CIM GROUP, INC.

Previous wording

We were formed on July 27, 2010, and we elected to be taxed, and conduct our operations to qualify, as a REIT for U.S. federal income tax purposes. We have no paid employees and are externally managed by CMFT Management and, with respect to investments in securities and certain other of our investments, our Investment Advisor, each of which is an affiliate of CIM Group, a vertically-integrated community-focused real estate and infrastructure owner, operator, lender and developer.

Current wording

We were formed on July 27, 2010, and we elected to be taxed, and conduct our operations to qualify, as a REIT for U.S. federal income tax purposes. We are externally managed by CMFT Management and, with respect to investments in securities and certain other investments of ours, our Investment Advisor, each of which is an affiliate of CIM Group, a vertically-integrated community-focused real estate and infrastructure owner, operator, lender and developer.

Previous wording

As of December 31, 2023, our loan portfolio consisted of 291 loans with a net book value of $4.3 billion, and investments in real estate-related securities of $519.7 million. The Company expects to conduct its commercial real estate lending business through CLR, a Maryland statutory trust and currently wholly owned subsidiary of the Company which we expect to be taxed as a REIT for U.S. federal income tax purposes. As of February 29, 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 December 31, 2024, our loan portfolio consisted of 68 loans with a net book value of $3.4 billion, and investments in real estate-related securities of $345.8 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 December 31, 2024, CLR holds a diversified portfolio of approximately$1.5 billion, which includes first mortgage loans with a net book value of $1.05 billion, CMBS with an estimated fair value of $241.3 million, and an investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies — Investment in Unconsolidated Entities to the consolidated financial statements in this Annual Report on Form 10-K) with a carrying value of $171.8 million.

Previous wording

As of December 31, 2023, 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 December 31, 2023, we owned condominium developments with a net book value of $87.6 million.

Current wording

As of December 31, 2024, we owned 187 commercial real estate properties, which consisted of 176 retail properties, seven office properties, and four industrial properties, representing 16 industry sectors and comprising approximately 5.8 million rentable square feet of commercial space located in 36 states, with a net book value of $983.3 million. As of December 31, 2024, we owned condominium developments with a net book value of $64.9 million.

Previous wording

During the year ended December 31, 2023, we disposed of 188 properties encompassing 4.8 million gross rentable square feet, including the sale of 178 properties that closed pursuant to the Realty Income Purchase and Sale Agreement (as defined in Note 4 — Real Estate Assets to the consolidated financial statements in this Annual Report on Form 10-K) for total consideration of $861.0 million, as further discussed in Note 4 — Real Estate Assets to the consolidated financial statements in this Annual Report on Form 10-K.

Current wording

During the year ended December 31, 2024, we disposed of seven properties encompassing 430,000 gross rentable square feet, and 11 condominium units for total consideration of $128.0 million, as further discussed in Note 4 — Real Estate Assets to the consolidated financial statements in this Annual Report on Form 10-K.

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 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 December 31, 2023, 99.3% of our CMBS and loans held-for-investment by carrying value earned a floating rate of interest, indexed to Secured Overnight Financing Rate (“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 December 31, 2023, with a weighted average remaining lease term of 10.7 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 other operating 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 December 31, 2024, 95.1% of our CMBS and loans held-for-investment by carrying value earned a floating rate of interest, indexed to Secured Overnight Financing Rate (“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 December 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.

Previous wording

The year 2023 was characterized by continued volatility in global markets, driven by investor concerns over inflation, rising interest rates, slowing economic growth, political and regulatory uncertainty and geopolitical conditions. Events affecting financial institutions have contributed to instability in the banking sector and have also contributed to diminished liquidity and credit availability in the market broadly.

Current wording

The year 2024 was 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 has caused the Federal Reserve to raise interest rates, 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

Heightened 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 the ability of our existing borrowers to pay debt service, tenants and property values of our own portfolio and the assets that serve as collateral for our loans. The Federal Reserve began to decrease interest rates in the second half of 2024 and has indicated that it may continue to decrease interest rates in 2025. 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

•Net income attributable to the Company of $28.1 million, or $0.06 per share.

