American Strategic Investment Co.

Previous wording

We are an externally managed company that owns a portfolio of commercial real estate located within the five boroughs of New York City, primarily Manhattan. Our real estate assets consist of office properties and certain real estate assets that accompany office properties, including retail spaces and amenities and parking garages that do not accompany office spaces. As of March 31, 2026, we owned five properties consisting of approximately 0.7 million rentable square feet, acquired for an aggregate purchase price of $442.7 million with an overall occupancy of 76.4%, which excludes one property, 1140 Avenue of the Americas, which is in a consensual foreclosure process.

Current wording

We are an externally managed company that owns a portfolio of commercial real estate located within the five boroughs of New York City, primarily Manhattan. Our real estate assets consist of office properties and certain real estate assets that accompany office properties, including retail spaces and amenities and parking garages that do not accompany office spaces. As of June 30, 2026, we owned five properties consisting of approximately 0.7 million rentable square feet, acquired for an aggregate purchase price of $442.7 million with an overall occupancy of 74.8%, which excludes one property, 1140 Avenue of the Americas, which is in a consensual foreclosure process.

Previous wording

The adverse economic impacts since the onset of the COVID-19 pandemic have caused us to experience challenges in leasing up available space and maintaining occupancy in our properties. These challenges with leasing activity have negatively impacted, and continue to impact, our results of operations, cash flows, and ability to comply with certain mortgage debt covenants. For additional information on our leasing activity for the three months ended March 31, 2026 and 2025, please see Results of Operations — Leasing Activity below.

Current wording

The adverse economic impacts since the onset of the COVID-19 pandemic have caused us to experience challenges in leasing up available space and maintaining occupancy in our properties. These challenges with leasing activity have negatively impacted, and continue to impact, our results of operations, cash flows, and ability to comply with certain mortgage debt covenants. For additional information on our leasing activity for the six months ended June 30, 2026 and 2025, please see Results of Operations — Leasing Activity below.

Previous wording

As of March 31, 2026 two of our mortgages encumbering three of our properties aggregating $60.0 million in principal are in default and/or remained in a cash trap events, as described in detail further below in the Liquidity and Capital Resources section. The lenders of one mortgage in default, which is in respect of our 1140 Avenue of the Americas property, have accelerated the debt outstanding under the applicable loan agreement and in June 2025 initiated foreclosure litigation as a result of alleged defaults. In September 2025, the Company and the lender agreed to pursue a cooperative consensual foreclosure. On September 11, 2025, the New York County Court appointed a receiver, and the Company ceased managing the property. As a result of the consensual foreclosure and the appointment of the receiver, the Company removed its related assets and liabilities from the consolidate balance sheet as of September 30, 2025. In addition, the 400 E. 67th Street/200 Riverside Blvd. properties are also in default and the lenders have accelerated the debt outstanding under the applicable loan agreement. See also Note 5 – Mortgage Notes Payable, Net — Debt Covenant Non-Compliance, Cash Sweep Events, Notices of Defaults and of Acceleration and Foreclosure Litigation to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.

Current wording

As of June 30, 2026 two of our mortgages encumbering three of our properties aggregating $60.0 million in principal are in default and/or remained in a cash trap events, as described in detail further below in the Liquidity and Capital Resources section. The lenders of one mortgage in default, which is in respect of our 1140 Avenue of the Americas property, have accelerated the debt outstanding under the applicable loan agreement and in June 2025 initiated foreclosure litigation as a result of alleged defaults. In September 2025, the Company and the lender agreed to pursue a cooperative consensual foreclosure. On September 11, 2025, the New York County Court appointed a receiver, and the Company ceased managing the property. As a result of the consensual foreclosure and the appointment of the receiver, the Company removed its related assets and liabilities from the consolidated balance sheet as of September 30, 2025. In addition, the 400 E. 67th Street/200 Riverside Blvd. properties are also in default and the lenders have accelerated the debt outstanding under the applicable loan agreement. See also Note 5 – Mortgage Notes Payable, Net — Debt Covenant Non-Compliance, Cash Sweep Events, Notices of Defaults and of Acceleration and Foreclosure Litigation to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

Our portfolio is primarily comprised of office and retail tenants. We have collected 98% of cash rent due across our entire portfolio for the three months ended March 31, 2026 (based on annualized straight-line rent as of March 31, 2026). We expect our cash rent collections will stay at that level, however there can be no assurance that we will be able to collect cash rent due in the future.

Current wording

Our portfolio is primarily comprised of office and retail tenants. We have collected 98% of cash rent due across our entire portfolio for the six months ended June 30, 2026 (based on annualized straight-line rent as of June 30, 2026). We expect our cash rent collections will stay at that level, however there can be no assurance that we will be able to collect cash rent due in the future.

Previous wording

(2)On November 6, 2025, the Company received a notice of acceleration from the special servicer on behalf of the lender with respect to the loan secured by the property (See Note 5— Mortgage Notes Payable, Net to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion).

Current wording

(2)On November 6, 2025, the Company received a notice of acceleration from the special servicer on behalf of the lender with respect to the loan secured by the property (See also Note 5 — Mortgage Notes Payable, Net — Debt Covenant Non-Compliance, Cash Sweep Events, Notices of Defaults and of Acceleration and Foreclosure Litigation to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion).

Previous wording

The following table is a summary of our quarterly leasing activity during the three months ended March 31, 2026:

Current wording

The following table is a summary of our quarterly leasing activity during the six months ended June 30, 2026:

Previous wording

The following table is a summary of our quarterly leasing activity during the three months ended March 31, 2025:

Current wording

The following table is a summary of our quarterly leasing activity during the six months ended June 30, 2025:

Previous wording

Our total overall portfolio occupancy decreased as of March 31, 2026 to 76.4% from a total portfolio occupancy of 82.0% as of March 31, 2025 from the following:

Current wording

Our total overall portfolio occupancy decreased as of June 30, 2026 to 74.8% from a total portfolio occupancy of 82.0% as of June 30, 2025 from the following:

Previous wording

•Occupancy at 123 William Street decreased to 73.8% as of March 31, 2026 compared to 84.4% as of March 31, 2025. The decrease in occupancy was due to a lease amendment and a tenant occupying less space and an early termination with a tenant during the quarter ended September 30, 2025.

Current wording

•Occupancy at 123 William Street decreased to 71.7% as of June 30, 2026 compared to 84.4% as of June 30, 2025. The decrease in occupancy was due to a lease amendment and a tenant occupying less space and an early termination with a tenant during the quarter ended September 30, 2025.

Previous wording

Net loss attributable to common stockholders was $7.8 million for the quarter ended March 31, 2026, as compared to $8.6 million for the quarter ended March 31, 2025. The change in net loss attributable to common stockholders is discussed in detail for each line item of the condensed consolidated statements of operations in the sections that follow.

Current wording

Net loss attributable to common stockholders was $8.3 million for the quarter ended June 30, 2026, as compared to $41.7 million for the quarter ended June 30, 2025. The change in net loss attributable to common stockholders is discussed in detail for each line item of the condensed consolidated statements of operations in the sections that follow.

Previous wording

Revenue from tenants decreased to $7.3 millionfor the three months ended March 31, 2026 as compared to $12.3 million for the three months ended March 31, 2025 primarily due to the disposition of our 1140 Avenue of the Americas property during the year ended December 31, 2025, resulting in a $5.0 million decrease in revenue from tenants.

Current wording

Revenue from tenants decreased to $7.3 millionfor the three months ended June 30, 2026 as compared to $12.2 million for the three months ended June 30, 2025 primarily due to the disposition of our 1140 Avenue of the Americas property during the year ended December 31, 2025, resulting in a $4.9 million decrease in revenue from tenants.

Previous wording

We incurred$1.6 million and $1.9 million in fees for asset and property management services paid to our Advisor and Property Manager for the three months ended March 31, 2026 and 2025, respectively. See Note 10 — Related Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for more information on fees incurred from our Advisor and Property Manager.

Current wording

We incurred$1.8 million and $1.7 million in fees for asset and property management services paid to our Advisor and Property Manager for the three months ended June 30, 2026 and 2025, respectively. See Note 10 — Related Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for more information on fees incurred from our Advisor and Property Manager.

Previous wording

Property operating expenses decreased to $4.6 million for the three months ended March 31, 2026 as compared to $8.1 million for the three months ended March 31, 2025. The decrease in expenses is primarily related to the disposition of our 1140 Avenue of the Americas property during the year ended December 31, 2025.

Current wording

Property operating expenses decreased to $4.3 million for the three months ended June 30, 2026 as compared to $8.0 million for the three months ended June 30, 2025. The decrease in expenses is primarily related to the disposition of our 1140 Avenue of the Americas property during the year ended December 31, 2025.

Previous wording

General and administrative expenses decreased to $2.3 million for the three months ended March 31, 2026 as compared to $3.1 million for three months ended March 31, 2025. The decrease in expenses is primarily due to lower external audit fees during thethree months ended March 31, 2026.

Current wording

General and administrative expenses increased to $2.9 million for the three months ended June 30, 2026 as compared to $2.2 million for three months ended June 30, 2025.

Previous wording

Total reimbursement expenses for administrative and personnel services provided by the Advisor, were$1.3 million during the three months ended March 31, 2026 and $1.6 million, during the three months ended March 31, 2025.

Current wording

Total reimbursement expenses for administrative and personnel services provided by the Advisor, were$1.3 million during the three months ended June 30, 2026 and $1.0 million, during the three months ended June 30, 2025.

Previous wording

Depreciation and amortization expense decreased to $2.5 million for the three months ended March 31, 2026 as compared to $3.6 million for the three months ended March 31, 2025. The decrease was primarily due to a lower depreciable asset base between periods primarily relating to the disposition of our 1140 Avenue of the Americas property during the year ended December 31, 2025. For more information, please see our 2025 Annual Report.

Current wording

Depreciation and amortization expense decreased to $2.5 million for the three months ended June 30, 2026 as compared to $3.5 million for the three months ended June 30, 2025. The decrease was primarily due to a lower depreciable asset base between periods primarily relating to the disposition of our 1140 Avenue of the Americas property during the year ended December 31, 2025. For more information, please see our 2025 Annual Report.

Previous wording

Interest expense increased to $2.3 million for the three months ended March 31, 2026 as compared to $0.0 for the three months ended March 31, 2025. The increase in interest expense associated with property in receivership is due to the court appointment of a receiver for 1140 Avenue of the Americas.

Current wording

Interest expense increased to $2.3 million for the three months ended June 30, 2026 as compared to $0.0 million for the three months ended June 30, 2025. The increase in interest expense associated with property in receivership is due to the court appointment of a receiver for 1140 Avenue of the Americas.

Previous wording

The following table represents a reconciliation of our net cash used in operations from our net loss for the three months ended March 31, 2026 and 2025:

Current wording

The following table represents a reconciliation of our net cash used in operations from our net loss for the six months ended June 30, 2026 and 2025:

Previous wording

The following table represents a reconciliation of our net cash used in investing activities for the three months ended March 31, 2026 and 2025:

Current wording

The following table represents a reconciliation of our net cash used in investing activities for the six months ended June 30, 2026 and 2025:

Previous wording

The following table represents a reconciliation of our net cash provided by financing activities for the three months ended March 31, 2026 and 2025.

Current wording

The following table represents a reconciliation of our net cash provided by financing activities for the six months ended June 30, 2026 and 2025.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of$2.5 million as compared to $1.3 million for the year ended December 31, 2025.

Current wording

As of June 30, 2026, we had cash and cash equivalents of$2.4 million as compared to $1.3 million for the year ended December 31, 2025.

Previous wording

We had restricted cash of $5.7 million as of March 31, 2026 as compared to $6.8 million as of December 31, 2025. Our restricted cash balance includes cash sweeps for 400 E 67th Street for $3.0 million and $3.7 million as of March 31, 2026 and December 31, 2025, respectively. The remaining balance of restricted cash is comprised of various escrow accounts and other cash accounts with restricted uses. We are able to use a portion of our restricted cash for certain property operating expenses and capital expenditures. As a result, some of the property operating expenses and capital expenditures that will be paid with restricted cash may reside in accounts payable and accrued expenses on our condensed consolidated balance sheet as of March 31, 2026.

Current wording

We had restricted cash of $5.5 million as of June 30, 2026 as compared to $6.8 million as of December 31, 2025. Our restricted cash balance includes cash sweeps for 400 E 67th Street for $3.3 million and $3.7 million as of June 30, 2026 and December 31, 2025, respectively. The remaining balance of restricted cash is comprised of various escrow accounts and other cash accounts with restricted uses. We are able to use a portion of our restricted cash for certain property operating expenses and capital expenditures. As a result, some of the property operating expenses and capital expenditures that will be paid with restricted cash may reside in accounts payable and accrued expenses on our condensed consolidated balance sheet as of June 30, 2026.

Previous wording

As of March 31, 2026, we are operating under three cash traps at 400 E. 67th Street/200 Riverside Blvd. and 8713 Fifth Avenue, which together, represent 19% of the rentable square feet in our portfolio as of March 31, 2026. However, our 8713 Fifth Avenue property has not generated enough excess cash after debt service and as of March 31, 2026 there is no related cash maintained in a segregated and restricted cash account for that property. Additionally, as of March 31, 2026, we are operating under one cash sweep at our 400 E. 67th Street/200 Riverside Blvd. properties. Under these lease sweep periods, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. This swept cash is classified as restricted cash on our condensed consolidated balance sheet. As of March 31, 2026 we had $3.0 million retained by the lender in a restricted cash account for our 400 E. 67th Street/200 Riverside Blvd. properties. For additional information please see Note 5 —Mortgage Notes Payable, Netto our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2026, we are operating under three cash traps at 400 E. 67th Street/200 Riverside Blvd. and 8713 Fifth Avenue, which together, represent 19% of the rentable square feet in our portfolio as of June 30, 2026. However, our 8713 Fifth Avenue property has not generated enough excess cash after debt service and as of June 30, 2026 there is no related cash maintained in a segregated and restricted cash account for that property. Additionally, as of June 30, 2026, we are operating under one cash sweep at our 400 E. 67th Street/200 Riverside Blvd. properties. Under these lease sweep periods, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. This swept cash is classified as restricted cash on our condensed consolidated balance sheet. As of June 30, 2026 we had $3.3 million retained by the lender in a restricted cash account for our 400 E. 67th Street/200 Riverside Blvd. properties. See also Note 5 —Mortgage Notes Payable, Net— Debt Covenant Non-Compliance, Cash Sweep Events, Notices of Defaults and of Acceleration and Foreclosure Litigation to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

We define our leverage as the ratio between our net debt, which is calculated as our gross debt of $251.0 million less cash and cash equivalents of $2.5 million divided by our gross asset value, which is calculated as the carrying value of our total assets of $445.0 million plus our accumulated depreciation and amortization of $82.9 million less our contract asset of $110.9 million. As of March 31, 2026, our net debt was $248.5 million, our gross asset value was $417.0 million and our leverage was 59.6%.

Current wording

We define our leverage as the ratio between our net debt, which is calculated as our gross debt of $251.0 million less cash and cash equivalents of $2.4 million divided by our gross asset value, which is calculated as the carrying value of our total assets of $444.8 million plus our accumulated depreciation and amortization of $85.3 million less our contract asset of $113.2 million. As of June 30, 2026, our net debt was $248.6 million, our gross asset value was $416.8 million and our leverage was 59.6%.

Previous wording

As of March 31, 2026 our gross borrowings totaled $251.0 million, which bore interest at a weighted-average annual rate of 4.56%, excluding default interest, and had a weighted-average maturity of 1.3 years. All of our properties are encumbered under mortgage notes payable, and are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied.

Current wording

As of June 30, 2026 our gross borrowings totaled $251.0 million, which bore interest at a weighted-average annual rate of 4.56%, excluding default interest, and had a weighted-average maturity of 1.1 years. All of our properties are encumbered under mortgage notes payable, and are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied.

Previous wording

We have breached both a debt service coverage provision and a reserve fund provision under our non-recourse mortgage secured by the 1140 Avenue of the Americas property in each of the last 22 quarters ended March 31, 2026. The principal amount of the loan was $99.0 million and reflected as debt associated with property in receivership on the condensed consolidated balance sheet as of March 31, 2026 (refer to Note 6 - Property Disposition to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q).

Current wording

We have breached both a debt service coverage provision and a reserve fund provision under our non-recourse mortgage secured by the 1140 Avenue of the Americas property in each of the last 23 quarters ended June 30, 2026. The principal amount of the loan was $99.0 million and reflected as debt associated with property in receivership on the condensed consolidated balance sheet as of June 30, 2026 (refer to Note 6 - Property Disposition to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q).

Previous wording

In September 2025, we agreed with the lender to pursue a consensual foreclosure. On September 11, 2025, the New York County Court appointed a receiver and we ceased managing the property. As a result of the consensual foreclosure and the appointment of the receiver, we removed our related assets and liabilities from the condensed consolidated balance sheet as of December 31, 2025 and recognized a gain of $47.9 million which is reflected in the consolidated statements of operations for the year ended December 31, 2025. As of March 31, 2026, the foreclosure has not concluded and therefore we continue to record accrued default interest. As a result, during the three months ended March 31, 2026 the Company recognized an additional gain of $2.3 million which is reflected in the condensed consolidated statements of operations for the three months ended March 31, 2026.

Current wording

In September 2025, we agreed with the lender to pursue a consensual foreclosure. On September 11, 2025, the New York County Court appointed a receiver and we ceased managing the property. As a result of the consensual foreclosure and the appointment of the receiver, we removed our related assets and liabilities from the condensed consolidated balance sheet as of December 31, 2025 and recognized a gain of $47.9 million which is reflected in the consolidated statements of operations for the year ended December 31, 2025. As of June 30, 2026, the foreclosure has not concluded and therefore we continue to record accrued default interest. As a result, during the three and six months ended June 30, 2026, the Company recognized an additional gain of $2.3 million and $4.5 million which is reflected in the condensed consolidated statements of operations for the three and six months ended June 30, 2026.

Previous wording

We also recorded a contract asset of $108.6 million and the related debt associated with property under receivership and accrued interest associated with property under receivership of $99.0 million and $9.6 million, respectively, are included in the consolidated balance sheet as of December 31, 2025. This contract asset represents our right to debt extinguishment once the foreclosure process on the 1140 Avenue of the Americas property is completed. As a result of the additional gain recognized during the three months ended March 31, 2026, the total contract asset recorded on the balance sheet as of March 31, 2026 is $110.9 million and the total accrued interest associated with property under receivership recorded on the balance sheet as of March 31, 2026 is $11.9 million.

Current wording

We also recorded a contract asset of $108.6 million and the related debt associated with property under receivership and accrued interest associated with property under receivership of $99.0 million and $9.6 million, respectively, are included in the consolidated balance sheet as of December 31, 2025. This contract asset represents our right to debt extinguishment once the foreclosure process on the 1140 Avenue of the Americas property is completed. As a result of the additional gain recognized during the six months ended June 30, 2026, the total contract asset recorded on the balance sheet as of June 30, 2026 is $113.2 million and the total accrued interest associated with property under receivership recorded on the balance sheet as of June 30, 2026 is $14.2 million.

Previous wording

We have breached a debt service coverage ratio covenant under the non-recourse mortgage secured by 8713 Fifth Avenue in each of the last 22 quarters ended March 31, 2026. The principal amount for the loan was $10.0 million as of March 31, 2026. The breach of this covenant did not result in an event of default but rather triggered an excess cash flow sweep period that has been ongoing. The excess cash flow sweep period will continue until the covenant breaches are cured in accordance with the terms of the loan agreement. This property has not generated any excess cash since the breach occurred, and thus no cash has ever been trapped related to this property.

Current wording

We have breached a debt service coverage ratio covenant under the non-recourse mortgage secured by 8713 Fifth Avenue in each of the last 23 quarters ended June 30, 2026. The principal amount for the loan was $10.0 million as of June 30, 2026. The breach of this covenant did not result in an event of default but rather triggered an excess cash flow sweep period that has been ongoing. The excess cash flow sweep period will continue until the covenant breaches are cured in accordance with the terms of the loan agreement. This property has not generated any excess cash since the breach occurred, and thus no cash has ever been trapped related to this property.

Previous wording

Under the lease sweep period, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. As of March 31, 2026 and December 31, 2025 we had $3.0 million and $3.7 million, respectively, in cash swept that is retained by the lender and recorded within restricted cash on our condensed consolidated balance sheet.

Current wording

Under the lease sweep period, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. As of June 30, 2026 and December 31, 2025 we had $3.3 million and $3.7 million, respectively, in cash swept that is retained by the lender and recorded within restricted cash on our condensed consolidated balance sheet.

Previous wording

On November 19, 2024, the lender sent a notice to us alleging that we were in default under the loan agreement governing the loan secured by the non-recourse mortgage on the property for events that occurred in the third and fourth quarters of 2023, specifically our failure to establish a cash management account for excess cash sweeps over monthly debt service requirements. The lender had been remitting excess cash on their own accord until the period of cash sweep was put into effect in 2024 as described above. In that notice of default, the lender asserted we owe an estimated $1.0 million in excess cash to be deposited into the loan reserve account. We responded to such notice of default on February 20, 2025 rejecting the assertions made by the lender, which we believed were without merit as a result of the lender's failure to implement a cash management account and our inability to take such action unilaterally due to the mechanics for receipt of lease payments provided for by the loan agreement. Beginning in March 2025, the lender began charging default interest to us, currently totaling $4.3 million. On June 10, 2025, the lender sent a second notice to us alleging defaults under such loan agreement as a result of (i) our failure to pay the outstanding amount due thereunder beginning in April 2025 and (ii) our failure to cooperate with the lender to comply with the aforementioned cash management procedures. The second default notice reaffirmed that, as a result of the aforementioned defaults, interest was accruing at the default rate under the loan agreement and made a demand that all unpaid amounts due under the loan agreement be paid. As of the date of this Quarterly Report on Form 10-Q, we have not responded to the second default notice. Further, we incurred a liability as of June 30, 2025 in relation to the June 10, 2025 default notice.

Current wording

On November 19, 2024, the lender sent a notice to us alleging that we were in default under the loan agreement governing the loan secured by the non-recourse mortgage on the property for events that occurred in the third and fourth quarters of 2023, specifically our failure to establish a cash management account for excess cash sweeps over monthly debt service requirements. The lender had been remitting excess cash on their own accord until the period of cash sweep was put into effect in 2024 as described above. In that notice of default, the lender asserted we owe an estimated $1.0 million in excess cash to be deposited into the loan reserve account. We responded to such notice of default on February 20, 2025 rejecting the assertions made by the lender, which we believed were without merit as a result of the lender's failure to implement a cash management account and our inability to take such action unilaterally due to the mechanics for receipt of lease payments provided for by the loan agreement. Beginning in March 2025, the lender began charging default interest to us, currently totaling $5.4 million. On June 10, 2025, the lender sent a second notice to us alleging defaults under such loan agreement as a result of (i) our failure to pay the outstanding amount due thereunder beginning in April 2025 and (ii) our failure to cooperate with the lender to comply with the aforementioned cash management procedures. The second default notice reaffirmed that, as a result of the aforementioned defaults, interest was accruing at the default rate under the loan agreement and made a demand that all unpaid amounts due under the loan agreement be paid. As of the date of this Quarterly Report on Form 10-Q, we have not responded to the second default notice. Further, we incurred a liability as of June 30, 2025 in relation to the June 10, 2025 default notice.

Previous wording

On November 6, 2025, we received a notice from the a special servicer on behalf of the lender identifying certain additional events of default, specifically incurrence of indebtedness that does not constitute permitted indebtedness and incurrence of liens that are not in favor of the lender or permitted encumbrances, subject to certain exceptions, as a result of our alleged failure to make certain additional payments and certain liens filed on the property as a result thereof. In such notice, the lender notified us that, due to the alleged events of default under the loan agreement, the loan had been accelerated, and all amounts under the loan agreement were due and payable, together with interest at the default rate set forth in the loan agreement, which is a rate annum equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) four percent (4%) above the interest rate of 4.516% per annum, compounded monthly. Such amounts include, but are not limited to, the $50.0 million principal amount of the promissory notes evidencing the loan agreement. We are evaluating our options with respect to the property and there can be no assurance as to the resolution of these matters with the lender.

Current wording

On November 6, 2025, we received a notice from the special servicer on behalf of the lender identifying certain additional events of default, specifically incurrence of indebtedness that does not constitute permitted indebtedness and incurrence of liens that are not in favor of the lender or permitted encumbrances, subject to certain exceptions, as a result of our alleged failure to make certain additional payments and certain liens filed on the property as a result thereof. In such notice, the lender notified us that, due to the alleged events of default under the loan agreement, the loan had been accelerated, and all amounts under the loan agreement were due and payable, together with interest at the default rate set forth in the loan agreement, which is a rate annum equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) four percent (4%) above the interest rate of 4.516% per annum, compounded monthly. Such amounts include, but are not limited to, the $50.0 million principal amount of the promissory notes evidencing the loan agreement. We are evaluating our options with respect to the property and there can be no assurance as to the resolution of these matters with the lender.

Previous wording

On January 21, 2026, the trustee appointed to act on behalf of the lenders filed a complaint with the New York County Court, naming the OP and our subsidiary borrowers under such loan agreement as defendants, requesting the New York County Court initiate foreclosure proceedings on the mortgage on the property and that the OP and such borrower pay the lenders the amount of the debt, inclusive of certain accrued fees and expenses, remaining unsatisfied after the sale of the property.

Current wording

On January 21, 2026, the trustee appointed to act on behalf of the lenders filed a complaint with the New York County Court, naming the OP and our subsidiary borrowers under such loan agreement as defendants, requesting the court enter a judgment of foreclosure on the property and that the OP and such borrower pay the lenders the amount of the debt, inclusive of certain accrued fees and expenses, remaining unsatisfied after the sale of the property.

Previous wording

For the three months ended March 31, 2026, we funded an aggregate of $0.1 million of capital expenditures primarily related to provisions for tenant improvements at certain of our properties.

Current wording

For the six months ended June 30, 2026, we funded an aggregate of $0.5 million of capital expenditures primarily related to provisions for tenant improvements at certain of our properties.

Previous wording

We funded our capital expenditures during the three months ended March 31, 2026 with (i) cash on hand, which included proceeds from previous financings, and (ii) cash retained from the Advisor either from (a) deferring payment of related-party management fees to the Advisor as needed or (b) providing a bridge loan when necessary.

Current wording

We funded our capital expenditures during the six months ended June 30, 2026 with (i) cash on hand, which included proceeds from previous financings, and (ii) cash retained from the Advisor either from (a) deferring payment of related-party management fees to the Advisor as needed or (b) providing a bridge loan when necessary.

Previous wording

We had no acquisitions or dispositions during the three months ended March 31, 2026 or 2025.

Current wording

We had no acquisitions or dispositions during the six months ended June 30, 2026 or 2025.

Previous wording

The below table presents a reconciliation of our EBITDA and our adjusted EBITDA from net income (loss) for the three months ended March 31, 2026 and 2025:

Current wording

The below table presents a reconciliation of our EBITDA and our adjusted EBITDA from net income (loss) for the three and six months ended June 30, 2026 and 2025:

Previous wording

We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. As of March 31, 2026, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 3.3%. To help mitigate the adverse impact of inflation, approximately 75% of our leases with our tenants contain rent escalation provisions which increase the cash rent that is due under these leases over time by an average cumulative increase of 2.2% per year. These provisions generally increase rental rates during the terms of the leases either at fixed rates or other measures. As of March 31, 2026, based on straight-line rent, approximately 75% are fixed rate, scheduled escalation increases recorded on a straight-line basis, and 25% do not contain any escalation provisions.

Current wording

We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. As of June 30, 2026, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 3.5%. To help mitigate the adverse impact of inflation, approximately 72% of our leases with our tenants contain rent escalation provisions which increase the cash rent that is due under these leases over time by an average cumulative increase of 2.2% per year. These provisions generally increase rental rates during the terms of the leases either at fixed rates or other measures. As of June 30, 2026, based on straight-line rent, approximately 72% are fixed rate, scheduled escalation increases recorded on a straight-line basis, and 28% do not contain any escalation provisions.