Medalist Diversified, Inc.
For the period ended Mar 31, 2026. Filed May 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 13, 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-Q
Period ended 2025-09-30; filed 2025-11-06.
0001104659-25-107749
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001104659-26-060239
Item 2. 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.
Compared 167 previous paragraphs and 119 current paragraphs.
50 unchanged; 30 reworded; 39 added; 82 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 73 previous and 45 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
Our current primary focus is to implement the strategic repositioning initiated during 2025. Effective January 1, 2026, we revoked our REIT status and are transitioning our primary focus to build the DST Program to generate fee income and increase assets under management. We will continue to evaluate direct and indirect real estate investments (i) for our general portfolio and (ii) that support the DST Program, including opportunities within our existing portfolio, including selective disposition of properties from our portfolio to generate capital for the DST Program and other potential acquisitions.
Current report
Our efforts to scale the DST Program will be focused on identifying real estate investments suitable for DST vehicles that offer competitive, risk-adjusted returns, with a 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.
Current report
As of March 31, 2026, the Tesla Pensacola Property was classified as assets held for sale on our condensed consolidated balance sheet. As of March 31, 2026, we held 73.6% of the beneficial ownership interests in XXV DST, which owns the Tesla Pensacola Property, and non-affiliated owners held the remaining 26.4% of the beneficial ownership interests in XXV DST.
Current report
Prior to January 1, 2026, we aggregated individual properties into retail, flex and STNL operating segments. Effective on January 1, 2026, following our strategic repositioning and increased focus on DST sponsorship activities, our CODM began evaluating the Company’s real estate portfolio on a combined basis as a single, “Investment Properties” segment. Additionally, as of January 1, 2026, we established a second operating segment for our DST sponsorship activities. These two segments align with how our CODM evaluates performance and allocates resources.
Current report
Sales of Investment Properties
Current report
On February 13, 2026, we sold the Greenbrier Business Center Property to an unrelated third party for a sale price of $11,000,000 and used $7,000,000 from the proceeds to repay a portion of the Wells Fargo Mortgage Facility. The sale of the Greenbrier Business Center Property resulted in a gain on disposal of investment properties of $4,228,612 reported on our condensed consolidated statement of operations for the three months ended March 31, 2026.
Current report
On February 27, 2026, we sold the Parkway Property to an unrelated third party for a sale price of $7,825,000 and used $4,735,614 from the proceeds to repay the Parkway Mortgage. The sale of the Parkway Property resulted in a gain on disposal of investment properties of $1,040,870 reported on our condensed consolidated statement of operations for the three months ended March 31, 2026.
Current report
On March 30, 2026, we sold the Franklin Square Property to an unrelated third party for a sale price of $24,100,000 and used $12,954,175 from the proceeds to repay the Franklin Square Mortgage. The sale of the Franklin Square Property resulted in a gain on disposal of investment properties of $7,580,745 reported on our condensed consolidated statement of operations for the three months ended March 31, 2026.
Current report
On October 23, 2025 and February 13, 2026, respectively, we sold the Salisbury Marketplace and Greenbrier Business Center Properties, respectively and used $5,145,479 and $7,000,000, respectfully, of the net proceeds of the sales to reduce the
Current report
principal balance of the Wells Fargo Mortgage Facility in exchange for Wells Fargo releasing its security interest in the respective properties. As of December 31, 2025 the portion of the Wells Fargo Mortgage Facility allocated to the Greenbrier Business Center Property was included in mortgages payable, net, associated with assets held for sale on our condensed consolidated balance sheet. As of March 31, 2026, the monthly payment is $30,000 and the remaining outstanding balance of the Wells Fargo Mortgage Facility is secured by the Lancer Center Property.
Current report
Income Taxes
Current report
Beginning with our taxable year ended December 31, 2017, and ending on December 31, 2025, we elected to be taxed as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain REIT status, the regulations require a REIT to distribute at least 90% of its taxable income to stockholders and meet certain other asset and income tests, as well as other requirements. We believe that we operated in a manner that met these requirements during those taxable years.
Current report
Effective on January 1, 2026, we terminated our election to be taxed as a REIT and will be subject to tax at regular corporate rates. We may not re-elect to be taxed as a REIT for five years.
Current report
We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more-likely-than-not that all or a portion of the deferred tax asset will not be realized.
Current report
Management uses a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense.
Current report
months ended March 31, 2026.
Current report
During the three months ended March 31, 2026, our cash provided by investing activities was $4,653,138, compared to cash used in investing activities of $227,464 during the three months ended March 31, 2025, an increase in cash provided by investing activities of $4,880,602.
Current report
Dividend and interest income on our marketable securities and cash balances are not guaranteed and can fluctuate significantly. Such income is influenced by a range of factors, including the composition of our investment portfolio, issuer credit quality, payout policies, and prevailing macroeconomic and policy developments that shape market conditions and investor sentiment. In particular, our dividend and interest income can be substantially affected by changes in interest rates, credit markets, and liquidity, all of which influence demand for our securities and, in turn, the level of income we realize from such investments.