Current wording

•Net loss attributable to the Company of $292.3 million, or $0.67 per share.

Previous wording

•Declared aggregate distributions of $0.425 per share.

Current wording

•Declared aggregate distributions of $0.45 per share.

Previous wording

•Invested $121.3 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $210.8 million.

Current wording

•Invested $65.4 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $452.9 million, including $265.4 million as part of the Master Participation Agreement (as defined in Note 13 — Related-Party Transactions and Arrangements to the consolidated financial statements in this Annual Report on Form 10-K). The liquid corporate senior loans served as the initial positions for the formation of a CLO, in which we invested $27.6 million in a CLO subordinated note.

Previous wording

•Invested $154.1 million in corporate senior loans.

Current wording

•Invested $78.7 million in corporate senior loans.

Previous wording

•Received principal repayments on loans held-for-investment of $197.0 million.

Current wording

•Received principal repayments on loans held-for-investment of $479.2 million.

Previous wording

•Invested $163.9 million in CMBS, received principal repayments on CMBS of $60.2 million and sold CMBS for an aggregate gross sales price of $77.4 million.

Current wording

•Invested $24.9 million in CMBS, received principal repayments on CMBS of $107.4 million and sold CMBS for an aggregate gross sales price of $31.1 million.

Previous wording

•Funded an additional $40.0 million in NP JV Holdings (as defined in Note 2 — Summary of Significant Accounting Policies to the consolidated financial statements in this Annual Report on Form 10-K).

Current wording

•Funded an additional $58.7 million in NP JV Holdings (as defined in Note 2 — Summary of Significant Accounting Policies to the consolidated financial statements in this Annual Report on Form 10-K).

Previous wording

•Disposed of 188 properties for an aggregate sales price of $925.9 million.

Current wording

•Disposed of seven properties for an aggregate sales price of $90.6 million.

Previous wording

•Disposed of 18 condominium units for an aggregate sales price of $51.2 million.

Current wording

•Disposed of 11 condominium units for an aggregate sales price of $37.4 million.

Previous wording

The following table shows the carrying value of our portfolio by investment type as of December 31, 2023 and 2022 (dollar amounts in thousands):

Current wording

The following table shows the net book value of our portfolio by investment type as of December 31, 2024 and 2023 (dollar amounts in thousands):

Previous wording

(1)As of December 31, 2023, 100% of our loans by principal balance earned a floating rate of interest indexed to SOFR.

Current wording

(1)As of December 31, 2024, 95.5% of our loans by principal balance earned a floating rate of interest indexed to SOFR.

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 consolidated financial statements in this Annual Report on Form 10-K), which had a carrying value of $126.8 million as of December 31, 2023.

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 consolidated financial statements in this Annual Report on Form 10-K), which had a carrying value of $181.4 million as of December 31, 2024.

Previous wording

As of December 31, 2023, 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 10.7 years. During the year ended December 31, 2023, we disposed of 188 properties for an aggregate gross sales price of $925.9 million. Additionally, during the year ended December 31, 2023, we sold 18 condominium units for an aggregate gross sales price of $51.2 million. During the years ended December 31, 2023 and 2022, the Company did not acquire any properties.

Current wording

As of December 31, 2024, we owned 187 commercial real estate 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. During the year ended December 31, 2024, we disposed of seven properties for an aggregate gross sales price of $90.6 million. Additionally, during the year ended December 31, 2024, we sold 11 condominium units for an aggregate gross sales price of $37.4 million.

