Units to our company’s President and CEO and 6,235 Common Shares to our company’s Chief Financial Officer under the Equity Incentive Plan in lieu of a portion of their 2025 cash compensation. The effective date of the grants was January 15, 2025. The Common Shares granted vested immediately and are unrestricted. The OP Units granted vest immediately but are not convertible to Common Shares until January 15, 2026. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan. Because the Common Shares and OP Units vested immediately, the fair value of the grants, or $384,683, was recorded to share based compensation expense on our company’s condensed consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of our company’s Common Shares on the effective date of the grant.
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On January 18, 2024, the Compensation Committee approved a grant of 7,637 Common Shares to our company’s five independent directors and a grant of 1,273 Common Shares to a consultant of our company. In addition, our company’s President and CEO agreed to accept a portion of his 2024 compensation in the form of OP Units. Accordingly, the Compensation Committee authorized the issuance of 19,348 OP Units to our company’s President and CEO under the Equity Incentive Plan. The effective date of the grants was January 18, 2024. The Common Shares granted vested immediately and are unrestricted. The OP Units granted vest immediately but are not convertible to Common Shares until January 18, 2025. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan. Because the Common Shares and OP Units vested immediately, the fair value of the grants, or $277,500, was recorded to share based compensation expense on our company’s condensed consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of our company’s Common Shares on the effective date of the grant.
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Our company financed its acquisitions of its investment properties through mortgages, as follows:
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our company assumed certain guaranty obligations under the Ashley Plaza mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for our company to maintain a net worth of $11,400,000, excluding the liabilities associated with the mortgage loan for the Ashley Plaza Property and for our company to maintain liquid assets of no less than $1,140,000. As of December 31, 2024 and 2023, respectively, our company believes that we are compliant with these covenants.
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Off-Balance Sheet Arrangements
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As of December 31, 2024 and 2023, we have no off-balance sheet arrangements.
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Year ended December 31, 2024
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Total revenue was $9,735,127 for the year ended December 31, 2024, consisting of $6,624,734 in revenues from retail center properties, $2,750,499 from flex center properties and $359,894 from STNL properties. Total revenues for the year ended December 31, 2024 decreased by $537,699 over the year ended December 31, 2023, primarily resulting from reduced revenues from
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our retail center properties due to the sale of the Hanover Square Property, partially offset by increased revenues from flex center properties and STNL properties.
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Revenues from retail center properties were $6,624,734 for the year ended December 31, 2024, a decrease of $917,180 over revenues from retail center properties for the year ended December 31, 2023. Decreased revenues of $1,047,479 due to the sale of the Hanover Square Property on March 13, 2024 and $58,150 from the Salisbury Marketplace Property due to decreased occupancy during the year ended December 31, 2024, were partially offset by increased revenues of $107,592 from the Franklin Square Property due to new leasing activity, $77,475 from the Lancer Center Property due to new leasing activity and $3,382 from the Ashley Plaza Property due to annual rent escalations.
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Revenues from the flex center properties were $2,750,499 for the year ended December 31, 2024, an increase of $245,847 over revenues from flex center properties for the year ended December 31, 2023 due to increased revenues from the Parkway Property of $39,914 and increased revenues from the Greenbrier Business Center Property of $169,423, both due to new leasing activity, and increased revenues from the Brookfield Center Property of $36,510 due to increased tenant reimbursements of common area maintenance expenses.
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Revenues from STNL properties were $359,894 for the year ended December 31, 2024, an increase of $133,634 from revenues from STNL properties for the year ended December 31, 2023, due to new STNL property revenue of $114,573 from the acquisition of the Citibank Property and $19,201 from a rent escalation in the lease for the T-Mobile Property, offset by a slight decline of $140 from the East Coast Wings Property due to decreased tenant reimbursements of common area maintenance expenses.
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Total operating expenses were $8,723,519 for the year ended December 31, 2024, consisting of $1,661,808 in expenses from retail center properties, $697,864 in expenses from flex center properties, $31,977 in expenses from STNL properties, $277,500 in share-based compensation, $1,170,270 in legal, accounting and other professional fees, $968,435 in corporate general and administrative expenses, a $182 loss on impairment, and $3,915,483 in depreciation and amortization.
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Operating expenses for retail center properties were $1,661,808 for the year ended December 31, 2024, a decrease of $239,294 from retail center property operating expenses for the year ended December 31, 2023. Decreased operating expenses of $210,155 resulting from the sale of the Hanover Square Property, $33,189 from the Salisbury Property, $17,561 from the Lancer Center Property and $5,020 from the Franklin Square Property, all primarily due to the elimination of asset management fees due to the termination of the Management Agreement on July 18, 2023, were offset by increased expenses of $26,631 from the Ashley Plaza Property, primarily resulting from increased bad debt expense of $18,605 for the year ended December 31, 2024.
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(1)Includes bad debt expense of $16,136 and $0 for the years ended December 31, 2024 and 2023, respectively.