Current report
As we execute our strategic transition, revenues may increasingly depend on capital allocation decisions, including income generated from short-term investments, fee-based activities, and potential acquisitions or strategic transactions. These activities are subject to market conditions, interest rate volatility, counterparty risk, regulatory considerations, and execution risk. There can be no assurance that these strategies will generate anticipated levels of income or returns.
Current report
Macroeconomic conditions, including inflation, elevated interest rates, economic slowdowns, recessionary pressures, and financial market volatility, may adversely affect our business, our tenants, the value of our real estate assets, the performance of our short-term and other investments, and our ability to identify and execute strategic investment opportunities. Rising interest rates may increase borrowing costs, reduce asset valuations, and alter the relative attractiveness of alternative investment options. Broader economic conditions, including employment levels, capital markets liquidity, and consumer confidence, may negatively impact tenant performance, demand for commercial real estate, and the operating performance or valuation of current and prospective investments.
Current report
cash flows.
Current report
Threemonths ended March 31, 2026
Current report
Total revenue was $2,159,265 for the three months ended March 31, 2026, a decrease of $162,375 from the three months ended March 31, 2025. We experienced decreased investment property revenues due to the sale of the Salisbury Marketplace, Buffalo Wild Wings, United Rentals, Parkway, Greenbrier and Franklin Square properties, and increased vacancy in the Lancer Center Property, which were offset by increased revenues from the acquisition of the Tesla Pensacola Property and new leasing activity in the Ashley Plaza and Brookfield properties.
Current report
Effective on January 1, 2026, we established two operating segments. The first operating segment consists of our investment properties (prior to January 1, 2026, we established operating segments that aggregated individual properties into retail, flex and STNL segments). As of January 1, 2026, we established a second operating segment for our DST sponsorship activities. These segments align with how the CODM evaluates performance and allocates resources.
Current report
Investment Property Revenues and Adjusted Net Operating Income
Current report
The following table presents property revenues, operating expenses and interest expense for our investment properties for the three months ended March 31, 2026 and 2025:
Current report
Investment property revenues were $2,159,265 for the three months ended March 31, 2026, a $162,375 decrease from the three months ended March 31, 2025. Adjusted Net Operating Income from investment properties was $1,073,187 for the three months ended March 31, 2026, a decrease of $57,499 from the three months ended March 31, 2025, due to the sale of the six properties, increased vacancy at the Lancer Center Property, slightly higher operating expenses at the Ashley Plaza Property and T-Mobile Property, offset by increased Adjusted NOI from the Brookfield Property due to new leases and from the East Coast Wings Property due to lower operating expenses.
Current report
DST Sponsorship Revenues and Adjusted Net Operating Income
Current report
The following table presents revenues, operating expenses and interest expense for our DST Program for the three months ended March 31, 2026 and 2025:
Current report
We initiated our DST Program during the three months ended March 31, 2026. Accordingly, there was no activity during the three months ended March 31, 2025. During the three months ended March 31, 2026, we incurred $222,896 in expenses associated with our DST Program, including salaries and benefits, conferences and travel, marketing, administrative and other expenses. Our DST Program did not generate revenues during the three months ended March 31, 2026. DST Program revenues generally consist of acquisition fees, asset management fees, and disposition fees. Acquisition fees are generally earned upon the completion of the sale of all beneficial interests in a DST. Asset management fees are generally earned monthly, but we have waived our asset management fees that during the first year of the XXV DST. Disposition fees are earned upon the sale of a DST property and are generally subordinated to DST investors’ return of capital.
Current report
Total operating expenses were $2,341,118 for the three months ended March 31, 2026, a decrease of $523,663 over the three months ended March 31, 2025, primarily due to decreased depreciation and amortization expense due to the sales of the Salisbury Marketplace, Greenbrier Business Center, Parkway properties, and the transfer of the Franklin Square Property to assets held for sale, at which point, we ceased recording depreciation and amortization, and a decrease in share based compensation expense, net of an increase due to DST sponsorship program expenses.
Current report
Operating income for the three months ended March 31, 2026 was $12,296,034, an increase of $12,848,550 from the operating loss of $552,516 for the three months ended March 31, 2025. This increase was primarily a result of the gain on the disposal of our investment properties, net of the loss on the extinguishment of debt related to three properties sold during the three months ended
Current report
Total interest expense for the three months ended March 31, 2026 decreased by $116,921 over the three months ended March 31, 2025. This decrease was primarily a result of the repayment of a portion of the Wells Fargo Mortgage Facility resulting from the sale of the Salisbury Marketplace and Greenbrier Business Center Properties and the repayment of the Parkway Center mortgage resulting from the sale of the Parkway Property.
Current report
Net Income (Loss) before Income Taxes
Current report
Net income was $12,044,127 for the three months ended March 31, 2026, before adjustments for net income attributable to noncontrolling interests. Net income for the three months ended March 31, 2026 increased by $13,071,011 over the three months ended March 31, 2025.
