Medalist Diversified, Inc.
For the period ended Jun 30, 2026. Filed Aug 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.
Jun 30, 2026 · Filed Aug 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 2026-03-31; filed 2026-05-13.
0001104659-26-060239
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001104659-26-095898
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 119 previous paragraphs and 152 current paragraphs.
70 unchanged; 40 reworded; 24 added; 8 removed; 1 previous and 18 current paragraphs rearranged.
Tables are not compared: 45 previous and 51 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 (24)
Current report
As of June 30, 2026, the Ashley Plaza Property was classified as assets held for sale on our condensed consolidated balance sheet. Additionally, as of June 30, 2026, we deconsolidated the entity owning the Telsa Pensacola Property and removed the associated assets and liabilities from our condensed consolidated balance sheets.
Current report
On June 24, 2026, we sold the Citibank Property to an unrelated third party for a sale price of $2,150,000. The sale of the Citibank property resulted in a loss on disposal of investment properties of $50,181.
Current report
that we are compliant with these covenants.
Current report
Pledged Asset Line
Current report
We entered into a Pledged Asset Line Agreement (the “PAL Agreement”) with Charles Schwab & Co., Inc. (“Schwab”). The PAL Agreement provides for a revolving, non-purpose margin credit facility, secured by a first-priority lien on our brokerage account maintained at Schwab (the “Collateral Account”), of an amount based on the collateral value in the Collateral Account. We hold marketable securities in the Collateral Account. Based on the collateral value in the Collateral Account as of June 30, 2026, we are permitted to borrow up to approximately $16.5 million under the PAL Agreement.
Current report
Borrowings under the PAL Agreement bear interest at a variable rate based on the SOFR plus 75 basis points. As of June 30, 2026 and December 31, 2025, SOFR was 3.63% and 3.69%, respectively. The PAL Agreement contains customary events of default, including, without limitation, failure to make any payment upon demand or otherwise when due or deposit additional collateral when required under the PAL Agreement; initiation of a bankruptcy petition or other insolvency proceeding; any event of default under any security agreement executed in connection with the Collateral Account; or the insufficiency of the value of the financial assets in the Collateral Account.
Current report
As of June 30, 2026 and December 31, 2025, the outstanding balance on the PAL Agreement was $0.
Current report
DST Sponsorship revenues consist of acquisition fees, asset management fees, disposition fees, cost reimbursement fees and other fees from the Company’s DST Program. Acquisition fees and cost reimbursement fees are generally recognized upon the completion of the sale of the beneficial interests in a DST. Asset management fees are recognized monthly as the related services are provided. Disposition fees are generally recognized upon the sale of the underlying DST property, when our company’s performance obligations have been satisfied, and are generally subordinated to the DST investors' return of capital.
Current report
The non-cash financing activity for the six months ended June 30, 2025 that did not affect the our cash used in financing activities was transfer of $6,069,312 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale.
Current report
Total operating expenses were $2,137,232 for the three months ended June 30, 2026, a decrease of $59,369 over the three months ended June 30, 2025, primarily due to decreased property operating expenses and depreciation and amortization expense due to the sales of the Salisbury Marketplace, Greenbrier Business Center, Parkway, Franklin Square and Citibank properties, and the transfer of the Ashley Plaza Property to assets held for sale, at which point, we ceased recording depreciation and amortization, a decrease in corporate general and administrative expenses, offset by increased DST sponsorship program expenses and increased legal, accounting and other professional fees and increased impairment of assets held for sale.
Current report
During the three months ended June 30, 2026, other income was $548,404, which consisted of $69,627 of unrealized gains on our investment in marketable securities, $69,000 related to the fair value change of the interest rate cap, $311,656 in dividend income, $62,978 in insurance proceeds related to property damage at the Brookfield Property, and $35,143 in interest income. This is an increase of $541,243 from other income of $7,161 for the three months ended June 30, 2025, which was interest income.
Current report
Net Loss
Current report
Six Months Ended June 30, 2026*
Current report
Revenues
Current report
Adjusted** Net Operating Income**
Current report
The following table presents revenues, operating expenses and interest expense for our DST Program the six months ended June 30, 2026 and 2025:
Current report
We initiated our DST Program during the first quarter of 2026. Accordingly, there was no activity during 2025. During the six months ended June 30, 2026, we recorded $465,792 in DST Program revenues related to acquisition fees, asset management fees and cost reimbursement fees from XXV DST. During the six months ended June 30, 2026, we incurred $464,430 in expenses associated with our DST Program, including salaries and benefits, conferences and travel, marketing, administrative and other expenses.
Current report
Operating** Expenses**
Current report
Interest Expense
Current report
Interest expense was $753,827 and $1,131,856 for the six months ended June 30, 2026 and 2025, respectively, as follows:
Current report
Total interest expense for the six months ended June 30, 2026 decreased by $378,029 over the six months ended June 30, 2025.
Current report
Other Income
Current report
Other Expense
Current report
Provision for Income Taxes
Removed paragraphs (8)
Previous 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.
Previous report
months ended March 31, 2026.
Previous report
cash flows.
Previous report
Operating Income
Previous 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
Previous report
Net Income (Loss) before Income Taxes
Previous 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.
Previous report
Net Income (Loss)
Reworded paragraphs (40)
Previous wording
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 wording
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 selective disposition of properties from our portfolio to generate capital for the DST Program and other potential acquisitions.
Previous wording
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 wording
Our efforts to scale the DST Program will be focused on (1) 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, in industries including, but not limited to, retail, medical, and single tenant industrial and warehouse uses; (2) syndicating these investments into DSTs; and (3) offering beneficial interests in the DSTs for sale to accredited investors in private placements under Regulation D.
Previous wording
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 wording
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 our 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.
Previous wording
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 wording
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 $4,213,586 reported on our condensed consolidated statement of operations for the six months ended June 30, 2026.
Previous wording
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 wording
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 six months ended June 30, 2026.
Previous wording
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 wording
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 six months ended June 30, 2026.
Previous wording
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 wording
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 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 June 30, 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.
Previous 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.
Current wording
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
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. 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.
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
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.
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 for our portfolio and for our DST Program, and recurring capital expenditures; and (3) financing needs, including cash dividends and debt repayments.
Previous 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:
Current wording
At June 30, 2026, our consolidated cash and restricted cash on hand totaled $7,427,773 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 six months ended June 30, 2026 are as follows:
Previous 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.
Current wording
During the six months ended June 30, 2026, our cash used in operating activities was $187,396 compared to cash provided by operating activities of $704,098 for the six months ended June 30, 2025, a decrease in cash provided by operating activities of $891,494.
Previous 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.
Current 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 six months ended June 30, 2026, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $88,374. During the six months ended June 30, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $950,746. The decrease of $862,372 in cash flows from operating activities adjusted for non-cash items for the six months ended June 30, 2026 was primarily from reduced net operating income from our investment properties and increased loss on extinguishment of debt and impairment of assets held for sale, net of unrealized gains on marketable securities, gains on disposal of investment properties, the income tax benefit and the DST sponsorship revenues recognized on deconsolidation.
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 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.
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 six months ended June 30, 2026, net changes in asset and liability accounts resulted in $275,770 in cash used in operations. During the six months ended June 30, 2025, net changes in asset and liability accounts resulted in $246,648 in cash used operations. This increase of $29,122 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 $93,889 and other assets of $159,182, net of decreased changes in unbilled rent of $78,237 and accounts payable and accrued liabilities of $203,956.
Previous 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
Current wording
The total of (i) the $862,372 decrease in cash flows from operations from the first category and (ii) the $29,122 decrease in cash provided by operations from the second category results in a total decrease of cash provided by operations of $891,494 for the six months ended June 30, 2026.
Previous wording
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 wording
During the six months ended June 30, 2026, our cash provided by investing activities was $1,952,925, compared to cash used in investing activities of $708,098 during the six months ended June 30, 2025, an increase in cash provided by investing activities of $2,661,023.
Previous 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.
Current wording
During the six months ended June 30, 2026, cash provided by investing activities consisted of $19,221,077 in cash received from the disposal of the Greenbrier Business Center, Parkway, Franklin Square and Citibank properties, and $3,709,847 in cash received from sales of XXV DST interests, offset by $20,420,257 in cash used for our investments in marketable securities, $241,077 for the purchase of crypto assets, and $359,197 in capitalized expenditures. During the six months ended June 30, 2025, cash used in investing activities consisted of $563,219 in capitalized expenditures, $55,004 for the purchase of crypto assets, 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 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.
Current wording
The non-cash investing activity for the six months ended June 30, 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, and the transfer of $7,682 of intangible lease liabilities, net, to liabilities held for sale.
Previous 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.
Current wording
The non-cash investing activity for the six months ended June 30, 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 $8,951,336 from investment properties, net, to assets held for sale, the
Previous 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.
Current wording
During the six months ended June 30, 2026, our cash provided by financing activities was $1,570,706 compared to cash used in financing activities of $2,430,954 during the six months ended June 30, 2025, an increase in cash provided by financing activities of $4,001,660. During the six months ended June 30, 2026 our cash provided by financing activities consisted of $2,847,522 of proceeds from the sale of beneficial interests in DST entities, net of $352,408 in principal payments for our mortgages, and $924,408 in dividends and distributions. During the six months ended June 30, 2025, our cash used in financing activities consisted of $1,500,000 for the partial redemption of our mandatorily redeemable preferred stock, $140,788 for the repurchases of common stock, $507,597 in principal payments for our mortgages, and $282,569 in dividends and distributions.
Previous 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.
Current wording
The non-cash financing activity for the six months ended June 30, 2026, that did not affect our cash provided by financing activities was $5,992,000 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 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.
Current wording
Liquidity for general operating needs and our investment properties is generally provided by the rental receipts from our investment properties, if any, and fee income generated by our DST Program. We expect to provide any liquidity for growth (acquisition of new investment properties) by raising additional investment capital and through short term borrowings under the PAL Agreement.
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 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.
Current wording
Our primary, non-operating liquidity needs are $151,168 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on July 13, 2026 and paid on July 30, 2026 to holders of record on July 23, 2026, and $248,982 in principal payments due on its mortgages payable during the remaining six 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
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.
Current wording
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
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 cash flows.
Previous wording
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 wording
Total revenue was $1,808,422 for the three months ended June 30, 2026, a decrease of $656,751 from the three months ended June 30, 2025. We experienced decreased investment property revenues due to the sale of the Salisbury Marketplace, Buffalo Wild Wings, United Rentals, Parkway, Greenbrier, Franklin Square and Citibank properties, and increased vacancy in the Ashley Plaza Property, which were offset by increased revenues from the acquisition of the Tesla Pensacola Property, new leasing activity in the Lancer Center and Brookfield properties, and DST Sponsorship Revenues from our new DST Program.
Previous wording
Net operating income (“NOI”) is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP. NOI is calculated by deducting operating expenses from operating revenues. NOI reflects occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs.
Current wording
Net operating income (“NOI”) is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP. NOI is calculated by deducting operating expenses from operating revenues. NOI reflects
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 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.
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 operating revenues. Operating revenues from our investment properties 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 for our investment properties 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. Operating revenues from our DST Program include acquisition fees, asset management fees and cost reimbursement revenues. Operating expenses from our DST Program include salaries and benefits, conferences and travel, marketing, administrative and other expenses.
Previous wording
Because Adjusted Net Operating Income only consists of revenues, operating expenses, and interest expense directly related to our real estate rental operations, management believes that the use of Adjusted Net Operating Income to evaluate the financial performance of its operating segments and individual investment properties is a useful tool that can assist in the comparison of the operating performance of our real estate assets between periods, or as compared to other companies and other investment opportunities we may consider from time to time. Management uses Adjusted Net Operating Income as a supplemental measure to evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance.
Current wording
Because Adjusted Net Operating Income only consists of revenues, operating expenses, and interest expense directly related to our real estate rental DST sponsorship operations, management believes that the use of Adjusted Net Operating Income to evaluate the financial performance of its operating segments and individual investment properties is a useful tool that can assist in the comparison of the operating performance of our real estate assets and DST Program between periods, or as compared to other companies and other investment opportunities we may consider from time to time. Management uses Adjusted Net Operating Income as a supplemental measure to evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance.
Previous wording
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 wording
The following table presents revenues, operating expenses and interest expense for our DST Program the three months ended June 30, 2026 and 2025:
Previous wording
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 wording
We initiated our DST Program during the first quarter of 2026. Accordingly, there was no activity during 2025. During the three months ended June 30, 2026, we recorded $465,792 in DST Program revenues related to acquisition fees, asset management fees and cost reimbursement fees from XXV DST. During the three months ended June 30, 2026, we incurred $241,534 in expenses associated with our DST Program, including salaries and benefits, conferences and travel, marketing, administrative and other expenses.
Previous wording
Interest expense was $456,095 and $573,016 for the three months ended March 31, 2026 and 2025, respectively, as follows:
Current wording
Interest expense was $297,732 and $558,840 for the three months ended June 30, 2026 and 2025, respectively, as follows:
Previous wording
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 wording
Total interest expense for the three months ended June 30, 2026 decreased by $261,108 over the three months ended June 30, 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 and Franklin Square mortgages resulting from the sales of the respective properties.
Previous 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.
Current wording
During the three months ended June 30, 2026 and 2025 other expense was $60,388 and $20,990, respectively. Other expense for the three months ended June 30, 2026 consists of unrealized loss on crypto assets. Other expense for the three months ended June 30, 2025 related to the fair value change of the interest rate cap.
Previous wording
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.
Current wording
Net loss was $206,121 for the three months ended June 30, 2026, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $418,684.
Previous 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.
Current wording
Net loss for the three months ended June 30, 2026 decreased by $125,042 over the three months ended June 30, 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 June 30, 2026 increased by $37,760 over the three months ended June 30, 2025.
Previous wording
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 wording
Total revenues were $3,967,687 for the six months ended June 30, 2026, a $819,126 decrease from the six months ended June 30, 2025. Adjusted Net Operating Income was $1,724,597 for the six months ended June 30, 2026, a decrease of $759,020 from the six months ended June 30, 2025, due to the sale of the seven properties, reduced revenues and higher operating expenses at the Ashley Plaza Property, offset by increased Adjusted NOI from the East Coast Wings due to reduced operating expenses, the Brookfield and Lancer Center Properties due to new leases, and increased Adjusted NOI from the DST Sponsorship Program.
Previous wording
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 wording
Total operating expenses were $4,478,350 for the six months ended June 30, 2026, a decrease of $645,247 over the six months ended June 30, 2025, primarily due to decreased investment property operating expenses and depreciation and amortization expense due to the sales of the Salisbury Marketplace, Greenbrier Business Center, Parkway, Franklin Square and Citibank properties, and the transfer of the Ashley Plaza Property to assets held for sale, at which point, we ceased recording depreciation and amortization, and a decrease in share based compensation expense and corporate general and administrative expenses, offset by an increase in bad debt expense, legal, accounting and other professional fees, DST sponsorship program expenses and impairment of assets held for sale.
Previous 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.
Current wording
During the six months ended June 30, 2026, other income was $824,219, which consisted of $300,492 of unrealized gains on our investment in marketable securities, $95,704 related to the fair value change of the interest rate cap, $323,202 in dividend income, $62,978 in insurance proceeds related to property damage at the Brookfield Property, and $41,843 in interest income. This is an increase of $690,184 from other income of $134,035 for the six months ended June 30, 2025, which consisted of $118,529 in lease termination fees and interest income of $15,506.
Previous wording
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 wording
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 six months ended June 30, 2026, we recorded a benefit for income taxes of $2,076,254, which consists of current and deferred components. Our effective tax rate of (17.5)% of pre-tax income reported in the period differs from the federal statutory rate of 21% primarily due to establishing the net deferred tax assets upon our termination of our election to be taxed as a REIT partially offset by tax expense related to deconsolidation of our DST subsidiary along with disposal of certain investment properties.
Rearranged current paragraphs (18)
Current report — wording carried from elsewhere
Our current primary focus is to implement the strategic repositioning initiated during 2025. Effective January 1, 2026, we
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
transfer of $481,568 of intangible lease assets, net, to assets held for sale, the transfer of $476,656 of intangible lease liabilities, net, to liabilities held for sale and accrued capital expenditures of $87,017.
Current report — wording carried from elsewhere
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
Current report — wording carried from elsewhere
occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs.
Current report — wording carried from elsewhere
Total revenues were $1,808,422 for the three months ended June 30, 2026, a $656,751 decrease from the three months ended June 30, 2025. Adjusted Net Operating Income from investment properties was $874,306 for the three months ended June 30, 2026, a decrease of $478,625 from the three months ended June 30, 2025, due to the sale of the seven properties, reduced revenues and higher operating expenses at the Ashley Plaza Property, offset by increased Adjusted NOI from the Brookfield and Lancer Center Properties due to new leases, and increased Adjusted NOI from the DST Sponsorship Program.
Current report — wording carried from elsewhere
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. Disposition fees are earned upon the sale of a DST property and are generally subordinated to DST investors’ return of capital. Adjusted net operating income for the three months ended June 30, 2026 was $224,258.
Current report — wording carried from elsewhere
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 June 30, 2026, we recorded a provision for income taxes of $2,388, which consists of current and deferred components. Our effective tax rate of (1.2)% of pre-tax income reported in the period differs from the federal statutory rate of 21% primarily due to deconsolidation of our DST subsidiary along with the disposals of certain investment properties.
Current report — wording carried from elsewhere
Revenues for the six months ended June 30, 2026 and 2025 are as follows:
Current report — wording carried from elsewhere
Total revenue was $3,967,687 for the six months ended June 30, 2026, a decrease of $819,126 from the six months ended June 30, 2025. We experienced decreased investment property revenues due to the sale of the Salisbury Marketplace, Buffalo Wild Wings, United Rentals, Parkway, Greenbrier, Franklin Square and Citibank properties, offset by increased revenues from the acquisition of the Tesla Pensacola Property, increased DST Sponsorship revenues and increased revenues from leasing activity at the Lancer Center and Brookfield properties.
Current report — wording carried from elsewhere
Adjusted Net Operating Income is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP. See the discussion above, under the discussion of operating results for the three months ended June 30, 2026. Please see below for the reconciliation of revenue and Adjusted Net Operating Income for each property.
Current report — wording carried from elsewhere
Investment Property Revenues and Adjusted Net Operating Income
Current report — wording carried from elsewhere
The following table presents property revenues, operating expenses and interest expense for our investment properties for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
DST Sponsorship Revenues and Adjusted Net Operating Income
Current report — wording carried from elsewhere
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. Disposition fees are earned upon the sale of a DST property and are generally subordinated to DST investors’ return of capital. Adjusted net operating income for the six months ended June 30, 2026 was $1,362.
Current report — wording carried from elsewhere
The following table presents our operating expenses** **for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
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 and Franklin Square mortgages resulting from the sale of the respective property.
Current report — wording carried from elsewhere
During the six months ended June 30, 2026 and 2025 other expense was $132,015 and $49,216, respectively. Other expense for the six months ended June 30, 2026 consists of unrealized loss on crypto assets. Other expense for the six months ended June 30, 2025 related to the fair value change of the interest rate cap.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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