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Operating expenses from the flex center properties were $697,864 for the year ended December 31, 2024, a decrease of $33,658 over flex center property operating expenses for the year ended December 31, 2023 due to decreased operating expenses from the Greenbrier Business Center Property of $18,590, decreased operating expenses from the Parkway Property of $8,782 and decreased operating expenses from the Brookfield Center Property of $6,286, all primarily due to the elimination of asset management fees due to the termination of the Management Agreement on July 18, 2023.
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The following discussion and analysis is based on, and should be read in conjunction with, the consolidated financial statements and the related notes thereto of Medalist Diversified REIT, Inc. contained in this Annual Report.
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The following discussion and analysis is based on, and should be read in conjunction with, the consolidated financial statements and the related notes thereto of Medalist Diversified, Inc. contained in this Annual Report.
Previous wording
Medalist Diversified REIT Inc. is a Maryland corporation formed on September 28, 2015. Beginning with our taxable year ended December 31, 2017, we believe that we have operated in a manner qualifying us as a real estate investment trust (“REIT”), and we have elected to be taxed as a REIT for federal income tax purposes. Our company serves as the general partner of Medalist Diversified Holdings, LP which was formed as a Delaware limited partnership on September 29, 2015.
Current wording
Medalist Diversified, Inc. is a Maryland corporation formed on September 28, 2015. Beginning with our taxable year ended December 31, 2017 through our taxable year ended December 31, 2025, we believe that we operated in a manner qualifying us as a real estate investment trust (“REIT”), and we elected to be taxed as a REIT for federal income tax purposes for those taxable years. We revoked our REIT election effective January 1, 2026. Medalist Diversified, Inc. serves as the general partner of Medalist Diversified Holdings, LP which was formed as a Delaware limited partnership on September 29, 2015. On March 2, 2026, we changed our name from Medalist Diversified REIT, Inc. to Medalist Diversified, Inc. in connection with our revocation of our REIT status.
Previous wording
As of December 31, 2024, our company also owned three undeveloped parcels which are currently being marketed for use as STNL properties including (i) an outparcel at our Lancer Center Property consisting of approximately 1.80 acres (the “Lancer Outparcel”), (ii) an outparcel at our Salisbury Marketplace Property consisting of approximately 1.20 acres (the “Salisbury Outparcel”) (the exact size of the Lancer Outparcel and Salisbury Outparcel will not be determined until a user is identified), and (iii) the Hanover Square Outparcel consisting of 0.86 acres located adjacent to the Hanover Square Shopping Center.
Current wording
As of December 31, 2025, our company also owned two undeveloped parcels which are currently being marketed for use as STNL properties including (i) an outparcel at our Lancer Center Property consisting of approximately 1.80 acres (the “Lancer Outparcel”), (the exact size of the Lancer Outparcel will not be determined until a user is identified), and (ii) the Hanover Square Outparcel consisting of 0.86 acres located adjacent to the Hanover Square Shopping Center.
Previous wording
Sale of the Hanover Square Shopping Center Property
Current wording
As of December 31, 2025, the Greenbrier Business Center and Parkway Properties were classified as assets held for sale on our consolidated balance sheet. On February 13, 2026 we closed on the sale of the Greenbrier Business Center Property and on February 27, 2026 we closed on the sale of the Parkway Property. On February 3, 2026, we entered into a purchase and sale agreement to sell the Franklin Square Property. The funds generated from the sales of the Greenbrier Business Center and Parkway Properties, and the Franklin Square Property, if we are successful in completing its sale, will be used to implement our strategy, outlined above.
Previous wording
On March 13, 2024, our company sold the Hanover Square Shopping Center Property to an unrelated third party for a sale price of $13.0 million, less credits for repairs of $85,000, resulting in a gain on disposal of investment properties of $2,819,502 reported on our Company’s condensed consolidated statement of operations for the year ended December 31, 2024. Our company did not report any gain or loss on the disposal of investment properties for the year ended December 31, 2023.
Current wording
On October 23, 2025, we sold the Salisbury Marketplace Property to an unrelated third party for a sale price of $9,930,000, resulting in a gain on disposal of investment properties of $841,278 reported on our company’s consolidated statement of operations for the year ended December 31, 2025.
Previous wording
On February 21, 2025, our company, through a wholly-owned subsidiary, completed its acquisition of the United Rentals Property, a 7,500 square foot single tenant building located on 3.0 acres located in Huntsville, Alabama. The United Rentals Property, built in 2010, is 100% leased to United Rentals Realty, LLC. The purchase price for the United Rentals Property was $3,145,000 paid through the issuance of 251,600 OP Units at a price of $12.50 per OP Unit. Our company’s total investment was $3,187,446. Our company incurred $42,446 of closing costs which were capitalized and added to the tangible assets acquired. Theseller of the United Rentals Property was Dionysus Investments, LLC, a company whose manageris Fort Ashford Funds, LLC, whose manager is Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. The purchase price was determined by
Current wording
On February 21, 2025, we, through a wholly-owned subsidiary, completed our acquisition of the United Rentals Property, a 7,529 square foot single tenant building located on 3.0 acres located in Huntsville, Alabama. The United Rentals Property, built in 2010, is 100% leased to United Rentals Realty, LLC. The purchase price for the United Rentals Property was $3,145,000 paid through the issuance of 251,600 OP Units at a price of $12.50 per OP Unit. Our total investment was $3,187,446. We incurred $42,446 of closing costs which were capitalized and added to the tangible assets acquired. The seller of the United Rentals Property was Dionysus Investments, LLC, a company whose manageris Fort Ashford Funds, LLC. Fort Ashford Funds, LLC is managed by Frank Kavanaugh, our President and Chief Executive Officer and Chairman of the Board. The purchase price was determined by an independent, third-party appraisal obtained by our company. Pursuant to our Related Person Transaction Policy (the “Related Person Transaction Policy”), our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.
