Belpointe PREP LLC

Previous wording

In connection with the Follow-on Registration Statement, we entered into a non-exclusive dealer manager agreement with Emerson Equity LLC (the “Dealer Manager”), a registered broker-dealer, for the sale of our Class A units through the Dealer Manager. The Dealer Manager will enter into participating dealer agreements and wholesale agreements with other broker-dealers, referred to as “selling group members,” to authorize those broker-dealers to solicit offers to purchase our Class A units. We will pay our Dealer Manager commissions of up to 0.25%, and the selling group members commissions ranging from 0.25% to 4.50%, of the principal amount of Class A unit sold in the Follow-on Offering. As of June 30, 2024, we have not sold any Class A units in connection with the Follow-on Offering.

Current wording

In connection with the Follow-on Registration Statement, we entered into a non-exclusive dealer manager agreement with Emerson Equity LLC (the “Dealer Manager”), a registered broker-dealer, for the sale of our Class A units through the Dealer Manager. The Dealer Manager will enter into participating dealer agreements and wholesale agreements with other broker-dealers, referred to as “selling group members,” to authorize those broker-dealers to solicit offers to purchase our Class A units. We will pay our Dealer Manager commissions of up to 0.25%, and the selling group members commissions ranging from 0.25% to 4.50%, of the principal amount of Class A unit sold in the Follow-on Offering.

Previous wording

In addition, the Follow-on Registration Statement constitutes a post-effective amendment to the registration statement on Form S-11, as amended (File No. 333-255424), registering the offer and sale of our ongoing initial public offering of up to $750,000,000 of our Class A units, declared effective by the SEC on September 30, 2021, of which $514,013,330 remained unsold as of June 30, 2024 (our “Primary Offering” and, together with our Follow-on Offering, our “Public Offerings”).

Current wording

In addition, the Follow-on Registration Statement constitutes a post-effective amendment to the registration statement on Form S-11, as amended (File No. 333-255424), registering the offer and sale of our ongoing initial public offering of up to $750,000,000 of our Class A units, declared effective by the SEC on September 30, 2021, of which $513,013,330 remained unsold as of September 30, 2024 (our “Primary Offering” and, together with our Follow-on Offering, our “Public Offerings”). For the three and nine months ended September 30, 2024, we have sold aggregate gross proceeds of $1,000,000 and $1,711,020, respectively, of Class A units in connection with our Public Offerings.

Previous wording

The purchase price for Class A units in our Public Offerings will be the lesser of (i) the net asset value (“NAV”) of our Class A units, and (ii) the average of the high and low sale prices of our Class A units on the NYSE American (the “NYSE”) during regular trading hours on the last trading day immediately preceding the investment date on which the NYSE was open for trading and trading in our Class A units occurred. Our Manager calculates our NAV within approximately 60 days of the last day of each quarter, and any adjustments take effect as of the first business day following its public announcement. On June 3, 2024, we announced that our NAV as of March 31, 2024 was equal to $99.59 per Class A unit.

Current wording

The purchase price for Class A units in our Public Offerings will be the lesser of (i) the net asset value (“NAV”) of our Class A units, and (ii) the average of the high and low sale prices of our Class A units on the NYSE American (the “NYSE”) during regular trading hours on the last trading day immediately preceding the investment date on which the NYSE was open for trading and trading in our Class A units occurred. Our Manager calculates our NAV within approximately 60 days of the last day of each quarter, and any adjustments take effect as of the first business day following its public announcement. On August 30, 2024, we announced that our NAV as of June 30, 2024 was equal to $98.24 per Class A unit.

Previous wording

1991 Main Street – Sarasota, Florida (also known as “Aster & Links”) – 1991 Main Street (“1991 Main” or “Aster & Links”) is a 5.13-acre site which was acquired for an aggregate purchase price of $20.7 million, inclusive of transaction costs and deferred financing fees. On August 24, 2023, we acquired an adjacent land parcel that was previously subject to a ground lease for a purchase price of $4.9 million, inclusive of transaction costs.

Current wording

1991 Main Street – Sarasota, Florida (“Aster & Links”) – 1991 Main Street (“1991 Main” or “Aster & Links”) is a 5.13-acre site which was acquired for an aggregate purchase price of $20.7 million.

Previous wording

1991 Main is being developed as two 10 story buildings with over 900 garage and surface-level parking spaces marketed under the name “Aster & Links.” Aster & Links features 424-apartments, including a mix of one-bedroom, two-bedroom, three-bedroom, four-bedroom apartments, townhome-style penthouse apartments, and six guest suite apartments, with approximately 51,000 square feet of retail space located on the first level. In May 2023, we announced the signing of a definitive lease agreement with Sprouts Farmers Market (“Sprouts”), one of the fastest growing specialty retailers of fresh, natural and organic food in the United States. Sprouts will occupy approximately 23,000 square feet of retail space at Aster & Links.

Current wording

During the nine months ended September 30, 2024, construction was completed and lease up began at Aster & Links, our mixed-use luxury development in downtown Sarasota, Florida. Aster & Links is comprised of 424 luxury residential units, including a mix of one-bedroom, two-bedroom, three-bedroom, four-bedroom apartments, townhome-style penthouse apartments, and six guest suite apartments, with approximately 51,000 square feet of retail space located on the first level. Aster & Links is made up of two distinct 10 story buildings and features over 900 garage and surface-level parking spaces, designed to cater to both residents and retail visitors.

Previous wording

Aster & Links will include a clubroom, fitness room, center courtyard with heated saltwater pool and roof top amenities including a community room and a private dining area for private events as well as outdoor grills and seating. In addition, each building will have its own leasing office.

Current wording

Aster & Links offers a range of high-end amenities for residents, including a clubroom, fitness room, center courtyard with heated saltwater pool and roof top amenities including a community room and a private dining area for private events as well as outdoor grills and seating. Each building has its own leasing office to assist new residents.

Previous wording

Aster & Links is situated in downtown Sarasota, at the intersection of Main Street and Links Avenue, and is located in a high foot traffic area next to a number of popular retail establishments. Sarasota’s metro area economy is the largest of the southwest Florida markets and has had very strong gains in jobs, population, and home values over the past year.

Current wording

Situated in downtown Sarasota, at the intersection of Main Street and Links Avenue, Aster & Links is located in a high foot traffic area next to a number of popular retail establishments. Sarasota’s metro area economy is the largest of the southwest Florida markets and has had very strong gains in jobs, population, and home values over the past few years. Aster & Links is well-positioned to be a premier residential and retail destination in the heart of this vibrant city.

Previous wording

During the year ended December 31, 2022, our indirect wholly-owned subsidiary entered into a construction management agreement for the development of 1991 Main. The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to a guaranteed maximum price (a “GMP”). We currently anticipate that the funding for construction and soft costs associated with the development will be a minimum of $186.8 million, inclusive of the GMP, and are building to an estimated unlevered yield of greater than 6%.

Current wording

During the year ended December 31, 2022, our indirect wholly-owned subsidiary entered into a construction management agreement for the development of Aster & Links. The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to a guaranteed maximum price (a “GMP”). We currently anticipate that the funding for construction and soft costs associated with the development will be a minimum of $187.7 million, inclusive of the GMP, and are building to an estimated unlevered yield of greater than 6%.

Previous wording

On May 12, 2023, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement (the “1991 Main Construction Loan Agreement”) for up to $130.0 million in principal amount (the “1991 Main Construction Loan”) with Bank OZK (the “1991 Main Mortgage Lender”), which is secured by 1991 Main. Advances under the 1991 Main Construction Loan bear interest at a per annum rate equal to the one-month term Secured Overnight Financing Rate (SOFR) plus 3.45%, subject to a minimum all-in per annum rate of 8.51%, and may be used to fund the development of 1991 Main. The 1991 Main Construction Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions. As of June 30, 2024, we have drawn down $71.7 million on the 1991 Main Construction Loan.

Current wording

On May 12, 2023, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement (the “1991 Main Construction Loan Agreement”) for up to $130.0 million in principal amount (the “1991 Main Construction Loan”) with Bank OZK (the “1991 Main Mortgage Lender”), which is secured by Aster & Links. Advances under the 1991 Main Construction Loan bear interest at a per annum rate equal to the one-month term Secured Overnight Financing Rate (SOFR) plus 3.45%, subject to a minimum all-in per annum rate of 8.51%, and may be used to fund the development of 1991 Main. The 1991 Main Construction Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions. As of September 30, 2024, we have drawn down $84.3 million on the 1991 Main Construction Loan.

Previous wording

As required under the terms of the 1991 Main Construction Loan Agreement, our indirect majority-owned subsidiary also entered into an interest rate cap agreement, effective July 10, 2023 (the “1991 Main Interest Rate Cap”), which, as of June 30, 2024, had a notional amount of approximately $112.5 million, a one-month SOFR rate based strike price of 5.07%, and which had a maturity date of July 10, 2024. We reacquired an interest rate cap, effective July 10, 2024, which has a one year term to maturity with a maximum notional amount of $115.1 million and a one-month SOFR rate based strike price of 5.07%.

Current wording

As required under the terms of the 1991 Main Construction Loan Agreement, our indirect majority-owned subsidiary also entered into an interest rate cap agreement, effective July 10, 2024 (the “1991 Main Interest Rate Cap”), which, as of September 30, 2024, had a notional amount of approximately $94.6 million, a one-month SOFR rate based strike price of 5.07%, and which is due to mature on July 10, 2025.

Previous wording

On January 31, 2024, our indirect majority-owned subsidiary entered into a mezzanine loan agreement, for up to $56.4 million in principal amount (the “1991 Main Mezzanine Loan”) with Southern Realty Trust Holdings, LLC (the “1991 Main Mezzanine Lender”). The 1991 Main Mezzanine Loan bears interest at a rate of 13.0% per annum and is secured by our investment in 1991 Main. Advances under the 1991 Main Mezzanine Loan may be used to reimburse us for certain costs and expenses incurred in relation to, and to fund the continued development of, 1991 Main. The 1991 Main Mezzanine Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions.

Current wording

On January 31, 2024, our indirect majority-owned subsidiary entered into a mezzanine loan agreement, for up to $56.4 million in principal amount (the “1991 Main Mezzanine Loan”) with Southern Realty Trust Holdings, LLC (the “1991 Main Mezzanine Lender”). The 1991 Main Mezzanine Loan bears interest at a rate of 13.0% per annum and is secured by our investment in Aster & Links. Advances under the 1991 Main Mezzanine Loan may be used to reimburse us for certain costs and expenses incurred in relation to, and to fund the continued development of, Aster & Links. The 1991 Main Mezzanine Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions.

Previous wording

In connection with the 1991 Main Mezzanine Loan, we are required to maintain an interest reserve and carry reserve for purposes of paying accrued but unpaid interest on the 1991 Main Mezzanine Loan and interest, principal and other obligations under the 1991 Main Construction Loan (the “Reserves”). We also provided the 1991 Main Mezzanine Lender with (i) a completion guaranty, which, among other things, guarantees completion of the work on 1991 Main, and (ii) a carveout guaranty, which, among other things, indemnifies the 1991 Main Mezzanine Lender for losses resulting from certain “bad acts,” insolvency, environmental conditions, violations of the terms of the 1991 Main Mezzanine Loan and certain provisions of the 1991 Main Construction Loan Agreement (collectively, the “Mezzanine Guarantees”). Similar to the Carveout Guaranty we provided to the 1991 Main Mortgage Lender, the Mezzanine Guarantees contain financial covenants requiring that we maintain liquid assets of no less than $20.0 million and a net worth of no less than $130.0 million. As of June 30, 2024, the principal balance of the 1991 Main Mezzanine Loan was $43.3 million.

Current wording

In connection with the 1991 Main Mezzanine Loan, we are required to maintain an interest reserve and carry reserve for purposes of paying accrued but unpaid interest on the 1991 Main Mezzanine Loan and interest, principal and other obligations under the 1991 Main Construction Loan (the “Reserves”). We also provided the 1991 Main Mezzanine Lender with (i) a completion guaranty, which, among other things, guarantees completion of the work on Aster & Links, and (ii) a carveout guaranty, which, among other things, indemnifies the 1991 Main Mezzanine Lender for losses resulting from certain “bad acts,” insolvency, environmental conditions, violations of the terms of the 1991 Main Mezzanine Loan and certain provisions of the 1991 Main Construction Loan Agreement (collectively, the “Mezzanine Guarantees”). Similar to the Carveout Guaranty we provided to the 1991 Main Mortgage Lender, the Mezzanine Guarantees contain financial covenants requiring that we maintain liquid assets of no less than $20.0 million and a net worth of no less than $130.0 million. As of September 30, 2024, the principal balance of the 1991 Main Mezzanine Loan was $44.7 million.

Previous wording

1900 Fruitville Road – Sarasota Florida – 1900 Fruitville Road is a 1.2-acre site, consisting of a retail building and parking lot, which we acquired for an aggregate purchase price of $4.7 million, inclusive of transaction costs. In July 2024, we completed the redevelopment of this property into additional non-exclusive parking for Sprouts, our grocery store tenant at Aster & Links.

Current wording

1900 Fruitville Road – Sarasota Florida – 1900 Fruitville Road was a 1.2-acre site, consisting of a retail building and parking lot, which we acquired for an aggregate purchase price of $4.7 million, inclusive of transaction costs. In July 2024, we completed the redevelopment of this property into additional non-exclusive parking for Sprouts, our grocery store tenant at Aster & Links.

Previous wording

1000 First Avenue North and 900 First Avenue North – St. Petersburg, Florida (also known as “Viv”) – We will consolidate several parcels, comprising 1.6-acres of land (previously referred to as 902-1020 First Avenue North, St. Petersburg, Florida), which we acquired for an aggregate purchase price of $12.1 million, inclusive of transaction costs, into 1000 First Avenue North, St. Petersburg, Florida (“1000 First” or “Viv”).

Current wording

1000 First Avenue North and 900 First Avenue North – St. Petersburg, Florida (“Viv”) – We previously acquired several parcels, comprising 1.6-acres of land (previously referred to as 902-1020 First Avenue North, St. Petersburg, Florida), which we acquired for an aggregate purchase price of $12.1 million, inclusive of transaction costs, with the intent to consolidate them and develop into a 15-story high-rise building at 1000 First Avenue North, St. Petersburg, Florida (“1000 First” or “Viv”). As of September 30, 2024, construction on Viv was approximately 60% complete. We currently anticipate construction to be completed in the second half of 2025, with leasing to begin prior.

Previous wording

1000 First is being developed into a 15-story high-rise building marketed under the name “Viv.” Viv will be comprised of two 11-story residential towers above a 4-story parking garage, featuring approximately 269-apartment homes with a mix of studio, one-bedroom, two-bedroom and three-bedroom units, with approximately 15,500 square feet of retail space located on the first level. Amenities at Viv will include a clubroom, fitness center, courtyard with a swimming pool, shared working space and a leasing office. We currently anticipate construction to be completed in the second half of 2025.

Current wording

Viv will be comprised of two 11-story residential towers above a 4-story parking garage, featuring approximately 269-apartment homes with a mix of studio, one-bedroom, two-bedroom and three-bedroom units, with approximately 15,500 square feet of retail space located on the first level. Amenities at Viv will include a clubroom, fitness center, courtyard with a swimming pool, shared working space and a leasing office.

Previous wording

Viv is located in the downtown district of St. Petersburg, one mile west of Tampa Bay and the downtown waterfront district and only one block away from Tropicana Field, home to the Tampa Bay Rays professional baseball team and features direct access to downtown amenities such as public parking, restaurants, museums and cultural sites. In September of 2023, the Tampa Bay Rays, City of St. Petersburg and Pinellas County announced a joint plan to build a brand new approximately 30,000 seat ballpark on the 86-acre site where the team’s current stadium sits. The project will include nearly 8 million square feet of mixed-use development and result in over $6.5 billion in investment in the Gas Plant District over the next 20 years.

Current wording

In July of 2024, the St. Petersburg City Council voted to approve a joint plan by the Tampa Bay Rays, City of St. Petersburg and Pinellas County to build a brand new approximately 30,000 seat stadium for the Tampa Bay Rays as part of the 86-acre Historic Gas Plant District redevelopment project in downtown St. Petersburg, located just half a mile from Viv. The project will include nearly 8 million square feet of mixed-use development and result in over $6.5 billion in investment over the next 20 years.

Previous wording

St. Petersburg placed 44 th on Niche’s 2023 Best Cities to Live in America list, earning an Overall Niche Grade of “A.” St. Petersburg is the 5th largest city in Florida and the 88th largest city in the United States and has an average annual population growth rate of approximately 0.82% since 2020. Downtown St. Petersburg is one of the fastest growing neighborhoods in the Tampa-St. Petersburg-Clearwater metropolitan statistical area (“MSA”) and has experienced increased demand in recent years because of proximity to the water, sporting events, shopping, bars and restaurants in the neighborhood. The Tampa-St. Petersburg-Clearwater MSA is home to more than 20 corporate headquarters, seven of which are Fortune 1000 companies. The St. Petersburg area also includes a branch of St. Petersburg College and the University of South Florida St. Petersburg and is home to two professional sports teams, the Tampa Bay Rays (Major League Baseball) and the Tampa Bay Rowdies (United Soccer League Championship).

Current wording

St. Petersburg placed 42 nd on Niche’s 2024 Best Cities to Live in America list, earning an Overall Niche Grade of “A.” St. Petersburg is the 5th largest city in Florida and the 86th largest city in the United States and an annual population growth rate of approximately 0.7% in 2023. Downtown St. Petersburg is one of the fastest growing neighborhoods in the Tampa-St. Petersburg-Clearwater metropolitan statistical area (“MSA”) and has experienced increased demand in recent years because of proximity to the water, sporting events, shopping, bars and restaurants in the neighborhood. The Tampa-St. Petersburg-Clearwater MSA is home to more than 20 corporate headquarters, 13 of which are on the 2024 edition of the Inc. 5000 (listing the fastest-growing private companies in America). The St. Petersburg area also includes a branch of St. Petersburg College and the University of South Florida St. Petersburg and is home to two professional sports teams, the Tampa Bay Rays (Major League Baseball) and the Tampa Bay Rowdies (United Soccer League Championship).

Previous wording

In April 2023, our indirect majority-owned subsidiary entered into a construction management agreement in connection with the development of 1000 First. The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to a GMP of $140.1 million.

Current wording

In April 2023, our indirect majority-owned subsidiary entered into a construction management agreement in connection with the development of 1000 First. The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to a GMP of $140.0 million.

Previous wording

On June 28, 2024, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement (the “1000 First Construction Loan Agreement”) for up to $104.0 million in principal amount (the “1000 First Construction Loan”) with various lenders, which is secured by 1000 First. Advances under the 1000 First Construction Loan bear interest at a per annum rate equal to the one-month term SOFR plus 3.80%, subject to a minimum all-in per annum rate of 7.55% and may be used to fund the development of 1000 First. The 1000 First Construction Loan has an initial maturity date of June 28, 2027 and contains two one-year extension options, subject to certain restrictions. As of June 30, 2024, we have not yet drawn down on the 1000 First Construction Loan.

Current wording

On June 28, 2024, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement (the “1000 First Construction Loan Agreement”) for up to $104.0 million in principal amount (the “1000 First Construction Loan”) with various lenders, which is secured by 1000 First. Advances under the 1000 First Construction Loan bear interest at a per annum rate equal to the one-month term SOFR plus 3.80%, subject to a minimum all-in per annum rate of 7.55% and may be used to fund the development of 1000 First. The 1000 First Construction Loan has an initial maturity date of June 28, 2027 and contains two one-year extension options, subject to certain restrictions. As of September 30, 2024, we have drawn down $12.1 million on the 1000 First Construction Loan.

Previous wording

1700 Main Street – Sarasota, Florida – 1700 Main Street (“1700 Main”) is a 1.3-acre site, consisting of a former gas station, a three-story office building with parking lot and a two-story retail building, which we acquired for an aggregate purchase price of $6.9 million, inclusive of transaction costs. We currently anticipate that 1700 Main will be redeveloped into an approximate 200-apartment home community consisting of one-bedroom, two-bedroom and three-bedroom units, with approximately 6,400 square feet of retail space located on the first two levels. We anticipate that 1700 Main will consist of a 10-story podium style building with a 3-story, 330-space garage and 7 stories of apartments above, including a clubroom, fitness center and courtyard with a swimming pool, as well as a leasing office.

Current wording

1700 Main Street – Sarasota, Florida – 1700 Main Street (“1700 Main”) is a 1.3-acre site, consisting of a former gas station, a three-story office building with parking lot and a two-story retail building, which we acquired for an aggregate purchase price of $6.9 million, inclusive of transaction costs. We currently anticipate that 1700 Main will be redeveloped into an approximate 187-apartment home community consisting of one-bedroom, two-bedroom and three-bedroom units, with approximately 6,000 square feet of retail space located on the first two levels. We anticipate that 1700 Main will consist of a 10-story podium style building with a 3-story, 330-space garage and 7 stories of apartments above, including a clubroom, fitness center and courtyard with a swimming pool, as well as a leasing office.

Previous wording

The following table sets forth information regarding our consolidated results of operations during the three and six months ended June 30, 2024 and 2023 (amounts in thousands):

Current wording

The following table sets forth information regarding our consolidated results of operations during the three and nine months ended September 30, 2024 and 2023 (amounts in thousands):

Previous wording

During the three and six months ended June 30, 2024 as compared to the same period in 2023, rental revenue decreased by $0.4 million and $0.6 million, respectively. This decrease is primarily due to lower below-market rent intangible amortization as certain intangible liabilities became fully amortized subsequent to June 30, 2023.

Current wording

During the nine months ended September 30, 2024 as compared to the same period in 2023, rental revenue decreased by $0.2 million, primarily due to lower below-market rent intangible amortization as certain intangible liabilities became fully amortized in the prior year, partially offset as a result of the lease-up of certain residential units and retail spaces at Aster & Links, which was placed into service during the current year.

Previous wording

During the three and six months ended June 30, 2024 and 2023, property expenses consisted of management fees, property operational expenses, real estate taxes, and utilities and insurance expenses incurred in relation to our operating properties. During the three and six months ended June 30, 2024, as compared to the same period in 2023, property expenses increased by $0.4 million and $0.7 million, respectively. This increase is primarily due to property general and administrative expenses incurred at Aster & Links in the current year periods, whereas there was no such expenses in the prior year periods.

Current wording

During the three and nine months ended September 30, 2024 and 2023, property expenses consisted of management fees, property operational expenses, real estate taxes, and utilities and insurance expenses incurred in relation to our operating properties. During the three and nine months ended September 30, 2024, as compared to the same period in 2023, property expenses increased by $1.1 million and $1.7 million, respectively. This increase is primarily due to the property expenses incurred at Aster & Links, which was placed into service during the current year.

Previous wording

During the three and six months ended June 30, 2024 and 2023, general and administrative expenses primarily consisted of employee cost sharing expenses (pursuant to our management agreement and employee and cost sharing agreement), marketing expenses, legal, audit, tax and accounting fees. During the three months ended as compared to the same period in 2023, general and administrative expenses remained relatively unchanged. During the six months ended June 30, 2024 as compared to the same period in 2023, general and administrative expenses decreased by $0.2 million, primarily due to lower legal fees and marketing expenses, partially offset by higher tax professional fees.

Current wording

During the three and nine months ended September 30, 2024 and 2023, general and administrative expenses primarily consisted of employee cost sharing expenses (pursuant to our management agreement and employee and cost sharing agreement), marketing expenses, legal, audit, tax and accounting fees. During the three and nine months ended September 30, 2024, as compared to the same period in 2023, general and administrative expenses decreased by $0.6 million and $0.8 million, respectively. This decrease is primarily due to lower marketing expenses, and dead deal costs recognized during the three and nine months ended September 30, 2023.

Previous wording

During the three and six months ended June 30, 2024, interest expense was comprised of interest related costs associated with our debt obligations. During the three and six months ended June 30, 2024, interest expense totaled $1.7 million and $2.4 million, respectively, due to gross interest expense of $2.6 million and $4.3 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of $0.4 million and $0.8 million, respectively, partially offset by capitalized interest and fees of $1.3 million and $2.6 million, respectively. Please see “Note 7– Debt” in our consolidated financial statements in this Form 10-Q for additional information regarding our debt arrangements.

Current wording

During the nine months ended September 30, 2024 and 2023, interest expense totaled $5.8 million and zero, respectively, due to gross interest expense of $8.8 million and $0.2 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of $1.5 million and $0.4 million, respectively, partially offset by capitalized interest and fees of $4.5 million and $0.6 million, respectively. Please see “Note 7– Debt” in our consolidated financial statements in this Form 10-Q for additional information regarding our debt arrangements.

Previous wording

During the three and six months ended June 30, 2024 as compared to the same periods in 2023, depreciation and amortization decreased by less than $0.1 million and $0.3 million, respectively. This decrease is primarily attributable to lower in-place lease intangible amortization as certain intangible assets became fully amortized subsequent to June 30, 2023, partially offset by the impact of placing certain fixed assets into service at Aster & Links during the three and six months ended June 30, 2024.

Current wording

During the three and nine months ended September 30, 2024 as compared to the same periods in 2023, depreciation and amortization increased by $1.0 million and $0.7 million, respectively. This increase is primarily attributable to the impact of placing certain fixed assets into service at Aster & Links during the three and nine months ended September 30, 2024, partially offset by lower in-place lease intangible amortization as certain intangible assets became fully amortized in 2023.

Previous wording

During the three and six months ended June 30, 2024, we recorded impairment charges of $0.2 million and $0.8 million, respectively. During the three and six months ended June 30, 2023, we recorded impairment charges of $2.2 million and $2.2 million, respectively. The impairment charges for all periods were in relation to one of our real estate assets located in Nashville, Tennessee, based on our conclusion that the estimated fair market value of the real estate asset was lower than the carrying value, and as a result, we reduced the carrying value to the estimated fair market value.

Current wording

During the three and nine months ended September 30, 2024, we recorded impairment charges of zero and $0.8 million, respectively. During the three and nine months ended September 30, 2023, we recorded impairment charges of $0.8 million and $3.0 million, respectively. The impairment charges recorded were in relation to one of our real estate assets located in Nashville, Tennessee, based on our conclusion that the estimated fair market value of the real estate asset was lower than the carrying value, and as a result, we reduced the carrying value to the estimated fair market value.

Previous wording

Interest income for the three and six months ended June 30, 2024, totaled $0.1 million and $0.2 million, respectively, which was comprised of interest earned from cash balances held in interest bearing bank accounts.

Current wording

Interest income for the periods presented were comprised of interest earned from cash balances held in interest bearing bank accounts. The increase in the current year periods as compared to the prior year periods were attributable to higher cash balances in interest bearing accounts.

Previous wording

Other (expense) income for the periods presented was primarily comprised of gains and losses in connection with our interest rate caps. Please see “Note 9 – Derivative Instruments” in our consolidated financial statements in this Form 10-Q for additional information.

Current wording

Other (expense) income for the periods presented were primarily comprised of gains and losses in connection with our interest rate caps. Please see “Note 9 – Derivative Instruments” in our consolidated financial statements in this Form 10-Q for additional information.

Previous wording

Our future needs for liquidity will depend on a variety of factors, including, without limitation, our ability to generate cash flows from operations, the timing and availability of net proceeds from our Public Offerings and any future offerings that we may conduct, the timing and extent of our real estate acquisition and disposition activities, and the timing and extent our construction and development costs.

Current wording

Our future needs for liquidity will depend on a variety of factors, including, without limitation, our ability to generate cash flows from operations, the timing and availability of net proceeds from our Public Offerings and any future offerings that we may conduct, the timing and extent of our real estate acquisition and disposition activities, and the timing and extent of our construction and development costs.

Previous wording

We believe that our cash on-hand, the anticipated net proceeds from our Public Offerings, the projected cash flows from our real estate assets and our current and anticipated financing activities will be sufficient to meet our liquidity and capital resource requirements for the next 12 months and beyond.

Current wording

We believe that our cash on-hand, the anticipated net proceeds from our Public Offerings, the projected cash flows from our real estate assets and our current and anticipated financing activities will be sufficient to meet our liquidity and capital resource requirements for the next 12 months from the date of issuance of this Form 10-Q.

Previous wording

Where our Manager and its affiliates, including our Sponsor, have funded, and in the future if they continue to fund, our capital requirements by advancing us offering and operating fees and expenses, we reimburse our Manager and its affiliates, including our Sponsor, pursuant to the terms of our management agreement and employee and cost sharing agreement. Fees payable and expenses reimbursable to our Manager and its affiliates, including our Sponsor, may be paid, at the election of the recipient, in cash, by issuance of our Class A Units at the then-current NAV, or through some combination of the foregoing. There were no Public Offering costs incurred by our Manager and its affiliates during the six months ended June 30, 2024 and 2023. During the three months ended June 30, 2024 and 2023, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $0.5 million and $0.6 million, respectively, on our behalf. During the six months ended June 30, 2024 and 2023, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $1.2 million and $1.3 million, respectively, on our behalf.

Current wording

Where our Manager and its affiliates, including our Sponsor, have funded, and in the future if they continue to fund, our capital requirements by advancing us offering and operating fees and expenses, we reimburse our Manager and its affiliates, including our Sponsor, pursuant to the terms of our management agreement and employee and cost sharing agreement. Fees payable and expenses reimbursable to our Manager and its affiliates, including our Sponsor, may be paid, at the election of the recipient, in cash, by issuance of our Class A Units at the then-current NAV, or through some combination of the foregoing. There were no Public Offering costs incurred by our Manager and its affiliates during the nine months ended September 30, 2024 and 2023. During the three months ended September 30, 2024 and 2023, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $0.5 million and $0.4 million, respectively, on our behalf. During the nine months ended September 30, 2024 and 2023, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $1.7 million and $1.7 million, respectively, on our behalf.

Previous wording

During the year ended December 31, 2022, our indirect majority-owned subsidiary entered into a construction management agreement for the development of 1991 Main. For additional details regarding 1991 Main, see “—Our Investments—1991 Main Street**–**Sarasota Florida (Aster & Links).” The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to guaranteed maximum price. As of June 30, 2024, we had an unfunded capital commitment totaling $30.5 million under the terms of this agreement as well as other construction related commitments for the development of 1991 Main. As of the date of this Form 10-Q, we currently anticipate that the remaining funding for construction and soft costs associated with the development of 1991 Main will be a minimum of $52.7 million (inclusive of the aforementioned unfunded capital commitment).

Current wording

During the year ended December 31, 2022, our indirect majority-owned subsidiary entered into a construction management agreement for the development of Aster & Links. For additional details regarding 1991 Main, see “—Our Investments—1991 Main Street**–**Sarasota Florida (“Aster & Links”).” The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to guaranteed maximum price. As of September 30, 2024, we had an unfunded capital commitment totaling $17.8 million under the terms of this agreement as well as other construction related commitments for the development of Aster & Links. As of the date of this Form 10-Q, we currently anticipate that the remaining funding for construction and soft costs associated with the development of Aster & Links will be a minimum of $37.8 million (inclusive of the aforementioned unfunded capital commitment).

Previous wording

During the year ended December, 31, 2023, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for up to $130.0 million in principal amount to fund the development of 1991 Main. Advances under the 1991 Main Construction Loan bear interest at a per annum rate equal to the one-month term SOFR plus 3.45%, subject to a minimum all-in per annum rate of 8.51%. The 1991 Main Construction Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions. As of June 30, 2024, we have drawn down $71.7 million on the 1991 Main Construction Loan. For additional details regarding the 1991 Main Construction Loan, see “—Our Investments—1991 Main Street**–**Sarasota Florida (also known as “Aster & Links”).”

Current wording

During the year ended December 31, 2023, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for up to $130.0 million in principal amount to fund the development of Aster & Links. Advances under the 1991 Main Construction Loan bear interest at a per annum rate equal to the one-month term SOFR plus 3.45%, subject to a minimum all-in per annum rate of 8.51%. The 1991 Main Construction Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions. As of September 30, 2024, we have drawn down $84.3 million on the 1991 Main Construction Loan. For additional details regarding the 1991 Main Construction Loan, see“—Our Investments—1991 Main Street**–**Sarasota Florida (“Aster & Links”).”

Previous wording

On January 31, 2024, our indirect majority-owned subsidiary entered into a mezzanine loan agreement for up to $56.4 million in principal amount. The 1991 Main Mezzanine Loan bears interest at a rate of 13.0% per annum, and is secured by 1991 Main. In connection with the 1991 Main Mezzanine Loan, we are required to maintain an interest reserve and carry reserve for purposes of paying accrued but unpaid interest on the 1991 Main Mezzanine Loan and interest, principal and other obligations under the 1991 Main Construction Loan. As of June 30, 2024, the 1991 Main Mezzanine Loan balance was $43.3 million. Proceeds under the 1991 Main Mezzanine Loan may be used to reimburse the Company for certain costs and expenses incurred in relation to, and to fund the continued development of, 1991 Main. The 1991 Main Mezzanine Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions. For additional details regarding the 1991 Main Mezzanine Loan, see “—Our Investments—1991 Main Street**–**Sarasota Florida (also known as “Aster & Links”).”

Current wording

On January 31, 2024, our indirect majority-owned subsidiary entered into a mezzanine loan agreement for up to $56.4 million in principal amount. The 1991 Main Mezzanine Loan bears interest at a rate of 13.0% per annum, and is secured by Aster & Links. In connection with the 1991 Main Mezzanine Loan, we are required to maintain an interest reserve and carry reserve for purposes of paying accrued but unpaid interest on the 1991 Main Mezzanine Loan and interest, principal and other obligations under the 1991 Main Construction Loan. As of September 30, 2024, the 1991 Main Mezzanine Loan balance was $44.7 million. Proceeds under the 1991 Main Mezzanine Loan may be used to reimburse the Company for certain costs and expenses incurred in relation to, and to fund the continued development of, Aster & Links. The 1991 Main Mezzanine Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions. For additional details regarding the 1991 Main Mezzanine Loan, see“—Our Investments—1991 Main Street**–**Sarasota Florida (“Aster & Links”).”

Previous wording

In April 2023, our indirect majority-owned subsidiary entered into a construction management agreement for the development of 1000 First. For additional details regarding 1000 First, see “—Our Investments—1000 First Avenue North and 900 First Avenue North**–**St. Petersburg, Florida (also known as “Viv”).” The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to guaranteed maximum price. As of June 30, 2024, we had an unfunded capital commitment of $78.7 million under the terms of this agreement. We currently anticipate the remaining funding for construction and soft costs associated with the development of 1000 First will be a minimum of approximately $103.9 million (inclusive of the aforementioned unfunded capital commitment).

Current wording

In April 2023, our indirect majority-owned subsidiary entered into a construction management agreement for the development of Viv. For additional details regarding Viv, see“—Our Investments—1000 First Avenue North and 900 First Avenue North**–**St. Petersburg, Florida (“Viv”).” The construction management agreement contains terms and conditions that are customary for a project of this type and will be subject to guaranteed maximum price. As of September 30, 2024, we had an unfunded capital commitment of $66.0 million under the terms of this agreement. We currently anticipate the remaining funding for construction and soft costs associated with the development of Viv will be a minimum of approximately $84.8 million (inclusive of the aforementioned unfunded capital commitment).

Previous wording

On June 28, 2024, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for up to $104.0 million in principal amount. The 1000 First Construction Loan bears interest at a per annum rate equal to the one-month term SOFR plus 3.80%, subject to a minimum all-in per annum rate of 7.55%, and is secured by 1000 First. Advances under the 1000 First Construction Loan may be used to fund the development of 1000 First. The 1000 First Construction Loan has an initial maturity date of June 28, 2027 and contains two one-year extension options, subject to certain restrictions. For additional details regarding the 1000 First Construction Loan, see “—Our Investments—1000 First Avenue North and 900 First Avenue North – St. Petersburg, Florida (also known as “Viv”). As of June 30, 2024, we have not yet drawn down on the 1000 First Construction Loan.

Current wording

On June 28, 2024, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for up to $104.0 million in principal amount. The 1000 First Construction Loan bears interest at a per annum rate equal to the one-month term SOFR plus 3.80%, subject to a minimum all-in per annum rate of 7.55%, and is secured by Viv. Advances under the 1000 First Construction Loan may be used to fund the development of Viv. The 1000 First Construction Loan has an initial maturity date of June 28, 2027 and contains two one-year extension options, subject to certain restrictions. For additional details regarding the 1000 First Construction Loan, see “—Our Investments—1000 First Avenue North and 900 First Avenue North – St. Petersburg, Florida (“Viv”). As of September 30, 2024, we have drawn down $12.1 million on the 1000 First Construction Loan.

Previous wording

The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash during the six months ended June 30, 2024 and 2023 (amounts in thousands):

Current wording

The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash during the nine months ended September 30, 2024 and 2023 (amounts in thousands):

Previous wording

As of June 30, 2024 and 2023, cash and cash equivalents and restricted cash totaled approximately $35.2 million and $90.1 million, respectively.

Current wording

As of September 30, 2024 and 2023, cash and cash equivalents and restricted cash totaled approximately $27.5 million and $39.7 million, respectively.

Previous wording

Net cash flows used in operating activities during the six months ended June 30, 2024 primarily relates to interest expense incurred on our indebtedness, the payment of employee cost sharing expenses as well as payments for legal, marketing, and accounting fees. Net cash flows used in operating activities during the six months ended June 30, 2023 primarily relates to the payment of management fees and employee cost sharing expenses as well as payments for legal, marketing, and accounting fees.

Current wording

Net cash flows used in operating activities during the nine months ended September 30, 2024 primarily relates to interest expense incurred on our indebtedness, the payment of employee cost sharing expenses as well as payments for property management, legal, and accounting fees. Net cash flows used in operating activities during the nine months ended September 30, 2023 primarily relates to the payment of management fees and employee cost sharing expenses as well as payments for legal, marketing, and accounting fees.