Current report
Provision for Income Taxes
Current report
Effective on January 1, 2026, we revoked our election to be taxed as a REIT and as a result, we recorded a net deferred tax asset and income tax benefit of $3,902,878. In addition, for the three months ended March 31, 2026, we recorded a provision for income taxes of $1,824,236, which consists of current and deferred components. Our effective tax rate of 16.4% of pre-tax income reported in the period differs from the federal statutory rate of 21% primarily due to establishing the net deferred tax asset upon the termination of our election to be taxed as a REIT.
Current report
Net Income (Loss)
Current report
Net income was $14,122,769 for the three months ended March 31, 2026, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders was $8,966,809.
Removed paragraphs (82)
Previous report
We were 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,
Previous report
We establish operating segments at the property level and aggregate individual properties into reportable segments based on product types in which we have investments. As of September 30, 2025, our reportable segments were retail center properties, flex center properties and STNL properties.
Previous report
Acquisition of the Tesla Pensacola Property, Commencement of DST Program
Previous report
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”).
Previous report
As of September 30, 2025, we had committed to a plan to contribute the Tesla Pensacola Property to a newly formed Delaware Statutory Trust (“DST”). Following the contribution, we plan to launch a program (the “DST Program”) to raise capital, through the Operating Partnership, through private placement offerings exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by selling beneficial interests (the “DST Interests”) in specific DSTs holding real properties (the “DST Properties”). 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 (the “Code”). We intend to use the net offering
Previous report
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. As of November 6, 2025, we have not initiated our efforts to raise gross offering proceeds through the DST Program.
Previous report
Farmers Line of Credit
Previous report
On July 18, 2025, we, through our wholly-owned subsidiaries, entered into the Farmers Line of Credit in the amount of $14,700,000 in connection with the acquisition of the Tesla Pensacola Property, discussed above. The Farmers Line of Credit is 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 of the prime rate announced by Farmers, subject to a floor rate of 7.25%. As of September 30, 2025, the interest rate was 7.25%. The Farmers Line of Credit has a one-year term and any outstanding balance will be due in full on August 10, 2026. The Farmers Line of Credit is unconditionally guaranteed by our company and our company’s Operating Partnership.
Previous report
that we maintain (i) a net worth of $4,850,000, excluding the liabilities associated with the mortgage loan for the Brookfield Property and (ii) liquid assets of no less than $485,000. As of September 30, 2025 and December 31, 2024, respectively, we believe that we are compliant with these covenants.
Previous report
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 September 30, 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 condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024, respectively.
Previous report
As of September 30, 2025, the outstanding balance, monthly payment and unamortized loan issuance costs related to the Wells Fargo Mortgage Facility are allocated, for reporting purposes, among the Salisbury Marketplace Property, 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 condensed consolidated balance sheets, while the portions allocated to the Salisbury Marketplace Property and Greenbrier Property, representing the estimated paydown amount upon their anticipated sale, is included in mortgages payable, net, associated with assets held for sale on our condensed consolidated balance sheets.
Previous report
REIT Status
Previous report
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 taxable years including the year during which we ceased to qualify as a REIT. 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.
Previous report
During the nine months ended September 30, 2025, our cash used in investing activities was $15,964,554, compared to cash provided by investing activities of $2,300,540 during the nine months ended September 30, 2024, a decrease in cash provided by investing activities of $18,265,094.
Previous report
consisted of $14,321,378 in net proceeds from the Farmers Line of Credit, offset by $1,500,000 for the final redemption of our mandatorily redeemable preferred stock, $816,596 in principal payments for our mortgages, $441,487 in dividends and distributions, and $140,788 to repurchase Common Shares. During the nine months ended September 30, 2024, our cash used in financing activities consisted of $1,000,000 to repay the line of credit, short term, $754,398 in principal payments for our mortgages, $685,659 in dividends and distributions, $77,226 for the Operating Partnership Unit redemption, $32,467 in repurchases of Common Shares and $2,705 for the retirement of fractional shares resulting from the reverse stock split.
Previous report
Additionally, the Farmers Line of Credit matures on August 10, 2026, at which time the full balance of $14,700,000 will be payable. Our company has received a commitment for $7,710,000 in permanent financing that will close upon our contribution of the Tesla Pensacola Property to our company’s first DST. The loan proceeds, net of closing costs, will be used to partially repay the Farmers Line of Credit. We expect that proceeds from the sale of beneficial interests in the DST, once issued, will be used to repay the remaining balance. There can be no assurance that the permanent financing will close or that the DST will be successful in selling beneficial interests or the timing of such potential issuances.
Previous report
The economy continues to face several issues including inflation risk, high interest rates, and potentially worsening economic conditions, which presents risks for our business and our tenants. Rising interest rates can increase borrowing costs and affect property valuations, influencing investment decisions and profitability. Broader economic factors, including inflation and employment rates, can influence consumer spending and tenant performance.
Previous report
Three months ended September 30, 2025
Previous report
Total revenue was $2,786,241 for the three months ended September 30, 2025, an increase of $449,316 from the three months ended September 30, 2024. Our company experienced increased retail center property revenues due to leasing activity in our Franklin Square, Salisbury Marketplace and Ashley Plaza properties, which were offset by decreased revenues from continuing vacancies in the Lancer Center Property, increased STNL property revenues resulting from the acquisition of the Buffalo Wild Wings Property, the United Rentals Property and the Tesla Pensacola Property, and increased flex center property revenues due to lease-up of the vacancy in our Brookfield Property, and strong occupancies in our Greenbrier Business Center and Parkway Center Properties.
Previous report
Retail Center Property Revenues and Adjusted Net Operating Income
Previous report
The following tables present property revenues, operating expenses and interest expense for our retail center properties for the three months ended September 30, 2025 and 2024:
Previous report
Retail center property revenues were $1,567,428 for the three months ended September 30, 2025, a $1,532 increase from the three months ended September 30, 2024. Increased revenues from the Franklin Square, which is fully occupied as of September 30, 2025, the Ashley Plaza Property which is 99.0% leased as of September 30, 2025 and the Salisbury Marketplace Property from increased tenant CAM reimbursements, were offset by decreased revenues from continued vacancies at the Lancer Center Property.
Previous report
Adjusted Net Operating Income from retail center properties was $735,804 for the three months ended September 30, 2025. Adjusted Net Operating Income for the three months ended September 30, 2025 decreased by $81,925 from the three months ended September 30, 2024, due to increased operating expenses offsetting the increased revenues, discussed above.
Previous report
Decreased Adjusted Net Operating Income from the Ashley Plaza Property was a result of increased retail center property expenses resulting from unplanned repairs, slightly offset by increased revenues and lower interest expense due to loan principal amortization. Increased Adjusted Net Operating Income from the Franklin Square Property resulted from increased rent revenues due to full occupancy and slightly decreased interest expense, offset by an increase in operating expenses. Decreased Adjusted Net Operating Income from the Lancer Center Property was a result of reduced revenues due to continued vacancies and increased operating expenses. Slightly increased Adjusted Net Operating Income from the Salisbury Marketplace Property resulted from increased tenant CAM reimbursement revenues, offset by increased retail center operating expenses.
Previous report
Flex Center Property Revenues and Adjusted Net Operating Income
Previous report
The following tables present property operating revenues, operating expenses and interest expense for our flex center properties for the three months ended September 30, 2025 and 2024:
Previous report
Flex center property revenues were $710,885 for the three months ended September 30, 2025, an increase of $34,131 from the three months ended September 30, 2024. Increased revenues were experienced at all our company’s flex center properties due to strong leasing activity and low vacancy.
Previous report
Adjusted Net Operating Income from our flex center properties was $378,310 for the three months ended September 30, 2025. Adjusted Net Operating Income for the three months ended September 30, 2025 increased by $29,875 from the three months ended September 30, 2024 due to increased flex center property revenues, and lower interest expense, slightly offset by increased flex center operating expenses.
Previous report
Increased Adjusted Net Operating Income from the Greenbrier Business Center resulted from increased flex center property revenues due to strong leasing and renewal activity, offset by increased flex center property operating expenses. Increased Adjusted Net Operating Income from the Brookfield Property resulted from increased flex center property revenues due to a new lease for a previously vacant space, offset by increased flex center operating expenses. Increased Adjusted Net Operating Income from the Parkway Property resulted from increased flex center property revenues from contractual rent escalations and new leases and decreased operating expenses.
Previous report
STNL Property Revenues and Adjusted Net Operating Income
Previous report
The following tables present property operating revenues, operating expenses and interest expense for our STNL center properties for the three months ended September 30, 2025 and 2024:
Previous report
STNL property revenues were $507,928 for the three months ended September 30, 2025, a $413,653 increase from the three months ended September 30, 2024. Adjusted Net Operating Income from STNL properties was $166,791 for the three months ended September 30, 2025, an increase of $80,704 over the three months ended September 30, 2024. STNL property revenues and Adjusted Net Operating Income increased due to the acquisition of the Buffalo Wild Wings Property, the United Rentals Property, but were slightly offset by Adjusted Net Operating Loss from the acquisition of the Tesla Pensacola Property.
Previous report
Total operating expenses were $2,344,725 for the three months ended September 30, 2025. Total expenses for the three months ended September 30, 2025 increased by $311,072 over the three months ended September 30, 2024, primarily due to increased legal, accounting and other professional fees, corporate general and administrative expenses, and impairment of assets held for sale, offset by decreased bad debt expense and decreased depreciation and amortization expense due to the sale of the Hanover Square Property and
Previous report
the transfer of the Salisbury Marketplace Property and Greenbrier Business Center Property to assets held for sale, at which time our company ceased depreciating these asset groups.
Previous report
Operating income for the three months ended September 30, 2025 was $441,516, an increase of $138,244 from the operating income of $303,272 for the three months ended September 30, 2024. This increase was primarily a result of increased net operating income from our flex property and STNL property operating segments, offset by decreased net operating income from our retail property operating segment, decreased bad debt expense and depreciation and amortization expense, offset by increased legal, accounting and other professional fees, corporate general and administrative expenses, and loss on impairment of assets held for sale.
Previous report
Total interest expense for the three months ended September 30, 2025 increased by $37,894 over the three months ended September 30, 2024. This increase was primarily a result of new interest expense from the Farmers Line of Credit, offset by decreased interest expense from the redemption of the mandatorily redeemable preferred stock. 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 unaudited condensed consolidated financial statements.
Previous report
During the three months ended September 30, 2025, other income was $180,283, which consisted of $172,931 in insurance proceeds for property damage at our Franklin Square Property, $3,734 in unrealized gain on crypto assets and $3,628 in interest income. This is an increase of $165,459 from other income of $14,824 for the three months ended September 30, 2024, which consisted of interest income.
Previous report
Net (Loss) Income
Previous report
Net loss was $166,738 for the three months ended September 30, 2025, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $395,948.
Previous report
Net loss for the three months ended September 30, 2025 decreased by $351,211 over the three months ended September 30, 2024, before adjustments for net (loss) income attributable to noncontrolling interests. After adjusting for noncontrolling
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Reworded paragraphs (30)
Previous wording
The following discussion and analysis is based on, and should be read in conjunction with, the condensed consolidated financial statements and the related notes thereto of Medalist Diversified REIT, Inc. contained in this Quarterly Report.
Current wording
The following discussion and analysis is based on, and should be read in conjunction with, the condensed consolidated financial statements and the related notes thereto of Medalist Diversified, Inc. contained in this Quarterly Report.
Previous wording
The U.S. Private Securities Litigation Reform Act of 1995 (the “1995 Act”) provides a “safe harbor” for forward-looking statements. This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, but not limited to, statements relating to our business activities, financing sources, liquidity, redemption of our mandatorily redeemable preferred stock and strategy. We have used the words “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and similar terms and phrases to identify forward-looking statements in this Quarterly Report.
Current wording
The U.S. Private Securities Litigation Reform Act of 1995 (the “1995 Act”) provides a “safe harbor” for forward-looking statements. This Quarterly Report contains “forward-looking statements” that we intend to be covered by the safe harbor provisions of the 1995 Act. We have used the words “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and similar terms and phrases, including references to strategy, plans or intentions, to identify forward-looking statements in this Quarterly Report.
Previous wording
The forward-looking statements contained in this Quarterly Report are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this Quarterly Report speaks only as of the date of this Quarterly Report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable laws.
Current wording
The forward-looking statements contained in this Quarterly Report are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this Quarterly Report speaks only as of the date of this Quarterly Report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.
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. Medalist Diversified REIT, Inc. 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 the taxable year ended December 31, 2017, we elected to be taxed as a REIT for federal income tax purposes. Effective on January 1, 2026, we terminated our election to be taxed as a REIT. 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.
Previous wording
North Carolina, and South Carolina, (ii) managing our STNL property portfolio in geographic markets across the United States, (iii) implementing a program by which we will act as a sponsor of Delaware Statutory Trust (“DST”) investment offerings and (iv) disposition of certain properties in our portfolio to generate funds for acquisition of properties suitable for contribution to our DST program. We may also pursue, in an opportunistic manner, other real estate-related and 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. While these types of investments are not intended to be a primary focus, we may make such investments in our discretion.
Current wording
We may also pursue, in an opportunistic manner, other real estate and 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. While these types of investments are not intended to be a primary focus, we may make such investments at the discretion of the Board.
Previous wording
In addition, as of September 30, 2025, we 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.
Current wording
As of March 31, 2026, we also owned two undeveloped parcels which are currently being marketed for sale or lease, 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 in Mechanicsville, Virginia.
Previous wording
Principal components of our total revenues for our retail center properties, flex center properties and STNL revenues include base rents and tenant reimbursements. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Certain lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent) which we recognize when the tenants achieve the specified targets as defined in their lease agreements. We periodically review the valuation of the asset/liability resulting from the straight-line accounting treatment of our leases in light of any changes in lease terms, financial condition or other factors concerning our tenants.
Current wording
Principal components of our total revenues for our investment property revenues include base rents and tenant reimbursements. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Certain lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent) which we recognize when the tenants achieve the specified targets as defined in their lease agreements. We periodically review the valuation of the asset/liability resulting from the straight-line accounting treatment of our leases in light of any changes in lease terms, financial condition or other factors concerning our tenants.
Previous wording
Our business model is intended to drive growth through acquisitions. Access to the capital markets is an important factor for our continued growth and success. Our primary liquidity needs are funding for (1) operations, including operating expenses, corporate and administrative costs, payment of principal of, and interest on, outstanding indebtedness, and escrow and reserve payments associated with long-term debt financing for our properties; (2) investing needs, including property acquisitions and recurring capital expenditures; and (3) financing needs, including cash dividends and debt repayments.
Current wording
Our business model is intended to drive growth through acquisitions and increasing assets under management. Our primary liquidity needs are funding for (1) operations, including operating expenses, corporate and administrative costs, payment of principal of, and interest on, outstanding indebtedness, and escrow and reserve payments associated with long-term debt financing for our properties; (2) investing needs, including property acquisitions and recurring capital expenditures; and (3) financing needs, including cash dividends and debt repayments.
Previous wording
Internal liquidity to fund operating needs is expected to be provided primarily by the rental receipts from our investment properties. The Farmers Line of Credit will not be a continuing source of liquidity for us. Upon repayment of the Farmers Line of Credit, no further advances will be available.
Current wording
Internal liquidity to fund operating needs is expected to be provided primarily by the rental receipts from our investment properties.
Previous wording
At September 30, 2025, our consolidated cash and restricted cash on hand totaled $3,802,586 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 nine months ended September 30, 2025 are as follows:
Current wording
At March 31, 2026, our consolidated cash and restricted cash on hand totaled $9,435,265 compared to consolidated cash on hand of $4,134,070 at December 31, 2025. Cash from operating activities, investing activities and financing activities for the three months ended March 31, 2026 are as follows:
Previous wording
During the nine months ended September 30, 2025, our cash provided by operating activities was $2,271,897 compared to cash provided by operating activities of $1,410,969 for the nine months ended September 30, 2024, an increase in cash provided by operating activities of $860,928.
Current wording
During the three months ended March 31, 2026, our cash used in operating activities was $508,353 compared to cash provided by operating activities of $459,972 for the three months ended March 31, 2025, a decrease in cash provided by operating activities of $968,325.
Previous wording
resulted in net cash provided by operating activities of $1,661,864. During the nine months ended September 30, 2024, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $1,519,643. The increase of $142,221 in cash flows from operating activities for the nine months ended September 30, 2025 was primarily the result of increased net operating income from our investment properties and decreased interest expense resulting from the redemption of our mandatorily convertible preferred stock, offset by increased legal, accounting and other professional fees.
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 three months ended March 31, 2026, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $318,580. During the three months ended March 31, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $389,549. The decrease of $708,129 in cash flows from operating activities for the three months ended March 31, 2026 was primarily from reduced lease termination fees, increased income tax expense, and an increase in DST sponsorship program expenses.
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 nine months ended September 30, 2025, net changes in asset and liability accounts resulted in $610,033 in cash provided by operations. During the nine months ended September 30, 2024, net changes in asset and liability accounts resulted in $108,674 in cash used in operations. This increase of $718,707 in cash provided by operations resulting from changes in assets and liabilities is a result of decreased changes in rent and other receivables, net, of $189,824, decreased changes in other assets of $308,703, and increased accounts payable and accrued liabilities of $312,230, all of which are sources of cash, offset by increased changes in unbilled rent of $92,050, which used cash.
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 three months ended March 31, 2026, net changes in asset and liability accounts resulted in $189,773 in cash used in operations. During the three months ended March 31, 2025, net changes in asset and liability accounts resulted in $70,423 in cash provided by operations. This increase of $260,196 in cash used in operations resulting from changes in assets and liabilities is a result of decreased changes in rent and other receivables, net, of $15,789, decreased changes in other assets of $301,593, and increased changes in accounts payable and accrued liabilities of $30,413, all of which are uses of cash, offset by decreased changes in unbilled rent of $26,773, which provided cash.
Previous wording
The total of (i) the $142,221 increase in cash provided by operations from the first category and (ii) the $718,707 increase in cash provided by operations from the second category results in a total increase of cash provided by operations of $860,928 for the nine months ended September 30, 2025.
Current wording
The total of (i) the $708,129 decrease in cash flows from operations from the first category and (ii) the $260,196 decrease in cash provided by operations from the second category results in a total decrease of cash provided by operations of $968,325 for the three
Previous 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 (loss) income 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.
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 (loss) income adjusted for non-cash operating activities, the first component, is a meaningful measure of our operating performance, along with adjusted net operating income, presented below.
Previous wording
During the nine months ended September 30, 2025, cash used in investing activities consisted of $1,131,036 in capitalized expenditures, including $338,998 in building improvements, $340,614 in leasing commissions, $418,710 in tenant improvements, and $32,714 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 $119,005 for the purchase of crypto assets. During the nine months ended September 30, 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 $664,264 in capitalized expenditures, including $113,847 in building improvements, $2,300 in site improvements, $174,159 in leasing commissions and $373,958 in capitalized tenant improvements.
Current wording
During the three months ended March 31, 2026, cash provided by investing activities consisted of $17,159,761 in cash received from the disposal of the Greenbrier Business Center, Parkway and Franklin Square properties, offset by $12,185,803 in cash used for our investments in marketable securities, $201,077 for the purchase of crypto assets, and $119,743 in capitalized expenditures. During the three months ended March 31, 2025, cash used in investing activities consisted of $137,589 in capitalized expenditures and $89,875 in investment property acquisitions for closing costs related to the Buffalo Wild Wings Property and United Rentals Property acquisitions.
Previous wording
The non-cash investing activity for the nine months ended September 30, 2025, that did not affect our cash provided by investing activities was the issuance of $5,765,000 of OP Units, $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, $2,544,042 related to the Exchange of Common Shares for OP Units, the transfer of $15,168,178 from investment properties, net, to assets held for sale, the transfer of $503,675 of intangible assets, net, to assets held for sale, and the transfer of $476,656 of intangible liabilities, net, to liabilities held for sale.
Current wording
The non-cash investing activity for the three months ended March 31, 2026, that did not affect our cash provided by investing activities was the transfer of $15,419,522 from investment properties, net, to assets held for sale, the transfer of $9,970 of intangible lease assets, net, to assets held for sale, the transfer of $7,682 of intangible lease liabilities, net, to liabilities held for sale, and $59,288 in accrued capital expenditures.
Previous wording
The non-cash investing activity for the nine months ended September 30, 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 and $74,105 of capital expenditures accrued as of September 30, 2024.
Current wording
The non-cash investing activity for the three months ended March 31, 2025, that did not affect our cash used in investing activities, was the issuance of $5,765,000 of OP Units and the transfer of $397,367 from investment properties, net, to assets held for sale.
Previous wording
During the nine months ended September 30, 2025, our cash provided by financing activities was $11,422,507 compared to cash used in financing activities of $2,552,455 during the nine months ended September 30, 2024, an increase in cash provided by financing activities of $13,974,962. During the nine months ended September 30, 2025 our cash provided by financing activities
Current wording
During the three months ended March 31, 2026, our cash provided by financing activities was $1,156,410 compared to cash used in financing activities of $1,898,196 during the three months ended March 31, 2025, an increase in cash provided by financing activities of $3,054,606. During the three months ended March 31, 2026 our cash provided by financing activities consisted of $2,106,312 of proceeds from the sale of beneficial interests in DST entities, net of $228,725 in principal payments for our mortgages, and $721,177 in dividends and distributions. During the three months ended March 31, 2025, our cash used in financing activities consisted of $1,500,000 for the partial redemption of our mandatorily redeemable preferred stock, $274,737 in principal payments for our mortgages, and $123,459 in dividends and distributions.
Previous wording
The non-cash financing activity for the nine months ended September 30, 2025, that did not affect our cash provided by financing activities was the transfer of $11,093,684 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale.
Current wording
The non-cash financing activity for the three months ended March 31, 2026, that did not affect our cash provided by financing activities was $3,720,000 for the conversion of OP Units to common shares and the transfer of $13,474,729 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale.
Previous 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.
Current wording
Liquidity for general operating needs and our investment properties is generally provided by the rental receipts from our investment 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
Our primary, non-operating liquidity needs are $149,919 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on September 25, 2025 and paid on October 14, 2025 to holders of record on October 9, 2025, and $274,273 in principal payments due on its mortgages payable during the remaining three months ending 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. We plan to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.
Current wording
Our primary, non-operating liquidity needs are $149,919 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on April 1, 2026 and paid on April 21, 2026 to holders of record on April 15, 2026, and $370,469 in principal payments due on its mortgages payable during the remaining nine months ending 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, sale of our marketable securities, potential dispositions of our investment properties, and cash generated by operations.
Previous wording
The ability to lease space to creditworthy tenants and maintain high occupancy levels directly impacts rental income. Changes in tenant demand, property competitiveness, or local economic conditions can influence occupancy rates. Upon the expiration or early termination of leases, we may face difficulties in re-leasing spaces on terms as favorable as previous agreements. Lease terminations and defaults or terminations by significant tenants can reduce revenues, especially if suitable replacements are not found promptly. Concentration risk from large tenants or tenants in financially stressed sectors may further impact revenue reliability.
Current wording
Rental revenues from our remaining investment properties 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. The ability to lease space to creditworthy tenants and maintain high occupancy levels directly impacts rental income. Changes in tenant demand, property competitiveness, or local economic conditions can influence occupancy rates. Upon the expiration or early termination of leases, we may face difficulties in re-leasing spaces on terms as favorable as previous agreements. Lease terminations and defaults or terminations by significant tenants can reduce revenues, especially if suitable replacements are not found promptly. Concentration risk from large tenants or tenants in financially stressed sectors may further impact revenue reliability.
Previous wording
Changes in international trade policies, including the imposition of tariffs, duties, import taxes, or other trade restrictions by the United States government or foreign governments, could adversely impact the operations of our retail tenants. Our tenants could source a substantial portion of their merchandise, raw materials, or manufacturing services from foreign countries. The imposition of new or increased tariffs on these goods, or retaliatory measures from trading partners, could increase costs for these tenants, potentially reducing their profitability and operational flexibility. Increased costs may not be fully passed on to consumers, which could lead to lower sales volumes, compressed margins, and in some cases, store closures or bankruptcy filings. If a significant number of our tenants experience financial distress or reduce their physical retail presence, this could negatively affect our occupancy rates, rental income, and cash flows.
