CTO Realty Growth, Inc.

Previous wording

When we refer to “we,” “us,” “our,” or “the Company,” we mean CTO Realty Growth, Inc. and its consolidated subsidiaries. References to “Notes to Financial Statements” refer to the Notes to the Consolidated Financial Statements of CTO Realty Growth, Inc. included in this Quarterly Report on Form 10-Q.

Current wording

When we refer to “we,” “us,” “our,” or “the Company,” we mean CTO Realty Growth, Inc. and its consolidated subsidiaries. References to “Notes to Financial Statements” refer to the Notes to the Consolidated Financial Statements of CTO Realty Growth, Inc. included in this Quarterly Report on Form 10-Q. Some of the comments we make in this section are forward-looking statements within the meaning of the federal securities laws. For a discussion of forward-looking statements, see the section below entitled “Special Note Regarding Forward-Looking Statements.” Certain factors that could cause actual results or events to differ materially from those the Company anticipates or projects are described in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Also, when the Company uses any of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” or similar expressions, the Company is making forward-looking statements. Management believes the expectations reflected in such forward-looking statements are based upon present expectations and reasonable assumptions. However, the Company’s actual results could differ materially from those set forth in the forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise such forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The risks and uncertainties that could cause our actual results to differ materially from those presented in our forward-looking statements, include, but are not limited to, the following:

Current wording

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Also, when the Company uses any of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” or similar expressions, the Company is making forward-looking statements. Management believes the expectations reflected in such forward-looking statements are based upon present expectations and reasonable assumptions. However, the Company’s actual results could differ materially from those set forth in the forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise such forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The risks and uncertainties that could cause our actual results to differ materially from those presented in our forward-looking statements, include, but are not limited to, the following:

Previous wording

The Company describes the risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” (Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023), “Quantitative and Qualitative Disclosures about Market Risk” (Part I, Item 3 of this Quarterly Report on Form 10-Q), and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” (Part I, Item 2 of this Quarterly Report on Form 10-Q).

Current wording

The Company describes the risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” (Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024), “Quantitative and Qualitative Disclosures about Market Risk” (Part I, Item 3 of this Quarterly Report on Form 10-Q), and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part I, Item 2 of this Quarterly Report on Form 10-Q).

Previous wording

As of September 30, 2024, we own and manage, sometimes utilizing third-party property management companies, 22 commercial real estate properties in seven states in the United States, comprising 4.6 million square feet of gross leasable space. In addition to our income property portfolio, as of September 30, 2024, our business included the following:

Current wording

As of March 31, 2025, we own and manage, sometimes utilizing third-party property management companies, 24 commercial real estate properties in seven states in the United States, comprising 5.2 million square feet of gross leasable space. In addition to our income property portfolio, as of March 31, 2025, our business included the following:

Previous wording

Management Services: A fee-based management business that is engaged in managing PINE as well as: (i) a portfolio of assets pursuant to the Portfolio Management Agreement (hereinafter defined) and (ii) Subsurface Interests (hereinafter defined) pursuant to the Subsurface Management Agreement (hereinafter defined), as further described in Note 5, “Management Services Business”.

Current wording

Management Services: A fee-based management business that is engaged in managing PINE as well as: (i) a portfolio of assets pursuant to the Portfolio Management Agreement (hereinafter defined) and (ii) Subsurface Interests (hereinafter defined) pursuant to the Subsurface Management Agreement (hereinafter defined), as further described in Note 5, “Management Services Business” in the Notes to Financial Statements.

Previous wording

Commercial Loans and Investments: A portfolio of four commercial loan investments and two preferred equity investments which are classified as commercial loan investments.

Current wording

Commercial Loans and Investments: A portfolio of five commercial loan investments and two preferred equity investments which are classified as commercial loan investments.

Previous wording

Real Estate Operations: During the nine months ended September 30, 2024, the Company sold its remaining mitigation credits. These credits were produced by the Company’s formerly owned mitigation bank. During the nine months ended September 30, 2024, the Company sold its portfolio of subsurface mineral interests associated with approximately 352,000 surface acres in 19 counties in the State of Florida (“Subsurface Interests”), as further described in Note 6, “Real Estate Operations”. As part of the Subsurface Interests sale, the Company entered into a management agreement with the buyer to provide ongoing management services (the “Subsurface Management Agreement”).

Current wording

Real Estate Operations: During the year ended December 31, 2024, the Company sold its portfolio of subsurface mineral interests associated with approximately 352,000 surface acres in 19 counties in the State of Florida (“Subsurface Interests”), as further described in Note 6, “Real Estate Operations” in the Notes to Financial Statements. As part of the Subsurface Interests sale, the Company entered into a management agreement with the buyer to provide ongoing management services (the “Subsurface Management Agreement”).

Previous wording

Investment in PINE: Our business also includes our investment in PINE. As of September 30, 2024, the fair value of our investment totaled $43.0 million, or 15.3% of PINE’s outstanding equity, including the units of limited partnership interest (“OP Units”) we hold in Alpine Income Property OP, LP (the “PINE Operating Partnership”), which are redeemable for cash, based upon the value of an equivalent number of shares of PINE common stock at the time of the redemption, or shares of PINE common stock on a one-for-one basis, at PINE’s election. Our investment in PINE generates investment income through the dividends distributed by PINE. In addition to the dividends we receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that

Current wording

Investment in PINE: Our business also includes our investment in PINE. As of March 31, 2025, the fair value of our investment totaled $39.5 million, or 15.1% of PINE’s outstanding equity, including the units of limited partnership interest (“OP Units”) we hold in Alpine Income Property OP, LP (the “PINE Operating Partnership”), which are redeemable for cash, based upon the value of an equivalent number of shares of PINE common stock at the time of the redemption, or shares of PINE common stock on a one-for-one basis, at PINE’s election. Our investment in PINE generates investment income through the dividends distributed by PINE. In addition to the dividends we receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that such appreciation will occur, the amount by which our investment will increase in value, or the timing thereof. Any dividends received from PINE are included in investment and other income (loss) on the accompanying consolidated statements of operations.

Previous wording

We believe investment in income-producing assets provides attractive opportunities for generally stable cash flows and increased returns over the long run through potential capital appreciation. Our focus on acquiring income-producing investments includes a continual review of our existing income property portfolio to identify opportunities to recycle our capital through the sale of income properties based on, among other possible factors, the current or expected performance of the property and favorable market conditions. During the nine months ended September 30, 2024, the Company sold two income properties for an aggregate sales price of $38.0 million and aggregate gains on sale of $3.8 million. As a result of entering into the Exclusivity and Right of First Offer Agreement with PINE (the “ROFO Agreement”) which generally prevents us from investing in single-tenant net lease income properties, our income property investment strategy is focused on multi-tenant, primarily retail-oriented, properties. We may pursue this strategy by monetizing certain of our single-tenant properties, and should we do so, we would seek to utilize the 1031 like-kind exchange structure to preserve the tax-deferred gain on the original transaction(s) that pertains to the replacement asset.

Current wording

We believe investment in income-producing assets provides attractive opportunities for generally stable cash flows and increased returns over the long run through potential capital appreciation. Our focus on acquiring income-producing investments includes a continual review of our existing income property portfolio to identify opportunities to recycle our capital through the sale of income properties based on, among other possible factors, the current or expected performance of the property and favorable market conditions. No properties were sold during the three months ended March 31, 2025. As a result of entering into the Exclusivity and Right of First Offer Agreement with PINE (the “ROFO Agreement”) which generally prevents us from investing in single-tenant net lease income properties, our income property investment strategy is focused on multi-tenant, primarily retail-oriented, properties. We may pursue this strategy by monetizing certain of our single-tenant properties, and should we do so, we would seek to utilize the 1031 like-kind exchange structure to preserve the tax-deferred gain on the original transaction(s) that pertains to the replacement asset.

Previous wording

Our current portfolio of 16 multi-tenant properties generates $85.8 million of revenue from annualized straight-line base lease payments and had a weighted average remaining lease term of 5.0 years as of September 30, 2024. Our current portfolio of 6 single-tenant income properties generates $5.6 million of revenues from annualized straight-line base lease payments and had a weighted average remaining lease term of 5.5 years as of September 30, 2024.

Current wording

Our current portfolio of 18 multi-tenant properties generates $98.3 million of revenue from annualized straight-line base lease payments and had a weighted average remaining lease term of 4.9 years as of March 31, 2025. Our current portfolio of 6 single-tenant income properties generates $5.4 million of revenues from annualized straight-line base lease payments and had a weighted average remaining lease term of 4.9 years as of March 31, 2025.