Previous wording
On January 24, 2024, our company, through a wholly-owned subsidiary, completed its acquisition of the Buffalo Wild Wings Property, a 6,400 square foot single tenant building located on 1.82 acres located in Bowling Green, Kentucky. The Buffalo Wild Wings Property, built in 1993 and subsequently renovated in 2018, is 100% leased to Buffalo Wild Wings, LLC. The purchase price for the Buffalo Wild Wings Property was $2,620,000 paid through the issuance of 206,900 OP Units at a price of $12.50 per OP Unit. Our company’s total investment was $2,667,430. Our company incurred $47,430 of closing costs which were capitalized and added to the tangible assets acquired. The seller of the Buffalo Wild Wings Property was CWS BET Seattle L.P. LLC, a company controlled and owned by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. Pursuant to the Related Person Transaction Policy, our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.
Current wording
On January 24, 2025, we completed its acquisition of the Buffalo Wild Wings Property, a 5,933 square foot single tenant building on 1.82 acres located in Bowling Green, Kentucky, through a wholly-owned subsidiary, from CWS BET Seattle, LP. The general partner of CWS BET Seattle, LP is Fort Ashford Funds, LLC, a California limited liability company controlled and owned by Frank Kavanaugh, our Company’s President and Chief Executive Officer and the Chairman of the Board. The Buffalo Wild Wings Property, built in 2018, was 100% leased to Buffalo Wild Wings as of December 31, 2025. The purchase price for the Buffalo Wild Wings Property was $2,620,000 paid through the issuance of 209,600 OP Units at a price of $12.50 per OP Unit. The purchase price was determined by an independent, third-party appraisal obtained by the Company. Pursuant to the Related Person Transaction Policy, the Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction. Our total investment was $2,667,429. We incurred $47,429 of closing costs which were capitalized and added to the tangible assets acquired.
Previous wording
On October 28, 2021, our company entered into the Interest Rate Protection Transaction to limit our exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, our interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR. For the period from September 1, 2022 through December 31, 2024, the applicable index (LIBOR or SOFR), exceeded the 3% cap, and payments from the Interest Rate Protection Transaction reduced our company’s net interest expense. Payments to our company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on our company’s consolidated statements of operations for the years ended years ended December 31, 2024 and 2023, respectively.
Current wording
On October 28, 2021, we entered into the Interest Rate Protection Transaction to limit our exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, our interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR. For the period from September 1, 2022 through December 31, 2025, the applicable index (LIBOR or SOFR), exceeded the 3% cap, and payments from the Interest Rate Protection Transaction reduced our net interest expense. Payments to us from the Interest Rate Protection Transaction are recorded as an offset to interest expense on our company’s consolidated statements of operations for the years ended years ended December 31, 2025 and 2024, respectively.
Previous wording
Our company financed its acquisitions of its assets held for sale through mortgages, which as of December 31, 2023 were recorded as mortgages payable, net, associated with assets held for sale, on our consolidated balance sheets. Our company sold the Hanover Square Shopping Center Property on March 13, 2024 and repaid the mortgage payable.
Current wording
We financed acquisitions of our assets held for sale through mortgages, which as of December 31, 2025 are recorded as mortgages payable, net, associated with assets held for sale, on our consolidated balance sheets, as follows:
Previous wording
The adoption of Accounting Standards Update (“ASU”) 2017-01,Business Combinations (Topic 805), as discussed in Note 2, “Summary of Significant Accounting Policies” of the consolidated financial statements included in this report, has impacted our accounting framework for the acquisition of investment properties. Upon acquisition of investment properties, our company estimates the fair value of acquired tangible assets (consisting of land, buildings and improvements, and furniture, fixtures and equipment) and identified intangible assets and liabilities, including in-place leases, above- and below-market leases, tenant relationships and assumed debt based on evaluation of information and estimates available at that date. Fair values for these assets are not directly observable and
Current wording
The adoption of Accounting Standards Update (“ASU”) 2017-01,Business Combinations (Topic 805), as discussed in Note 2, “Summary of Significant Accounting Policies” of the consolidated financial statements included in this report, has impacted our accounting framework for the acquisition of investment properties. Upon acquisition of investment properties, we estimate the fair value of acquired tangible assets (consisting of land, buildings and improvements, and furniture, fixtures and equipment) and identified intangible lease assets and liabilities, including in-place leases, above- and below-market leases, tenant relationships and assumed debt based on evaluation of information and estimates available at that date. Fair values for these assets are not directly observable and estimates are based on comparable market data and other information which is subjective in nature, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information.
Previous wording
We periodically review investment properties for impairment on a property-by-property basis to identify any events or changes in circumstances that indicate that the carrying value of investment properties may not be recoverable. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. If any such events or changes in circumstances are identified, we perform a formal impairment analysis. We measure any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization, is less than the carrying value of the property. To the extent impairment has occurred, we charge to income the excess of carrying value of the property over its estimated fair value. We estimate fair value using data such as operating income, estimated capitalization rates or multiples, leasing prospects and local market information. Our company also reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of its intangible assets may not be recoverable, but at least annually.
Current wording
undiscounted operating income before depreciation and amortization, is less than the carrying value of the property. To the extent impairment has occurred, we charge to income the excess of carrying value of the property over its estimated fair value. We estimate fair value using data such as operating income, estimated capitalization rates or multiples, leasing prospects and local market information. We also review our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of our intangible assets may not be recoverable, but at least annually.
Previous wording
We are a Maryland corporation that has elected to be treated, for U.S. federal income tax purposes, as a REIT. We elected to be taxed as a REIT under the Code for the year ended December 31, 2017 and have not revoked such election. A REIT is a corporate entity which holds real estate interests and must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted taxable income to stockholders. As a REIT, we generally will not be subject to corporate level federal income tax on our taxable income if we annually distribute 100% of our taxable income to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to regular federal and state corporate income taxes and may not be able to elect to qualify as a REIT for five subsequent taxable years. Our qualification as a REIT requires management to exercise significant judgment and consideration with respect to operational matters and accounting treatment. Therefore, we believe our REIT status is a critical accounting estimate.
Current wording
We are a Maryland corporation that previously elected to be treated, for U.S. federal income tax purposes, as a REIT. We elected to be taxed as a REIT under the Code for the taxable years ended December 31, 2017 through December 31, 2025. We revoked our election effective January 1, 2026. A REIT is a corporate entity which holds real estate interests and must meet a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its adjusted taxable income to stockholders. In the years that we qualified as a REIT, we generally were not subject to corporate level federal income tax on our taxable income if we annually distribute 100% of our taxable income to our stockholders. Following our revocation of REIT status, we are subject to regular federal and state corporate income taxes and may not be able to elect to qualify as a REIT for five taxable years including our 2026 taxable year during which we ceased to qualify as a REIT.
Previous wording
Under the accounting guidance related to the presentation of financial statements, our company is required to evaluate, on a quarterly basis, whether or not the entity’s current financial condition, including its sources of liquidity at the date that the consolidated financial statements are issued, will enable the entity to meet its obligations as they come due arising within one year of the date of the issuance of our company’s consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the entity will be able to continue as a going concern. Our company’s consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In applying applicable accounting guidance, management considered our company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our company’s obligations due over the next twelve months, as well as our company’s recurring business operating expenses.
Current wording
Under the accounting guidance related to the presentation of financial statements, we are required to evaluate, on a quarterly basis, whether or not our current financial condition, including our sources of liquidity at the date that the condensed consolidated financial statements are issued, will enable us to meet our obligations as they come due arising within one year of the date of the issuance of our consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that we will be able to continue as a going concern. Our consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In applying applicable accounting guidance, management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our obligations due over the next twelve months, as well as our recurring business operating expenses.
Previous wording
We have concluded that it is probable that we will be able to meet our obligations arising within one year of the date of issuance of these consolidated financial statements within the parameters set forth in the accounting guidance. For additional information regarding our company’s liquidity, see Note 5 – Loans Payable and Note 8 – Commitments and Contingencies in the notes to our company’s consolidated financial statements.
Current wording
We have concluded that it is probable that we will be able to meet our obligations arising within one year of the date of issuance of these consolidated financial statements within the parameters set forth in the accounting guidance. For additional information regarding our liquidity, see Note 5 – Loans Payable and Note 8 – Commitments and Contingencies in the notes to our consolidated financial statements.
Previous wording
Internal liquidity to fund operating needs are expected to be provided primarily by the rental receipts from our retail center properties, flex center properties, and STNL properties.
Current wording
Internal liquidity to fund operating needs is expected to be provided by the rental receipts from our legacy investment properties, income from other investments, and fee income from our DST sponsorship program.
Previous wording
At December 31, 2024, our consolidated cash and restricted cash on hand totaled $6,072,736 compared to consolidated cash on hand of $3,809,605 at December 31, 2023. Cash from operating activities, investing activities and financing activities for the year ended December 31, 2024 are as follows:
Current wording
At December 31, 2025, our consolidated cash and restricted cash on hand totaled $4,134,070 compared to consolidated cash on hand of $6,072,736 at December 31, 2024. Cash from operating activities, investing activities and financing activities for the year ended December 31, 2025 are as follows:
Previous wording
During the year ended December 31, 2024, our cash provided by operating activities was $1,796,137 compared to cash provided by operating activities of $104,013 for the year ended December 31, 2023, an increase in cash provided by operating activities of $1,692,124.
Current wording
During the year ended December 31, 2025, our cash provided by operating activities was $1,530,751 compared to cash provided by operating activities of $1,796,137 for the year ended December 31, 2024, a decrease in cash provided by operating activities of $265,386.
