Belpointe PREP, LLC

BELPOINTE PREP, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 –Organization, Business Purpose and Capitalization

Organization and Business Purpose

Belpointe PREP, LLC (together with its subsidiaries, the “Company,” “we,” “us,” or “our”) is focused on identifying, acquiring, developing or redeveloping and managing commercial real estate located within “qualified opportunity zones.” We were formed on January 24, 2020 as a Delaware limited liability company and are treated as a partnership and qualified opportunity fund for U.S. federal income tax purposes.

At least 90% of our assets consist of qualified opportunity zone property, and all of our assets are held by, and all of our operations are conducted through, one or more operating companies (each an “Operating Company” and collectively, our “Operating Companies”), either directly or indirectly through their subsidiaries. We are externally managed by Belpointe PREP Manager, LLC (our “Manager”), 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, dispositions, and other investments on our behalf.

Capitalization

We are the successor in interest to Belpointe REIT, Inc., a Maryland corporation (“Belpointe REIT”), incorporated on June 19, 2018. During the year ended December 31, 2021, we acquired all of the outstanding shares of common stock of Belpointe REIT in an exchange offer and related conversion and merger transaction.

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”).

In connection with the Follow-on Offering, 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 entered 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 paid 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 units sold in the Follow-on Offering.

For the three and six months ended June 30, 2026, we have sold aggregate gross proceeds ofzero and $3,210,218, respectively, of Class A units in connection with our Follow-on Offering. Together with the gross proceeds raised in our primary offering, which expired in 2024 (our “Primary Offering” and, together with our Follow-on Offering, our “Public Offerings”) and the gross proceeds raised in Belpointe REIT’s prior offerings, as of June 30, 2026, we have raised aggregate gross offering proceeds of $371.8 million in our Public Offerings.

The purchase price for Class A units in our Follow-on Offering was the lesser of (i) the current net asset value (the “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 29, 2026, we announced that our NAV as of March 31, 2026 was equal to $116.25 per Class A unit.

During the three and six months ended June 30, 2026, we sold an aggregate of 11,798 Class A units, at an average price of $47.60 per Class A unit for aggregate gross proceeds of $566,041, in a series of transactions not involving a public offering to two individual investors in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The issuances did not involve any underwriters or underwriting discounts or commissions.

Note 2 –Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and Article 8 of Regulation S-X of the rules and regulations of the SEC.

In the opinion of management, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The consolidated financial statements as of June 30, 2026, and for the three and six months ended June 30, 2026 and 2025, are unaudited and may not include year-end adjustments necessary to make them comparable to audited results. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2025 included in our Annual Report on Form 10-K. The operating results for interim periods are not necessarily indicative of operating results for any other interim period or for the entire year.

Basis of Consolidation

The accompanying consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portion of members’ capital in controlled subsidiaries that are not attributable, directly or indirectly, to us are presented in noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.

We have evaluated our economic interests in entities to determine if they are deemed to be variable interest entities (“VIEs”) and whether the entities should be consolidated. An entity is a VIE if it has any one of the following characteristics: (i) the entity does not have enough equity at risk to finance its activities without additional subordinated financial support; (ii) the at-risk equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. The distinction between a VIE and other entities is based on the nature and amount of the equity investment and the rights and obligations of the equity investors. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered VIEs unless the limited partners hold substantive kick-out rights or participation rights.

Significant judgment is required to determine whether a VIE should be consolidated. We review all agreements and contractual arrangements to determine whether (i) we or another party have any variable interests in an entity, (ii) the entity is considered a VIE, and (iii) which variable interest holder, if any, is the primary beneficiary of the VIE. Determination of the primary beneficiary is based on whether a party (a) has the power to direct the activities that most significantly impact the economic performance of the VIE, and (b) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

The following table presents the financial data of the consolidated VIEs, which are considered VIEs as they do not have sufficient equity at risk to finance their activities without additional subordinated financial support, included in the consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively (amounts in thousands):

An interest in a VIE requires reconsideration when an event occurs that was not originally contemplated. At each reporting period we will reassess whether there are any events that require us to reconsider our determination of whether an entity is a VIE and whether it should be consolidated.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the Jump Start Our Business Startups Act of 2012 (“JOBS Act”). Under Section 107 of the JOBS Act, emerging growth companies are permitted to use an extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards that have different effective dates for public and private companies. We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards which is the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the effective date of our Primary Offering (which will be September 30, 2026), (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a “large accelerated filer” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period, or (iii) the date that we affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B). By electing to extend the transition period for complying with new or revised accounting standards, our consolidated financial statements may not be comparable to the consolidated financial statements of companies that comply with public company effective dates.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes to the consolidated financial statements. Actual results could materially differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Restricted Cash

Restricted cash consists of amounts required to be reserved pursuant to contractual obligations and lender agreements for debt service. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within our consolidated balance sheets to our consolidated statements of cash flows (amounts in thousands):

Segment Reporting

Our Chief Executive Officer is our chief operating decision maker (“CODM”). We are focused on identifying, acquiring, developing or redeveloping and managing real estate assets located within qualified opportunity zones. Our operating segments are based on the way we organize and evaluate our business internally. We currently operate intwo reportable segments, commercial and mixed-use, which are further described in Note 12 - Segment Reporting.

Loan Receivable

Our loan receivable consists of our convertible loan due from a related party as further described in Note 4 – Related Party Arrangements. Our loan receivables are carried at amortized cost, including any unamortized discounts or fees, and net of allowance for credit losses, if any. We recognize interest income when collection is probable over the term of the loan receivable, which is calculated based on the contractual terms of the loan agreement. We evaluate the collectibility of our loan receivables primarily based on payment status, the estimated fair value of the collateral, or otherwise when other circumstances indicate that collection is not probable. Accrued but unpaid interest on our convertible loan due from a related party is included within Due from affiliates on our consolidated balance sheets. We estimate expected credit losses over the contractual term of the loan primarily by using methods that project future principal and interest cash flow using reasonable and supportable forecasts, discounted at the effective interest rate. An allowance for credit loss reflects the difference between the amortized cost and the present value of the expected cash flows of the loan.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)—Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)—Clarifying the Effective Date(“ASU 2025-01”). ASU 2024-03 requires public entities to provide disaggregated disclosure of certain income statement expense captions within the footnotes to the financial statements. ASU No. 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact ASU No. 2024-03, as clarified by ASU 2025-01 will have on our consolidated financial statements and disclosures.

In May 2025, the FASB issued ASU No. 2025-03,Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity(“ASU 2025-03”). ASU 2025-03 requires public business entities to assess which entity is the accounting acquirer for a business combination that is effected primarily by exchanging equity interest in which a VIE is acquired. ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are currently evaluating the impact ASU 2025-03 will have on our consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270)—Narrow Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. ASU 2025-11 is effective for interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact ASU 2025-11 will have on our consolidated financial statements and disclosures.

Note 3 –Leases

Lessor Accounting

We earn lease revenue from our residential, retail, office, and warehouse properties that are leased to tenants under operating leases. Certain of our leases may include options to extend or terminate the lease, which are included in the lease term when we are reasonably certain they will be exercised. Revenues from such leases are reported as Rental revenue in our consolidated statements of operations and are comprised of (i) lease components, which includes fixed and variable lease payments, and (ii) non-lease components which includes reimbursements of property level operating expenses. We have elected the practical expedient under Accounting Standards Codification Topic 842, Leases, to combine both lease and non-lease components, as the timing and pattern of transfer are the same.

Fixed lease revenues represent the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancelable term of the lease. Variable lease revenues include payments based on (i) tenant reimbursements, (ii) changes in the index or market-based indices after the inception of the lease, or (iii) percentage rents. Variable lease revenues are not recognized until the specific events that trigger the variable payments have occurred.

The following table summarizes the components of lease revenues (amounts in thousands):

In certain of our leases, the tenant is obligated to pay the real estate taxes, insurance, and certain other expenses directly to the vendor. These obligations, which have been assumed by the tenants, are not reflected in our consolidated financial statements. To the extent any such tenant defaults on its lease or if it is deemed probable that the tenant will fail to pay for such obligations, a liability for such obligations would be recorded.

We assess the collectability of substantially all lease payments due, including unbilled rent receivable balances, by reviewing a tenant’s payment history and financial condition, and the age of the receivables. Changes to collectability are recognized as a current period adjustment to rental revenue. We have assessed the collectability of all recorded lease revenues as probable as of June 30, 2026.

Note 4 –Related Party Arrangements

Tokeneke Transactions

On March 3, 2026, the Company, through our indirect wholly-owned subsidiary BPOZ 100 Tokeneke Holding, LLC (“BPOZ Tokeneke”), made a loan (the “BPOZ Tokeneke Loan”) in the principal amount of $5.0 million, evidenced by a convertible promissory note (the “BPOZ Tokeneke Note”), to 100 Tokeneke Road, LLC (“Tokeneke Road”). Tokeneke Road is managed by Tokeneke Manager LLC (the “Tokeneke Manager”), which has exclusive control over the business and affairs of Tokeneke Road. Our Chief Executive Officer controls Tokeneke Manager. Certain immediate family members of our Chief Executive Officer hold an indirect passive beneficial ownership interest in Tokeneke Road and a passive beneficial ownership interest in Tokeneke Manager. Tokeneke Road is recognized as an affiliate of the Company due to the fact that our Chief Executive Officer has the exclusive right to manage the business and affairs of Tokeneke Road through Tokeneke Manager. The BPOZ Tokeneke Loan bears interest at a rate of 3.6% per annum, computed on the basis of a 365/366-day year, and, unless earlier converted, is due and payable on March 3, 2028. The BPOZ Tokeneke Note is convertible, in whole or in part, in the sole discretion of BPOZ Tokeneke into that number of Class A units of 100 Tokeneke Partners, LLC (“Tokeneke Partners”) a direct holding company for Tokeneke Road, that equal the total amount then being converted, divided by $14.50 per Class A unit (the “Conversion Price”), subject to adjustment as provided in the BPOZ Tokeneke Note. The proceeds of the BPOZ Tokeneke Loan were immediately applied by Tokeneke Road in connection with consummation of its purchase of certain real property located at 100 Tokeneke Road, Darien, Connecticut (the “Property”). During the three and six months ended June 30, 2026, we recognized interest income of less than $0.1 million and less than $0.1 million, respectively, in connection with the BPOZ Tokeneke Loan.

Concurrently with our advancement of the BPOZ Tokeneke Loan, Belpointe Tokeneke Investment, LLC, an entity in which certain immediate family members of our Chief Executive Officer hold an indirect passive beneficial ownership interest (the “Related Party”), also made a loan (the “Related Party Loan”) in the principal amount of $3.3 million, evidenced by a convertible promissory note (the “Related Party Note”), to Tokeneke Road. The Related Party Loan bears interest at a rate of 3.6% per annum, computed on the basis of a 365/366-day year, and is due and payable on March 3, 2028. The Related Party Note contains a mandatory post-closing conversion clause which required $0.6 million of the principal balance of the Related Party Loan be converted into Class A units in Tokeneke Partners (the “Mandatory Conversion”). Following the Mandatory Conversion the Related Party became the 50% beneficial owner of Tokeneke Partners. The remaining balance of the Related Party Note is convertible, in whole or in part, in the sole discretion of the Related Party into that number of Class A units of Tokeneke Partners that equal the total amount then being converted divided by the Conversion Price, subject to adjustment as provided in the Related Party Note. The proceeds of the Related Party Loan were immediately applied by Tokeneke Road in connection with consummation of its purchase of the Property.

Our Joint Venture and other Co-Ownership Arrangements

Each of our investment assets has either an affiliate of our Sponsor or Manager, or their respective affiliates (together, the “Belpointe SP Group”), or an independent third party, or any combination of the foregoing, as the sponsor or co-sponsor, general partner or co-general partner, manager or co-manager, developer or co-developer of the investment asset, and our role, in general, is as a passive investor.

For the three and six months ended June 30, 2026 and 2025, members of the Belpointe SP Group did not make any contributions to our investments.

Our Relationship with Our Manager and Sponsor

Our Manager and its affiliates, including our Sponsor, receive fees or reimbursements in connection with our Follow-on Offering and the management of our investments.

The following table summarizes the fees incurred on our behalf by, and expenses reimbursable to, our Manager and its affiliates, including our Sponsor, in accordance with the terms of our relevant agreements with such parties (amounts in thousands):

The following table summarizes amounts included in Due to affiliates in our consolidated balance sheets (amounts in thousands):

Other Operating Expenses

Pursuant to the terms of a management agreement between us, our Operating Companies and our Manager (the “Management Agreement”), we reimburse our Manager, Sponsor and their respective affiliates for actual expenses incurred on our behalf in connection with the selection, acquisition or origination of investments, whether or not we ultimately acquire or originate an investment. We also reimburse our Manager, Sponsor and their respective affiliates for out-of-pocket expenses paid to third parties in connection with providing services to us.

Pursuant to an Amended and Restated Services and Cost Sharing Agreement by and among the Company, our Operating Companies, our Manager and our Sponsor Group (the “Services and Cost Sharing Agreement”), we reimburse our Sponsor Group and our Manager for expenses incurred for our allocable share of the salaries, benefits and overhead of personnel providing services to us. During the three months ended June 30, 2026 and 2025, our Manager and its affiliates, including the Sponsor Group, incurred operating expenses of $0.5 million and $0.4 million, respectively, on our behalf. During the six months ended June 30, 2026 and 2025, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $0.9 million and $0.9 million, respectively, on our behalf. The expenses are payable, at the election of the recipient, either in cash, by issuance of our Class A units at the then-current NAV, or through some combination of the foregoing. As of June 30, 2026, all expenses incurred since inception have been paid in cash.

Management Fee

Subject to the limitations set forth in our Amended and Restated Limited Liability Company Operating Agreement (our “Operating Agreement”) and the oversight of our Board, our Manager is responsible for managing our affairs on a day-to-day basis and for the origination, selection, evaluation, structuring, acquisition, financing and development of our commercial real estate properties, real estate-related assets, including but not limited to commercial real estate loans, and debt and equity securities issued by other real estate-related companies, as well as private equity acquisitions and investments, and opportunistic acquisitions of other qualified opportunity funds and qualified opportunity zone businesses.

Pursuant to the 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.

Property Management Oversight Fee

We, through the individual subsidiaries of our Operating Companies, pay our Manager, or an affiliate of our Manager, an annual property management oversight fee equal to 1.5% of revenues generated by the applicable property.

Development Fees and Reimbursements

Affiliates of our Sponsor are entitled to receive (i) development fees on each project in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project, and (ii) reimbursements for their expenses, such as employee compensation and other overhead expenses incurred in connection with the project.

During the three months ended June 30, 2026 and 2025, we incurred development fees earned during the construction phase of less than $0.1 million and $0.8 million, respectively. During the six months ended June 30, 2026 and 2025, we incurred development fees earned during the construction phase of less than $0.1 million and $1.7 million, respectively. As of June 30, 2026 and December 31, 2025, $2.7 million and $2.7 million, respectively, remained due and payable to our affiliates for development fees.

During the three months ended June 30, 2026 and 2025, we incurred operating reimbursement expenditures to our affiliates acting as development managers of $0.4 million and $0.5 million, respectively, of which zero and $0.2 million, respectively, is included in Real estate under construction in our consolidated balance sheets, and $0.4 million and $0.3 million, respectively, is included in General and administrative expenses in our consolidated statements of operations. During the six months ended June 30, 2026 and 2025, we incurred operating reimbursement expenditures to our affiliates acting as development managers of $0.8 million and $0.9 million, respectively, of which less than $0.1 million and $0.4 million, respectively, is included in Real estate under construction in our consolidated balance sheets, and $0.8 million and $0.5 million, respectively, is included in General and administrative expenses in our consolidated statements of operations. As of June 30, 2026 and December 31, 2025, $0.2 million and $0.6 million, respectively, remained due and payable to our affiliates for operating reimbursement expenditures.

Acquisition Fees

We will pay our Manager, Sponsor, or an affiliate of our Manager or Sponsor, an acquisition fee equal to 1.5% of the total value of any acquisition transaction, including any acquisition through merger with another entity (but excluding any transactions in which our Sponsor, or an affiliate of our Manager or Sponsor, would otherwise receive a development fee). We did not incur any acquisition fees during the three and six months ended June 30, 2026 and 2025.

Insurance

Certain immediate family members of our Chief Executive Officer have a passive indirect minority beneficial ownership interest in Belpointe Specialty Insurance, LLC (“Belpointe Specialty Insurance”). Belpointe Specialty Insurance has acted, and may continue to act, as our broker in connection with the placement of insurance coverage for certain of our properties and operations. Belpointe Specialty Insurance earns brokerage commissions related to the brokerage services that it provides to us, which commissions vary, are based on a percentage of the premiums that we pay and are set by the insurer. We have also engaged Belpointe Specialty Insurance to provide us with contract insurance consulting services related to owner-controlled insurance programs, for which we pay an administration fee. Management believes that the commissions that Belpointe Specialty Insurance earns are comparable to those commissions that we would pay to unaffiliated third parties in arms-length transactions.

During the three months ended June 30, 2026 and 2025, we obtained insurance coverage and paid premiums in the aggregate amount of less than $0.1 million and $0.5 million, respectively, from which Belpointe Specialty Insurance earned commissions and administrative fees of less than $0.1 million and less than $0.1 million, respectively. During the six months ended June 30, 2026 and 2025, we obtained insurance coverage and paid premiums in the aggregate amount of $0.1 million and $0.7 million, respectively, from which Belpointe Specialty Insurance earned commissions and administrative fees of less than $0.1 million and less than $0.1 million, respectively. Insurance premiums are prepaid and are included in Other assets on the consolidated balance sheets.

Economic Dependency

Under various agreements we have engaged our Manager and its affiliates, including in certain cases members of the Sponsor Group, to provide certain services that are essential to us, including asset management services, asset acquisition and disposition services, supervision of our Follow-on Offerings and any other offerings that we may conduct, as well as other administrative responsibilities for the Company, including, without limitation, accounting services and investor relations services. As a result of these relationships, we are dependent upon our Manager and its affiliates, including the Sponsor Group. In the event that our Manager and its affiliates are unable to provide us with the services we have engaged them to provide, we would be required to find alternative service providers.

Note 5 –Real Estate, Net

Real Estate Under Construction

The following table provides the activity of our Real estate under construction (amounts in thousands):

Non-cash Disclosures

For the six months ended June 30, 2026, non-cash investing activity relating to the development of real estate totaled $0.7 million and is included in Building and improvements in our consolidated balance sheets. For the six months ended June 30, 2025, non-cash investing activity relating to the development of real estate totaled $11.6 million, of which $10.6 million was included in Real estate under construction in our consolidated balance sheets, (inclusive of unpaid development fees of $1.7 million and unpaid employee cost sharing and reimbursements of less than $0.1 million), and $1.0 million was included in Building and improvements in our consolidated balance sheets.

Depreciation Expense

Depreciation expense was $3.0 million and $1.8 million for the three months ended June 30, 2026 and 2025, respectively, and $6.1 million and $3.6 million for the six months ended June 30, 2026 and 2025, respectively, and is included in Depreciation and amortization on the consolidated statements of operations.

Note 6 –Intangible Assets and Liabilities

Intangible assets and liabilities are summarized as follows (amounts in thousands):

In-place leases and development rights intangible assets, noted above, are included in Intangible assets on the consolidated balance sheets. Below-market lease liabilities, noted above, are included in Intangible liabilities, net on the consolidated balance sheets.

Amortization of in-place lease intangible assets was less than $0.1 million and less than $0.1 million for the three months ended June 30, 2026 and 2025, respectively, and less than $0.1 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively, and is included in Depreciation and amortization in the consolidated statements of operations.

Amortization of below-market lease liabilities was less than $0.1 million and less than $0.1 million for the three months ended June 30, 2026 and 2025, respectively, and less than $0.1 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively, and is included in Rental revenue in the consolidated statements of operations.

Note 7 –Debt, Net

2026 Debt Transactions

On June 10, 2026, we, through our indirect majority-owned subsidiaries, entered into a loan modification agreement (the “Loan Modification Agreement”) with KHRE SMA Funding, LLC, as lender, with respect to the fixed-rate loan secured by 900 8th Avenue South, Nashville, Tennessee (the “900 8th Land Loan”). The Loan Modification Agreement extends the maturity date of the 900 8th Land Loan from July 2, 2026 to July 2, 2027. In connection with the Loan Modification Agreement, we repaid $1.5 million in principal and paid $0.9 million in prepaid interest and fees. Refer to the table below for additional details regarding the 900 8th Land Loan.

2025 Debt Transactions

On September 29, 2025, we, through our indirect majority-owned subsidiaries, entered into a variable-rate non-recourse mortgage loan providing for up to $163.3 million in principal amount (the “Aster & Links Mortgage Loan”), and a variable-rate non-recourse mezzanine loan providing for up to $40.8 million in principal amount (the “Aster & Links Mezzanine Loan”, and together with the Aster & Links Mortgage Loan, the “Aster & Links Loans”) with SM Finance III LLC, as lender.

The following table details our Debt, net (dollars in thousands):

The following table summarizes the scheduled future principal payments, excluding extension options, under our debt arrangements as of June 30, 2026 (amounts in thousands):

Interest paid, net of capitalized interest for the six months ended June 30, 2026 and 2025, was $9.5 million and $7.5 million, respectively.

Amortization of deferred financing costs for the three months ended June 30, 2026 and 2025, was $0.7 million and $0.7 million, respectively, of which zero and $0.2 million was capitalized, respectively. Amortization of deferred financing costs for the six months ended June 30, 2026 and 2025 was $1.4 million and $1.5 million, respectively, of which zero and $0.4 million was capitalized, respectively.

Guarantees and Covenants

Each of our indebtedness agreements are secured by either the individual underlying real estate investments or by a pledge of ownership interests in the entity that indirectly owns the real estate investment. In connection with certain agreements, we have provided guarantees of payment and performance, completion guarantees, which, among other things, guarantee completion of the work at each individual construction project, as well as carveout guarantees pursuant to which we guarantee the borrower’s obligations with respect to certain non-recourse carveout events, such as “bad acts,” environmental conditions, and violations of certain provisions of the loan documents. We also provided a customary environmental indemnity agreement to the certain lenders pursuant to which we agreed to protect, defend, indemnify, release and hold harmless such lenders from and against certain environmental liabilities related to the real estate investments for which they apply.

We are subject to various financial and operational covenants in connection with the Aster & Links Loans and 1000 First Construction Loan which include, but are not limited to, maintaining liquid assets of no less than $10.0 million and a net worth of no less than $110.0 million. As of June 30, 2026, and December 31, 2025, we were in compliance with all of our loan covenants.

Note 8 –Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date under current market conditions (i.e., the exit price).

We categorize our financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities.

Level 2 – Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs).

Level 3 – Valuation generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow methodologies or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation.

Recurring Fair Value Measurements

Assets measured at fair value on a recurring basis is comprised of our interest rate caps (see Note 9 – Derivative Instruments). The valuation of our interest rate caps were determined by management based on a valuation prepared by an independent third-party and is classified as Level 2 in the fair value hierarchy, as the valuation is approximated using market values of similar instruments in active markets.

The following table sets forth the carrying value and estimated fair value of our debt payables and receivable arrangements as of June 30, 2026 and December 31, 2025, respectively (amounts in thousands):

We estimated that our other financial assets and liabilities had fair values that approximated their carrying values as of June 30, 2026 and December 31, 2025.

Note 9 –Derivative Instruments

In connection with our 1000 First Construction Loan, Aster & Links Mortgage Loan and Aster & Links Mezzanine Loan (collectively, the “Variable Rate Loans”) (see Note 7 – Debt, Net), we are required to obtain and maintain interest rate protection in the form of interest rate caps during the term of the Variable Rate Loans to effectively limit the impact of increases in the one-month SOFR. We are subject to credit risk by the counterparty of these derivative instruments in the event of non-performance under the derivative contracts, however we believe the risk to be minimal.

The following table details our derivative financial instruments as of June 30, 2026 (dollars in thousands):

The following table details the fair value of our derivative financial instruments (amounts in thousands):

The following table details the effect of our derivative financial instruments on our consolidated statements of operations (amounts in thousands):

Note 10 –Members’ Capital

Our Operating Agreement generally authorizes our Board to issue an unlimited number of units and options, rights, warrants and appreciation rights relating to such units for consideration or for no consideration and on the terms and conditions as determined by our Board, in its sole discretion, in most cases without the approval of our members. These additional securities may be used for a variety of purposes, including in future offerings to raise additional capital and acquisitions. Our Operating Agreement currently authorizes the issuance of anunlimited number of Class A units,100,000 Class B units andone Class M unit.

During the three months ended June 30, 2026 and 2025, we issued 11,798 and 56,073 Class A units, respectively. During the six months ended June 30, 2026 and 2025, we issued 73,206 and 60,288 Class A units, respectively. As of June 30, 2026 and December 31, 2025, there were 3,909,902 and 3,836,696 Class A units, respectively,100,000 Class B units and one Class M unit issued and outstanding.

Class A units

Upon payment in full of any consideration payable with respect to the initial issuance of our Class A units, the holder thereof will not be liable for any additional capital contributions to the Company. Holders of Class A units are not entitled to preemptive, redemption or conversion rights. Holders of our Class A units are entitled to one vote per unit on all matters submitted to a vote of our members. Matters must generally be approved by a majority (or, in the case of the election of directors, by a plurality) of the votes entitled to be cast.

Holders of our Class A units share ratably in any distributions we make, subject to any statutory or contractual restrictions on distributions and to any restrictions on distributions imposed by the terms of any preferred units we issue.

Upon our dissolution, liquidation or winding up, after payment of all amounts required to be paid to creditors and holders of preferred units, if any, holders of our Class A units are entitled to receive our remaining assets available for distribution.

Class B units

All of our Class B units are currently held by our Manager and were issued on September 14, 2021. Holders of our Class B units are not entitled to preemptive, redemption or conversion rights. Holders of our Class B units are entitled to one vote per unit on all matters submitted to a vote of our members. Matters must generally be approved by a majority (or, in the case of the election of directors, by a plurality) of the votes entitled to be cast.

Holders of our Class B units are entitled to share ratably as a class in 5% of any gains recognized by, or distributed to, the Company or recognized by or distributed from our Operating Companies or any subsidiary or other entity related to the Company, regardless of whether the holders of our Class A units have received a return of their capital. The allocation and distribution rights that the holders of our Class B units are entitled to may not be amended, altered or repealed, and the number of authorized Class B units may not be increased or decreased, without the consent of the holders of our Class B units. In addition, our Manager, or any other holder of our Class B units, will continue to hold the Class B units even if our Manager is no longer our manager.

Upon our dissolution, liquidation or winding up, after payment of all amounts required to be paid to creditors and holders of preferred units, if any, holders of our Class B units will be entitled to receive any accrual of gains or distributions otherwise distributable pursuant to the terms of the Class B units, regardless of whether the holders of our Class A units have received a return of their capital.

Class M unit

The Class M unit is currently held by our Manager and was issued on September 14, 2021. The holder of our Class M unit is not entitled to preemptive, redemption or conversion rights. The holder of our Class M unit is entitled to that number of votes equal to the product obtained by multiplying (i) the sum of the aggregate number of outstanding Class A units plus Class B units, by (ii) 10, on matters on which the Class M unit has a vote. Our Manager will continue to hold the Class M unit for so long as it remains our manager.

The holder of our Class M unit does not have any right to receive ordinary, special or liquidating distributions.

Preferred units

Under our Operating Agreement, our Board may from time to time establish and cause us to issue one or more classes or series of preferred units and set the designations, preferences, rights, powers and duties of such classes or series.

Basic and Diluted Loss Per Class A Unit

For the three months ended June 30, 2026 and 2025, the basic and diluted weighted-average units outstanding were the same and were 3,902,089 and 3,696,709, respectively. For the three months ended June 30, 2026 and 2025, net loss attributable to Class A units was $9.2 million and $7.6 million, respectively, and the loss per basic and diluted unit was $2.37 and $2.06, respectively. For the six months ended June 30, 2026 and 2025, the basic and diluted weighted-average units outstanding were the same and were 3,890,731 and 3,681,439, respectively. For the six months ended June 30, 2026 and 2025, net loss attributable to Class A units was $19.9 million and $16.2 million, respectively, and the loss per basic and diluted unit was $5.12 and $4.41, respectively.

Tokeneke Letter Agreement

The Company entered into a letter agreement, effective January 6, 2026, (the “Letter Agreement”) with the unaffiliated 50% equity holder of Tokeneke Partners (the “Unaffiliated Member”), pursuant to which the Company and the Unaffiliated Member were each granted put and call rights with respect to the Unaffiliated Member’s equity interest totaling $3.5 million in Tokeneke Partners (see Note 4 – Related Party Arrangements) in exchange for Class A units of the Company issued at a price per Class A unit equal to the average of the high and low sale prices of our Class A units on the NYSE during regular trading hours on the last trading day immediately preceding the put or call date on which the NYSE was open for trading and trading in our Class A units occurred. As set forth in the Letter Agreement, the Unaffiliated Member, shall have the right to sell its 50% equity interest in Tokeneke Partners, in whole or in part, at any point prior to May 31, 2027. In addition, the Company has the right to require the Unaffiliated Member to sell, in whole or in part, its equity interest in Tokeneke Partners during the period commencing on June 1, 2027 and ending on December 31, 2027. Accordingly, as of June 30, 2026, the Company recorded $3.5 million within Accrued expenses and other liabilities and Other assets on our consolidated balance sheets, representing the value of the put and call option associated with the Unaffiliated Member’s interest.

Redeemable Noncontrolling Interest

On March 9, 2026, we, through CMC Storrs SPV, LLC, (“CMC”), the holding company for our investment property located at 497-501 Middle Turnpike, Storrs, Connecticut (“497-501 Middle”), entered into a letter agreement (the “CMC Letter Agreement”) with an entity holding Class A preferred equity (the “Class A Preferred Equity”), representing a non-voting economic interest in CMC. Pursuant to the CMC Letter Agreement, the Class A Preferred Equity was redeemed in accordance with the terms of CMC’s Amended and Restated Limited Liability Company Agreement for an aggregate amount of $1.6 million, representing the entities original investment together with all accrued and unpaid preferred returns thereon through the date of the CMC Letter Agreement.

Note 11 –Commitments and Contingencies

Litigation

From time to time the Company may become involved in certain non-material litigation, as described below, or other claims arising in the ordinary course of business. As of June 30, 2026, neither we nor any of our subsidiaries were subject to any material legal proceedings nor were we aware of any material legal proceedings threatened against us or any of our subsidiaries.

JZ Investments, Inc. Litigation

On April 24, 2026, JZ Investments, Inc., a Connecticut corporation (“JZ Investments”), individually and derivatively as an equity holder of CMC QOF I, LLC, a Delaware limited liability company, filed a complaint in Connecticut State Superior Court naming us, one of our Operating Companies, BPOZ Storrs Holding, LLC, and CMC as defendants alongside Chen Ji, an individual (“Chen”). In the complaint JZ Investments alleges, among other things, that Chen acted fraudulently and we acted negligently, in violation of the Connecticut Unfair Trade Practices Act, and in breach of the implied covenant of good faith and fair dealing, fraudulent transfer and unjust enrichment when entering into a settlement agreement with JZ Investments. JZ Investments is seeking, among other things, restoration of its preferred equity interest in CMC, certain declaratory relief as well as damages, attorneys’ fees, and costs and expenses related thereto.

On May 28, 2026, we filed a motion to dismiss, seeking to dismiss the complaint for lack of personal jurisdiction and insufficiency of service of process. On June 8, 2026, JZ Investments filed a motion to amend the return date, seeking for the return date to be amended to May 12, 2026 in order to comply with the relevant Connecticut statute and to negate our motion to dismiss. In June 2026, the parties filed objections and replies to the motions, and the court has scheduled a hearing for September 14, 2026 on our motion to dismiss and related papers.

We dispute any liability in the JZ Investments litigation and intend to vigorously defend the matter.

The Galinn Fund LLC

On December 5, 2024, the Galinn Fund LLC, a New York limited liability company (“Galinn”), filed a complaint in Connecticut State Superior Court naming CMC, as a defendant, alongside Chen, and two additional entities (the “Guarantors”).

In the complaint Galinn alleges, among other things, that on May 24, 2024, Chen, on behalf of CMC, executed a mortgage note (the “Note”) in the principal amount of $3.0 million (the “Loan”), which was secured in part by a mortgage against 497-501 Middle (the “Mortgage”). Galinn further alleges that CMC is in default under both the Note and Mortgage for failure to make payments when due. Galinn is seeking to foreclose on the Mortgage and damages against CMC and the Guarantors.

In March 2020, when we first acquired an equity interest in CMC, Chen was an affiliate of the entity, however, he thereafter exited the investment and is no longer in any way affiliated with or authorized to act on behalf of CMC. We maintain that the Loan was obtained as a result of Chen’s fraud and Galinn’s negligence, and had Galinn done adequate due diligence, or reviewed the publicly available filings on the State of Connecticut’s Business Records website, or even a basic Google search, Chen’s lack of authority would have been readily apparent prior to Galinn having made the Loan.

On September 15, 2025, CMC filed an amended counterclaim and cross complaint against Chen and Galinn alleging, among other things, fraud, wrongful conduct, theft, conversion, forgery, slander and violations of the Connecticut Unfair Trade Practices Act, and seeking certain declaratory relief as well as damages, attorneys’ fees, and costs and expenses related thereto.

We dispute any liability in this litigation, believe we have substantial defenses to Galinn’s claims, and continue to vigorously defend the matter.

Development Projects

In connection with the development of Aster & Links and VIV, we have entered into separate construction management agreements for each asset which contain terms and conditions that are customary for the related scope of work. As of June 30, 2026, we have an aggregate unfunded commitment of $3.7 million under these two development projects. As of June 30, 2026, $3.0 million of retainage was outstanding and payable in connection with these developments.

Note 12 –Segment Reporting

We identify our operating segments based on the way we organize and evaluate our business, which consists of:

Our CODM reviews financial information presented on an operating segment basis for purposes of allocating resources, making decisions and assessing financial performance.

We believe that analyzing net operating income (loss) by segment (“Segment NOI”) provides a useful measure of our performance of our business, as it reflects the core rental operations of our operating real estate. Segment NOI is calculated as total revenues, less property expenses, excluding corporate level items, such as management fees incurred to our Manager (see Note 4 – Related Party Arrangements), depreciation and amortization, general and administrative expenses, interest expense, and other non-operating items.

The following table details the unaudited results of Segment NOI, reconciled to Net loss as reported on our consolidated statements of operations for the three months ended June 30, 2026 and 2025 (amounts in thousands):

The following table details the unaudited significant expense categories by segment for the three months ended June 30, 2026 and 2025 (amounts in thousands):

The following table details the unaudited results of Segment NOI, reconciled to our consolidated statements of operations for the six months ended June 30, 2026 and 2025 (amounts in thousands):

The following table details the unaudited significant expense categories by segment for the six months ended June 30, 2026 and 2025 (amounts in thousands):

The following table details our total assets by segment as of June 30, 2026, and December 31, 2025 (amounts in thousands):

Note 13 –Subsequent Events

Management has evaluated subsequent events to determine if events or transactions occurring after the consolidated balance sheet date through the date the consolidated financial statements were issued require potential adjustment to or disclosure in the consolidated financial statements and has concluded that all such events or transactions that would require recognition or disclosure have been recognized or disclosed.