Previous wording

Although there are variations in the specific terms of the leases of our properties, the following is a summary of the general structure of our current leases. Generally, the leases of the properties acquired provide for initial terms of ten or more years and provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions as the initial lease term. Certain leases also provide that in the event we wish to sell the property subject to that lease, we first must offer the lessee the right to purchase the property on the same terms and conditions as any offer which we intend to accept for the sale of the property. The properties are generally leased under net leases pursuant to which the tenant bears responsibility for substantially all property costs and expenses associated with ongoing maintenance and operation, including utilities, property taxes and insurance, while certain of the leases require us to maintain the roof, structure and parking areas of the building. Additionally, certain leases provide for increases in rent as a result of fixed increases, increases in the consumer price index, and/or increases in the tenant’s sales volume. The leases of the properties provide for annual rental payments (payable in monthly installments) ranging from $47,000 to $3.7 million (average of $471,000). Certain leases provide for limited increases in rent as a result of fixed increases or increases in the consumer price index.

Current wording

Although there are variations in the specific terms of the leases of our properties, the following is a summary of the general structure of our current leases. Generally, the leases of the properties acquired provide for initial terms of ten or more years and provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions as the initial lease term. Certain leases also provide that in the event we wish to sell the property subject to that lease, we first must offer the lessee the right to purchase the property on the same terms and conditions as any offer which we intend to accept for the sale of the property. The properties are generally leased under net leases pursuant to which the tenant bears responsibility for substantially all property costs and expenses associated with ongoing maintenance and operation, including utilities, property taxes and insurance, while certain of the leases require us to maintain the roof, structure and parking areas of the building. Additionally, certain leases provide for increases in rent as a result of fixed increases, increases in the consumer price index, and/or increases in the tenant’s sales volume. The leases of the properties provide for annual rental payments (payable in monthly installments) ranging from $47,000 to $3.1 million (average of $461,000). Certain leases provide for limited increases in rent as a result of fixed increases or increases in the consumer price index.

Previous wording

We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate in general, such as inflation and rising interest rates, that may reasonably be expected to have a material impact on our results from the acquisition, management and operation of properties and credit investments other than those listed in Part I, Item 1A. Risk Factors.

Current wording

We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate in general, such as inflation and heightened interest rates and the imposition of tariffs and other changes to trade policy in the U.S. and other jurisdictions, that may reasonably be expected to have a material impact on our results from the acquisition, management and operation of properties and credit investments other than those listed in Part I, Item 1A. Risk Factors.

Previous wording

The increase in our Credit segment revenues of $214.7 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to increased average index rates during 2023, as well as an increase in the overall size of our investment portfolio. As of December 31, 2023, we held $4.8 billion in credit investments compared to $4.6 billion in credit investments as of December 31, 2022.

Current wording

The decrease in our Credit segment revenues of $63.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the suspension of interest income on three of our risk-rated 5 first mortgage loans with a carrying value of $373.8 million that were placed on nonaccrual status and were past due on their interest payments as of December 31, 2024, as well as a decrease in the overall size of our investment portfolio and a decline in interest rates during the year ended December 31, 2024. As of December 31, 2024, we held credit investments with an outstanding principal balance of $4.4 billion compared to credit investments with an outstanding principal of $5.1 billion as of December 31, 2023.

Previous wording

Expenses for our Credit segment consist primarily of interest expense, increases (decreases) to our provision for credit losses, management fees, and general and administrative expenses. The increase in our Credit segment expenses of $240.7 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $123.3 million increase in interest expense, net due to higher average index rates during 2023 and increased outstanding borrowings used to fund credit investments. The increase was further driven by a $104.8 million increase in the provision for credit losses, primarily due to the asset-specific credit loss provision of $64.6 million recognized on two of the Company’s first mortgage loan investments and the $35.8 million credit loss allowance related to a CMBS position that was recognized due to a decline in the underlying collateral value during the year ended December 31, 2023.

Current wording

Expenses for our Credit segment consist primarily of interest expense, increases (decreases) to our provision for credit losses, management fees, and general and administrative expenses. The increase in our Credit segment expenses of $191.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to a $208.5 million increase in the provision for credit losses, primarily due to the asset-specific credit loss provision on funded and unfunded commitments recognized on seven of the Company’s first mortgage loan investments and the increase in provision for credit loss related to two CMBS positions that was recognized due to a decline in the underlying collateral value during the year ended December 31, 2024.

Previous wording

Other expense for our Credit segment consists of gain on investment in unconsolidated entities, unrealized gain (loss) on equity security, along with dividend income from our equity security. The increase in our Credit segment other expense of $12.7 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $35.4 million decrease in other (expense) income, net, $39.4 million of which was due to the realized loss on sale of CMBS. The increase in other expense was partially offset by a $4.8 million unrealized gain on equity security recognized during the year ended December 31, 2023, compared to a $15.1 million unrealized loss on equity security recognized during the year ended December 31, 2022, a $4.9 million increase in gain on investment in unconsolidated entities and a $3.6 million increase driven by increased dividend income on our equity security and increased interest income generated by short-term investments included in cash and cash equivalents on the consolidated balance sheet for the year ended December 31, 2023.

Current wording

Other expense for our Credit segment consists of gain on investment in unconsolidated entities, unrealized (loss) gain on equity securities, and loss on extinguishment of debt, along with dividend income from our equity securities. The decrease in our Credit segment other expense of $7.6 million during the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a $25.2 million decrease in other (expense) income, net, driven by a $36.4 million decrease in loss on sale of CMBS during the year ended December 31, 2024, as compared to the same period in 2023, partially offset by a $13.7 million increase in loss on sale of liquid corporate senior loans during the year ended December 31, 2024, as compared to the same period in 2023. The decrease in other expense was further driven by a $1.9 million increase in gain on investment in unconsolidated entities and a decrease of $1.2 million in loss on extinguishment of debt during the year ended December 31, 2024, as compared to the same period in 2023. The decrease in other expense was partially offset by a $15.9 million unrealized loss on equity securities during the year ended December 31, 2024, compared to a $4.8 million unrealized gain on equity securities during the year ended December 31, 2023.

Previous wording

The decrease in our Real Estate segment revenues of $97.9 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to the disposition of 188 properties subsequent to December 31, 2022 and the disposition of 134 properties during the year ended December 31, 2022. 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 $21.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the disposition of seven properties subsequent to December 31, 2023 and the disposition of 188 properties during the year ended December 31, 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 $70.3 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to the disposition of 188 properties subsequent to December 31, 2022. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”. The decrease was partially offset by an increase in impairment charges of $4.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, as six properties were deemed to be impaired during the year ended December 31, 2023, resulting in impairment charges of $20.4 million, as compared to 23 properties that were deemed to be impaired during the year ended December 31, 2022, resulting in impairment charges of $16.2 million.

Current wording

The increase in our Real Estate segment expenses of $16.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to an increase in impairment charges of $31.8 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, as ten properties were deemed to be impaired during the year ended December 31, 2024, due to sales prices or revised cash flow estimates that were less than their respective carrying values, resulting in impairment charges of $52.2 million, as compared to six properties that were deemed to be impaired during the year ended December 31, 2023, resulting in impairment charges of $20.4 million. The increase was partially offset by the disposition of seven properties subsequent to December 31, 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 $60.0 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to the disposition of 188 properties resulting in a net gain of $44.4 million during the year ended December 31, 2023, compared to the disposition of 134 properties and an outparcel of land for a gain of $117.8 million during the year ended December 31, 2022. Other income was further reduced due to a $4.6 million decrease in the fair value of our interest rate caps during the year ended December 31, 2023, as compared to a $4.5 million increase in the fair value of our interest rate caps during the year ended December 31, 2022. The decrease was partially offset by a $17.5 million decrease in loss on extinguishment of debt, driven by increased termination of certain mortgage notes in connection with the disposition of the underlying properties during the year ended December 31, 2022, as compared to the year ended December 31, 2023.

Current wording

Other income for our Real Estate segment primarily consists of gain on disposition of real estate, loss on extinguishment of debt and other income. The decrease in our Real Estate segment other income of $41.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the disposition of seven properties resulting in a net gain of $1.9 million during the year ended December 31, 2024, compared to the disposition of 188 properties resulting in a net gain of $44.4 million during the year ended December 31, 2023.

Previous wording

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, decreased $65,000 during the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to the write-off of certain rent previously owed as a result of a settlement during the year ended December 31, 2023.

Current wording

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, did not meaningfully change during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

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 impairment on our condominium and rental units acquired via foreclosure. The decrease in corporate expenses of $10.1 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, was primarily due to a decrease in interest expense, net of $9.3 million, driven by the pay down and termination of the credit agreement with JPMorgan Chase Bank, N.A. (“JP Morgan Chase”) and PNC Bank, N.A. (the “CMFT Credit Facility”) during the year ended December 31, 2023, along with a decrease in expense reimbursements to related parties of $3.3 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022. The decrease was partially offset by a $3.4 million increase in transaction-related expenses driven by a tax settlement related to the Company’s condominium units during the year ended December 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 and impairment on our condominium and rental units acquired via foreclosure. The decrease in corporate expenses of $6.3 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023, was partially due to a $5.6 million decrease in impairment charges related to condominium units during the year ended December 31, 2024, as compared to the year ended December 31, 2023, and a decrease in interest expense, net of $4.3 million, 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”) and the paydown and termination of the variable rate debt assumed by the Company upon completing the January 2021 foreclosure of assets which previously secured the Company's mezzanine loans (the “Assumed Variable Rate Debt”) during the year ended December 31, 2023. The decrease was further driven by a $3.4 million decrease in transaction-related expenses driven by a tax settlement related to the Company’s condominium units during the year ended December 31, 2023. In addition, we saw a decrease in property operating expenses of $1.9 million, primarily driven by decreased condominium-related legal expenses during the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease was partially offset by an increase in general and administrative expenses of $8.9 million, primarily in connection with restricted stock unit related expenses recorded during the year ended December 31, 2024 as well as an increase in escrow and trustee fees and a non-recurring increase in taxes.

Previous wording

The increase in corporate other income of $484,000 during the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily driven by an increase in other income, net of $9.6 million due to interest income generated by an increase in short-term liquid investments included in cash and cash equivalents on the consolidated balance sheet for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase was partially offset by the $5.2 million net gain during the year ended December 31, 2022, related to our investment in CIM UII Onshore, L.P. (“CIM UII Onshore”), which was subsequently redeemed during 2022. The increase was further offset by a $3.4 million increase in loss on extinguishment of debt during the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily in connection with the paydown and termination of the CMFT Credit Facility and the refinanced Assumed Variable Rate Debt.

Current wording

The increase in corporate other income of $911,000 during the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily driven by a decrease of $4.4 million in loss on extinguishment of debt during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily in connection with the paydown and termination of the CMFT Credit Facility and the refinanced Assumed Variable Rate Debt. The increase was further driven by the disposition of 11 condominium units resulting in a net gain of $4.8 million during year ended December 31, 2024, compared to the disposition of 18 condominium units resulting in a net gain of $3.6 million during the year ended December 31, 2023. The increase was partially offset by a decrease in other (expense) income, net of $4.7 million primarily due to a decrease in interest income generated by decreased short-term liquid investments included in cash and cash equivalents on the consolidated balance sheets during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Previous wording

The following table reconciles our Real Estate segment net income, calculated in accordance with GAAP, to net operating income (in thousands):

Current wording

The following table reconciles our Real Estate segment net (loss) income, calculated in accordance with GAAP, to net operating income (in thousands):

Previous wording

A total of 192 properties were acquired before January 1, 2022 and represent our “same store” properties during the years ended December 31, 2023 and 2022. “Non-same store” properties, for purposes of the table below, include properties acquired or disposed of on or after January 1, 2022.

Current wording

A total of 185 properties were acquired before January 1, 2023 and represent our “same store” properties during the years ended December 31, 2024 and 2023. “Non-same store” properties, for purposes of the table below, include properties acquired or disposed of on or after January 1, 2023.

Previous wording

Non-same store property net operating income decreased $81.7 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022. The decrease was primarily due to the disposition of 188 properties subsequent to December 31, 2022 in addition to the disposition of 134 properties during the year ended December 31, 2022.

Current wording

Non-same store property net operating income decreased $19.8 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023. The decrease was primarily due to the disposition of seven properties subsequent to December 31, 2023 in addition to the disposition of 188 properties during the year ended December 31, 2023.

Previous wording

As of December 31, 2023, we had distributions payable of $16.0 million.

Current wording

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

Previous wording

(1)Net cash provided by operating activities for the years ended December 31, 2023 and 2022 was $223.8 million and $178.7 million, respectively.

Current wording

(1)Net cash provided by operating activities for the years ended December 31, 2024 and 2023 was $161.2 million and $223.8 million, respectively.

Previous wording

During the year ended December 31, 2023, we received valid redemption requests under our share redemption program totaling approximately 110.2 million shares, of which we redeemed approximately 5.2 million shares as of December 31, 2023 for $33.9 million (at an average redemption price of $6.57 per share) and approximately 1.7 million shares subsequent to December 31, 2023 for $11.0 million (at an average redemption price of $6.31 per share). The remaining redemption requests relating to approximately 103.3 million shares went unfulfilled. During the year ended December 31, 2022, we received valid redemption requests under our share redemption program totaling approximately 99.2 million shares, of which we redeemed approximately 4.1 million shares as of December 31, 2022 for $29.7 million (at an average redemption price of $7.20 per share) and approximately 1.6 million shares subsequent to December 31, 2022 for $10.5 million (at an average redemption price of $6.57 per share). The remaining redemption requests relating to approximately 93.5 million shares went unfulfilled.

Current wording

During the year ended December 31, 2024, we received valid redemption requests under our share redemption program totaling approximately 151.9 million shares, of which we redeemed approximately 5.6 million shares as of December 31, 2024 for $33.9 million (at an average redemption price of $6.09 per share) and approximately 1.8 million shares subsequent to December 31, 2024 for $11.1 million (at an average redemption price of $6.09 per share). The remaining redemption requests relating to approximately 144.5 million shares went unfulfilled. During the year ended December 31, 2023, we received valid redemption requests under our share redemption program totaling approximately 110.2 million shares, of which we redeemed approximately 5.2 million shares as of December 31, 2023 for $33.9 million (at an average redemption price of $6.57 per share) and approximately 1.7 million shares subsequent to December 31, 2023 for $11.0 million (at an average redemption price of $6.31 per share). The remaining redemption requests relating to approximately 103.3 million shares went unfulfilled.

Previous wording

We expect to utilize proceeds from net cash provided by operations, cash proceeds from the sale of credit investments, principal payments received on credit investments, cash proceeds from real estate asset dispositions, proceeds from the Secondary DRIP Offering, proceeds from the sale of subsidiary equity, distributions, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions and loan originations, repayment of certain indebtedness and for general corporate uses. The sources of our operating cash flows will primarily be provided by interest income from our portfolio of credit investments and the rental and other property income received from current and future leased properties.

Current wording

We expect to utilize proceeds from net cash provided by operations, cash proceeds from the sale of credit investments, principal payments received on credit investments, cash proceeds from real estate asset dispositions, proceeds from the Secondary DRIP Offering, proceeds from the sale of subsidiary equity, distributions from certain investments, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions and loan originations, repayment of certain indebtedness, distributions, redemptions and for general corporate uses. The sources of our operating cash flows will primarily be provided by interest income from our portfolio of credit investments and the rental and other property income received from current and future leased properties.

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 $633.1 million within the next 12 months, $199.6 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 consolidated financial statements in this Annual Report on Form 10-K.

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 $1.7 billion within the next 12 months, $104.0 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 consolidated financial statements in this Annual Report on Form 10-K.

Previous wording

As of December 31, 2023, we had debt outstanding with a carrying value of $3.9 billion and a weighted average interest rate of 6.4%. See Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K for certain terms of our debt outstanding.

Current wording

As of December 31, 2024, we had debt outstanding with a carrying value of $3.2 billion and a weighted average interest rate of 5.5%. See Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K for certain terms of our debt outstanding, including extension options.