Previous wording
Cash flows from operating activities has two components. The first component consists of net operating income (loss) adjusted for non-cash operating activities. During the year ended December 31, 2024, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $2,317,671. During the year ended December 31, 2023, operating activities adjusted for non-cash items resulted in net cash provided in operating activities of $229,141. The increase of $2,088,530 in cash flows from operating activities for the year ended December 31, 2024 was primarily the result of the management restructuring expenses of $2,066,521 incurred during the year ended December 31, 2023 related to the Termination Agreement. No such management restructuring expenses were incurred during the year ended December 31, 2024. Reduced net operating income from our investment properties resulting from the sale of the Hanover Square Property on March 13, 2024 and increased corporate general and administrative expenses were offset by reduced interest expense from the sale of the Hanover Square Property.
Current wording
Cash flows from operating activities has two components. The first component consists of net operating (loss) income adjusted for non-cash operating activities. During the year ended December 31, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $2,259,840. During the year ended December 31, 2024, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $2,317,671. The decrease of $57,831 in cash flows from operating activities for the year ended December 31, 2025 was primarily the result of decreased operating income resulting from increased legal, accounting and other professional fees, corporate general and administrative expenses, impairment of assets held for sale, offset by decreased depreciation and amortization and interest expense.
Previous wording
The second component consists of changes in assets and liabilities. Increases in assets and decreases in liabilities result in cash used in operations. Decreases in assets and increases in liabilities result in cash provided by operations. During the year ended December 31, 2024, net changes in asset and liability accounts resulted in $521,534 in cash used in operations. During the year ended December 31, 2023, net changes in asset and liability accounts resulted in $125,128 in cash used in operations. This increase of $396,406 in cash used in operations resulting from changes in assets and liabilities is a result of increased changes in rent and other receivables, net, of $124,922, increased changes in other assets of $466,171, partially offset by decreased changes in accounts payable and accrued liabilities of $193,783, and decreased changes in unbilled rent of $904.
Current wording
The second component consists of changes in assets and liabilities. Increases in assets and decreases in liabilities result in cash used in operations. Decreases in assets and increases in liabilities result in cash provided by operations. During the year ended December 31, 2025, net changes in asset and liability accounts resulted in $729,089 in cash used in operations. During the year ended December 31, 2024, net changes in asset and liability accounts resulted in $521,534 in cash used in operations. This increase of $207,555 in cash used in operations resulting from changes in assets and liabilities is a result of increased rent and other receivables, net, of $19,320, increased unbilled rent of $108,719, increased other assets of $209,543, and decreased accounts payable and accrued liabilities of $327,699, all of which used cash.
Previous wording
The net of (i) the $2,317,671 increase in cash provided by operations from the first category and (ii) the $521,534 cash used by operations from the second category results in a total increase of cash provided in operations of $1,796,137 for the year ended December 31, 2024.
Current wording
The total of (i) the $57,831 decrease in cash provided by operations from the first category and (ii) the $207,555 increase in cash used in operations from the second category results in a total decrease of cash provided by operations of $265,386 for the year ended December 31, 2025.
Previous wording
Management believes that separately evaluating these two components of our company’s cash provided by operating activities provides management with additional insight into this GAAP measure. Management believes that separating changes in assets and liabilities, the second component, from net operating income (loss) adjusted for non-cash operating activities, the first component, is a meaningful measure of our company’s operating performance, along with adjusted funds from operations, presented below.
Current wording
Management believes that separately evaluating these two components of our cash provided by operating activities provides management with additional insight into this GAAP measure. Management believes that separating changes in assets and liabilities, the second component, from net operating income (loss) adjusted for non-cash operating activities, the first component, is a meaningful measure of our operating performance, along with adjusted net operating income and adjusted funds from operations, presented below.
Previous wording
During the year ended December 31, 2024, our cash provided by investing activities was $2,062,407, compared to cash used in investing activities of $1,483,117 during the year ended December 31, 2023, an increase in cash provided by investing activities of $3,545,524.
Current wording
During the year ended December 31, 2025, our cash used in investing activities was $6,979,859, compared to cash provided by investing activities of $2,062,407 during the year ended December 31, 2024, a decrease in cash provided by investing activities of $9,042,266.
Previous wording
During the year ended December 31, 2024, cash provided by investing activities consisted of $3,110,149 in cash received from the disposal of the Hanover Square Shopping Center Property, which was partially offset by cash used in investing activities consisting of $902,397 in capitalized expenditures, including $159,349 in building improvements, $52,212 in site improvements, $316,878 in leasing commissions and $373,958 in tenant improvements, $145,345 for the acquisitions of the Citibank Property and the noncontrolling owner’s interest in the Hanover Square Outparcel. During the year ended December 31, 2023, cash used in investing activities consisted of $1,483,117 in capitalized expenditures, including $210,505 in building improvements, $11,323 in site improvements, $432,613 in tenant improvements and $828,676 in leasing commissions.
Current wording
During the year ended December 31, 2025, cash used in investing activities consisted of $1,453,758 in capitalized expenditures, including $434,426 in building improvements, $457,274 in leasing commissions, $516,474 in tenant improvements, and $45,584 in site improvements, $14,714,513 in investment property acquisitions, including $14,624,638 for the acquisition of the Tesla Pensacola Property and $89,875 for closing costs related to the Buffalo Wild Wings Property and United Rentals Property acquisitions, and $337,928 for the purchase of crypto assets, offset by $9,526,340 in cash received from the disposal of investment properties,. During the year ended December 31, 2024, cash provided by investing activities consisted of $3,110,149 in cash received from the disposal of the Hanover Square Shopping Center Property, offset by cash used in investing activities consisting of $145,345 in investment property acquisitions, including $100,891 in cash paid for the acquisition of the noncontrolling owner’s 16% interest in the Hanover Square Outparcel and $44,454 paid in cash for closing costs related to the Citibank Property acquisition, and$902,397 in capitalized expenditures, including $159,349 in building improvements, $52,212 in site improvements, $316,878 in leasing commissions and $373,958 in tenant improvements.
Previous wording
the year ended December 31, 2023, that did not affect our cash provided by investing activities, was the transfer of investment properties, net, to assets held for sale, net of $9,707,154.
Current wording
The non-cash investing activity for the year ended December 31, 2025, that did not affect our cash provided by investing activities was the issuance of $5,765,000 of OP Units, including $2,620,000 of OP Units for the acquisitions of the Buffalo Wild Wings Property and $3,145,000 of OP Units for the United Rentals Property, the transfer of $27,080,926 from investment properties, net, to assets held for sale, the transfer of $960,876 of intangible lease assets, net, to assets held for sale, the transfer of $529,681 of intangible lease liabilities, net, to liabilities held for sale, and accrued but unpaid capital expenditures of $62,658 as of December 31, 2025.
Previous wording
The non-cash investing activity for the year ended December 31, 2024, that did not affect our cash provided by investing activities, was the issuance of $2,400,000 of OP Units for the acquisition of the Citibank Property. The non-cash investing activity for
Current wording
The non-cash investing activity for the year ended December 31, 2024, that did not affect our cash provided by investing activities, was the issuance of $2,400,000 of OP Units for the acquisition of the Citibank Property.
Previous wording
During the year ended December 31, 2024, our cash used by financing activities was $1,595,413 compared to cash used by financing activities of $474,144 during the year ended December 31, 2023, an increase in cash used by financing activities of $1,121,269. During the year ended December 31, 2024, our cash used by financing activities consisted of $958,579 in principal payments for our company’s mortgages, $787,027 in dividends and distributions, $2,705 to retire fractional shares resulting from the reverse stock split, $1,000,000 to repay the line of credit, short term, $93,220 to redeem OP Units, $43,306 in capitalized closing costs for the Wells Fargo Line of Credit renewal and increase, $3,500,000 for the partial redemption of our company’s mandatorily redeemable preferred stock, and $32,467 to repurchase Common Shares, partially offset by $2,851,977 in proceeds from sales of Common Shares and $1,969,914 in proceeds from sales of OP Units. During the year ended December 31, 2023, our cash used by financing activities consisted of $1,085,480 in principal payments for our company’s mortgages, $383,665 in dividends and distributions and $4,999 to retire fractional shares resulting from the reverse stock split, offset by $1,000,000 in proceeds from the line of credit, short term.
Current wording
During the year ended December 31, 2025, our cash provided by financing activities was $3,510,442 compared to cash used by financing activities of $1,595,413 during the year ended December 31, 2024, an increase in cash provided by financing activities of $5,105,855. During the year ended December 31, 2025, our cash provided by financing activities consisted of $14,321,378 in net proceeds from the Farmers Line of Credit, $7,505,754 in net proceeds from the Tesla DST Mortgage, offset by $14,700,000 for the repayment of the Farmers Line of Credit, $1,500,000 for the final redemption of our mandatorily redeemable preferred stock, $1,133,907 in principal payments for our mortgages, $602,207 in dividends and distributions, $140,788 to repurchase Common Shares and $239,788 in offering costs associated with our DST Program. During the year ended December 31, 2024, our cash used in financing activities consisted of $3,500,000 for the partial redemption of our mandatorily redeemable preferred stock, $1,000,000 to repay the line of credit, short term, $958,579 in principal payments for our mortgages, $787,027 in dividends and distributions, $93,220 for the Operating Partnership Unit redemptions, $43,306 in capitalized closing costs for the Wells Fargo LOC renewal and increase, $32,467 in repurchases of Common Shares, and $2,705 for the retirement of fractional shares resulting from the reverse stock split, offset by $2,851,977 in proceeds from the sales of Common Shares, net of capitalized offering costs, and $1,969,914 in proceeds from the sale of OP Units, net of capitalized offering costs.
Previous wording
Liquidity for general operating needs and our company’s investment properties is generally provided by the rental receipts from our retail properties, flex center properties and STNL properties, if any. We expect to provide any liquidity for growth (acquisition of new investment properties) by raising additional investment capital. In addition, our company continually reviews and evaluates its outstanding mortgages payable for refinancing opportunities. While some of our mortgages payable are not pre-payable, some mortgages payable may present opportunities for refinancing.
Current wording
Liquidity for general operating needs and our investment properties is generally provided by the rental receipts from our retail properties, flex center properties and STNL properties, if any. We expect to provide any liquidity for growth (acquisition of new investment properties) by raising additional investment capital. In addition, we continually review and evaluate our outstanding mortgages payable for refinancing opportunities. While some of our mortgages payable are not pre-payable, some mortgages payable may present opportunities for refinancing.
Previous wording
The primary, non-operating liquidity needs of our company are $1,526,140 to redeem the remaining 60,000 shares of our mandatorily redeemable preferred stock on January 10, 2025, pursuant to the redemption notice issued on December 10, 2024, $114,643 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on January 7, 2024 and payable January 23, 2025 to holders of record on January 20, 2025, and $1,088,084 in principal payments due on its mortgages payable during the 12-month period from January 1, 2025 through December 31, 2025. In addition to liquidity required to fund these dividends and principal payments, we may also incur some level of capital expenditures for our existing properties that cannot be passed on to our tenants. Our company plans to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.
Current wording
As of December 31, 2025, our primary, non-operating liquidity needs were $149,919 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on December 18, 2025 and paid on January 13, 2026 to holders of record on January 8, 2026, and $1,408,050 in principal payments due on its mortgages payable during the 12-month period from January 1, 2026 through December 31, 2026. In addition to liquidity required to fund these dividends and principal payments, we may also incur some level of capital expenditures for our existing properties that cannot be passed on to our tenants. We plan to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.
Previous wording
To meet these future liquidity needs, our company has the following resources:
Current wording
To meet these future liquidity needs, we have the following resources:
Previous wording
Interest expense was $3,019,799 and $3,540,900 for the years ended December 31, 2024 and 2023, respectively, as follows:
Current wording
Interest expense was $2,620,396 and $3,019,799 for the years ended December 31, 2025 and 2024, respectively, as follows:
Previous wording
Total interest expense for the year ended December 31, 2024 decreased by $521,101 over the year ended December 31, 2023. This decrease was a result of decreased interest of $578,356 from the sale of the Hanover Square Shopping Center Property, decreased interest expense from each of the Ashley Plaza mortgage of $7,462, the Brookfield mortgage of $3,185, the Wells Fargo Mortgage Facility of $45,711, all due to amortization of principal, and the amortization and preferred dividends on our company’s mandatorily redeemable preferred stock of $17,598, partially offset by increased interest from the Parkway Mortgage of $107,550 due to the variable interest rate, increased interest from the Franklin Square Mortgage of $1,401, increased interest from the Wells Fargo Line of Credit of $17,700 due to the outstanding balance during parts of the year ended December 31, 2024, and increased other interest of $4,560. Interest expense above includes non-cash amortization of discounts and capitalized issuance costs related to the mandatorily redeemable preferred stock. See Note 5 of the accompanying notes to the consolidated financial statements.
Current wording
Total interest expense for the year ended December 31, 2025 decreased by $399,403 from the year ended December 31, 2024. This decrease was primarily a result of decreased interest from the sale of the Hanover Square Shopping Center Property and the redemption of the mandatorily redeemable preferred stock, offset by new interest expense from the Farmers Line of Credit and Tesla DST Mortgage. Other interest expense, above, includes (i) other interest, (ii) preferred dividends on mandatorily redeemable preferred stock and (iii) non-cash amortization of discounts and capitalized issuance costs related to the mandatorily redeemable preferred stock. See Note 5 of the accompanying notes to the consolidated financial statements.
Previous wording
During the year ended December 31, 2024, other income was $88,856, an increase of $39,582 from other income of $49,274 for the year ended December 31, 2023. Other income for the year ended December 31, 2024 consisted of interest income of $54,064 and gain on the extinguishment of lease liability of $34,792. Other income for the year ended December 31, 2023 consisted of interest income of $38,308 and lease termination fee income of $10,966.
Current wording
During the year ended December 31, 2025, other income was $361,498, which consisted of $162,749 in lease termination fees, $172,931 in insurance proceeds for property damage at our Franklin Square Property, and $25,828 in interest income. This is an increase of $272,642 from other income of $88,856 for the year ended December 31, 2024, which consisted of $54,064 in interest income and $34,792 in gain on the extinguishment of lease liabilities.
Previous wording
During the year ended December 31, 2024, other expense was $56,325, a decrease of $28,239 from other expense of $84,564 for the year ended December 31,2023. Other expense for the year ended December 31, 2024 consisted of $56,325 in expense related to the fair value change of the interest rate cap. Other expense for the year ended December 31, 2023 consisted of $84,564 in expense related to the fair value change of the interest rate cap.
Current wording
During the year ended December 31, 2025, other expense was $224,777, which consisted of $180,751 in loss related to the fair value change of the interest rate cap and $44,026 in unrealized loss on crypto assets. This is an increase of $168,452 from other expense of $56,325 for the year ended December 31, 2024, which was related to the fair value change of the interest rate cap.
Previous wording
Net income was $744,325 for the year ended December 31, 2024, before adjustments for net income (loss) attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders was $27,524. Net loss was $4,573,354 for the year ended December 31, 2023, before adjustments for net income (loss) attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $4,571,279, for the year ended December 31, 2023.
Current wording
Net loss was $1,935,773 for the year ended December 31, 2025, before adjustments for net loss attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $2,388,837.
Previous wording
Net income for the year ended December 31, 2024 increased by $5,317,679 over the year ended December 31, 2023, before adjustments for net income (loss) attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders for the year ended December 31, 2024 increased by $4,598,803 over the year ended December 31, 2023.
Current wording
Net loss for the year ended December 31, 2025 represented a decrease of $2,680,098 from the net income of $744,325 for the year ended December 31, 2024, before adjustments for net (loss) income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders for the year ended December 31, 2025 increased by $2,416,361 over the net income of $27,524 for the year ended December 31, 2024.
Previous wording
We use funds from operations (“FFO”), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in its December 2018 White Paper (the “NAREIT White Paper”). As defined in the NAREIT White Paper, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs and above and below market leases) and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.
Current wording
Although our company has revoked its REIT election, for the periods during which we operated under REIT status, we used funds from operations (“FFO”), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in its December 2018 White Paper (the “NAREIT White Paper”). As defined in the NAREIT White Paper, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs and above and below market leases) and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.
Previous wording
The NAREIT White Paper states, “FFO of a REIT includes the FFO of all consolidated properties, including consolidated, partially owned affiliates”. Additionally, since the adjustments to GAAP net income, such as depreciation and amortization, used in the reconciliation of net income (loss) to determine FFO are not allocated between common stockholders and noncontrolling interests (i.e. 100% of depreciation and amortization are “added back” without reduction to reflect the noncontrolling owners’ interest in such items), our company believes that the appropriate starting point for the calculation is the net income (loss) before allocation to noncontrolling interests. This allows our company to use FFO as a tool to measure the overall performance of its investment properties, as a whole, not just the portion of the investment properties controlled by our company’s common stockholders.
Current wording
The NAREIT White Paper states, “FFO of a REIT includes the FFO of all consolidated properties, including consolidated, partially owned affiliates”. Additionally, since the adjustments to GAAP net income, such as depreciation and amortization, used in the reconciliation of net income (loss) to determine FFO are not allocated between common stockholders and noncontrolling interests (i.e. 100% of depreciation and amortization are “added back” without reduction to reflect the noncontrolling owners’ interest in such items), we believe that the appropriate starting point for the calculation is the net (loss) income before allocation to noncontrolling
Previous wording
Below is our company’s FFO, which is a non-GAAP measurement, for the years ended December 31, 2024 and 2023:
Current wording
The following table reconciles our calculations of FFO, which is a non-GAAP measurement, to net (loss) income, the most directly comparable GAAP financial measure, for the years ended December 31, 2025 and 2024:
Previous wording
The NAREIT White Paper encourages companies reporting FFO to “make supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period.” We believe that the computation of FFO in accordance with the NAREIT White Paper’s definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include non-cash items such as amortization of loans and above and below market leases, unbilled rent arising from applying straight line rent revenue recognition and share-based compensation expenses. Additionally, the impact of capital expenditures, including tenant improvement and leasing commissions, net of reimbursements of such expenditures by property escrow funds, is included in our calculation of AFFO. Therefore, in addition to FFO, management uses Adjusted FFO (“AFFO”), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as their exclusion is not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.
Current wording
The NAREIT White Paper encourages companies reporting FFO to “make supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period.” We believe that the computation of FFO in accordance with the NAREIT White Paper’s definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include non-cash items such as amortization of loans and above and below market leases, unbilled rent arising from applying straight line rent revenue recognition and share-based compensation expenses. Additionally, the impact of capital expenditures, including tenant improvement and leasing commissions, net of reimbursements of such
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
We periodically review investment properties for impairment on a property-by-property basis to identify any events or changes in circumstances that indicate that the carrying value of investment properties may not be recoverable. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. If any such events or changes in circumstances are identified, we perform a formal impairment analysis. We measure any impairment of investment property when the estimated
Current report — wording carried from elsewhere
Comparison of the Year ended December 31, 2025 and 2024
Current report — wording carried from elsewhere
Revenues for the years ended December 31, 2025 and 2024 are as follows:
Current report — wording carried from elsewhere
We establish operating segments at the property level and aggregate individual properties into reportable segments based on product types in which we have investments. During the years ended December 31, 2025 and 2024, our reportable segments consisted of retail center properties, flex center properties and STNL properties. We base our evaluation of our results of operations on the net operating income adjusted for interest expense of each reportable segment and, in some cases, of each property.
Current report — wording carried from elsewhere
interests. This allows us to use FFO as a tool to measure the overall performance of its investment properties, as a whole, not just the portion of the investment properties controlled by our common stockholders.
Current report — wording carried from elsewhere
expenditures by property escrow funds, is included in our calculation of AFFO. Therefore, in addition to FFO, management uses Adjusted FFO (“AFFO”), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as their exclusion is not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.
Current report — wording carried from elsewhere
supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period. We have elected to include non-cash expenses (bad debt expense) in our calculation of AFFO.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
an independent, third-party appraisal obtained by our company. Pursuant to our company’s Related Person Transaction Policy (the “Related Person Transaction Policy”), our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.
Previous report — wording carried elsewhere
estimates are based on comparable market data and other information which is subjective in nature, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information.