Previous wording

Total revenue for the three months ended September 30, 2024 increased to $31.8 million, compared to $28.5 million during the three months ended September 30, 2023. The $3.3 million increase in total revenue is primarily attributable to increased income produced by the Company’s recent income property acquisitions versus that of properties disposed of by the Company during the comparative period, as well as more same store revenue from our properties owned during each period. Additionally, revenues from our commercial loans and investments increased, which was offset by reduced revenues from our real estate operations.

Current wording

Total revenue for the three months ended March 31, 2025 increased to $35.8 million, compared to $28.1 million during the three months ended March 31, 2024. The $7.7 million increase in total revenue is primarily attributable to increased income produced by the Company’s recent income property acquisitions versus that of properties disposed of by the Company during the comparative period, as well as more same store revenue from our properties owned during each period. Additionally, revenues from our commercial loans and investments increased, which was partially offset by reduced revenues from our real estate operations.

Previous wording

Revenue and operating income from our income property operations totaled $28.5 million and $20.7 million, respectively, during the three months ended September 30, 2024, compared to total revenue and operating income of $25.2 million and $18.1 million, respectively, for the three months ended September 30, 2023. The direct costs of revenues for our income property operations totaled $7.8 million and $7.1 million for the three months ended September 30, 2024 and 2023, respectively. The increase in revenues of $3.3 million, or 13.3%, during the three months ended September 30, 2024 is primarily related to the overall growth and lease up of the Company’s income property portfolio, as well as the timing of acquisitions versus dispositions. The increase in operating income of $2.6 million from our income property operations reflects increased rent revenues related to net investment as well as leasing activity.

Current wording

Revenue and operating income from our income property operations totaled $31.7 million and $22.8 million, respectively, during the three months ended March 31, 2025, compared to total revenue and operating income of $24.6 million and $17.8 million, respectively, for the three months ended March 31, 2024. The direct costs of revenues for our income property operations totaled $8.9 million and $6.8 million for the three months ended March 31, 2025 and 2024, respectively. The increase in revenues of $7.1 million, or 28.6%, during the three months ended March 31, 2025 is primarily related to the overall growth and lease up of the Company’s income property portfolio, as well as the timing of acquisitions versus dispositions. The increase in operating income of $5.0 million from our income property operations reflects increased rent revenues related to net investment as well as leasing activity.

Previous wording

Revenue from our management services from PINE totaled $1.1 million during the three months ended September 30, 2024 and 2023. Management services during the three months ended September 30, 2024 also included less than $0.1 million of revenue, from each of the asset management agreement with a third party to manage a portfolio of multi-tenant and single-tenant assets (the “Portfolio Management Agreement”) and the Subsurface Management Agreement, with no such revenue recognized during the three months ended September 30, 2023.

Current wording

Revenue from our management services from PINE totaled $1.1 million and $1.0 million during the three months ended March 31, 2025 and 2024, respectively. Management services during the three months ended March 31, 2025 and 2024 also included less than $0.1 million of revenue, from each of the asset management agreement with a third party to manage a portfolio of multi-tenant and single-tenant assets (the “Portfolio Management Agreement”) and the Subsurface Management Agreement.

Previous wording

Interest income from our commercial loans and investments totaled $1.6 million and $1.1 million during the three months ended September 30, 2024 and 2023, respectively. The increase is primarily due to increased income as a result of the timing of investments made related to new loan originations and structured investments during the nine months ended September 30, 2024.

Current wording

Interest income from our commercial loans and investments totaled $3.0 million and $1.4 million during the three months ended March 31, 2025 and 2024, respectively. The increase of $1.6 million is primarily due to increased income as a result of the timing of investments made related to new loan originations and structured investments.

Previous wording

The primary reason for the increase in total general and administrative expenses is the overall higher employee count as a result of the increased operating activity from the significant increase in managed income property assets.

Current wording

The primary reason for the increase in total general and administrative expenses is the overall higher employee count, as a result of the increased operating activity from the increase in managed income property assets, as well as increases in compensation effective on January 1, 2025.

Previous wording

Depreciation and amortization totaled $13.2 million and $11.7 million during the three months ended September 30, 2024 and 2023, respectively. The increase of $1.5 million is due to the overall growth in the Company’s income property portfolio.

Current wording

Depreciation and amortization totaled $14.3 million and $10.9 million during the three months ended March 31, 2025 and 2024, respectively. The increase of $3.4 million is due to the overall growth in the Company’s income property portfolio, as well as $0.7 million in the acceleration of amortization for lease intangibles related to certain leases terminated during the three months ended March 31, 2025.

Previous wording

Gain on Disposition of Assets. During the nine months ended September 30, 2024, the Company sold two income properties for an aggregate sales price of $38.0 million and aggregate gains on sales of $3.8 million. The sales consisted of (i) one mixed use income property in downtown Santa Fe, New Mexico for $20.0 million, resulting in a gain of $4.6 million, and (ii) one multi-tenant income property located in West Jordan, Utah for $18.0 million resulting in a loss on sale of $0.8 million. Additionally, during the nine months ended September 30, 2024, the Company sold its portfolio of Subsurface Interests for $5.0 million, resulting in a gain of $4.5 million.

Current wording

2024 Dispositions. During the three months ended March 31, 2024, the Company sold one mixed use income property in downtown Santa Fe, NM for $20.0 million, resulting in a gain of $4.6 million. Additionally, during the three months ended March 31, 2024, the Company sold its portfolio of Subsurface Interests for $5.0 million, resulting in a gain of $4.5 million.

Previous wording

Provision for Impairment. There were no impairment charges on the Company’s income property portfolio during the three months ended September 30, 2024. During the three months ended September 30, 2023, the Company recorded a $0.9 million impairment charge on the sale of the Westcliff Property which represents the sales price, less the book value of the asset as of September 30, 2023, less costs to sell.

Current wording

Provision for Impairment. There were no impairment charges on the Company’s income property portfolio during the three months ended March 31, 2025 and 2024. The Company recorded an impairment charge of $0.05 million during the three months ended March 31, 2024, representing the provision for credit losses related to our commercial loans and investments, with no such provision being recorded during the three months ended March 31, 2025.

Previous wording

During the three months ended September 30, 2024, the closing stock price of PINE increased by $2.64 per share, with a closing price of $18.20 on September 30, 2024. During the three months ended September 30, 2023, the closing stock price of PINE increased by $0.11 per share, with a closing price of $16.36 on September 30, 2023. The change in stock price resulted in an unrealized non-cash gain on the Company’s investment in PINE in the amount of $6.2 million and $0.3 million which is included in investment and other income in the consolidated statements of operations for the three months ended September 30, 2024 and 2023, respectively.

Current wording

During the three months ended March 31, 2025, the closing stock price of PINE decreased by $0.07 per share, with a closing price of $16.72 on March 31, 2025. During the three months ended March 31, 2024, the closing stock price of PINE decreased by $1.63 per share, with a closing price of $15.28 on March 31, 2024. The change in stock price resulted in unrealized non-cash losses on the Company’s investment in PINE in the amount of $0.2 million and $3.8 million which is included in investment and other income (loss) in the consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Interest expense totaled $16.8 million and $16.2 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of $0.6 million is primarily related to increases in the Company’s fixed rates on the 2026 Term Loan and the 2027 Term Loan due to swaps effective on March 29, 2024, which was partially offset by a $0.4 million reduction in interest on the Credit Facility due to a lower average outstanding balance during the nine months ended September 30, 2024, as compared to the same period in 2023.

Current wording

Interest expense totaled $6.1 million and $5.5 million for the three months ended March 31, 2025 and 2024, respectively. The increase of $0.6 million is primarily due to the $1.2 million increase in interest from the Company’s 2029 Term Loan effective on September 30, 2024, partially offset by a $0.7 million reduction in interest on the Credit Facility due to a lower average outstanding balance during the three months ended March 31, 2025, as compared to the same period in 2024.

Previous wording

Net income attributable to the Company totaled $6.2 million and $2.7 million during the three months ended September 30, 2024 and 2023, respectively. The $3.5 million decrease in net income is attributable to the factors described above.

Current wording

Net income attributable to the Company totaled $2.3 million and $5.8 million during the three months ended March 31, 2025 and 2024, respectively. The $3.5 million decrease in net income is attributable to the factors described above, most notably the $9.2 million of gains on disposition of assets during the three months ended March 31, 2024 with no such gains during the same period in 2025.

Previous wording

Cash and cash equivalents totaled $8.2 million at September 30, 2024, while restricted cash totaled $1.7 million, see Note 2, “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance at September 30, 2024.

Current wording

Cash and cash equivalents totaled $8.4 million at March 31, 2025, while restricted cash totaled $6.9 million, see Note 2, “Summary of Significant Accounting Policies” in the Notes to Financial Statements under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance at March 31, 2025.

Previous wording

Our cash flows provided by operating activities totaled $45.8 million during the nine months ended September 30, 2024, as compared to $39.9 million during the nine months ended September 30, 2023, an increase of $5.9 million. The primary reason for the increase is the increased cash flows provided by income properties, which is the result of theoverall growth and lease up of the Company’s income property portfolio, as well as increased cash flows from our commercial loans and investments.

Current wording

Our cash flows provided by operating activities totaled $10.3 million during the three months ended March 31, 2025, as compared to $11.8 million during the three months ended March 31, 2024, a decrease of $1.5 million. The primary reason for the decrease in cash flows is an increase in interest expense as well as general and administrative expenses, which are partially offset by the increase in cash flows provided by income properties, which is the result of theoverall growth and lease up of the Company’s income property portfolio, as well as increased cash flows from our commercial loans and investments.

Previous wording

Our cash flows used in investing activities totaled $215.3 million during the nine months ended September 30, 2024, as compared to $98.3 million during the nine months ended September 30, 2023, for an increase in cash outflows of $117.0 million. The increase in cash used in investing activitiesis primarily the result of an increase in acquisition activity of income properties and commercial loans and investments, partially offset by an increase in proceeds from dispositions, for an increase in net cash used of $121.2 million during thenine months ended September 30, 2024 as compared to the same period in 2023.

Current wording

Our cash flows used in investing activities totaled $80.6 million during the three months ended March 31, 2025, as compared to $52.0 million during the three months ended March 31, 2024, for an increase in cash outflows of $28.6 million. The increase in net cash used in investing activitiesis primarily the result of a decrease in disposition activity, as $24.5 million of proceeds were received during the three months ended March 31, 2024 for the sales of an income property and Subsurface Interests for which there were no such proceeds during the three months ended March 31, 2025.

Previous wording

Our cash flows provided by financing activities totaled $161.6 million for the nine months ended September 30, 2024, compared to $66.8 million for the nine months ended September 30, 2023, an increase in cash inflows of $94.8 million. The increase is primarily due to a $132.3 million increase in proceeds from common and preferred stock issuances under the respective ATM programs, proceeds from preferred equity issuances of $33.0 million, partially offset by a $70.3 million decrease in cash inflows provided by net debt activity during the nine months ended September 30, 2024 as compared to the same period in 2023.

Current wording

Our cash flows provided by financing activities totaled $68.3 million for the three months ended March 31, 2025, compared to $37.2 million for the three months ended March 31, 2024, an increase in cash inflows of $31.1 million. The increase is primarily due to a $36.5 million increase in cash flows provided by net debt activity during the three months ended March 31, 2025, as compared to the same period in 2024, partially offset by $4.1 million more in cash outflows to pay the Company’s common and preferred dividends during the three months ended March 31, 2025, as compared to the same period in 2024.

Previous wording

*Long-Term Debt.*At September 30, 2024, the current commitment level under the Credit Facility was $300.0 million. The undrawn commitment under the Credit Facility totaled $205.0 million. As of September 30, 2024, the Credit Facility had a $95.0 million balance outstanding. See Note 15, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance at September 30, 2024.

Current wording

*Long-Term Debt.*At March 31, 2025, the current commitment level under the Credit Facility was $300.0 million. The undrawn commitment under the Credit Facility totaled $130.0 million. As of March 31, 2025, the Credit Facility had a $170.0 million balance outstanding. See Note 15, “Long-Term Debt” in the Notes to Financial Statements for the Company’s disclosure related to its long-term debt balance at March 31, 2025.

Previous wording

Acquisitions and Investments. During the nine months ended September 30, 2024, the Company acquired four multi-tenant income properties, one vacant land parcel within an existing multi-tenant property, and one building within an existing multi-tenant income property for an aggregate purchase price of $210.0 million, or a total acquisition cost of $207.8 million. During the nine months ended September 30, 2024, the Company also originated three structured investments consisting of a construction loan, a first mortgage, and a preferred equity investment for an aggregate investment of $63.8 million. During the nine months ended September 30, 2023, the Company acquired four buildings within an existing multi-tenant income property, one multi-tenant income property, and one vacant land parcel adjacent to an existing multi-tenant property for an aggregate purchase price of $80.0 million, or a total acquisition cost of $80.3 million. During the nine months ended September 30, 2023, the Company also originated one structured investment, a first mortgage, in the amount of $15.0 million.

Current wording

Acquisitions and Investments. During the three months ended March 31, 2025, the Company acquired one multi-tenant income property for a purchase price of $79.5 million, or a total acquisition cost of $80.0 million, including capitalized acquisition costs. During the three months ended March 31, 2024, the Company acquired one multi-tenant income property and one building within an existing multi-tenant income property for an aggregate purchase price of $71.0 million, or a total acquisition cost of $71.1 million. During the three months ended March 31, 2024, the Company also originated one structured investment, to provide $10.0 million of funding towards the construction of improvements on seven outparcel locations located in Lake Worth, Florida, of which $6.7 million was funded as of March 31, 2024.

Previous wording

The Company’s guidance for 2024 investments in income-producing properties, including structured investments, ranges from $300.0 million to $350.0 million. We expect to fund future acquisitions utilizing cash on hand, cash from operations, proceeds from the dispositions of income properties through 1031 like-kind exchanges, borrowings on our Credit Facility, if available, and additional financing sources. We expect dispositions of income properties will qualify under the like-kind exchange deferred-tax structure.

Current wording

The Company’s guidance for 2025 investments in income-producing properties, including structured investments, ranges from $100.0 million to $200.0 million. We expect to fund future acquisitions utilizing cash on hand, cash from operations, proceeds from the dispositions of income properties through 1031 like-kind exchanges, borrowings on our Credit Facility, if available, and additional financing sources. We expect dispositions of income properties will qualify under the like-kind exchange deferred-tax structure.

Previous wording

*Other Matters.*We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, $3.6 million of availability remaining under the 2022 ATM Program, and $205.0 million undrawn commitment under the existing $300.0 million Credit Facility as of September 30, 2024.

Current wording

*Other Matters.*We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, $216.5 million of availability remaining under the 2024 ATM Program, and $130.0 million undrawn commitment under the existing $300.0 million Credit Facility as of March 31, 2025.

Previous wording

We believe that we currently have a reasonable level of leverage. Our strategy is to utilize leverage, when appropriate and necessary, and proceeds from sales of income properties and the disposition or payoffs on our commercial loans and investments to acquire income properties. We may also acquire or originate commercial loans and investments, invest in

Current wording

We believe that we currently have a reasonable level of leverage. Our strategy is to utilize leverage, when appropriate and necessary, and proceeds from sales of income properties and the disposition or payoffs on our commercial loans and investments to acquire income properties. We may also acquire or originate commercial loans and investments, invest in securities of real estate companies, or make other shorter-term investments. Our targeted investment classes may include the following:

Previous wording

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by U.S. GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have an impact on the Company’s financial condition as well as results of operations due to resulting changes in depreciation and amortization as a result of the fair value allocation. The acquisitions of real estate subject to this estimate totaled four multi-tenant income properties, one vacant land parcel within an existing multi-tenant property, and one building within an existing multi-tenant income property for an aggregate purchase price of $210.0 million, or a total acquisition cost of $207.8 million, for the nine months ended September 30, 2024, and four buildings within an existing multi-tenant income property, one multi-tenant property, and one vacant land parcel adjacent to an existing multi-tenant property for an aggregate purchase price of $80.0 million, or a total acquisition cost of $80.3 million, for the nine months ended September 30, 2023.

Current wording

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by U.S. GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have an impact on the Company’s financial condition as well as results of operations due to resulting changes in depreciation and amortization as a result of the fair value allocation. The acquisitions of real estate subject to this estimate totaled one multi-tenant income property for an aggregate purchase price of $79.5 million, or a total acquisition cost of $80.0 million, for the three months ended March 31, 2025, andone building within an existing multi-tenant income property and one multi-tenant property for an aggregate purchase price of $71.0 million, or a total acquisition cost of $71.1 million, for the three months ended March 31, 2024.

Previous wording

See Note 2, “Summary of Significant Accounting Policies”, for further discussion of the Company’s accounting estimates and policies.

Current wording

See Note 2, “Summary of Significant Accounting Policies” in the Notes to Financial Statements, for further discussion of the Company’s accounting estimates and policies.