What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-08 · 285 added, 131 removed, 257 unchanged (62% of the section changed)

6 unchanged sentences

Forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.

These risks and uncertainties include those associated with (i) the timing, form, and operational effects of our development activities, (ii) our ability to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and continuing higher interest rates on our operations and profitability, (v) general economic, market and other conditions, including the effects of high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth, and (vi) our approach to artificial intelligence (“AI”).

These risks and uncertainties include those associated with (i) the timing, form, and operational effects of our development activities, (ii) our ability to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and continuing higher interest rates on our operations and profitability, (v) general economic, market and other conditions, including the effects of high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth, (vi) our approach to artificial intelligence (“AI”) and (vii) the ongoing conflict in the Middle East and related disruptions.

Additional important factors that could cause our actual results to differ materially from our expectations are discussed in “Item 1A—Risk Factors” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 10, 2026 (the “2025 Form 10-K”).

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We do not undertake to update them to reflect changes that occur after the date they are made, except as may be required by applicable securities laws.

The following discussion of our financial condition as of March 31, 2026 and results of operations for the three months ended March 31, 2026 and 2025 should be read in conjunction with the 2025 Form 10-K.

The following discussion of our financial condition as of June 30, 2026 and results of operations for the three and six months ended June 30, 2026 and 2025 should be read in conjunction with the 2025 Form 10-K.

For a more detailed description of the risks affecting our financial condition and results of operations, see “Risk Factors” in Part I, Item 1A of the 2025 Form 10-K.

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The phrase “ADR” represents average daily rate.

It is calculated as trailing three-month room revenue divided by the number of rooms occupied.

It is calculated as trailing six-month room revenue divided by the number of rooms occupied.

For sold properties, ADR is presented for the Company’s period of ownership only.

The phrase “annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, multiplied by 12.

The phrase “annualized rent” represents gross monthly base rent, or gross monthly contractual rent under retail leases, multiplied by 12.

This amount reflects total cash rent before abatements.

Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

The phrase “net annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, net of total rent abatements granted in the applicable month, multiplied by 12.

The phrase “net annualized rent” represents gross monthly base rent, or gross monthly contractual rent under retail leases, net of total rent abatements granted in the applicable month, multiplied by 12.

Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

The phrase “RevPAR” represents revenue per available room.

It is calculated as trailing three-month room revenue divided by the number of available rooms.

It is calculated as trailing six-month room revenue divided by the number of available rooms.

For sold properties, RevPAR is presented for the Company’s period of ownership only.

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CIM also maintains additional offices globally with distribution staff and Joint Venture (“JV”) partnerships.

As of March 31, 2026, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures.

As of June 30, 2026, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures.

Our Unconsolidated Joint Ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now being classified as a multifamily property) and one commercial development site.

As of March 31, 2026, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 73.1% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $178.71 for the three months ended March 31, 2026 and our five multifamily properties were 89.6% occupied.

Additionally, as of March 31, 2026, we had eight development sites (two of which were being used as parking lots).

As of June 30, 2026, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 71.9% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $179.59 for the six months ended June 30, 2026 and our five multifamily properties were 93.6% occupied.

Additionally, as of June 30, 2026, we had eight development sites (two of which were being used as parking lots).

We are a Maryland corporation and REIT.

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CIM also seeks to maximize synergies across its vertically integrated platform.

The three investment platforms, real estate, infrastructure, and credit leverage in-house expertise to create value within each investment.

CIM manages assets and pursues opportunities across five platforms:

real estate, credit, infrastructure, opportunity zones, and strategic opportunities, with a focus on generating attractive risk-adjusted returns.

Financing Strategy

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(ii) issuances of interests in our operating partnership in exchange for properties;

(iii) credit facilities and term loans;

(iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral;

(v) the sale of existing assets;

and/or (vi) cash flows from operations.

(iii) issuances of Preferred Stock to one or more of our affiliates;

(iv) credit facilities and term loans;

(v) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral;

(vi) the sale of one or more of our existing assets;

and/or (vii) cash flows from operations.

Rental Rate Trends

1 unchanged sentence

The following table sets forth occupancy rates and annualized rent per occupied square foot across our office portfolio as of the specified periods (includes 100% of our properties partially owned through Unconsolidated Joint Ventures):

As of March 31,

As of June 30,

Occupancy (1)

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Annualized rent for certain office properties includes rent attributable to retail.

Total abatements, representing lease incentives in the form of free rent, for the twelve months ended March 31, 2026 and 2025 were approximately $1.8 million and $1.0 million, respectively.

Giving effect to abatements, net annualized rent per occupied square foot was $55.90 and $58.00 as of March 31, 2026 and 2025, respectively (See Definitions for more detail).

Total abatements, representing lease incentives in the form of free rent, for the twelve months ended June 30, 2026 and 2025 were approximately $1.8 million and $1.1 million, respectively.

Giving effect to abatements, net annualized rent per occupied square foot was $56.94 and $60.05 as of June 30, 2026 and 2025, respectively (See Definitions for more detail).

Over the next four quarters, we expect to see expiring cash rents as set forth in the table below (includes 100% of our properties partially owned through Unconsolidated Joint Ventures):

For the Three Months Ended

June 30, 2026 September 30, 2026 December 31, 2026 March 31, 2027

September 30, 2026 December 31, 2026 March 31, 2027 June 30, 2027

Expiring Cash Rents:

4 unchanged sentences

(1) Month-to-month tenants occupying a total of 5,058 square feet are included in the expiring leases in the first quarter listed.

(2) Represents gross monthly base rent, as of March 31, 2026, under leases expiring during the periods above, multiplied by 12.

(2) Represents gross monthly base rent, as of June 30, 2026, under leases expiring during the periods above, multiplied by 12.

This amount reflects total cash rent before abatements.

Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

During the three months ended March 31, 2026, we executed leases with terms longer than 12 months totaling 20,562 square feet.

The table below sets forth information on certain of our executed leases during the three months ended March 31, 2026, excluding space that was vacant for more than one year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party:

During the three and six months ended June 30, 2026, we executed leases with terms longer than 12 months totaling 16,176 and 36,738 square feet, respectively.

The table below sets forth information on certain of our executed leases during the three and six months ended June 30, 2026, excluding space that was vacant for more than one year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party:

New Cash Expiring Cash

1 unchanged sentence

Square Feet Foot (2)

Three Months Ended March 31, 2026 10 20,562 $ 61.35 $ 65.72

Three Months Ended June 30, 2026 6 16,176 $ 50.21 $ 56.99

Six Months Ended June 30, 2026 16 36,738 $ 56.44 $ 61.87

(1) Based on the number of tenants that signed leases.

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The following table sets forth occupancy rates and the monthly rent per occupied unit across our multifamily portfolio for the specified periods (includes 100% of our properties partially owned through an Unconsolidated Joint Venture):

As of March 31,

As of June 30,

Occupancy 93.6 % 83.4 %

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This amount reflects total cash rent before concessions.

Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,156 and $2,341 as of March 31, 2026 and 2025, respectively.

Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,286 and $2,284 as of June 30, 2026 and 2025, respectively.

Hotel Statistics:

The following table sets forth the occupancy, ADR and RevPAR for our hotel in Sacramento, California for the specified periods:

For the Three Months Ended

For the Six Months Ended

79.6 % 79.2 %

10 unchanged sentences

At the Closing, pursuant to the Membership Interest Purchase Agreement, and upon the terms and subject to the conditions therein, Buyer purchased from the Company all of the issued and outstanding equity interests of First Western for a purchase price of $44.9 million (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), resulting in proceeds of $31.2 million after the repayment of the Lending Division Revolving Credit Facility, and a net gain of $1.7 million.

Subsequent to March 31, 2026, the Company received $1.0 million of escrow proceeds in connection with the Transactions.

The Company received $1.0 million of incremental proceeds held in escrow which was previously contemplated in connection with the Transactions during the three months ended June 30, 2026.

Property Concentration

Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 24.0% of our annualized office rental income for the three months ended March 31, 2026.

Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 24.3% of our annualized office rental income for the three months ended June 30, 2026.

2026 Results of Operations

We are not aware of any material trends or uncertainties, other than geopolitical conflict and national economic conditions affecting real estate in general, such as the effects of high unemployment rates, continued or renewed inflation, heightened interest rates, and any recession or slowdown in economic growth and any proposed or imposed tariffs by the U.S.

We are not aware of any material trends or uncertainties, other than geopolitical conflict and national economic conditions affecting real estate in general, such as the ongoing conflict in the Middle East and related disruptions, the effects of high unemployment rates, continued or renewed inflation, heightened interest rates, any recession or slowdown in economic growth and any proposed or imposed tariffs by the U.S.

government and retaliatory tariffs proposed or imposed by U.S.

trading partners, that may reasonably be expected to have a material impact on our results from operations other than those listed in the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.

Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025

Net Loss and FFO

Three Months Ended March 31, Change

Three Months Ended June 30, Change

2026 2025 $ %

2 unchanged sentences

Total expenses $ 36,447 $ 38,245 $ (1,798) (4.7) %

Gain on sale of First Western

$ 1,737 $ — $ 1,737 N/A

$ (8,417) $ (6,272) $ (2,145) 34.2 %

The Company had a net loss of $8.4 million for the three months ended March 31, 2026, representing an increase of $2.1 million compared to a net loss of $6.3 million for the three months ended March 31, 2025.

The increase in net loss was primarily due to a decrease of $1.9 million in segment net operating income (discussed in more detail below in “Summary Segment Results”).

Net loss $ (9,986) $ (9,151) $ (835) 9.1 %

The Company had a net loss of $10.0 million for the three months ended June 30, 2026, representing an increase of $835,000 compared to a net loss of $9.2 million for the three months ended June 30, 2025.

The increase in net loss was

primarily due to a decrease of $510,000 in segment net operating income (discussed in more detail below in “Summary Segment Results”).

Funds from Operations

We believe that funds from operations (“FFO”), a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results.

FFO represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferred stock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, and real estate depreciation and amortization.

FFO represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable Preferred Stock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, casualty losses, net, and real estate depreciation and amortization.

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”).

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accordingly, our FFO may not be comparable to the FFOs of other REITs.

Therefore, FFO should be considered only as a supplement to net income (loss) as a measure of our

performance and should not be used as a supplement to or substitute measure for cash flows from operating activities computed in accordance with GAAP.

Therefore, FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a supplement to or substitute measure for cash flows from operating activities computed in accordance with GAAP.

FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.

The following table sets forth a historical reconciliation of net (loss) attributable to common stockholders to FFO attributable to holders of common stockholders (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

(in thousands)

Net loss attributable to common stockholders (1)

2 unchanged sentences

Noncontrolling interests’ proportionate share of depreciation and amortization (60) (59)

Gain on sale of First Western

Impairment of real estate — 221

Casualty loss, net 455 —

FFO attributable to common stockholders (1)

$ (3,492) $ (7,853)

(1) During the three months ended March 31, 2026 and 2025, we recognized $22.2 million and $300,000, respectively, of redeemable preferred stock redemptions.

(1) During the three months ended June 30, 2026 and 2025, we recognized $82,000 and $0, respectively, of redeemable Preferred Stock redemptions.

Such amounts are included in, and have the effect of increasing, net loss attributable to common stockholders and FFO attributable to common stockholders because redeemable Preferred Stock redemptions are not an adjustment prescribed by NAREIT.

FFO attributable to common stockholders, which is a non-GAAP measure, was $(28.8) million for the three months ended March 31, 2026, a decrease of $(23.4) million compared to $(5.4) million for the three months ended March 31, 2025.

The decrease in FFO was primarily attributable to an increase in redeemable preferred stock redemptions of $21.9 million, a decrease of $1.9 million in segment net operating income (discussed in more detail below in “Summary Segment Results”) and an increase of $705,000 in loss on early extinguishment of debt, partially offset by a decrease in redeemable preferred stock dividends of $1.3 million.

FFO attributable to common stockholders, which is a non-GAAP measure, was $(3.5) million for the three months ended June 30, 2026, an increase of $4.4 million compared to $(7.9) million for the three months ended June 30, 2025.

The increase in FFO was primarily attributable to a decrease in redeemable Preferred Stock dividends of $4.3 million, and a decrease in transaction-related costs of $786,000, partially offset by a decrease of $510,000 in segment net operating income (discussed in more detail below in “Summary Segment Results”).

Summary Segment Results

During the three months ended March 31, 2026 and 2025, we operated in three segments:

During the three months ended June 30, 2026 and 2025, we operated in three segments:

office, hotel and multifamily properties.

As previously disclosed, the Company completed the sale of its lending business on January 21, 2026, and, as a result, the Company’s lending business ceased to be one of the Company’s reportable segments during the three months ended March 31, 2026.

As the lending segment activity was de minimis during the period it remained under the Company’s ownership for the three months ended March 31, 2026, the related amounts are included within non-segment interest and other income, interest expense, and general and administrative, as applicable, in the following table for the three months ended March 31, 2026.

Set forth and described below are summary segment results for our operating segments (dollar amounts in thousands).

Three Months Ended

March 31, Change

June 30, Change

2026 2025 $ %

(dollars in thousands)

Office $ 12,491 $ 11,877 $ 614 5.2 %

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Lending $ — $ 2,137 $ (2,137) NM*

Income (Loss) From Unconsolidated Entities

(Loss) Income From Unconsolidated Entities

Office $ (2,217) $ 175 $ (2,392) NM*

1 unchanged sentence

Non-Segment Revenue and Expenses:

Interest and other income $ 591 $ 91 $ 500 NM*

Interest and other income $ 144 $ 143 $ 1 0.7 %

Asset management and other fees to related parties $ (859) $ (349) $ (510) NM*

Expense reimbursements to related parties—corporate $ (852) $ (891) $ 39 (4.4) %

Interest expense $ (9,046) $ (9,627) $ 581 (6.0) %

General and administrative $ (1,139) $ (712) $ (427) 60.0 %

Transaction-related costs $ (17) $ (803) $ 786 (97.9) %

Depreciation and amortization $ (7,071) $ (6,264) $ (807) 12.9 %

Loss on early extinguishment of debt $ — $ (88) $ 88 NM*

Casualty loss, net $ (455) $ — $ (455) N/A

Impairment of real estate $ — $ (221) $ 221 NM*

Provision for income taxes $ — $ (158) $ 158 NM*

______________________

(*) Percentage changes in excess of 100% are deemed to be not meaningful (“NM”)

Office Revenue:

Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties.

Office revenue increased to $12.5 million for the three months ended June 30, 2026 from $11.9 million for the three months ended June 30, 2025.

The change was primarily due to an increase in rental revenue and tenant reimbursement revenue at an office property in Los Angeles, California, in addition to an increase in tenant reimbursement revenue at an office property in Oakland, California.

Hotel Revenue:

Hotel revenue increased to $12.8 million for the three months ended June 30, 2026, compared to $11.6 million for the three months ended June 30, 2025.

The increase was primarily due to an increase in room revenue and an

increase in food and beverage revenues, as a result of increased occupancy for the three months ended June 30, 2026, compared to June 30, 2025.

Multifamily Revenue:

Multifamily revenue increased to $4.3 million for the three months ended June 30, 2026, compared to $3.9 million for the three months ended June 30, 2025.

The increase was primarily due to an increase in occupancy at our multifamily properties during the three months ended June 30, 2026.

Lending Revenue:

Lending revenue represented interest income on loans and other loan-related fee income from our lending business (First Western), which was sold on January 21, 2026.

As such, the Company recorded no lending revenue for the three months ended June 30, 2026, compared to $2.1 million for the three months ended June 30, 2025.

(Loss) Income From Unconsolidated Office Entities:

Loss from our unconsolidated office entities was $2.2 million for the three months ended June 30, 2026, compared to income from our unconsolidated office entities of $175,000 for the three months ended June 30, 2025.

The change was primarily due to fair value adjustments to real estate at two of our unconsolidated office entities during the three months ended June 30, 2026.

Loss From Unconsolidated Multifamily Entities:

Loss from our unconsolidated multifamily entities increased to $1.0 million for the three months ended June 30, 2026, compared to $612,000 for the three months ended June 30, 2025.

The change was primarily due to an increase in the unrealized loss on investments in real estate at our unconsolidated multifamily entities during the three months ended June 30, 2026.

Interest and Other Income:

Interest and other income, which has not been allocated to our operating segments, was $144,000 for the three months ended June 30, 2026, consistent with $143,000 for the three months ended June 30, 2025.

Office Expenses:

Office expenses decreased to $6.2 million for the three months ended June 30, 2026, compared to $6.5 million for the three months ended June 30, 2025.

The decrease was primarily a result of a decrease in real estate taxes at an office property in Los Angeles, California and lower administrative costs at an office property in Austin, Texas and across five of our office properties in Los Angeles, California for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Hotel Expenses:

Hotel expenses increased to $8.2 million for the three months ended June 30, 2026, compared to $7.5 million for the three months ended June 30, 2025.

The increase was due to an increase in food and beverage expenses and room expenses, driven primarily by increased occupancy for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, in addition to an increase in general and administrative expenses compared to the prior year period.

Multifamily Expenses:

Multifamily expenses decreased to $2.6 million for the three months ended June 30, 2026, compared to $3.1 million for the three months ended June 30, 2025.

The decrease was primarily due to a decrease in real estate taxes at our multifamily properties in Oakland, California for the three months ended June 30, 2026, compared to the prior period.

Lending Expenses:

Lending expenses included interest expense, general and administrative expenses and fees to related parties from our lending business (First Western), which was sold on January 21, 2026.

As such, the Company recorded no lending expenses for the three months ended June 30, 2026, compared to $2.1 million for the three months ended June 30, 2025.

Asset Management and Other Fees to Related Parties:

Asset management fees and other fees to related parties, which have not been allocated to our operating segments increased to $859,000 for the three months ended June 30, 2026, compared to $349,000 for the three months ended June 30, 2025.

The change was a result of an increase in asset management fees driven by an increase in our net asset value attributable to common stockholders resulting from the issuance of additional shares of Common Stock, primarily during the first quarter of 2026.

Expense Reimbursements to Related Parties—Corporate :

The Administrator receives compensation and/or reimbursement for performing certain services for the Company and its subsidiaries.

Expense reimbursements to related parties—corporate were $852,000 for the three months ended June 30, 2026, relatively consistent with $891,000 for the three months ended June 30, 2025.

Interest Expense:

Interest expense, which has not been allocated to our operating segments, was $9.0 million for the three months ended June 30, 2026, compared to $9.6 million for the three months ended June 30, 2025.

The decrease was primarily due to a decrease in the outstanding balance on the Channel House Mortgage subsequent to June 30, 2025 in addition to a decrease in variable interest rates.

General and Administrative Expenses:

General and administrative expenses, which have not been allocated to our operating segments, were $1.1 million for the three months ended June 30, 2026, compared to $712,000 for the three months ended June 30, 2025.

The change was primarily due to legal fees normalizing from below-average levels when compared to the prior year period.

Transaction-Related Costs:

Transaction-related costs were $17,000 for the three months ended June 30, 2026, compared to $803,000 for the three months ended June 30, 2025.

The decrease was due to a lower volume of contemplated transactions and reduced dead deal costs incurred during the three months ended June 30, 2026 compared to the prior year period.

Depreciation and Amortization Expense:

Depreciation and amortization expense increased to $7.1 million for the three months ended June 30, 2026, compared to $6.3 million for the three months ended June 30, 2025.

The increase was primarily due to an increase in tenant improvement amortization at an office property located in Beverly Hills, California, as well as an increase at our hotel property due to renovation projects which have increased depreciable assets.

Impairment of Real Estate:

No impairment of real estate was recognized during the three months ended June 30, 2026, compared to $221,000 for the three months ended June 30, 2025, due to an impairment charge recognized in connection with an office property in Austin, Texas.

Loss on Early Extinguishment of Debt:

Loss on early extinguishment of debt was $88,000 for the three months ended June 30, 2025 in connection with the payoff and termination of the 2022 credit facility.

No such amounts were recorded during the three months ended June 30, 2026.

Casualty Loss, Net:

Casualty loss, net was $455,000 for the three months ended June 30, 2026, due to water damage at our hotel property.

No such amounts were recognized during the prior year period.

Provision for Income Taxes:

There was no provision for income taxes for the three months ended June 30, 2026, compared to a provision for income taxes of $158,000 for the three months ended June 30, 2025.

The decrease was primarily due to the sale of First Western, one of our taxable REIT subsidiaries, in January 2026.

2026 Results of Operations

Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

Net Loss and FFO

Six Months Ended June 30, Change

2026 2025 $ %

Total revenues $ 59,100 $ 61,984 $ (2,884) (4.7) %

Total expenses $ 74,642 $ 75,540 $ (898) (1.2) %

Gain on sale of First Western $ 1,737 $ — $ 1,737 N/A

$ (18,403) $ (15,423) $ (2,980) 19.3 %

The Company had a net loss of $18.4 million for the six months ended June 30, 2026, representing an increase of $3.0 million compared to a net loss of $15.4 million for the six months ended June 30, 2025.

The change was primarily driven by an increase in depreciation and amortization of $2.0 million and a decrease of $2.4 million in segment net operating income (discussed in more detail below in “Summary Segment Results”), partially offset by a $1.7 million gain on sale of First Western recognized during the six months ended June 30, 2026.

Funds from Operations

We believe that FFO, a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results.

We calculate FFO in accordance with the standards established by NAREIT.

Like any metric, FFO should not be used as the only measure of our performance because it excludes depreciation and amortization and captures neither the changes in the value of our real estate properties that result from use or market conditions

nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our operating results.

Other REITs may not calculate FFO in accordance with the standards established by the NAREIT;

accordingly, our FFO may not be comparable to the FFOs of other REITs.

FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.

The following table sets forth a historical reconciliation of net (loss) attributable to common stockholders to FFO attributable to holders of common stockholders:

Six Months Ended June 30,

Net loss attributable to common stockholders (1)

$ (45,653) $ (26,177)

Depreciation and amortization 14,792 12,824

Noncontrolling interests’ proportionate share of depreciation and amortization (118) (126)

Impairment of real estate — 221

Gain on sale of First Western (1,737) —

Casualty loss, net 455 —

FFO attributable to common stockholders (1)

$ (32,261) $ (13,258)

(1) During the six months ended June 30, 2026 and 2025, we recognized $22.3 million and $300,000, respectively, of redeemable Preferred Stock redemptions.

Such amounts are included in, and have the effect of increasing, net loss attributable to common stockholders and decreasing FFO attributable to common stockholders because redeemable Preferred Stock redemptions are not an adjustment prescribed by NAREIT.

FFO attributable to common stockholders, which is a non-GAAP measure, was $(32.3) million for the six months ended June 30, 2026, a decrease of $(19.0) million compared to $(13.3) million for the six months ended June 30, 2025.

The decrease in FFO was primarily attributable to an increase in redeemable Preferred Stock redemptions of $22.0 million and a decrease of $2.4 million in segment net operating income (discussed in more detail below in “Summary Segment Results”), partially offset by a decrease in redeemable Preferred Stock dividends of $5.6 million.

Summary Segment Results

During the six months ended June 30, 2026 and 2025, we operated in three segments:

office, hotel and multifamily properties.

Set forth and described below are summary segment results for our operating segments (dollar amounts in thousands).

Six Months Ended

June 30, Change

2026 2025 $ %

Office $ 25,069 $ 24,931 $ 138 0.6 %

Hotel $ 25,156 $ 24,316 $ 840 3.5 %

$ 8,140 $ 8,035 $ 105 1.3 %

Lending $ — $ 4,468 $ (4,468) NM*

Office $ 12,368 $ 12,457 $ (89) (0.7) %

Hotel $ 16,576 $ 15,474 $ 1,102 7.1 %

$ 5,672 $ 6,732 $ (1,060) (15.7) %

Lending $ — $ 3,925 $ (3,925) NM*

(Loss) Income From Unconsolidated Entities

Office $ (2,155) $ 146 $ (2,301) NM*

$ (2,443) $ (1,734) $ (709) 40.9 %

Non-Segment Revenue and Expenses:

Interest and other income $ 735 $ 234 $ 501 NM*

Asset management and other fees to related parties $ (1,443) $ (709) $ (734) NM*

Expense reimbursements to related parties—corporate $ (1,727) $ (1,517) $ (210) 13.8 %

Interest expense $ (18,170) $ (18,811) $ 641 (3.4) %

General and administrative $ (2,710) $ (1,953) $ (757) 38.8 %

Transaction-related costs $ (7) $ (26) $ 19 NM*

Transaction-related costs $ (24) $ (829) $ 805 (97.1) %

Depreciation and amortization $ (14,792) $ (12,824) $ (1,968) 15.3 %

Loss on early extinguishment of debt $ (705) $ — $ (705) N/A

Loss on early extinguishment of debt $ (705) $ (88) $ (617) NM*

Casualty loss, net $ (455) $ — $ (455) N/A

Impairment of real estate $ — $ (221) $ 221 NM*

Gain on sale of First Western $ 1,737 $ — $ 1,737 N/A

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Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties.

Office revenue decreased to $12.6 million for the three months ended March 31, 2026 from $13.1 million for the three months ended March 31, 2025.

The change is primarily due to a decrease in tenant reimbursement revenue at an office property in Oakland, California.

Office revenue remained relatively consistent at $25.1 million for the six months ended June 30, 2026, compared to $24.9 million for the six months ended June 30, 2025.

Hotel Revenue:

Hotel revenue decreased to $12.4 million for the three months ended March 31, 2026, compared to $12.7 million for the three months ended March 31, 2025.

The decrease was largely attributable to temporary factors, including

a renovation-related disruption early in the quarter, and an issue in one of the mechanical systems that temporarily removed a number of rooms from service in March of 2026.

Hotel revenue increased to $25.2 million for the six months ended June 30, 2026, compared to $24.3 million for the six months ended June 30, 2025.

The increase was primarily due to an increase in average daily rate and occupancy during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Multifamily Revenue:

Multifamily revenue decreased to $3.9 million for the three months ended March 31, 2026, compared to $4.1 million for the three months ended March 31, 2025.

The decrease is primarily due to decreased rent per occupied unit, net of rent concessions, at our multifamily properties during the three months ended March 31, 2026.

Multifamily revenue remained relatively consistent at $8.1 million for the six months ended June 30, 2026, compared to $8.0 million for the six months ended June 30, 2025.

Lending Revenue:

Lending revenue represented interest income on loans and other loan-related fee income from our lending business (First Western), which was sold on January 21, 2026.

The Company recorded no lending revenue for the three months ended March 31, 2026, compared to $2.4 million for the three months ended March 31, 2025.

Lending revenue for the period First Western was still under ownership during the three months ended March 31, 2026 was recorded to interest and other income not allocated to any of our operating segments.

Income (Loss) From Unconsolidated Office Entities:

Income from our unconsolidated office entities was $62,000 for the three months ended March 31, 2026, compared to a loss of $29,000 for the three months ended March 31, 2025.

The increase was due to an increase in rental revenues at one of our unconsolidated office entities during the three months ended March 31, 2026.

The Company recorded no revenue for the six months ended June 30, 2026, compared to $4.5 million for the six months ended June 30, 2025.

Lending revenue for the period First Western was still under ownership during the six months ended June 30, 2026 was recorded to interest and other income not allocated to any of our operating segments.

(Loss) Income From Unconsolidated Office Entities:

Loss from our unconsolidated office entities was $2.2 million for the six months ended June 30, 2026, compared to income of $146,000 for the six months ended June 30, 2025.

The change was primarily due to fair value adjustments to real estate at two of our unconsolidated office entities during the six months ended June 30, 2026.

Loss From Unconsolidated Multifamily Entities:

The loss from our unconsolidated multifamily entities increased to $1.4 million for the three months ended March 31, 2026, compared to $1.1 million for the three months ended March 31, 2025.

The increase is due to an increase in the unrealized loss on investments in real estate at one of our unconsolidated multifamily entities during the three months ended March 31, 2026, partially offset by an increase in rental revenues at the property.

Loss from our unconsolidated multifamily entities was $2.4 million for the six months ended June 30, 2026, compared to a loss of $1.7 million for the six months ended June 30, 2025.

The change was primarily due to an increase in the unrealized loss on investments in real estate at our unconsolidated multifamily entities, partially offset by an increase in rental revenues during the six months ended June 30, 2026, compared to the prior year period.

Interest and Other Income:

Interest and other income, which has not been allocated to our operating segments, was $591,000 for the three months ended March 31, 2026, compared to $91,000 for the three months ended March 31, 2025.

The increase is primarily due the Company recording lending revenue for the period First Western was still under ownership during the three months ended March 31, 2026 to interest and other income.

Interest and other income, which has not been allocated to our operating segments, increased to $735,000 for the six months ended June 30, 2026, compared to $234,000 for the six months ended June 30, 2025.

The increase was primarily due to the Company recording lending revenue for the period First Western was still under ownership during the six months ended June 30, 2026 to interest and other income.

Office Expenses:

Office expenses increased to $6.1 million for the three months ended March 31, 2026, compared to $5.9 million for the three months ended March 31, 2025.

The increase is primarily a result of an increase in real estate tax expense at an office property in Beverly Hills, California for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven by a tax refund recorded in the prior-year period.

Office expenses remained relatively consistent at $12.4 million for the six months ended June 30, 2026, compared to $12.5 million for the six months ended June 30, 2025.

Hotel Expenses:

Hotel expenses increased to $8.4 million for the three months ended March 31, 2026, compared to $8.0 million for the three months ended March 31, 2025.

The increase is due to an increase in operating expenses and administrative expenses, driven mostly by elevated maintenance and marketing costs for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Hotel expenses were $16.6 million for the six months ended June 30, 2026, compared to $15.5 million for the six months ended June 30, 2025.

The increase was primarily due to an increase in food and beverage expenses and room expenses, driven primarily by increased occupancy during the six months ended June 30, 2026 compared to the prior year period.

The increase was further driven by increased advertising and general and administrative expenses during the six months ended June 30, 2026.

Multifamily Expenses:

Multifamily expenses decreased to $3.0 million for the three months ended March 31, 2026, compared to $3.6 million for the three months ended March 31, 2025.

The decrease was primarily due to a decrease in real estate tax expenses at multifamily properties in Oakland, California for the three months ended March 31, 2026, compared to the prior period.

Multifamily expenses decreased to $5.7 million for the six months ended June 30, 2026, compared to $6.7 million for the six months ended June 30, 2025.

The decrease was primarily due to a decrease in real estate taxes at our multifamily properties during the six months ended June 30, 2026 compared to the prior year period.

Lending Expenses:

Lending expenses included interest expense, general and administrative expenses and fees to related parties from our lending business (First Western), which was sold on January 21, 2026.

The Company recorded no lending expenses for the three months ended March 31, 2026, compared to $1.8 million for the three months ended March 31, 2025.

Lending expenses for the period First Western was still under ownership during the three months ended March 31, 2026 were recorded to general and administrative expenses and interest expense not allocated to any of our operating segments.

As such, the Company recorded no lending expenses for the six months ended June 30, 2026, compared to $3.9 million for the six months ended June 30, 2025.

Lending expenses for the period First Western was still under ownership during the six months ended June 30, 2026 were recorded to general and administrative expenses and interest expense not allocated to any of our operating segments.

Asset Management and Other Fees to Related Parties:

Asset management fees and other fees to related parties, which have not been allocated to our operating segments increased to $584,000 for the three months ended March 31, 2026, compared to $360,000 for the three months ended March 31, 2025.

Asset management fees and other fees to related parties, which have not been allocated to our operating segments increased to $1.4 million for the six months ended June 30, 2026, compared to $709,000 for the six months ended June 30, 2025.

Expense Reimbursements to Related Parties—Corporate :

The Administrator receives compensation and/or reimbursement for performing certain services for the Company and its subsidiaries.

Expense reimbursements to related parties—corporate were $875,000 for the three months ended March 31, 2026, compared to $626,000 for the three months ended March 31, 2025.

The change was primarily due to an increase in expense allocation as well as an increase in legal services.

Expense reimbursements to related parties—corporate were $1.7 million for the six months ended June 30, 2026, an increase from $1.5 million for the six months ended June 30, 2025.

The increase was primarily attributable to an increase in legal services.

Interest Expense:

Interest expense, which has not been allocated to our operating segments, was $9.1 million for the three months ended March 31, 2026, consistent with $9.2 million for the three months ended March 31, 2025.

Interest expense, which has not been allocated to our operating segments, decreased to $18.2 million for the six months ended June 30, 2026, compared to $18.8 million for the six months ended June 30, 2025.

The decrease was primarily attributable to a lower average outstanding principal balance on our debt resulting from debt repayments, as well as lower variable interest rates during the six months ended June 30, 2026.

General and Administrative Expenses:

General and administrative expenses, which have not been allocated to our operating segments, were $1.6 million for the three months ended March 31, 2026, compared to $1.2 million for the three months ended March 31, 2025.

The increase is primarily due the Company recording lending general and administrative expenses for the period First Western was still under ownership during the three months ended March 31, 2026 to general and administrative expenses not allocated to any of our operating segments.

General and administrative expenses, which have not been allocated to our operating segments, were $2.7 million for the six months ended June 30, 2026, compared to $2.0 million for the six months ended June 30, 2025.

The increase was primarily due to the Company recording lending general and administrative expenses for the period First Western was still under ownership during the six months ended June 30, 2026 to general and administrative expenses not allocated to any of our operating segments, in addition to legal fees normalizing from below-average levels when compared to the prior year period.

Transaction-Related Costs:

Transaction-related costs were $7,000 for the three months ended March 31, 2026, generally consistent with $26,000 for the three months ended March 31, 2025.

Transaction-related costs were $24,000 for the six months ended June 30, 2026, compared to $829,000 for the six months ended June 30, 2025.

The decrease was due to a lower volume of contemplated transactions and reduced dead deal costs incurred during the six months ended June 30, 2026.

Depreciation and Amortization Expense:

Depreciation and amortization expense increased to $7.7 million for the three months ended March 31, 2026, compared to $6.6 million for the three months ended March 31, 2025.

Depreciation and amortization expense increased to $14.8 million for the six months ended June 30, 2026, compared to $12.8 million for the six months ended June 30, 2025.

Loss on Early Extinguishment of Debt:

Loss on early extinguishment of debt increased to $705,000 for the six months ended June 30, 2026 in connection with the payoff and termination of the Lending Division Revolving Credit Facility, compared to $88,000 for the six months ended June 30, 2025 in connection with the payoff and termination of the 2022 credit facility.

Impairment of Real Estate:

No impairment of real estate was recognized during the six months ended June 30, 2026, compared to $221,000 for the six months ended June 30, 2025, due to an impairment charge recognized in connection with an office property in Austin, Texas.

Gain on sale of First Western:

Gain on sale of First Western was $1.7 million for the three months ended March 31, 2026, related to the sale of First Western in January 2026.

There were no such amounts recorded for the three months ended March 31, 2025.

Gain on sale of First Western was $1.7 million for the six months ended June 30, 2026 as a result of the sale of First Western in January 2026.

There were no such amounts recorded for the six months ended June 30, 2025.

Casualty Loss, Net:

Casualty loss, net was $455,000 for the six months ended June 30, 2026, due to water damage at our hotel property.

No such amounts were recognized during the prior year period.

Provision for Income Taxes:

There was no provision for income taxes for the three months ended March 31, 2026, compared to a provision for income taxes of $121,000 for the three months ended March 31, 2025.

The decrease is primarily due to the sale of First Western, one of our taxable REIT subsidiaries, on January 21, 2026.

There was no provision for income taxes for the six months ended June 30, 2026, compared to $279,000 for the six months ended June 30, 2025.

The decrease was primarily due to the sale of First Western, one of our taxable REIT subsidiaries, in January 2026.

Cash Flow Analysis

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Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs.

Net cash used in operating activities was $26.0 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $1.2 million for the three months ended March 31, 2025.

The decrease is primarily due to changes in working capital, including the timing of cash payments related to amounts due to related parties, as well as, an increase in net loss, adjusted for depreciation and amortization expense and other non-cash items of $2.4 million.

Net cash used in operating activities was $22.5 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $1.3 million for the six months ended June 30, 2025.

The increase is primarily due to changes in working capital, including the timing of cash payments related to amounts due to related parties.

Our cash flows from investing activities are primarily related to property acquisitions and dispositions, expenditures for the development or repositioning of properties, capital expenditures and, prior to the sale of First Western in January 2026, cash flows associated with loans originated at our lending segment.

Net cash provided by investing activities was $41.4 million for the three months ended March 31, 2026, compared to net cash used in investing activities of $5.2 million for the three months ended March 31, 2025.

The change was primarily due to $44.6 million of proceeds from the sale of assets held for sale, net, in connection with the sale of First Western, as further discussed in Note 5 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, as well as a $2.3 million decrease in capital expenditures, partially offset by a decrease in proceeds from principal loan collections, net of loans funded, of $2.0 million during the three months ended March 31, 2026 as compared to the same period in 2025.

Net cash provided by investing activities was $40.1 million for the six months ended June 30, 2026, compared to net cash used in investing activities of $10.2 million for the six months ended June 30, 2025.

The change was primarily due to $45.6 million of proceeds from the sale of assets held for sale, net, in connection with the sale of First Western, as further discussed in Note 5 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, as well as $6.4 million decrease in capital expenditures, partially offset by a decrease in proceeds from principal loan collections, net of loans funded, of $3.7 million during the six months ended June 30, 2026 as compared to the same period in 2025.

Our cash flows from financing activities are generally impacted by borrowings and capital activities.

Net cash used in financing activities for the three months ended March 31, 2026 was $15.4 million, compared to net cash provided by financing activities of $206,000 for the three months ended March 31, 2025.

The change was primarily due to net repayments on debt of $10.3 million during the three months ended March 31, 2026, as compared to net proceeds from debt of $6.4 million during the three months ended March 31, 2025.

The change was partially offset by a $1.0 million decrease in preferred stock dividends paid during three months ended March 31, 2026, as compared to the same period in 2025.

Net cash used in financing activities for the six months ended June 30, 2026 was $18.5 million, compared to net cash provided by financing activities of $16.5 million for the six months ended June 30, 2025.

The change was primarily due to net repayments on debt of $12.2 million during the six months ended June 30, 2026, as compared to net proceeds from debt of $30.3 million during the six

months ended June 30, 2025.

The change was partially offset by a $5.4 million decrease in Preferred Stock dividends paid and a $2.0 million decrease in deferred cost paid during six months ended June 30, 2026, as compared to the same period in 2025.

Liquidity and Capital Resources

On a short-term basis, our principal demands for funds will be for the acquisition of assets, development or repositioning of properties (as further described below) (including pre-construction costs such as obtaining entitlements and permits and architectural work), or re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, and paying distributions on our Preferred Stock.

On a short-term basis, our principal demands for funds will be for the acquisition of assets, development or repositioning of properties (as further described below) (including pre-construction costs such as obtaining entitlements and permits and architectural work), re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, funding redemptions of our Preferred Stock, and paying distributions on our Preferred Stock.

We may finance our future activities through one or more of the following methods:

(i) offerings of shares of Common Stock or other equity and/or debt securities of

(i) offerings of shares of Common Stock or other equity and/or debt securities of the Company;

(ii) issuances of interests in our operating partnership in exchange for properties;

(iii) credit facilities and term loans;

(iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral;

(v) the sale of existing assets;

and/or (vi) cash flows from operations .

Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, or re-leasing of space in existing properties, capital expenditures, paying interest and principal on debt financings, refinancing of indebtedness, paying distributions on our Preferred Stock or any other preferred stock we may issue, any future repurchase of Common Stock and/or redemption of our Preferred Stock (if we choose, or are required, to pay the redemption price in cash instead of in shares of our Common Stock) and any renewed distributions on our Common Stock.

(iii) issuances of Preferred Stock to one or more of our affiliates;

(iv) credit facilities and term loans;

(v) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral;

(vi) the sale of one or more of our existing assets;

and/or (vii) cash flows from operations.

We are currently evaluating a number of these alternatives in respect of our short-term cash requirements, including the potential private issuance of additional shares of Preferred Stock to one or more of our affiliates and the potential sale of one or more of our real estate assets.

There can be no assurance that we will complete any such issuance or asset sale, or, if completed, as to the timing, size or terms thereof.

Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, re-leasing of space in existing properties, capital expenditures, paying interest and principal on debt financings, refinancing of indebtedness, funding redemptions of our Preferred Stock, paying distributions on our Preferred Stock or any other Preferred Stock we may issue, any future repurchase of Common Stock and/or redemption of our Preferred Stock (if we choose, or are required, to pay the redemption price in cash instead of in shares of our Common Stock) and any renewed distributions on our Common Stock.

To the extent we decide to proceed with development work on any of our development sites (in addition to those discussed below), we will have increased liquidity needs.

Construction has been substantially completed on the renovation of the Sheraton Grand Hotel’s guest rooms and corridors (the “Rooms Renovation Project”) at our Sheraton Grand Hotel in Sacramento, California, with total costs incurred of $21.5 million as of March 31, 2026.

We also started our renovation of Sheraton Grand Hotel’s lobbies and common areas (the “Lobby Renovation Project”) during the third quarter of 2025.

The estimated cost for the Lobby Renovation Project is approximately $11.6 million, of which $9.0 million had been incurred as of March 31, 2026.

The estimated cost for the Lobby Renovation Project is approximately $11.6 million, of which $9.2 million had been incurred as of June 30, 2026.

Both the Rooms Renovation Project and Lobby Renovation Project are being funded by a combination of draws on the mortgage loan at the property, key money from the Sheraton Grand Hotel’s franchisor, and cash from operations of the hotel.

In addition, we are evaluating a potential refinancing and are in discussions with and receiving proposals from potential lenders related to the Sheraton Hotel that could result in an upsized loan and a reduced interest rate.

In addition, we are in discussions with a lender related to the Sheraton Hotel to refinance the asset, which we expect to result in an upsized loan and a reduced interest rate.

From and after September 2024, at our option, we redeemed 10,129,244, 4,019,649 and 21,760 shares of Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock, respectively, in shares of Common Stock and we have paid holder-requested redemptions of 935,176, 798,574, and 4,122 shares of Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock, respectively, in shares of Common Stock.

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However, the Company will evaluate redemption requests submitted by holders of its shares of Preferred Stock at the time it receives them and may elect to redeem those Preferred Shares in Common Stock or cash, at the Company’s discretion.

As of May 1, 2026, the Company has received redemption requests related to Series A1 Preferred Stock and Series A Preferred Stock, totaling approximately $204,000, which the Company intends to redeem in shares of Common Stock as soon as practical after the Company opens its trading window in accordance with its Insider Trading Policy.

In order to fund cash redemptions of Preferred Stock, the Company may pursue one or more of the financing alternatives described above, including issuances of Preferred Stock to one or more of our affiliates and/or the sale of one or more of our real estate assets.

The measures noted above, taken together, strengthen our balance sheet and improve liquidity.

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The nature of our business, and the requirements imposed by REIT rules that we distribute a substantial majority of our REIT taxable income on an annual basis in the form of dividends, may cause us to have substantial liquidity needs over the long-term.

While we will seek to satisfy such needs through one or more of the methods described in this Quarterly Report on Form 10-Q, our ability to take such actions is highly uncertain and cannot be predicted, and could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in “Item 1A—Risk Factors” of the 2025 Form 10-K.

While we will seek to satisfy such needs through one or more of the methods described in this

Quarterly Report on Form 10-Q, our ability to take such actions is highly uncertain and cannot be predicted, and could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in “Item 1A—Risk Factors” of the 2025 Form 10-K.

If we cannot obtain funding for our long-term liquidity needs, our assets may generate lower cash flows or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or any renewed distributions on our Common Stock.

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On May 1, 2025, we received a letter from the Nasdaq Listing Qualification Department informing the Company that it had regained compliance with the Bid Price Requirement as of April 30, 2025 due to the price of our Common Stock maintaining a minimum bid price in excess of $1.00 for ten consecutive business days.

In addition, in order to remain in compliance with Nasdaq’s Modified Low-

Price Requirement (which triggers an immediate suspension of trading and potential delisting notice for securities that do not maintain a closing bid price of greater than $0.10 for ten consecutive trading days), the Company effected a 1-for-10 reverse stock split on March 26, 2026 and, in order to remain in compliance with the Bid Price Requirement, the Company effected an additional 1-for-10 reverse stock split on April 20, 2026.

In addition, in order to remain in compliance with Nasdaq’s Modified Low-Price Requirement (which triggers an immediate suspension of trading and potential delisting notice for securities that do not maintain a closing bid price of greater than $0.10 for ten consecutive trading days), the Company effected a 1-for-10 reverse stock split on March 26, 2026 and, in order to remain in compliance with the Bid Price Requirement, the Company effected an additional 1-for-10 reverse stock split on April 20, 2026.

However, our ability to maintain compliance with Nasdaq’s listing standards requirements in the future, including the Bid Price Requirement, is not guaranteed.

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Sources and Uses of Funds

We have mortgage loan agreements with outstanding balances of $477.1 million as of March 31, 2026.

Our mortgage loans mature on various dates from June 7, 2026 through January 11, 2030.

With regard to the mortgage payable with a balance of $66.3 million as of March 31, 2026 maturing on June 7, 2026 (the “1150 Clay Mortgage”), the Company executed the final one-year extension option under the mortgage in June 2025.

The Company intends to work with the lender in order to refinance the 1150 Clay Mortgage beyond its stated maturity date of June 7, 2026.

We have mortgage loan agreements with outstanding balances of $475.2 million as of June 30, 2026.

Our mortgage loans mature on various dates from July 1, 2026 through January 11, 2030.

With regard to the mortgage payable with a balance of $64.3 million as of June 30, 2026 (the “1150 Clay Mortgage”), on May 29, 2026, the Company reached an agreement with the lender to extend the maturity date through June 7, 2027 (the “1150 Clay Mortgage Extension”).

In connection with the 1150 Clay Mortgage Extension, the Company made a $2.0 million repayment under the 1150 Clay Mortgage.

The Company intends to refinance the 1150 Clay Mortgage beyond its stated maturity date of June 7, 2027.

Although the Company believes it is likely it will be able to refinance the 1150 Clay Mortgage prior to June 7, 2027, there can be no assurance that such refinancing will occur.

If the Company and the lender under the 1150 Clay Mortgage cannot agree on an extension of the mortgage and the Company fails to repay the loan in full upon its contractual maturity date, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, take possession of the property.

With regard to the mortgage payable with a balance of $81.0 million as of March 31, 2026 secured by a multifamily property in Oakland, California (the “Channel House Mortgage”), on August 4, 2025 the Company reached an agreement with the lender to extend the maturity date through January 31, 2027 (the “Channel House Mortgage Extension”).

If the Company cannot refinance the mortgage and the Company fails to repay the loan in full upon its contractual maturity date, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, take possession of the property.

With regard to the mortgage payable with a balance of $81.0 million as of June 30, 2026 secured by a multifamily property in Oakland, California (the “Channel House Mortgage”), on August 4, 2025 the Company reached an agreement with the lender to extend the maturity date through January 31, 2027 (the “Channel House Mortgage Extension”).

In connection with the Channel House Mortgage Extension, the Company made a repayment of $6.0 million under the Channel House Mortgage, reducing it from its previous balance of $87.0 million.

The Company intends to refinance the Channel House Mortgage beyond its stated maturity date of January 31, 2027.

Although the Company believes it is likely it will be able to refinance the Channel House Mortgage prior to January 31, 2027, there can be no assurance that such refinancing will occur.

If the Company and the lender under the Channel House Mortgage cannot agree on an extension of the mortgage and the Company fails to repay the loan in full upon its contractual maturity date, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, take possession of the property.

With regard to the mortgage payable with a balance of $97.1 million as of March 31, 2026 maturing on July 1, 2026 (the “1 Kaiser Mortgage”), the Company intends to work with the lender in order to refinance the 1 Kaiser Mortgage beyond its stated maturity date of July 1, 2026.

Although the Company believes it is likely it will be able to refinance the 1 Kaiser Mortgage prior to July 1, 2026, there can be no assurance that such refinancing will occur.

If the Company and the lender under the 1 Kaiser Mortgage cannot agree on an extension of the mortgage and the Company fails to repay the loan in full upon its contractual maturity date, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, take possession of the property.

With regard to the mortgage payable with a balance of $97.1 million as of June 30, 2026 (the “Oakland Office Mortgage”), the Company has been in maturity default since July 1, 2026 as the outstanding mortgage payable was not repaid on its contractual maturity date of July 1, 2026.

The Company is evaluating its options with respect to the maturity default, including potential discussions with the lender regarding a resolution of the matured indebtedness and an extension of the Oakland Office Mortgage.

There can be no assurance regarding the timing or outcome of this matter.

If the Company and the

lender under the Oakland Office Mortgage cannot agree on a resolution and the Company fails to repay the loan in full, such failure would allow the lender to, among other remedies, take possession of the property.

As a result of the maturity default, all rents, profits and income derived from the property are the property of the lender and must be held in trust for the benefit of the lender.

Further, pursuant to the loan agreement entered into in connection with the Oakland Office Mortgage, upon an event of default, all accrued and unpaid interest in respect of the Oakland Office Mortgage and any other amounts due under the loan agreement, accrue interest at the specified default rate per annum equal to the lesser of (a) the maximum legal rate as set forth in the loan agreement or (b) 5.0% above the interest rate of 4.14% per annum.

In addition, the Company is party to a guaranty related to certain obligations associated with the Oakland Office Mortgage.

Upon the occurrence of specified events, the Company may be required to fund such obligations.

See Note 15 to the consolidated financial statements included in this Quarterly Report on Form 10-Q for further information regarding the guaranty.

Revolving Credit Facilities

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The junior subordinated notes may be redeemed at par at our option.

The aggregate principal balance of the junior subordinated notes was $27.1 million as of March 31, 2026.

The aggregate principal balance of the junior subordinated notes was $27.1 million as of June 30, 2026.

Securities Offerings

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We have suspended our offering of Series A1 Preferred Stock.

As of March 31, 2026, we had issued 12,040,878 shares of Series A1 Preferred Stock, 8,251,657 shares of Series A Preferred Stock and 56,857 shares of Series D Preferred Stock and received aggregate net proceeds of $459.1 million after commissions, fees and allocated costs.

As of June 30, 2026, we had issued 12,040,878 shares of Series A1 Preferred Stock, 8,251,657 shares of Series A Preferred Stock and 56,857 shares of Series D Preferred Stock and received aggregate net proceeds of $459.1 million after commissions, fees and allocated costs.

Dividends on and Redemptions of Preferred Stock

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The redemption price in respect of any share of Preferred Stock, whether redeemed at our option or at the option of a holder, may be paid in cash or in shares of Common Stock in our sole discretion.

Through March 31, 2026, we had redeemed 7,109,143 shares of Series A Preferred Stock, 11,225,466 shares of Series A1 Preferred Stock, and 34,292 of Series D Preferred Stock.

Through June 30, 2026, we had redeemed 7,148,409 shares of Series A Preferred Stock, 11,247,501 shares of Series A1 Preferred Stock, and 34,292 of Series D Preferred Stock.

Other than the March 2026 Redemption, the Company does not currently intend to redeem, at the Company’s election, additional Preferred Stock in shares of Common Stock.

Of the 7,148,409 shares of Series A Preferred Stock that have been redeemed, the redemption of 2,330,186 shares of Series A Preferred Stock were paid in cash, 2,313,106 of which were redeemed at the option of the holders and 17,080 of which were redeemed at the option of the Company.

As of March 31, 2026, the Company, at its option, redeemed 4,019,649 shares of Series A Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, as of March 31, 2026, 759,308 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series A In-

Kind Redemptions”).

The Series A In-Kind Redemptions resulted in the aggregate issuance of 534,863 shares of Common Stock.

As of June 30, 2026, the Company, at its option, redeemed 4,019,649 shares of Series A Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, as of June 30, 2026, 798,574 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series A In-Kind Redemptions”).

The Series A In-Kind Redemptions resulted in the aggregate issuance of 743,943 shares of Common Stock (adjusted for the Reverse Stock Splits).

Of the 11,247,501 shares of Series A1 Preferred Stock that have been redeemed, the redemption of 183,081 shares of Series A1 Preferred Stock were paid in cash (all of which were redeemed at the option of the holders).

As of March 31, 2026, the Company had, at its option, redeemed 10,129,244 shares of Series A1 Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, as of March 31, 2026, 913,141 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series A1 In-Kind Redemptions”).

The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 2,096,914 shares of Common Stock.

As of June 30, 2026, the Company had, at its option, redeemed 10,129,244 shares of Series A1 Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, as of June 30, 2026, 935,176 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series A1 In-Kind Redemptions”).

The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 2,196,513 shares of Common Stock (adjusted for the Reverse Stock Splits).

Of the 34,292 shares of Series D Preferred Stock that have been redeemed, the redemption of 8,410 shares of Series D Preferred Stock were paid in cash (all of which were redeemed at the option of the holders).

As of March 31, 2026, the Company had, at its option, redeemed 21,760 shares of Series D Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date and, in addition, as of March 31, 2026, 4,122 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series D In-Kind Redemptions”).

The Series D In-Kind Redemptions resulted in the aggregate issuance of 6,057 shares of Common Stock.

As of June 30, 2026, the Company had, at its option, redeemed 21,760 shares of Series D Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date and, in addition, as of June 30, 2026, 4,122 shares redeemed at the option of the holders were paid in shares of Common Stock, including all accrued and unpaid dividends as of the redemption date (collectively, the “Series D In-Kind Redemptions”).

The Series D In-Kind Redemptions resulted in the aggregate issuance of 6,057 shares of Common Stock (adjusted for the Reverse Stock Splits).

Dividends on Common Stock

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Off Balance Sheet Arrangements

As of March 31, 2026, we did not have any off-balance sheet arrangements.

As of June 30, 2026, we did not have any off-balance sheet arrangements.

Recently Issued Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis