Q - Belpointe PREP,

Previous wording

In this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless context otherwise requires, references to “we,” “us,” “our” “Belpointe” or the “Company” refer to Belpointe PREP, LLC, its operating companies, Belpointe PREP OC, LLC, and Belpointe PREP TN OC, LLC (each an “Operating Company” and collectively, the “Operating Companies”), and each of the Operating Companies’ subsidiaries, collectively.

Current wording

In this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless context otherwise requires, references to “we,” “us,” “our” or the “Company” refer to Belpointe PREP, LLC, its operating companies, Belpointe PREP OC, LLC, and Belpointe PREP TN OC, LLC (each an “Operating Company” and collectively, the “Operating Companies”), and each of the Operating Companies’ direct and indirect subsidiaries, collectively.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report”) filed with the U.S. Securities and Exchange Commission on March 31, 2025, a copy of which may be accessed here. As discussed in the section entitled “Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled “Risk Factors” included our Annual Report.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report”) filed with the U.S. Securities and Exchange Commission on March 31, 2025, a copy of which may be accessed here. As discussed in the section entitled “Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, identified in the section entitled “Forward-Looking Statements,” and those discussed in the section entitled “Risk Factors” included our Annual Report.

Previous wording

We are the only publicly traded qualified opportunity fund listed on a national securities exchange. We are a Delaware limited liability company formed on January 24, 2020, and a partnership for U.S. federal income tax purposes.

Current wording

We are the only publicly traded qualified opportunity fund listed on a national securities exchange. We are a Delaware limited liability company formed on January 24, 2020, and a partnership for U.S. federal income tax purposes. We qualified as a qualified opportunity fund beginning with our taxable year ended December 31, 2020. Because we are a qualified opportunity fund certain of our investors are eligible for favorable capital gains tax treatment on their investments.

Previous wording

We are focused on identifying, acquiring, developing or redeveloping and managing properties in two operating segments: commercial and mixed-use real estate, in each case located within qualified opportunity zones. At least 90% of our assets consist of qualified opportunity zone property. We qualified as a qualified opportunity fund beginning with our taxable year ended December 31, 2020. Because we are a qualified opportunity fund certain of our investors are eligible for favorable capital gains tax treatment on their investments.

Current wording

We are focused on identifying, acquiring, developing or redeveloping and managing properties in two operating segments: commercial and mixed-use real estate, in each case located within qualified opportunity zones. The commercial segment consists of properties such as office, retail centers, and warehouses (the “Commercial Segment”), and the mixed-use segment consists of properties that have both residential and retail spaces within a single real estate asset (the “Mixed-use Segment”).

Previous wording

All of our assets are and will continue to be held by, and all of our operations are and will continue to be conducted through, one or more of our Operating Companies, either directly or indirectly through their subsidiaries. We are externally managed by Belpointe PREP Manager, LLC (our “Manager”), which is an affiliate of our sponsor, Belpointe, LLC (our “Sponsor”).

Current wording

At least 90% of our assets consist of qualified opportunity zone property, and all of our assets are and will continue to be held by, and all of our operations are and will continue to be conducted through, one or more of our Operating Companies, either directly or indirectly through their subsidiaries. We are externally managed by Belpointe PREP Manager, LLC (our “Manager”), which is an affiliate of our sponsor, Belpointe, LLC (our “Sponsor”). Subject to the oversight of our board of directors (our “Board”), our Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making acquisitions and investments on our behalf.

Previous wording

On May 9, 2023, the U.S. Securities and Exchange Commission (the “SEC”) declared effective our follow-on registration statement on Form S-11, as amended (File No. 333-271262) (the “Follow-on Registration Statement”), registering the offer and sale of up to $750,000,000 of our Class A units on a continuous “best efforts” basis by any method deemed to be an “at the market” offering pursuant to Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including by offers and sales made directly to investors or through one or more agents.

Current wording

On May 9, 2023, the U.S. Securities and Exchange Commission (the “SEC”) declared effective our registration statement on Form S-11, as amended (File No. 333-271262) (the “Follow-on Registration Statement”), registering the offer and sale of up to $750,000,000 of our Class A units on a continuous “best efforts” basis by any method deemed to be an “at the market” offering pursuant to Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including by offers and sales made directly to investors or through one or more agents (our “Follow-on Offering”).

Previous wording

In addition, our Follow-on Registration Statement constituted a post-effective amendment to our initial registration statement on Form S-11, as amended (File No. 333-255424), which registered the offer and sale of our 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 $511,393,317 remained unsold as of March 31, 2025 (our “Primary Offering” and, together with our Follow-on Offering, our “Public Offerings”). For the three months ended March 31, 2025, we have sold aggregate gross proceeds of $270,013 of Class A units in connection with our Public Offerings.

Current wording

For thethree and six months ended June 30, 2025, we have sold aggregate gross proceeds of $3,753,108 and $4,023,121, respectively, of Class A units in connection with our primary registered offering, which commenced in 2021 (our “Primary Offering” and, together with our Follow-on Offering, our “Public Offerings”) and our Follow-on Offering.

Previous wording

The purchase price for Class A units in our Public Offerings is 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 March 10, 2025, we announced that our NAV as of December 31, 2024 was equal to $119.94 per Class A unit.

Current wording

The purchase price for Class A units in our Follow-on Offering is 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 May 30, 2025, we announced that our NAV as of March 31, 2025 was equal to $118.38 per Class A unit.

Previous wording

Market conditions for multifamily and mixed-use rental properties in the geographic regions in which we operate have generally remained consistent over the past several quarters. However, future economic conditions and demand for multifamily and mixed-use rental properties are, and the real estate industry in general is, subject to ongoing uncertainty as a result of a number of factors, including, among others, the rate of rent growth, rate of new construction, rate of absorption, the rate of unemployment, higher interest rates, higher rates of inflation, the availability of credit, financial market volatility, uncertainty around the timing, magnitude and impact of tariffs and general economic uncertainty, increasing energy costs, supply chain disruptions and labor shortages. The potential effect of these and other factors and the projected impact of these and other events on our business, results of operations and financial performance, presents material uncertainty and risk with respect to our future performance and financial results, including the potential to negatively impact our costs of operations, our financing arrangements, the value of our investments, and the laws, regulations and governmental and regulatory policies applicable to us. As a result, our past performance may not be indicative of future results.

Current wording

Market conditions for commercial and mixed-use properties in the geographic regions in which we operate have generally remained consistent over the past several quarters. However, future economic conditions and demand for commercial and mixed-use properties are, and the real estate industry in general is, subject to ongoing uncertainty as a result of a number of factors, including, among others, the rate of rent growth, rate of new construction, rate of absorption, the rate of unemployment, higher interest rates, higher rates of inflation, potentially higher costs associated with the development of our projects, the availability of credit, financial market volatility, uncertainty around the timing, magnitude and impact of tariffs and general political and economic uncertainty, increasing energy costs, supply chain disruptions and labor shortages. The potential effect of these and other factors and the projected impact of these and other events on our business, results of operations and financial performance, presents material uncertainty and risk with respect to our future performance and financial results, including the potential to negatively impact our costs of operations, our financing arrangements, the value of our investments, and the laws, regulations and governmental and regulatory policies applicable to us. As a result, our past performance may not be indicative of future results.

Previous wording

As of the date of this Form 10-Q, our investment portfolio consisted of the following commercial and mixed-use rental properties:

Current wording

As of the date of this Form 10-Q, our investment portfolio consisted of the following commercial and mixed-use properties:

Previous 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. 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, inclusive of transaction costs. 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.

Previous wording

In 2024, construction was substantially 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.

Current wording

During the year ended December 31, 2024, we substantially completed construction and began lease up 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

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.

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 has historically been the largest of the southwest Florida markets and has experienced strong gains in jobs, population, and home values over the past few years. We believe that Aster & Links is well-positioned to be a premier residential and retail destination in the heart of what will continue to be a 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 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 $187.5 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 “1991 Main CMA”). The 1991 Main CMA contains terms and conditions that are customary for a project of this type and is 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 $180.2 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 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 March 31, 2025, we have drawn down $103.1 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, 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 June 30, 2025, we have drawn down $111.2 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, 2024 (the “1991 Main Interest Rate Cap”), which, as of March 31, 2025, had a notional amount of approximately $109.0 million, a one-month SOFR rate based strike price of 5.07%, and which is due to mature on July 10, 2025.

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, which, as of June 30, 2025, had a notional amount of approximately $115.1 million, a one-month SOFR rate based strike price of 5.07%, and which matured on July 10, 2025. On July 1, 2025, our indirect majority-owned subsidiary entered into a new interest rate cap agreement with a notional amount of $130.0 million, a strike price of 5.07% and which is scheduled to mature on July 10, 2026.

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 andinterest, 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”). The 1991 Main Construction Loan and the 1991 Main Mezzanine Loan 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 March 31, 2025, the principal balance of the 1991 Main Mezzanine Loan was $47.8 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 andinterest, principal and other obligations under the 1991 Main Construction Loan. 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. The 1991 Main Construction Loan and the 1991 Main Mezzanine Loan 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, 2025, the principal balance of the 1991 Main Mezzanine Loan was $49.4 million.

Previous 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 March 31, 2025, construction on Viv was 84% complete. We currently anticipate construction to be completed in the second half of 2025, with leasing to begin prior.

Current wording

1000 First Avenue North and 900 First Avenue North – St. Petersburg, Florida (“VIV”) – 1000 First Avenue North, St. Petersburg, Florida (“1000 First” or “VIV”) consists of several parcels, comprising 1.6-acres of land, which we acquired for an aggregate purchase price of $12.1 million, inclusive of transaction costs. As of June 30, 2025, construction on VIV was 90% complete. We currently anticipate construction to be completed in the second half of 2025, with leasing to begin prior to completion.

Previous 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).

Current wording

St. Petersburg placed 46th on Niche’s 2025 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 0.6% in 2024. 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 19 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 $140.5 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 “1000 First CMA”). The 1000 First CMA contains terms and conditions that are customary for a project of this type and will be subject to a GMP of $141.0 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 March 31, 2025, we have drawn down $48.0 million 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 June 30, 2025, we have drawn down $62.6 million on the 1000 First Construction Loan. The 1000 First Construction Loan is prepayable in whole or in part at any time with not less than 45 days’ notice. Full prepayment is subject to an interest rate make-whole amount, if any, calculated as of the prepayment date.

Previous wording

As required under the terms of the 1000 First Construction Loan Agreement, our indirect majority-owned subsidiary also entered into an interest rate cap agreement, effective June 28, 2024 (the “1000 First Interest Rate Cap”), which, as of March 31, 2025, had a notional amount of approximately $104.0 million, a one-month SOFR rate based strike price of 6.25%, and which is due to mature on July 1, 2025.

Current wording

As required under the terms of the 1000 First Construction Loan Agreement, our indirect majority-owned subsidiary also entered into an interest rate cap agreement, effective June 28, 2024, which, as of June 30, 2025, had a notional amount of approximately $104.0 million, a one-month SOFR rate based strike price of 6.25%, and which was due to mature on July 1, 2025. On June 26, 2025, our indirect majority-owned subsidiary entered into a new interest rate cap agreement, effective July 1, 2025, with a notional amount of $104.0 million, a strike price of 6.25% and which is scheduled to mature on July 1, 2026.

Previous wording

497-501 Middle Turnpike and Cedar Swamp Road –Storrs, Connecticut – 497-501 Middle Turnpike (“497-501 Middle”) is an approximately 60.0-acre site, consisting of approximately 30 acres of former golf course and approximately 30 acres of wetlands some of which includes walking trails. We acquired a majority ownership interest in CMC Storrs SPV, LLC (“CMC”), the holding company for 497-501 Middle, for an initial capital contribution of $3.8 million.

Current wording

497-501 Middle Turnpike and Cedar Swamp Road –Storrs, Connecticut – 497-501 Middle Turnpike (“497-501 Middle”) is an approximately 60.0-acre site, consisting of approximately 30 acres of former golf course and approximately 30 acres of wetlands some of which includes walking trails. On June 28, 2022, through an indirect majority-owned subsidiary, we acquired a 70.2% controlling interest (the “CMC Interest”) in CMC Storrs SPV, LLC (“CMC”), the holding company for 497-501 Middle, for an initial capital contribution of $3.8 million. As part of the transaction two unaffiliated joint venture partners (the “CMC JV Partners”) were deemed to have made initial capital contributions to CMC. Following our acquisition of the CMC Interest, we discovered that one of the CMC JV Partners had misappropriated cash from the other’s cash account. Accordingly, the CMC JV Partner forfeited $1.0 million, or 29.8%, of their noncontrolling interest in CMC on March 24, 2023. As a result of the forfeiture, we indirectly own a 100% controlling interest in CMC.

Previous wording

497-501 Middle and Cedar Swamp Road are located less than a mile from the main college campus at the University of Connecticut (“UConn”) in Storrs, Connecticut (“Storrs”), approximately 30 minutes from Hartford, Connecticut, and 90 minutes from Boston, Massachusetts. UConn ranked 26th among “top public universities” nationally in the 2024 U.S. New & World Report (“U.S. News”) collegiate rankings, and, based on a fact sheet published by UConn, over 19,300 undergraduate students attended college at the Storrs campus in Fall 2023, with more than a third of those students living off campus.

Current wording

497-501 Middle and Cedar Swamp Road are located less than a mile from the main college campus at the University of Connecticut (“UConn”) in Storrs, Connecticut (“Storrs”), approximately 30 minutes from Hartford, Connecticut, and 90 minutes from Boston, Massachusetts. UConn ranked 32nd among “Top Public Schools” nationally in the 2025 U.S. New & World Report (“U.S. News”) collegiate rankings, and, based on a fact sheet published by UConn, over 20,056 undergraduate students attended college at the Storrs campus in Fall 2024, with more than a third of a students living off campus.

Previous wording

On June 26, 2024, our indirect majority-owned subsidiary entered into a fixed-rate loan for $10.0 million in principal amount with KHRE SMA Funding, LLC, which is secured by 900 8th Avenue South (the “900 8th Land Loan”). The 900 8th Land Loan bears interest at a rate of 9.50% per annum, and is due to mature on June 26, 2025, with two six-month extension options, subject to certain restrictions.

Current wording

On June 26, 2024, our indirect majority-owned subsidiary entered into a fixed-rate loan for $10.0 million in principal amount with KHRE SMA Funding, LLC, which is secured by 900 8th Avenue South (the “900 8th Land Loan”). The 900 8th Land Loan bears interest at a rate of 9.50% per annum, and is due to mature on January 2, 2026, with one six-month extension option remaining, subject to certain restrictions. In June 2025, we exercised the first of two available six-month extension options on the loan, extending the maturity to January 2026. One additional six-month extension option remains available, subject to certain conditions.

Previous wording

U.S. News & World Report ranked Sarasota as the 5th best place to live in the United States for 2023-2024, number two among the fastest growing places in the U.S., and the 18th best place to retire. Sarasota is headquarters to a diverse group of large companies, such as Boar’s Head Provisions, CAE Healthcare, PGT Innovations, Tervis, Sun Hydraulics and Voalte. The Sarasota area also has a large number of universities including the University of Southern Florida, Florida State University’s College of Medicine campus, Ringling College, State College of Florida, Keiser College and New College of Florida.

Current wording

U.S. News & World Report ranked Sarasota as the 59th best place to live in Florida for 2025-2026, and the 4th best place to retire in the United States. Sarasota is headquarters to a diverse group of large companies, such as Boar’s Head Provisions, CAE Healthcare, Sun Hydraulics and Voalte. The Sarasota area also has a large number of universities including the University of Southern Florida, Florida State University’s College of Medicine campus, Ringling College, State College of Florida, Keiser College and New College of Florida.

Previous wording

1130 Davidson Street – Nashville, Tennessee – 1130 Davidson Street (“1130 Davidson Street”) is an approximately 1.7-acre site consisting of a single-story, 10,000 square foot retail building and associated parking lot, which we acquired for an aggregate purchase price of $2.1 million, inclusive of transaction costs. The building is leased back to the seller through March 2025, with the ability to continue month to month thereafter. In September 2023, the parcel was successfully rezoned to accommodate medium to high density multi-family residential and a mix of other commercial uses including hotel, office, retail and restaurant.

Current wording

1130 Davidson Street – Nashville, Tennessee – 1130 Davidson Street (“1130 Davidson Street”) is an approximately 1.7-acre site consisting of a single-story, 10,000 square foot retail building and associated parking lot, which we acquired for an aggregate purchase price of $2.1 million, inclusive of transaction costs. In September 2023, the parcel was successfully rezoned to accommodate medium to high density multi-family residential and a mix of other commercial uses including hotel, office, retail and restaurant.

Previous wording

As a result of having placed Aster & Links into service and commencing operations in 2024, we revised our reportable segments to include the following two distinct operating segments: commercial and mixed-use. Our commercial segment includes properties such as office, retail centers, and warehouses (the “Commercial Segment”), and our mixed-use segment includes properties that blend both residential and retail components within a single real estate asset (the “Mixed-use Segment”).

Current wording

As a result of having placed Aster & Links into service and commencing operations in 2024, we revised our reportable segments into two distinct operating segments based on the way that we organize and evaluate our business internally: Commercial Segment and Mixed-use Segment. Our Commercial Segment includes properties such as office, retail centers, and warehouses, and our Mixed-use Segment includes properties that blend both residential and retail components within a single real estate asset.

Previous wording

We believe that segment net operating income (loss) (“Segment NOI”) provides a useful measure of the performance of our business, as it reflects the core rental operations of our operating real estate. Segment NOI is calculated as rental revenue, less property expenses, excluding corporate level items, such as management fees incurred to our Manager, depreciation and amortization, general and administrative expenses, interest expense, and other non-operating items.

Current wording

We believe that analyzing net operating income (loss) (“NOI”) at the segment level (“Segment NOI”) provides a useful financial performance measure, because it reflects the core rental operations of our real estate assets. We calculate Segment NOI as rental revenue, less property expenses, excluding non-segment NOI (“Non-Segment NOI”). Non-Segment NOI includes corporate level items, such as management fees incurred to our Manager, general and administrative expenses, interest expense, depreciation and amortization, interest income and other non-operating items.

Previous wording

During the three months ended March 31, 2025 as compared to the same period in 2024, Commercial Segment NOI decreased by $0.1 million, primarily due to higher real estate taxes.

Current wording

During the three months ended June 30, 2025 as compared to the same period in 2024, Commercial Segment NOI decreased by $0.5 million, primarily due to higher real estate taxes.

Previous wording

During the three months ended March 31, 2025 as compared to the same period in 2024, Mixed-use Segment NOI increased by $0.2 million, primarily driven by the recent placement in service of Aster & Links, which was not yet operational in the prior year period.

Current wording

During the three months ended June 30, 2025 as compared to the same period in 2024, Mixed-use Segment NOI decreased by $0.3 million, primarily driven by the recent placement in service of Aster & Links. Aster & Links commenced operations in the prior year period, and as such, the year-over-year comparison is not directly comparable. The current year period primarily reflects operating activity of Aster & Links during its lease-up phase.

Previous wording

Please see “Note 7– Debt, Net” in our consolidated financial statements in this Form 10-Q for additional information regarding our debt arrangements.

Current wording

Please see “Note 7– Debt, Net” in our consolidated financial statements in this Form 10-Q for additional information regarding our debt obligations.

Previous wording

During the three months ended March 31, 2025 as compared to the same periods in 2024, depreciation and amortization increased by $1.6 million. This increase is primarily attributable to the impact of placing fixed assets in service at Aster & Links subsequent to March 31, 2024.

Current wording

During the three months ended June 30, 2025 as compared to the same periods in 2024, depreciation and amortization increased by $1.2 million. This increase is primarily attributable to the impact of placing fixed assets in service at Aster & Links subsequent to June 30, 2024.

Previous wording

During the three months ended March 31, 2024, we recorded impairment charges of $0.6 million. 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.

Current wording

During the three months ended June 30, 2024, we recorded impairment charges of $0.2 million. 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 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.

Current wording

During the three months ended June 30, 2025 and 2024, interest income totaled approximately $0.3 million and $0.1 million, respectively, and was comprised of interest earned from cash balances held in interest bearing bank accounts. The increase in interest income during the three months ended June 30, 2025 as compared to the same period in 2024, is attributable to higher cash balances in interest bearing accounts.

Previous wording

Pursuant to our management agreement, we pay our Manager a quarterly management fee in arrears of one-fourth of 0.75%. The management fee is based on our NAV at the end of each quarter. During the three months ended March 31, 2025 as compared to the same period in 2024, management fees increased by $0.1 million due to an increase in our NAV.

Current wording

Pursuant to our Management Agreement, we pay our Manager a quarterly management fee in arrears of one-fourth of 0.75%. The management fee is based on our NAV at the end of each quarter. During the six months ended June 30, 2025 as compared to the same period in 2024, management fees increased by $0.3 million due to an increase in our NAV.

Previous wording

During the three months ended March 31, 2025 and 2024, 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 March 31, 2025, as compared to the same period in 2024, general and administrative expenses remained relatively unchanged.

Current wording

During the six months ended June 30, 2025 and 2024, 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 six months ended June 30, 2025, as compared to the same period in 2024, general and administrative expenses remained relatively unchanged.

Previous wording

During the three months ended March 31, 2025 and 2024, interest expense totaled $4.4 million and $0.7 million, respectively, consisting of gross interest expense of $4.8 million and $1.6 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of $0.7 million and $0.4 million, respectively, partially offset by capitalized interest and fees of $1.1 million and $1.3 million, respectively. The increase in interest expense during the three months ended March 31, 2025 as compared to the same period in 2024, is primarily due to no longer capitalizing interest on properties that were under development during the three months ended March 31, 2024.

Current wording

During the six months ended June 30, 2025 and 2024, interest expense totaled $7.2 million and $2.4 million, respectively, consisting of gross interest expense of $10.0 million and $4.3 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of $1.5 million and $0.8 million, respectively, partially offset by capitalized interest and fees of $4.3 million and $2.7 million, respectively. The increase in interest expense during the six months ended June 30, 2025 as compared to the same period in 2024, is primarily due to a higher weighted average outstanding debt balance in the current year period as compared to the prior year period, as well as no longer capitalizing interest on properties that were under development during the prior year period.

Previous wording

Our primary needs for liquidity and capital resources are to fund our investments, including construction and development costs, pay our Public Offering and operating fees and expenses, pay any distributions that we may make to the holders of our units and pay interest on our outstanding indebtedness.

Current wording

Our primary needs for liquidity and capital resources are to fund our investments, including construction and development costs, pay our Follow-on Offering and operating fees and expenses, pay any distributions that we may make to the holders of our units and pay interest on our outstanding indebtedness.

Previous wording

Our Public Offering and operating fees and expenses include, among other things, legal, audit and valuation fees and expenses, federal and state filing fees, SEC, FINRA and NYSE filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution fees, the management fee that we pay to our Manager, and fees and expenses related to acquiring, financing, appraising, and managing our commercial real estate properties. We do not have office or personnel expenses as we do not have any employees.

Current wording

Our Follow-on Offering and operating fees and expenses include, among other things, legal, audit and valuation fees and expenses, federal and state filing fees, SEC, FINRA and NYSE filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution fees, the management fee that we pay to our Manager, and fees and expenses related to acquiring, financing, appraising, and managing our commercial real estate properties. We are externally managed and do not have office or personnel expenses as we do not have any employees.