Current wording
Changes in international trade policies, including the imposition of tariffs, duties, import taxes, or other trade restrictions by the United States government or foreign governments, could adversely impact the operations of our retail tenants. Our tenants could source a substantial portion of their merchandise, raw materials, or manufacturing services from foreign countries. The imposition of new or increased tariffs on these goods, or retaliatory measures from trading partners, could increase costs for these tenants, potentially reducing their profitability and operational flexibility. Increased costs may not be fully passed on to consumers, which could lead to lower sales volumes, compressed margins, and in some cases, store closures or bankruptcy filings. If a significant number of our tenants experience financial distress or reduce their physical retail presence, this could negatively affect our occupancy rates, rental income, and
Previous wording
We establish operating segments at the property level and aggregates individual properties into reportable segments based on product types in which we have investments. During the three and nine months ended September 30, 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 wording
During the three months ended March 31, 2026 and 2025, our reportable segments consisted of our investment properties and our DST Sponsorship activities. We base our evaluation of our results of operations on the net operating income adjusted for interest expense of each reportable segment. In our discussion below, we have provided an evaluation on a property by property basis.
Previous wording
NOI adjusted for interest expense (“Adjusted Net Operating Income”), also a non-GAAP financial measure, is calculated by deducting operating expenses and interest expense from investment property rental revenues. Operating revenues include rental income, tenant reimbursements, other property income and non-cash revenues such as straight line rent and amortization of above and below market leases. Operating expenses include retail center property, flex center property and single tenant net lease property operating costs. Interest expense includes mortgage interest expense, only, and excludes non-mortgage interest expense and non-cash interest expense such as amortization of loan issuance costs.
Current wording
NOI adjusted for interest expense (“Adjusted Net Operating Income”), also a non-GAAP financial measure, is calculated by deducting operating expenses and interest expense from investment property rental revenues. Operating revenues include rental income, tenant reimbursements, other property income and non-cash revenues such as straight line rent and amortization of above and below market leases. Operating expenses include all investment property operating costs. Interest expense includes mortgage interest expense, only, and excludes non-mortgage interest expense and non-cash interest expense such as amortization of loan issuance costs.
Previous wording
Interest expense was $768,816 and $730,922 for the three months ended September 30, 2025 and 2024, respectively, as follows:
Current wording
Interest expense was $456,095 and $573,016 for the three months ended March 31, 2026 and 2025, respectively, as follows:
Previous wording
During the nine months ended September 30, 2025, other income was $314,318, which consisted of $118,529 in lease termination fees, $172,931 in insurance proceeds for property damage at our Franklin Square Property, $3,733 in unrealized gain on crypto assets, and $19,135 in interest income. This is an increase of $273,832 from other income of $40,486 for the nine months ended September 30, 2024, which consisted solely of interest income.
Current wording
During the three months ended March 31, 2026, other income was $275,815, which consisted of unrealized gains on our investment in marketable securities of $230,865, $26,704 related to the fair value change of the interest rate cap, $11,546 in dividend income, and $6,700 in interest income. This is an increase of $148,941 from other income of $126,874 for the three months ended March 31, 2025, which consisted of $118,529 in lease termination fees and interest income of $8,345.
Previous wording
During the three months ended September 30, 2025, other expense was $19,721 related to the fair value change of the interest rate cap. This is a decrease of $85,402 from other expense of $105,123 for the three months ended September 30, 2024, which also consisted of the fair value change of the interest rate cap.
Current wording
During the three months ended March 31, 2026 and 2025 other expense was $71,627 and $28,226, respectively. Other expense for the three months ended March 31, 2026 consists of unrealized loss on crypto assets. Other expense for the three months ended March 31, 2025 related to the fair value change of the interest rate cap.
Previous wording
Net income for the nine months ended September 30, 2025 decreased by $2,503,278 from the nine months ended September 30, 2024, before adjustments for net (loss) income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders for the nine months ended September 30, 2025 decreased by $2,230,133 over the nine months ended September 30, 2024.
Current wording
Net income for the three months ended March 31, 2026 increased by $15,149,653 over the three months ended March 31, 2025, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders for the three months ended March 31, 2026 increased by $9,973,635 over the three months ended March 31, 2025.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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 nine months ended September 30, 2025, operating activities adjusted for non-cash items
Previous report — wording carried elsewhere
Rental revenues from our 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.
Previous report — wording carried elsewhere
Revenues for the nine months ended September 30, 2025 and 2024 are as follows:
Previous report — wording carried elsewhere
Please see below for the reconciliation of revenue and Adjusted Net Operating Income for each property.
Previous report — wording carried elsewhere
The following table presents our operating expenses** **for the nine months ended September 30, 2025 and 2024: