CIM REAL ESTATE FINANCE TRUST INC

Previous wording

As of March 31, 2024, our loan portfolio consisted of 254 loans with a net book value of $4.1 billion, and 25 investments in CMBS and equity securities of $513.5 million. The Company expects to conduct its commercial real estate lending business through CLR, a Maryland statutory trust and subsidiary of the Company which we expect to be taxed as a REIT for U.S. federal income tax purposes. As of March 31, 2024, CLR holds a diversified portfolio of approximately $1.6 billion of the Company’s senior secured mortgage loans and commercial mortgage-backed securities.

Current wording

As of June 30, 2024, our loan portfolio consisted of 210 loans with a net book value of $3.8 billion, and 21 investments in CMBS and equity securities of $404.4 million. The Company conducts and expects to continue to conduct its commercial real estate lending business through CLR, a Maryland statutory trust and subsidiary of the Company which we expect to be taxed as a REIT for U.S. federal income tax purposes. As of June 30, 2024, CLR holds a diversified portfolio of approximately $1.5 billion of the Company’s senior secured mortgage loans and commercial mortgage-backed securities.

Previous wording

As of March 31, 2024, we owned 192 properties, which consisted of 179 retail properties, eight office properties, and five industrial properties, representing 17 industry sectors and comprising approximately 6.2 million rentable square feet of commercial space located in 37 states, with a net book value of $1.1 billion. As of March 31, 2024, we owned condominium developments with a net book value of $80.1 million.

Current wording

As of June 30, 2024, we owned 190 properties, which consisted of 178 retail properties, seven office properties, and five industrial properties, representing 17 industry sectors and comprising approximately 6.0 million rentable square feet of commercial space located in 36 states, with a net book value of $1.0 billion. As of June 30, 2024, we owned condominium developments with a net book value of $70.0 million.

Previous wording

During the three months ended March 31, 2024, we did not dispose of any properties, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Current wording

During the six months ended June 30, 2024, we disposed of two properties encompassing approximately 182,000 gross rentable square feet, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Previous wording

Our operating results and cash flows are primarily influenced by interest income from our credit investments, rental and other property income from our commercial properties, interest expense on our indebtedness and credit investments and related expenses. In general, our business model is such that rising interest rates will correlate to increases in our net income, while declining interest rates will correlate to decreases in our net income. As of March 31, 2024, 99.3% of our CMBS and loans held-for-investment by net book value earned a floating rate of interest, indexed to SOFR, and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. CMFT Management reviews our investment portfolio and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. In addition, as 99.9% of our rentable square feet was under lease, including any month-to-month agreements, as of March 31, 2024, with a weighted average remaining lease term of 10.5 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors. Our manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If our manager identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

Current wording

Our operating results and cash flows are primarily influenced by interest income from our credit investments, rental and other property income from our commercial properties, interest expense on our indebtedness and credit investments and related expenses. In general, our business model is such that rising interest rates will correlate to increases in our net income, while declining interest rates will correlate to decreases in our net income. As of June 30, 2024, 99.2% of our CMBS and loans held-for-investment by net book value earned a floating rate of interest, indexed to SOFR, and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. CMFT Management reviews our investment portfolio and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. In addition, as 100.0% of our rentable square feet was under lease, including any month-to-month agreements, as of June 30, 2024, with a weighted average remaining lease term of 10.5 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors. Our manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If our manager identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

Previous wording

Thethree months ended March 31, 2024 have been characterized by a mix of positive and challenging developments leading to continued volatility in global markets. Investor concerns over inflation, high interest rates, slowing economic growth, political and regulatory uncertainty and geopolitical conditions have persisted. If inflation and other economic indicators do not meet central banks’ relevant expectations, interest rates could remain higher for longer than expected by market participants and observers, which could create further uncertainty for the economy and our borrowers.

Current wording

Thesix months ended June 30, 2024 have been characterized by a mix of positive and challenging developments leading to continued volatility in global markets. Investor concerns over inflation, higher interest rates, slowing economic growth, political and regulatory uncertainty and geopolitical conditions have persisted.

Previous wording

Continued inflation caused the Federal Reserve to raise interest rates in 2022 and 2023, and while the Federal Reserve has left interest rates unchanged since its July 26, 2023 meeting, interest rates are expected to remain at an elevated level in the near-term, which has created further uncertainty for the economy and for our borrowers and tenants. Although the majority of our business model is such that rising interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers, tenants and owned property values. Additionally, rising rates and increasing costs may dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans and the ability of our tenants to pay rent. While there is debate among economists as to whether such factors indicate that the U.S. will enter a recession, it remains difficult to predict the full impact of recent changes and any future changes in interest rates or inflation.

Current wording

Continued inflation caused the Federal Reserve to raise interest rates in 2022 and 2023. Although the majority of our business model is such that elevated interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers, tenants and owned property values. The Federal Reserve has indicated that it may decrease interest rates in 2024. In a period of declining interest rates, our interest income on floating-rate investments may generally decrease, subject to the impact of interest rate floors in our investment portfolio

Previous wording

•Declared aggregate distributions of $0.11 per share.

Current wording

•Declared aggregate distributions of $0.23 per share.

Previous wording

•Funded $10.0 million in existing first mortgage loans.

Current wording

•Funded $34.3 million in existing first mortgage loans.

Previous wording

•Invested $5.6 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $74.1 million.

Current wording

•Invested $7.2 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $120.0 million.

Previous wording

•Invested $11.8 million in corporate senior loans.

Current wording

•Invested $12.4 million in corporate senior loans.

Previous wording

•Received principal repayments on loans held-for-investment of $46.3 million.

Current wording

•Received principal repayments on loans held-for-investment of $136.6 million.

Previous wording

•Received repayments on CMBS of $3.2 million.

Current wording

•Received repayments on CMBS of $96.2 million.

Previous wording

•Funded an additional $12.0 million in NP JV Holdings.

Current wording

•Funded an additional $26.8 million in NP JV Holdings.

Previous wording

•Disposed of four condominium units for an aggregate sales price of $13.2 million.

Current wording

•Disposed of eight condominium units for an aggregate sales price of $27.1 million.

Previous wording

•Decreased total debt by $35.5 million.

Current wording

•Decreased total debt by $148.2 million.

Previous wording

(1)Table does not include our investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies — Investment in Unconsolidated Entities to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q), which had a carrying value of $138.3 million as of March 31, 2024.

Current wording

(1)Table does not include our investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies — Investment in Unconsolidated Entities to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q), which had a carrying value of $152.3 million as of June 30, 2024.

Previous wording

(3)Table does not include our investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies — Investment in Unconsolidated Entities to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q), which had a carrying value of $138.3 million as of March 31, 2024.

Current wording

(3)Table does not include our investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies — Investment in Unconsolidated Entities to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q), which had a carrying value of $152.3 million as of June 30, 2024.

Previous wording

As of March 31, 2024, we owned 192 properties located in 37 states, the gross rentable square feet of which was 99.9% leased, including any month-to-month agreements, with a weighted average lease term remaining of 10.5 years. As of March 31, 2024, no single tenant accounted for greater than 10% of our 2024 annualized rental income. As of March 31, 2024, we had certain geographic and industry concentrations in our property holdings. In particular, we had properties located in Ohio, which accounted for 16% of our 2024 annualized rental income. In addition, we had tenants in the health and personal care stores, manufacturing, and sporting goods, hobby, and musical instrument retailers industries, which accounted for 14%, 12%, and 11%, respectively, of our 2024 annualized rental income. During the three months ended March 31, 2024, we sold four condominium units for a gross sales price of $13.2 million.

Current wording

As of June 30, 2024, we owned 190 properties located in 36 states, the gross rentable square feet of which was 100.0% leased, including any month-to-month agreements, with a weighted average lease term remaining of 10.5 years. As of June 30, 2024, we had certain tenant, geographic and industry concentrations in our property holdings. As of June 30, 2024, one of the Company’s tenants, CVS, accounted for 10% of our 2024 annualized rental income across 33 properties. As of June 30, 2024, we had properties located in Ohio, which accounted for 17% of our 2024 annualized rental income. In addition, we had tenants in the health and personal care stores, manufacturing, and sporting goods, hobby, and musical instrument retailers industries, which accounted for 15%, 12%, and 12%, respectively, of our 2024 annualized rental income. During the six months ended June 30, 2024, we disposed of two properties for an aggregate gross sales price of $53.9 million as well as eight condominium units for a gross sales price of $27.1 million.

Previous wording

The following table compares our summarized results of operations for the three months ended March 31, 2024 and 2023 by operating segment (amounts in thousands):

Current wording

The following table compares our summarized results of operations for the three and six months ended June 30, 2024 and 2023 by operating segment (amounts in thousands):

Previous wording

The increase in our Credit segment revenues of $1.8 million for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to increased average index rates during 2024, as well as an increase in the overall size of our investment portfolio. As of March 31, 2024, we held $4.6 billion in credit investments compared to $4.5 billion in credit investments as of March 31, 2023. The increase was partially offset by the suspension of interest income on our risk-rated 5 loans placed on nonaccrual status subsequent to March 31, 2023.

Current wording

Our Credit segment revenues decreased $16.7 million for the three months ended June 30, 2024, as compared to the same period in 2023. The decrease was primarily due to the suspension of interest income on three of our risk-rated 5 first mortgage loans with a carrying value of $436.1 million that were placed on nonaccrual status subsequent to June 30, 2023, as well as a decrease in the overall size of our investment portfolio during the three months ended June 30, 2024 as compared to the same period in 2023. As of June 30, 2024, we held credit investments with an outstanding principal balance of $4.8 billion compared to credit investments with an outstanding principal balance of $5.0 billion as of June 30, 2023.

Previous wording

Expenses for our Credit segment consist primarily of interest expense, management fees, increases (decreases) to our provision for credit losses, and general and administrative expenses. The increase in our Credit segment expenses of $72.5 million for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to a $65.7 million increase in the provision for credit losses during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, driven by a net increase in the asset-specific credit loss provision of $70.3 million on funded amounts during the three months ended March 31, 2024. The increase was further driven by a $5.7 million increase in interest expense primarily due to higher average index rates during 2024.

Current wording

Expenses for our Credit segment consist primarily of interest expense, management fees, increases (decreases) to our provision for credit losses, and general and administrative expenses. The increase in our Credit segment expenses of $169.5 million for the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to a $167.3 million increase in the provision for credit losses during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, primarily due to the asset-specific credit loss provision of $197.1 million on funded and unfunded commitments recognized on eight of the Company’s first mortgage loan investments during the three months ended June 30,

Previous wording

Other (expense) income for our Credit segment consists of gain (loss) on investment in unconsolidated entities, unrealized (loss) gain on equity securities, along with dividend income from our equity securities. The decrease in our Credit segment other (expense) income of $10.0 million during the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to recognizing an $11.4 million unrealized loss on equity securities during the three months ended March 31, 2024, as compared to a $2.3 million unrealized gain on equity securities for the same period in 2023. The change was partially offset by the recognition of a $2.5 million gain on investment in unconsolidated entities during the three months ended March 31, 2024, as compared to a $770,000 loss on investment in unconsolidated entities for the same period in 2023.

Current wording

Other income for our Credit segment consists of gain on investment in unconsolidated entities, unrealized (loss) gain on equity securities, along with dividend income from our equity securities. The decrease in our Credit segment other income of $9.4 million during the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to recognizing a $4.2 million unrealized loss on equity securities during the three months ended June 30, 2024, as compared to a $3.1 million unrealized gain on equity securities for the same period in 2023. The change was further driven by a $3.1 million decrease in gain on investment in unconsolidated entities during the three months ended June 30, 2024, as compared to the same period in 2023.

Previous wording

The decrease in our Real Estate segment revenues of $14.3 million for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to the disposition of 36 properties subsequent to March 31, 2023. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Current wording

The decrease in our Real Estate segment revenues of $2.1 million for the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to the disposition of five properties subsequent to June 30, 2023. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Previous wording

The decrease in our Real Estate segment expenses of $14.8 million for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to the disposition of 36 properties subsequent to March 31, 2023. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”. The decrease was also driven by a decrease in impairment charges of $4.8 million for the three months ended March 31, 2024, as compared to the same period in 2023, as there were no properties deemed to be impaired during the three months ended March 31, 2024, compared to one property that was deemed to be impaired during the three months ended March 31, 2023, resulting in impairment charges of $4.8 million.

Current wording

The increase in our Real Estate segment expenses of $51.9 million for the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to an increase in impairment charges of $51.5 million for the three months ended June 30, 2024, as compared to the same period in 2023, as there were no properties deemed to be impaired during the three months ended June 30, 2023, compared to seven properties that were deemed to be impaired during the three months ended June 30, 2024, due to sales prices or revised cash flow estimates that were less than their respective carrying values. The increase was partially offset by the disposition of five properties subsequent to June 30, 2023. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Previous wording

Other income for our Real Estate segment primarily consists of gain on disposition of real estate and condominium developments, net, loss on extinguishment of debt and other income, net. The decrease in our Real Estate segment other income of $16.5 million for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to no properties being disposed of during the three months ended March 31, 2024, compared to the disposition of 152 properties resulting in a net gain of $19.6 million during the three months ended March 31, 2023. The decrease was partially offset due to $1.9 million of unrealized loss on interest rate caps included in other income, net on the condensed consolidated statements of operations for the three months ended March 31, 2023. The decrease was further offset by $1.2 million of loss on extinguishment of debt recognized during the three months ended March 31, 2023, driven by the termination of certain mortgage loans in connection with the disposition of the underlying properties.

Current wording

Other income for our Real Estate segment primarily consists of gain on disposition of real estate and condominium developments, net, loss on extinguishment of debt and other income, net. The decrease in our Real Estate segment other income of $21.8 million for the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to the disposition of two properties resulting in no gain or loss during the three months ended June 30, 2024, compared to the disposition of 33 properties resulting in a net gain of $24.3 million during the three months ended June 30, 2023. The decrease was partially offset due to $2.4 million of unrealized loss on interest rate caps included in other income, net on the condensed consolidated statements of operations for the three months ended June 30, 2023.

Previous wording

The increase in corporate other income (expense) of $4.1 million during the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to $2.5 million in loss on extinguishment of debt recognized during the three months ended March 31, 2023, driven by the paydown and termination of the CMFT Credit Facility. The increase was further driven by an increase in other income, net of $952,000 due to interest income generated by an increase in short-term liquid investments included in cash and cash equivalents on the condensed consolidated balance sheets during the three months ended March 31, 2024, as compared to the same period in 2023. The increase was also driven by the disposition of four condominium units resulting in a net gain of $782,000 during the three months ended March 31, 2024, compared to the disposition of one condominium unit for a gain of $60,000 for the three months ended March 31, 2023.

Current wording

June 30, 2023, driven by the partial paydown of the Assumed Variable Rate Debt during the three months ended June 30, 2023. The increase was further driven by the disposition of four condominium units resulting in a net gain of $2.5 million during the three months ended June 30, 2024, compared to the disposition of nine condominium units for a gain of $2.3 million for the three months ended June 30, 2023. The increase was partially offset by a decrease in other income, net of $828,000 primarily due to a decrease in interest income generated by decreased short-term liquid investments included in cash and cash equivalents on the condensed consolidated balance sheets during the three months ended June 30, 2024, as compared to the same period in 2023.

Previous wording

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, increased $51,000 during the three months ended March 31, 2024 as compared to the same period in 2023, primarily due to rental credits issued to tenants during the three months ended March 31, 2023 in relation to ongoing onsite condominium and rental unit construction.

Current wording

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, increased $29,000 during the six months ended June 30, 2024 as compared to the same period in 2023, primarily due to rental credits issued to tenants during the six months ended June 30, 2023 in relation to ongoing onsite condominium and rental unit construction.

Previous wording

Our corporate expenses consist primarily of general and administrative expenses, expense reimbursements to related parties, interest expense, net related to our credit facilities, and property operating expenses related to our condominium and rental units acquired via foreclosure. The increase in corporate expenses of $276,000 during the three months ended March 31, 2024 as compared to the same period in 2023, was partially due to an increase in property operating expenses of $2.1 million, primarily driven by increased condominium-related legal fees during the three months ended March 31, 2024 as compared to the same period in 2023. The change was also driven by an increase of $2.1 million in general and administrative expenses during the three months ended March 31, 2024 as compared to the same period in 2023, primarily in connection with restricted stock unit related expense recorded during the three months ended March 31, 2024 as compared to the same period in 2023. The increase was partially offset by a decrease in interest expense, net of $4.1 million during the three months ended March 31, 2024 as compared to the same period in 2023, driven by the pay down and termination of the credit agreement with JPMorgan Chase Bank, N.A. and PNC Bank, N.A. (the “CMFT Credit Facility”) during the three months ended March 31, 2023.

Current wording

Our corporate expenses consist primarily of general and administrative expenses, expense reimbursements to related parties, interest expense, net related to our credit facilities, and property operating expenses related to our condominium and rental units acquired via foreclosure. The increase in corporate expenses of $6.0 million during the six months ended June 30, 2024 as compared to the same period in 2023, was partially due to $5.5 million in impairment charges related to condominium units during the six months ended June 30, 2024. There were no impairments related to condominium units during the six months ended June 30, 2023. The increase was further driven by an increase of general and administrative expenses of $3.8 million, primarily in connection with restricted stock unit expenses recorded during the six months ended June 30, 2024 as well as a $1.8 million increase in property operating expenses during the six months ended June 30, 2024 as compared to the same period in 2023, primarily driven by increased condominium-related legal fees during the six months ended June 30, 2024 as compared to the same period in 2023. The increase was partially offset by a $4.4 million decrease in interest expense, net driven by the pay down and termination of the credit agreement with JPMorgan Chase Bank, N.A. and PNC Bank, N.A. (the “CMFT Credit Facility”) during the six months ended June 30, 2023 and the paydown and termination of the Assumed Variable Rate Debt subsequent to June 30, 2023.

Previous wording

A total of 192 properties were acquired before January 1, 2023 and represent our “same store” properties during the three months ended March 31, 2024 and 2023. “Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after January 1, 2023.

Current wording

A total of 190 properties were acquired before April 1, 2023 and represent our “same store” properties during the three months ended June 30, 2024 and 2023. “Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after April 1, 2023.

Previous wording

The following table details the components of our Real Estate segment net operating income broken out between same store and non-same store properties (dollar amounts in thousands):

Current wording

The following table details the components of our Real Estate segment net operating income broken out between same store and non-same store properties (in thousands):

Previous wording

Our Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, during the year ended December 31, 2023 and the three months ended March 31, 2024 for the periods indicated below:

Current wording

Our Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, during the year ended December 31, 2023 and the six months ended June 30, 2024 for the periods indicated below:

Previous wording

As of March 31, 2024, we had distributions payable of $16.5 million.

Current wording

As of June 30, 2024, we had distributions payable of $16.6 million.

Previous wording

(1)Net cash provided by operating activities for the three months ended March 31, 2024 and 2023 was $50.7 million and $65.1 million, respectively.

Current wording

(1)Net cash provided by operating activities for the six months ended June 30, 2024 and 2023 was $86.1 million and $110.1 million, respectively.

Previous wording

Our share redemption program permits our stockholders to sell their shares of common stock back to us, subject to certain conditions and limitations. We will limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited, among other things, to the net proceeds we receive from the sale of shares under our DRIP, net of shares redeemed to date. In an effort to accommodate redemption requests throughout the calendar year, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. We will determine whether we have sufficient funds and/or shares available as soon as practicable after the end of each fiscal quarter, but in any event prior to the applicable payment date. If we cannot purchase all shares presented for redemption in any fiscal quarter, based upon insufficient cash available from the sale of shares under our DRIP and/or the limit on the number of shares we may redeem during any quarter or year, we will give priority to the redemption of deceased stockholders’ shares and stockholders with exigent circumstances, as determined in our sole discretion and accompanied by such evidentiary documentation as we may request. While the shares of deceased stockholders and stockholders determined to have exigent circumstances will be included in calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps; therefore, if the volume of requests to redeem deceased stockholders’ shares and stockholders determined to have exigent circumstances in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares and stockholders determined to have exigent circumstances would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available. If sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares and shareholders determined to have exigent circumstances would be honored on a pro ra…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Our share redemption program permits our stockholders to sell their shares of common stock back to us, subject to certain conditions and limitations. We will limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited, among other things, to the net proceeds we receive from the sale of shares under our DRIP, net of shares redeemed to date. In an effort to accommodate redemption requests throughout the calendar year, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. We will determine whether we have sufficient funds and/or shares available as soon as practicable after the end of each fiscal quarter, but in any event prior to the applicable payment date. If we cannot purchase all shares presented for redemption in any fiscal quarter, based upon insufficient cash available from the sale of shares under our DRIP and/or the limit on the number of shares we may redeem during any quarter or year, we will give priority to the redemption of deceased stockholders’ shares and stockholders with exigent circumstances, as determined in our sole discretion and accompanied by such evidentiary documentation as we may request. While the shares of deceased stockholders and stockholders determined to have exigent circumstances will be included in calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps; therefore, if the volume of requests to redeem deceased stockholders’ shares and stockholders determined to have exigent circumstances in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares and stockholders determined to have exigent circumstances would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available. If sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares and shareholders determined to have exigent circumstances would be honored on a pro ra…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our principal demands for funds will be for the acquisition or origination of credit investments and real estate, and the payment of tenant improvements, acquisition-related expenses, operating expenses, distributions, redemptions and interest and principal on current and any future debt financings, including principal repayments of $639.3 million within the next 12 months, $188.1 million of which has a rolling term that resets monthly, as further discussed in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Current wording

Our principal demands for funds will be for the acquisition or origination of credit investments and real estate, and the payment of tenant improvements, acquisition-related expenses, operating expenses, distributions, redemptions and interest and principal on current and any future debt financings, including principal repayments of $547.9 million within the next 12 months, $130.5 million of which has a rolling term that resets monthly, as further discussed in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Previous wording

As of March 31, 2024, we had unfunded commitments of $218.9 million related to 34 loans and unfunded commitments of $76.7 million related to the NewPoint JV. Loan funding commitments are generally subject to certain conditions and the satisfaction of borrower milestones. Therefore, the exact timing and amounts of such future loan fundings are uncertain and will depend on the current and future performance of the underlying collateral assets. We expect to fund our loan commitments over the remaining term of the related loans, which have a weighted-average future funding period of 3.0 years.

Current wording

As of June 30, 2024, we had unfunded commitments of $232.5 million related to 34 loans and unfunded commitments of $61.9 million related to the NewPoint JV. Loan funding commitments are generally subject to certain conditions and the satisfaction of borrower milestones. Therefore, the exact timing and amounts of such future loan fundings are uncertain and will depend on the current and future performance of the underlying collateral assets. We expect to fund our loan commitments over the remaining term of the related loans, which have a weighted-average future funding period of 2.7 years.

Previous wording

As of March 31, 2024, we had debt outstanding with a carrying value of $3.9 billion and a weighted average interest rate of 6.3%. See Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt outstanding.

Current wording

As of June 30, 2024, we had debt outstanding with a carrying value of $3.8 billion and a weighted average interest rate of 6.3%. See Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt outstanding.

Previous wording

(2)Comprised of our off-balance sheet unfunded loan commitments to provide additional CRE loan, corporate senior loan and liquid corporate senior loan financing as of March 31, 2024. The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final maturity date; however, we may be obligated to fund these commitments earlier than such date. This table does not include $76.7 million of unfunded commitments related to the NewPoint JV.

Current wording

(2)Comprised of our off-balance sheet unfunded loan commitments to provide additional CRE loan, corporate senior loan and liquid corporate senior loan financing as of June 30, 2024. The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final maturity date; however, we may be obligated to fund these commitments earlier than such date. This table does not include $61.9 million of unfunded commitments related to the NewPoint JV.

Previous wording

We expect to incur additional borrowings in the future to acquire additional properties and credit investments. There is no limitation on the amount we may borrow against any single improved property. As of March 31, 2024, our ratio of debt to total gross assets net of gross intangible lease liabilities was 64.2%.

Current wording

We expect to incur additional borrowings in the future to acquire additional properties and credit investments. There is no limitation on the amount we may borrow against any single improved property. As of June 30, 2024, our ratio of debt to total gross assets net of gross intangible lease liabilities was 68.5%.

Previous wording

Operating Activities. Net cash provided by operating activities decreased by $14.4 million for the three months ended March 31, 2024, as compared to the same period in 2023. The decrease was primarily due to the disposition of 36 properties subsequent to March 31, 2023. The decrease was partially offset by net increases in credit investments of $171.2 million coupled with an increase in interest rates driving higher interest income for the three months ended March 31, 2024, as compared to the same period in 2023. See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.

Current wording

Operating Activities. Net cash provided by operating activities decreased by $23.9 million for the six months ended June 30, 2024, as compared to the same period in 2023. The decrease was primarily due to decreased interest income of $12.6 million as a result of our three first mortgage loans being placed on nonaccrual status subsequent to June 30, 2023, along with the disposition of five properties and net decreases in credit investments of $154.1 million subsequent to June 30, 2023. See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.