What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-16 compared with 2021-05-17 · 472 added, 312 removed, 881 unchanged (47% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts) (Unaudited)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Real estate assets:

31 unchanged sentences

Common stock, $ 0.01 par value per share;

490,000,000 shares authorized, 362,001,968 shares issued and outstanding as of both March 31, 2021 and December 31, 2020

490,000,000 shares authorized, 362,923,841 and 362,001,968 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Capital in excess of par value 2,990,971 3,157,859

7 unchanged sentences

(in thousands, except share and per share amounts) (Unaudited)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Rental and other property income $ 75,302 $ 60,103 $ 152,232 $ 128,539

5 unchanged sentences

Real estate tax 7,706 6,748 19,925 13,726

Management and advisory fees and expenses 13,014 11,090

Expense reimbursements to related parties 3,210 3,057 5,871 5,235

Management fees 11,755 9,750 23,332 19,600

Transaction-related 27 125 31 250

3 unchanged sentences

Total operating expenses 62,506 58,943 134,120 138,097

Gain on disposition of real estate, net — 13,110

Gain on disposition of real estate and condominium developments, net 46,469 3,791 46,469 16,901

Operating income 75,725 12,144 92,994 20,107

3 unchanged sentences

Total other expense ( 17,938 ) ( 15,890 ) ( 37,960 ) ( 36,028 )

Net loss $ ( 2,753 ) $ ( 12,175 )

Net income (loss) $ 57,787 $ ( 3,746 ) $ 55,034 $ ( 15,921 )

Weighted average number of common shares outstanding:

Basic and diluted 362,448,778 310,558,499 362,226,607 310,903,460

Net loss per common share:

Net income (loss) per common share:

Basic and diluted $ 0.16 $ ( 0.01 ) $ 0.15 $ ( 0.05 )

3 unchanged sentences

(in thousands) (Unaudited)

Three Months Ended March 31,

Net loss $ ( 2,753 ) $ ( 12,175 )

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) $ 57,787 $ ( 3,746 ) $ 55,034 $ ( 15,921 )

Other comprehensive income (loss)

Unrealized gain on real estate-related securities 1,930 20 2,052 20

Unrealized gain (loss) on interest rate swaps 123 ( 10,805 )

Amount of loss reclassified from other comprehensive income (loss) into income as interest expense and other, net 3,132 977

Reclassification adjustment for realized gain included in income as other income ( 648 ) — ( 648 ) —

Unrealized (loss) gain on interest rate swaps ( 52 ) ( 805 ) 71 ( 11,610 )

Amount of loss reclassified from other comprehensive income (loss) into income (loss) as interest expense and other, net 71 3,343 3,203 4,320

Total other comprehensive income (loss) 1,301 2,558 4,678 ( 7,270 )

16 unchanged sentences

Balance as of March 31, 2021 362,001,968 $ 3,620 $ 3,157,899 $ ( 996,665 ) $ 1,330 $ 2,166,184

Issuance of common stock

917,769 9 6,651 — — 6,660

Equity-based compensation

4,104 — 49 — — 49

Distributions declared on common stock — $ 0.09 per common share

— — — ( 32,948 ) — ( 32,948 )

Changes in redeemable common stock

— — ( 173,628 ) — — ( 173,628 )

Comprehensive income — — — 57,787 1,301 59,088

Balance as of June 30, 2021 362,923,841 $ 3,629 $ 2,990,971 $ ( 971,826 ) $ 2,631 $ 2,025,405

Common Stock Capital in Excess

1 unchanged sentence

Distributions in Excess of Earnings Accumulated

Other Comprehensive Loss Total

Other Comprehensive (Loss) Income Total

Stockholders’

14 unchanged sentences

Balance as of March 31, 2020 311,174,986 $ 3,112 $ 2,606,965 $ ( 878,690 ) $ ( 13,736 ) $ 1,717,651

Issuance of common stock

1,242,475 12 9,531 — — 9,543

Equity-based compensation

— — 40 — — 40

Distributions declared on common stock — $ 0.04 per common share

— — — ( 13,072 ) — ( 13,072 )

Redemptions of common stock

( 2,468,754 ) ( 25 ) ( 19,166 ) — — ( 19,191 )

Changes in redeemable common stock

— — 9,643 — — 9,643

Comprehensive (loss) income — — — ( 3,746 ) 2,558 ( 1,188 )

Balance as of June 30, 2020 309,948,707 $ 3,099 $ 2,607,013 $ ( 895,508 ) $ ( 11,178 ) $ 1,703,426

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net loss $ ( 2,753 ) $ ( 12,175 )

Net income (loss) $ 55,034 $ ( 15,921 )

Adjustments to reconcile net loss to net cash provided by operating activities:

8 unchanged sentences

Write-offs for uncollectible lease-related receivables 591 5,870

Gain on disposition of real estate assets, net — ( 13,110 )

Loss on sale of credit investments, net 111 —

Gain on disposition of real estate assets and condominium developments, net ( 46,469 ) ( 16,901 )

Gain on sale of credit investments, net ( 813 ) ( 223 )

Amortization of fair value adjustment and gain on interest rate swaps ( 2,757 ) ( 10 )

17 unchanged sentences

Principal payments received on real estate-related securities 20 355

Net proceeds from disposition of real estate assets 3,511 126,645

Net proceeds from sale of real estate-related securities 27,624 —

Net proceeds from disposition of real estate assets and condominium developments 304,370 157,198

Net proceeds from sale of broadly syndicated loans 36,518 19,842

Payment of property escrow deposits — ( 250 )

Refund of property escrow deposits — 250

Proceeds from the settlement of insurance claims 58 —

Net cash used in investing activities ( 247,855 ) ( 188,124 )

2 unchanged sentences

Distributions to stockholders ( 59,166 ) ( 44,150 )

Proceeds from credit facility and repurchase facilities 282,323 100,000

Repayments of credit facility and notes payable ( 85,298 ) ( 97,129 )

Proceeds from credit facilities and repurchase facilities 590,182 320,992

Repayments of credit facilities and notes payable ( 298,021 ) ( 218,814 )

Payment of loan deposits ( 650 ) —

Refund of loan deposits 65 —

Deferred financing costs paid ( 4,093 ) ( 844 )

Net cash provided by (used in) financing activities 163,277 ( 45,906 )

Net decrease in cash and cash equivalents and restricted cash ( 50,486 ) ( 228,279 )

Net cash provided by financing activities 228,317 18,479

Net increase (decrease) in cash and cash equivalents and restricted cash 45,809 ( 132,416 )

Cash and cash equivalents and restricted cash, beginning of period 128,408 473,355

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited)

June 30, 2021 (Unaudited)

NOTE 1 — ORGANIZATION AND BUSINESS

4 unchanged sentences

The Company continues to pursue a more diversified investment strategy across the capital structure by balancing the Company’s existing core of commercial real estate assets leased to creditworthy tenants under long-term net leases with a portfolio of commercial mortgage loans and other credit investments in which the Company’s sponsor and its affiliates have expertise.

As of March 31, 2021, the Company owned 515 properties, comprising 21.3 million rentable square feet of commercial space located in 45 states.

As of March 31, 2021, the rentable square feet at these properties was 93.7 % leased, including month-to-month agreements, if any.

As of March 31, 2021, the Company’s loan portfolio consisted of 227 loans with a net book value of $ 1.0 billion, and investments in real estate-related securities of $ 67.2 million.

During the three months ended March 31, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its eight mezzanine loans, including 75 condominium units and 21 rental units across four buildings.

As of June 30, 2021, the Company owned 469 properties, comprising 18.6 million rentable square feet of commercial space located in 41 states.

As of June 30, 2021, the rentable square feet at these properties was 93.1 % leased, including month-to-month agreements, if any.

As of June 30, 2021, the Company’s loan portfolio consisted of 247 loans with a net book value of $ 1.3 billion, and investments in three real estate-related securities with a net book value of $ 42.1 million.

On January 7, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its eight mezzanine loans, including 75 condominium units and 21 rental units across four buildings.

As of June 30, 2021, the Company owned $ 197.1 million of condominium developments.

A majority of the Company’s business is conducted through CIM Real Estate Finance Operating Partnership, LP, a Delaware limited partnership, of which the Company is the sole general partner and owns, directly or indirectly, 100 % of the partnership interests.

21 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

June 30, 2021 (Unaudited) – (Continued)

(“CCIT III”) and Cole Credit Property Trust V, Inc.

4 unchanged sentences

Additionally, the estimated per share NAV as determined by the Board serves as the per share NAV for purposes of the share redemption program.

As of March 31, 2021, the estimated per share NAV of the Company’s common stock was $ 7.31 , which was established by the Board on August 11, 2020 using a valuation date of June 30, 2020.

Commencing on August 14, 2020, $ 7.31 served as the per share NAV under the DRIP.

The Board previously established a per share NAV as of August 31, 2015, September 30, 2016, December 31, 2016, December 31, 2017, December 31, 2018, December 31, 2019, and March 31, 2020.

As of June 30, 2021, the estimated per share NAV of the Company’s common stock was $ 7.20 , which was established by the Board on May 25, 2021 using a valuation date of March 31, 2021.

Commencing on May 26, 2021, $ 7.20 served as the per share NAV under the DRIP.

The Board previously established a per share NAV as of August 31, 2015, September 30, 2016, December 31, 2016, December 31, 2017, December 31, 2018, December 31, 2019, March 31, 2020 and June 30, 2020.

The Company’s estimated per share NAVs are not audited or reviewed by its independent registered public accounting firm.

10 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Reclassifications

Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation.These reclassifications had no effect on previously reported totals or subtotals.

The Company is separately presenting the write-offs for uncollectible lease-related receivables of $ 636,000 for the three months ended March 31, 2020, which was previously included in straight-line rental income, net in the condensed consolidated statements of cash flows.

Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation.

This reclassification had no effect on previously reported totals or subtotals.

The reclassifications have been made to the condensed consolidated statements of operations for the three and six months ended June 30, 2020 as follows (in thousands):

Three Months Ended June 30, 2020 Six Months Ended June 30, 2020

As previously reported Reclassification As Revised As previously reported Reclassification As Revised

Condensed Consolidated Statements of Operations

General and administrative $ 4,235 $ ( 1,215 ) $ 3,020 $ 7,917 $ ( 2,015 ) $ 5,902

Management fees $ 11,398 $ ( 1,648 ) $ 9,750 $ 22,488 $ ( 2,888 ) $ 19,600

Transaction-related $ 330 $ ( 205 ) $ 125 $ 582 $ ( 332 ) $ 250

Expense reimbursements to related parties $ — $ 3,057 $ 3,057 $ — $ 5,235 $ 5,235

Interest expense and other, net $ 15,509 $ 11 $ 15,520 $ 31,276 $ — $ 31,276

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

Real Estate Assets

17 unchanged sentences

Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions.

During the three months ended March 31, 2021, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $ 4.3 million related to five properties, of which impairment at three properties was due to sales prices that were less than their respective carrying values and impairment at two properties was due to vacancy.

The Company’s impairment assessment as of March 31, 2021 was based on the most current information available to the Company, including expected holding periods.

During the six months ended June 30, 2021, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $ 4.4 million related to five properties, of which impairment at three properties was due to sales prices that were less than their respective carrying values and impairment at two properties was due to vacancy.

The Company’s impairment assessment as of June 30, 2021 was based on the most current information available to the Company, including expected holding periods.

If the Company’s expected holding periods for assets change, subsequent tests for impairment could result in additional impairment charges in the future.

The Company cannot provide any assurance that additional material impairment charges with respect to the Company’s real estate assets will not occur during 2021 or in future periods.

During the three months ended March 31, 2020, the Company recorded impairment charges of $ 11.7 million related to six properties due to revised cash flow estimates as a result of market conditions and one property due to a tenant bankruptcy.

During the six months ended June 30, 2020, the Company recorded impairment charges of $ 15.5 million related to nine properties due to revised cash flow estimates as a result of market

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

conditions and one property due to a tenant bankruptcy.

The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in detail in Note 3 — Fair Value Measurements.

3 unchanged sentences

If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs.

As of March 31, 2021, the Company identified two properties with a fair value of $ 31.2 million as held for sale, which were sold subsequent to March 31, 2021 at a gain of $ 824,000 .

As of March 31, 2021, the Company had mortgage notes payable of $ 21.9 million related to one of the held for sale properties, which was repaid subsequent to March 31, 2021 in connection with the disposition of the underlying held for sale property.

As of December 31, 2020, the Company identified one property with a fair value of $ 3.5 million as held for sale, which was sold during the three months ended March 31, 2021.

As of June 30, 2021, the Company identified two properties with a fair value of $ 6.1 million as held for sale, which were sold subsequent to June 30, 2021 at a gain of $ 779,000 .

As of December 31, 2020, the Company identified one property with a fair value of $ 3.5 million as held for sale, which was sold during the six months ended June 30, 2021.

No gain or loss was recognized on this disposition.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

Disposition of Real Estate Assets

1 unchanged sentence

A discontinued operation includes only the disposal of a component of an entity and represents a strategic shift that has (or will have) a major effect on an entity’s financial results.

The Company’s property dispositions during the three months ended March 31, 2021 and 2020 did not qualify for discontinued operations presentation and thus, the results of the properties that were sold will remain in operating income, and any associated gains or losses from the disposition are included in gain on disposition of real estate, net.

See Note 4 — Real Estate Assets for a discussion of the disposition of individual properties during the three months ended March 31, 2021.

The Company’s dispositions during the six months ended June 30, 2021 and 2020 did not qualify for discontinued operations presentation and thus, the results of the properties and condominiums that were sold will remain in operating income, and any associated gains or losses from the disposition are included in gain on disposition of real estate and condominium developments, net.

See Note 4 — Real Estate Assets for a discussion of the disposition of individual properties and condominiums during the six months ended June 30, 2021.

Allocation of Purchase Price of Real Estate Assets

7 unchanged sentences

Certain acquisition-related expenses related to asset acquisitions are capitalized and allocated to tangible and intangible assets and liabilities, as described above.

Other acquisition-related expenses, such as manager expense reimbursements, continue to be expensed as incurred and are included in transaction-related expenses in the accompanying condensed consolidated statements of operations .

Acquisition-related manager expense reimbursements are expensed as incurred and are included in expense reimbursements to related parties in the accompanying condensed consolidated statements of operations.

Other acquisition-related expenses continue to be expensed as incurred and are included in transaction-related expenses in the accompanying condensed consolidated statements of operations.

Restricted Cash

The Company had $ 20.4 million and $ 7.0 million in restricted cash as of March 31, 2021 and December 31, 2020, respectively.

Included in restricted cash was $ 4.0 million and $ 3.6 million held by lenders in lockbox accounts, as of March 31, 2021 and December 31, 2020, respectively.

The Company had $ 32.9 million and $ 7.0 million in restricted cash as of June 30, 2021 and December 31, 2020, respectively.

Included in restricted cash was $ 4.1 million and $ 3.6 million held by lenders in lockbox accounts, as of June 30, 2021 and December 31, 2020, respectively.

As part of certain debt agreements, rents from certain encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess is disbursed to the Company.

Also included in restricted cash was $ 16.4 million and $ 3.4 million held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement, as of March 31, 2021 and December 31, 2020, respectively.

Also included in restricted cash was $ 28.8 million and $ 3.4 million of construction reserves, amounts held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement, as of June 30, 2021 and December 31, 2020, respectively.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Real Estate-Related Securities

1 unchanged sentence

The Company determines the appropriate classification for real estate-related securities at the time of purchase and reevaluates such designation as of each balance sheet date.

As of March 31, 2021, the Company classified its investments as available-for-sale as the Company is not actively trading the securities;

As of June 30, 2021, the Company classified its investments as available-for-sale as the Company is not actively trading the securities;

however, the Company may sell them prior to their maturity.

These investments are carried at their estimated fair value with unrealized gains and losses reported in other comprehensive income (loss).

During the three months ended March 31, 2021, the Company invested $ 28.5 million in CMBS.

As of March 31, 2021, the Company had investments in five CMBS with an estimated aggregate fair value of $ 67.2 million.

During the six months ended June 30, 2021, the Company invested $ 28.5 million in CMBS.

During the same period, the Company sold CMBS with a carrying value of $ 27.0 million resulting in net proceeds of $ 27.6 million and a gain of $ 648,000 .

As of June 30, 2021, the Company had investments in three CMBS with an estimated aggregate fair value of $ 42.1 million.

The Company monitors its available-for-sale securities for changes in fair value.

2 unchanged sentences

However, the allowance is limited by the amount that the fair value is less than the amortized cost basis.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

the failure of the issuer of the security to make scheduled interest or principal payments, and external credit ratings and recent changes in such ratings.

The Company considers many factors in determining whether a credit loss exists, including, but not limited to, the extent to which the fair value is less than the amortized cost basis, recent events specific to the security, industry or geographic area, the payment structure of the security, the failure of the issuer of the security to make scheduled interest or principal payments, and external credit ratings and recent changes in such ratings.

The analysis of determining whether a credit loss exists requires significant judgments and assumptions.

The use of alternative judgments and assumptions could result in a different conclusion.

The amortized cost of real estate-related securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated statements of operations in interest and other expense, net.

Upon the sale of a security, the realized net gain or loss is computed on the specific identification method.

1 unchanged sentence

Interest is capitalized when certain conditions are met as specified in each security agreement.

During the three months ended March 31, 2021, the Company recorded $ 12.0 million in interest income on its credit investments, $ 173,000 of which was capitalized to real estate-related securities.

No such amounts were capitalized during the three months ended March 31, 2020 as the Company began investing in real estate-related securities in June 2020.

During the three and six months ended June 30, 2021, the Company capitalized $ 435,000 of interest income to real estate-related securities.

No such amounts were capitalized during the three and six months ended June 30, 2020.

Loans Held-for-Investment

7 unchanged sentences

Interest is capitalized when certain conditions are met as specified in each loan agreement.

During the three months ended March 31, 2020, the Company recorded $ 5.6 million in interest income on its credit investments, $ 539,000 of which was capitalized to loans held-for-investment and related receivables, net.

During the three and six months ended June 30, 2020, the Company recorded $ 7.2 million and $ 12.8 million, respectively, in interest income on its credit investments, $ 539,000 of which was capitalized during the six months ended June 30, 2020.

No such amounts were capitalized during the three months ended June 30, 2020.

Accrual of interest income is suspended on nonaccrual loans.

2 unchanged sentences

Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured.

As of March 31, 2021, the Company did no t have nonaccrual loans.

As of June 30, 2021, the Company did no t have nonaccrual loans.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Allowance for Credit Losses

9 unchanged sentences

The Company then records an allowance for credit losses equal to the difference between the amortized cost basis of the asset and the present value of the expected cash flows.

The Company considers loan investments that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral, and

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

(ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans.

The Company considers loan investments that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral, and (ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans.

For such loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date.

22 unchanged sentences

A “3” rating is at times characterized by acceptable cash flows from operations.

The trends and conditions of the credit's operations and balance sheet are neutral.

The trends and conditions of the credit's

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

operations and balance sheet are neutral.

Collateral performance, if appropriate, meets or is on track to meet underwriting;

14 unchanged sentences

The Company generally assigns a risk rating of “3” to all newly originated or acquired loans held-for-investment during a most recent quarter, except in the case of specific circumstances warranting an exception.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

The Company has lease agreements with lease and non-lease components.

5 unchanged sentences

Judgments include the nature of any options, including if they will be exercised, evaluation of implicit discount rates and the assessment and consideration of “fixed” payments for straight-line rent revenue calculations.

The Company has an investment in a real estate property that is subject to a ground lease, for which a lease liability and right of use (“ROU”) asset of $ 2.4 million was recorded as of both March 31, 2021 and December 31, 2020.

See Note 15 — Leases for a further discussion regarding this ground lease.

5 unchanged sentences

Project costs and expenses, including interest incurred, associated with the development, construction and lease-up of a real estate project are capitalized as construction in progress.

During the three months ended March 31, 2021, the Company capitalized $ 514,000 of interest expense associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

There were no development projects during the three months ended March 31, 2020.

During the six months ended June 30, 2021, the Company capitalized $ 1.8 million of interest expense associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

There were no development projects during the six months ended June 30, 2020.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Revenue Recognition

10 unchanged sentences

The Company does not use a general reserve approach and lease-related receivables are adjusted and taken against rental and other property income only when collectability becomes not probable.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

During the three months ended March 31, 2021, the Company identified certain tenants where collection was no longer considered probable.

For these tenants, the Company made the determination to record revenue on a cash basis and wrote off total outstanding receivables of $ 1.8 million for the three months ended March 31, 2021, which included $ 29,000 of straight-line rental income and $ 1.1 million related to certain tenant reimbursements.

These write-offs reduced rental and other property income during the three months ended March 31, 2021.

During the six months ended June 30, 2021, the Company identified certain tenants where collection was no longer considered probable.

For these tenants, the Company made the determination to record revenue on a cash basis and wrote off total outstanding receivables of $ 591,000 for the six months ended June 30, 2021, which included $ 525,000 of straight-line rental income.

These write-offs reduced rental and other property income during the six months ended June 30, 2021.

Revenue from lending activities

13 unchanged sentences

Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

In April 2020, the FASB issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the current novel coronavirus (“COVID-19”) pandemic.

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, many lessors may be required to provide rent deferrals and other lease concessions to lessees.

While the lease modification guidance in ASC 842 addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from COVID-19 related impacts.

While the lease modification guidance in ASU No.

2016-02, Leases (Topic 842) (“ASC 842”) addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from COVID-19 related impacts.

Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework).

1 unchanged sentence

The Company has elected to apply this guidance to avoid performing a lease by lease analysis for the lease concessions that (1) were granted as relief due to COVID-19 related impacts and (2) result in the cash flows remaining substantially the same or less than the original contract and will account for these lease concessions as if no changes were made to the leases.

During the three months ended March 31, 2021, the Company provided lease concessions, either in the form of rental deferrals or abatements, to certain tenants in response to the impact of the COVID-19 pandemic on those tenants.

During the three months ended March 31, 2021, the Company had granted rent deferrals of $ 427,000 .

The deferral of rental payments affects the timing, but not the amount, of the lease payments and resulted in an increase of $ 427,000 to the Company’s lease-related receivables balance as of March 31, 2021.

Additionally, during the three months ended March 31, 2021, the Company had granted rental abatements of $ 13,000 .

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

In addition, the Company entered into lease amendments during the three months ended March 31, 2021 that provided for lease concessions, through rent abatements or rent deferrals, that represented substantive changes to the consideration in the original lease.

These lease amendments extended the lease periods ranging from 12 months to 63 months.

For these leases, the Company applied the lease modification accounting framework pursuant to ASC 842.

During the three months ended March 31, 2021 , these lease amendments resulted in rent abatements of $ 235,000 and deferred rental income of $ 5,000 .

As of May 6, 2021, the Company has collected approximately 98 % of rental payments billed to tenants during the three months ended March 31, 2021 .

During the three and six months ended June 30, 2021, the majority of the lease concessions provided by the Company were in the form of rental abatements, to certain tenants in response to the impact of the COVID-19 pandemic on those tenants.

As of August 9, 2021 , the Company has collected approximately 99 % of rental payments billed to tenants during the three months ended June 30, 2021, and as of August 9, 2021 , the Company collected $ 4.1 million of deferred rent, representing approximately 99 % of amounts due through June 30, 2021.

In January 2021, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

14 unchanged sentences

Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:

2 unchanged sentences

Depending upon the significance of the fair value inputs used in determining these fair values, these securities are valued using either Level 2 or Level 3 inputs.

As of March 31, 2021, the Company concluded that $ 27.4 million of real estate-related securities fell under Level 2 and $ 39.8 million of real estate-related securities fell under Level 3.

As of June 30, 2021, the Company concluded that all of its real estate-related securities fell under Level 3.

Credit facilities and notes payable — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date.

1 unchanged sentence

These financial instruments are valued using Level 2 inputs.

As of March 31, 2021, the estimated fair value of the Company’s debt was $ 2.45 billion, which approximated its carrying value.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

estimated fair value of the Company’s debt as of December 31, 2020 was $ 2.14 billion, compared to a carrying value of $ 2.15 billion.

Derivative instruments — The Company’s derivative instruments are comprised of interest rate swaps.

As of June 30, 2021, the estimated fair value of the Company’s debt was $ 2.54 billion, which approximated its carrying value.

The estimated fair value of the Company’s debt as of December 31, 2020 was $ 2.14 billion, compared to a carrying value of $ 2.15 billion.

Derivative instruments — The Company’s derivative instruments are comprised of interest rate swaps and interest rate caps.

All derivative instruments are carried at fair value and are valued using Level 2 inputs.

2 unchanged sentences

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties.

However, as of March 31, 2021 and December 31, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives.

However, as of June 30, 2021 and December 31, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives.

As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

3 unchanged sentences

The Company’s broadly syndicated loans are classified as Level 2 or Level 3 depending on the number of market quotations or indicative prices from pricing services that are available, and whether the depth of the market is sufficient to transact at those prices in amounts approximating the Company’s investment position at the measurement date.

As of March 31, 2021, $ 389.7 million and $ 107.6 million of the Company’s broadly syndicated loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively.

As of June 30, 2021, $ 407.6 million and $ 76.2 million of the Company’s broadly syndicated loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively.

As of December 31, 2020, $ 359.6 million and $ 114.1 million of the Company’s broadly syndicated loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively.

As of March 31, 2021, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 1.03 billion, compared to its carrying value of $ 1.01 billion.

As of June 30, 2021, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 1.36 billion, compared to its carrying value of $ 1.34 billion.

As of December 31, 2020, the estimated fair value of the Company’s loans held-for-investment was $ 907.8 million, compared to its carrying value of $ 892.3 million.

3 unchanged sentences

Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities.

As of March 31, 2021 and December 31, 2020, there have been no transfer s of financial assets or liabilities between fair value hierarchy levels.

As of June 30, 2021 and December 31, 2020, there have been no transfer s of financial assets or liabilities between fair value hierarchy levels.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

June 30, 2021 (Unaudited) – (Continued)

Items Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (in thousands):

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 (in thousands):

Balance as of

March 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

June 30, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial assets:

CMBS $ 42,071 $ — $ — $ 42,071

Interest rate caps — — — —

Total financial assets $ 42,071 $ — $ — $ 42,071

13 unchanged sentences

Total financial liabilities $ ( 12,308 ) $ — $ ( 12,308 ) $ —

The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2021 (in thousands):

The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the six months ended June 30, 2021 (in thousands):

Beginning Balance, January 1, 2021 $ 10,733

Total gains and losses:

Unrealized loss included in other comprehensive income, net 70

Unrealized loss included in other comprehensive income (loss), net 1,804

Purchases and payments received:

2 unchanged sentences

Principal payments received

Ending Balance, March 31, 2021

Ending Balance, June 30, 2021

Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

As discussed in Note 4 — Real Estate Assets, during the three months ended March 31, 2021, real estate assets related to five properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 31.3 million, resulting in impairment charges of $ 4.3 million.

During the three months ended March 31, 2020, real estate assets related to seven properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 52.6 million, resulting in impairment charges of $ 11.7 million.

June 30, 2021 (Unaudited) – (Continued)

As discussed in Note 4 — Real Estate Assets, during the six months ended June 30, 2021, real estate assets related to five properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 31.2 million, resulting in impairment charges of $ 4.4 million.

During the six months ended June 30, 2020, real estate assets related to 10 properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 70.2 million, resulting in impairment charges of $ 15.5 million.

The Company estimates fair values using Level 3 inputs and a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions.

7 unchanged sentences

The Company determined that the selling prices used to determine the fair values were Level 2 inputs.

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the three months ended March 31, 2021:

Three Months Ended March 31, 2021

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the six months ended June 30, 2021:

Six Months Ended June 30, 2021

Discount Rate Terminal Capitalization Rate

1 unchanged sentence

7.4 % - 9.2 %

The following table presents the impairment charges by asset class recorded during the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended March 31,

The following table presents the impairment charges by asset class recorded during the six months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended June 30,

Asset class impaired:

6 unchanged sentences

2021 Property Acquisitions

During the three months ended March 31, 2021 and 2020, the Company did no t acquire any properties.

During the six months ended June 30, 2021, the Company did no t acquire any properties.

Assets Acquired Via Foreclosure

No land was acquired in connection with the foreclosure.

The following table summarizes the purchase price allocation for the real estate acquired via foreclosure (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

As of March 31, 2021

June 30, 2021 (Unaudited) – (Continued)

The following table summarizes the purchase price allocation for the real estate acquired via foreclosure (in thousands):

As of June 30, 2021

Buildings, fixtures and improvements 192,182

4 unchanged sentences

2021 Condominium Development Project

During the three months ended March 31, 2021, the Company capitalized $ 1.5 million of expenses as construction in progress associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

2021 Property Disposition and Real Estate Assets Held for Sale

During the three months ended March 31, 2021, the Company disposed of one retail property for an aggregate gross sales price of $ 3.7 million, resulting in proceeds of $ 3.5 million after closing costs.

The Company has no continuing involvement with this property.

As of March 31, 2021, there were two properties classified as held for sale with a carrying value of $ 31.2 million included in assets held for sale in the accompanying condensed consolidated balance sheets.

Subsequent to March 31, 2021, the Company disposed of these properties, as further discussed in Note 17 — Subsequent Events.

During the six months ended June 30, 2021, the Company capitalized $ 4.5 million of expenses as construction in progress associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

2021 Condominium Dispositions

During the six months ended June 30, 2021, the Company disposed of condominium units for an aggregate sales price of $ 8.8 million, resulting in proceeds of $ 8.5 million after closing costs and a gain of $ 1.5 million.

The Company has no continuing involvement with these condominium units.

The gain on sale of condominium units is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.

2021 Property Dispositions and Real Estate Assets Held for Sale

During the six months ended June 30, 2021, the Company disposed of 47 retail properties for an aggregate gross sales price of $ 304.0 million, resulting in proceeds of $ 296.0 million after closing costs and a gain of $ 46.5 million.

The Company has no continuing involvement with these properties.

The gain on sale of real estate is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.

As of June 30, 2021, there were two properties classified as held for sale with a carrying value of $ 6.1 million included in assets held for sale in the accompanying condensed consolidated balance sheets.

Subsequent to June 30, 2021, the Company disposed of these properties, as further discussed in Note 17 — Subsequent Events.

2021 Impairment

1 unchanged sentence

See Note 2 — Summary of Significant Accounting Policies for a discussion of the Company’s accounting policies regarding impairment of real estate assets.

During the three months ended March 31, 2021, five properties totaling approximately 165,000 square feet with a carrying value of $ 35.6 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 31.3 million, resulting in impairment charges of $ 4.3 million, which were recorded in the condensed consolidated statements of operations.

During the six months ended June 30, 2021, five properties totaling approximately 165,000 square feet with a carrying value of $ 35.5 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 31.2 million, resulting in impairment charges of $ 4.4 million, which were recorded in the condensed consolidated statements of operations.

See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges.

2020 Property Acquisition

During the six months ended June 30, 2020, the Company acquired one commercial property for an aggregate purchase price of $ 4.7 million (the “2020 Property Acquisition”), which includes $ 42,000 of external acquisition-related expenses that were capitalized.

The Company funded the 2020 Property Acquisition with proceeds from real estate dispositions and available borrowings.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

The following table summarizes the purchase price allocation for the 2020 Property Acquisition (in thousands):

2020 Property Acquisition

Buildings, fixtures and improvements 2,800

Acquired in-place leases and other intangibles (1)

Total purchase price $ 4,659

______________________

(1) The amortization period for acquired in-place leases and other intangibles is 14.8 years.

2020 Property Dispositions

During the three months ended March 31, 2020, the Company disposed of 12 properties, consisting of nine retail properties and three anchored shopping centers, for an aggregate gross sales price of $ 129.0 million, resulting in proceeds of $ 126.6 million after closing costs and disposition fees due to CMFT Management or its affiliates, and a gain of $ 13.1 million.

During the six months ended June 30, 2020, the Company disposed of 16 properties, consisting of 10 retail properties and six anchored shopping centers, for an aggregate gross sales price of $ 160.8 million, resulting in proceeds of $ 157.2 million after closing costs and disposition fees due to CMFT Management or its affiliates, and a gain of $ 16.9 million.

The Company has no continuing involvement with these properties.

The gain on sale of real estate is included in gain on disposition of real estate, net in the condensed consolidated statements of operations.

The gain on sale of real estate is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.

2020 Impairment

During the three months ended March 31, 2020, seven properties totaling approximately 414,000 square feet with a carrying value of $ 64.3 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 52.6 million, resulting in impairment charges of $ 11.7 million, which were recorded in the condensed consolidated statements of operations.

During the six months ended June 30, 2020, 10 properties totaling approximately 673,000 square feet with a carrying value of $ 85.7 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 70.2 million, resulting in impairment charges of $ 15.5 million, which were recorded in the condensed consolidated statements of operations.

See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES

Intangible lease assets and liabilities consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands, except weighted average life remaining):

March 31, 2021 December 31, 2020

Intangible lease assets and liabilities consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands, except weighted average life remaining):

June 30, 2021 December 31, 2020

Intangible lease assets:

5 unchanged sentences

Intangible lease liabilities:

Acquired below-market leases, net of accumulated amortization of $ 33,341 and $ 31,933 , respectively (both with a weighted average life remaining of 7.5 years)

Acquired below-market leases, net of accumulated amortization of $ 34,297 and $ 31,933 , respectively (with a weighted average life remaining of 7.4 years and 7.5 years, respectively)

$ 27,917 $ 32,718

1 unchanged sentence

Amortization of below-market leases is recorded as an increase to rental and other property income in the accompanying condensed consolidated statements of operations.

The following table summarizes the amortization related to the intangible lease assets and liabilities for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended March 31,

The following table summarizes the amortization related to the intangible lease assets and liabilities for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

In-place lease and other intangible amortization $ 7,428 $ 5,615 $ 15,201 $ 11,555

1 unchanged sentence

Below-market lease amortization $ 1,377 $ 1,267 $ 2,843 $ 2,666

As of March 31, 2021, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

As of June 30, 2021, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

In-Place Leases and

8 unchanged sentences

NOTE 6 — REAL ESTATE-RELATED SECURITIES

As of March 31, 2021, the Company had CMBS investment securities with an aggregate estimated fair value of $ 67.2 million.

The CMBS mature on various dates from January 2024 through June 2058 and have interest rates ranging from 4.0 % to 13.0 %.

The following is a summary of the Company’s real estate-related securities as of March 31, 2021 (in thousands):

As of June 30, 2021, the Company had CMBS investment securities with an aggregate estimated fair value of $ 42.1 million.

The CMBS mature on various dates from November 2033 through June 2058 and have interest rates ranging from 2.7 % to 13.0 %, with one CMBS earning a zero coupon rate.

The following is a summary of the Company’s real estate-related securities as of June 30, 2021 (in thousands):

Real Estate-Related Securities

2 unchanged sentences

Total real estate-related securities $ 39,520 $ 2,551 $ 42,071

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

The following table provides the activity for the real estate-related securities during the three months ended March 31, 2021 (in thousands):

The following table provides the activity for the real estate-related securities during the six months ended June 30, 2021 (in thousands):

Amortized Cost Basis Unrealized Gain Fair Value

4 unchanged sentences

Amortization of discount on real estate-related securities 525 — 525

Sale of real estate-related securities ( 26,976 ) ( 648 ) ( 27,624 )

Capitalized interest income on real estate-related securities 435 — 435

1 unchanged sentence

Unrealized gain on real estate-related securities — 2,052 2,052

Real estate-related securities as of March 31, 2021 $ 65,953 $ 1,269 $ 67,222

During the three months ended March 31, 2021, the Company invested $ 28.5 million in CMBS.

Real estate-related securities as of June 30, 2021

$ 39,520 $ 2,551 $ 42,071

During the six months ended June 30, 2021, the Company invested $ 28.5 million in CMBS.

During the same period, the Company sold CMBS with a carrying value of $ 27.0 million resulting in net proceeds of $ 27.6 million and a gain of $ 648,000 .

Unrealized gains and losses on real estate-related securities are recorded in other comprehensive income (loss), with a portion of the amount subsequently reclassified into interest expense and other, net in the accompanying condensed consolidated statements of operations as securities are sold and gains and losses are recognized.

During the three months ended March 31, 2021, the Company recorded $ 122,000 of unrealized gains on its real estate-related securities included in accumulated other comprehensive (loss) income in the accompanying condensed consolidated statement of stockholders’ equity.

The scheduled maturities of the Company’s real estate-related securities as of March 31, 2021 are as follows (in thousands):

During the three and six months ended June 30, 2021, the Company recorded $ 1.9 million and $ 2.1 million, respectively, of unrealized gains on its real estate-related securities included in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss).

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

The scheduled maturities of the Company’s real estate-related securities as of June 30, 2021 are as follows (in thousands):

Available-for-sale securities

8 unchanged sentences

In estimating credit losses related to real estate-related securities, management considers a variety of factors, including (1) whether the Company has the intent to sell the impaired security before the recovery of its amortized cost basis, (2) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (3) whether the Company expects to recover the entire amortized cost basis of the security.

As of March 31, 2021, the Company had no credit losses related to real estate-related securities.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

As of June 30, 2021, the Company had no credit losses related to real estate-related securities.

NOTE 7 — LOANS HELD-FOR-INVESTMENT

The Company’s loans held-for-investment consisted of the following as of March 31, 2021 and December 31, 2020 (dollar amounts in thousands):

As of March 31, As of December 31,

The Company’s loans held-for-investment consisted of the following as of June 30, 2021 and December 31, 2020 (dollar amounts in thousands):

As of June 30, As of December 31,

Mezzanine loans $ — $ 147,475

5 unchanged sentences

Total loans held-for-investment and related receivable, net $ 1,343,236 $ 892,266

During the three months ended March 31, 2021, the Company invested $ 82.1 million in broadly syndicated loans.

During the same period, the Company received $ 51.6 million of principal payments on broadly syndicated loans and sold $ 7.6 million of broadly syndicated loans, resulting in proceeds of $ 7.4 million after closing costs and a loss of $ 111,000 .

The loss was recorded as an increase to interest expense and other, net in the condensed consolidated statements of operations.

As of March 31, 2021, the Company had $ 34.5 million of unsettled broadly syndicated loan purchases included in cash and cash equivalents in the accompanying condensed consolidated balance sheet.

As of March 31, 2021, the Company had $ 64.4 million of unfunded commitments related to CRE loans held-for-investment, the funding of which is subject to the satisfaction of borrower milestones.

During the six months ended June 30, 2021, the Company invested $ 142.3 million in broadly syndicated loans.

During the same period, the Company received $ 97.3 million of principal payments on broadly syndicated loans and sold $ 36.7 million of broadly syndicated loans, resulting in proceeds of $ 36.5 million after closing costs and a gain of $ 165,000 .

The gain was recorded as a decrease to interest expense and other, net in the condensed consolidated statements of operations.

As of June 30, 2021, the Company had $ 43.2 million of unsettled broadly syndicated loan purchases included in cash and cash equivalents in the accompanying condensed consolidated balance sheet.

As of June 30, 2021, the Company had $ 108.3 million of unfunded commitments related to CRE loans held-for-investment, the funding of which is subject to the satisfaction of borrower milestones.

These commitments are not reflected in the accompanying condensed consolidated balance sheet.

The following table details overall statistics for the Company’s loans held-for-investment as of March 31, 2021 and December 31, 2020 (dollar amounts in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

The following table details overall statistics for the Company’s loans held-for-investment as of June 30, 2021 and December 31, 2020 (dollar amounts in thousands):

CRE Loans (1) (2)

Broadly Syndicated Loans

March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

Number of loans 10 12 237 194

5 unchanged sentences

____________________________________

(1) As of March 31, 2021, 100 % of the Company’s CRE loans by principal balance earned a floating rate of interest, primarily indexed to U.S.

(1) As of June 30, 2021, 100 % of the Company’s CRE loans by principal balance earned a floating rate of interest, primarily indexed to U.S.

dollar LIBOR.

1 unchanged sentence

however, the Company’s CRE loans may be repaid prior to such date.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

Activity relating to the Company’s loans held-for-investment portfolio was as follows (dollar amounts in thousands):

12 unchanged sentences

Accretion and amortization of fees and other items

— ( 783 ) — ( 783 )

Foreclosure of assets (2)

2 unchanged sentences

— 57,347 — 57,347

Balance, March 31, 2021

Balance, June 30, 2021

$ 1,369,626 $ ( 26,390 ) $ — $ 1,343,236

1 unchanged sentence

(1) Other items primarily consist of allowance for credit losses (as discussed below), purchase discounts or premiums, accretion of exit fees and deferred origination expenses.

(2) During the three months ended March 31, 2021, the Company completed foreclosure of the assets which previously secured its eight mezzanine loans.

(3) Includes the reversal of the allowance for credit losses related to the mezzanine loans upon foreclosure of the assets which previously secured the loans, as further discussed below in “Allowance for Credit Losses,” partially offset by the increase in allowance for credit losses related to the Company’s loans held-for-investment during the three months ended March 31, 2021.

(2) During the six months ended June 30, 2021, the Company completed foreclosure of the assets which previously secured its eight mezzanine loans.

Allowance for Credit Losses

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

The following table presents the activity in the Company’s allowance for credit losses by loan type for the three months ended March 31, 2021 (dollar amounts in thousands):

June 30, 2021 (Unaudited) – (Continued)

The following table presents the activity in the Company’s allowance for credit losses by loan type for the six months ended June 30, 2021 (dollar amounts in thousands):

Mezzanine Loans Senior Loans Broadly Syndicated Loans Total

4 unchanged sentences

Allowance for credit losses as of March 31, 2021 $ — $ 3,885 $ 9,003 $ 12,888

Provision for (reversal of) credit losses — 2,581 ( 2,458 ) 123

Allowance for credit losses as of June 30, 2021 $ — $ 6,466 $ 6,545 $ 13,011

____________________________________

(1) During the three months ended March 31, 2021, the Company completed foreclosure of the assets which previously secured its eight mezzanine loans.

Changes to the allowance for credit losses are recognized through net loss on the Company’s condensed consolidated statements of operations.

(1) During the six months ended June 30, 2021, the Company completed foreclosure of the assets which previously secured its eight mezzanine loans.

Changes to the allowance for credit losses are recognized through net income (loss) on the Company’s condensed consolidated statements of operations.

Troubled Debt Restructuring

8 unchanged sentences

As a result of the foreclosure, the Company recorded a $ 58.0 million decrease to its provision for credit losses related to its mezzanine loans during the three months ended March 31, 2021.

During the same period, the Company recorded a $ 568,000 net increase to the provision for credit losses related to its senior loans and broadly syndicated loans to reflect the estimated fair value of such loans, bringing the total allowance for credit losses to $ 12.9 million as of March 31, 2021.

During the six months ended June 30, 2021, the Company recorded a $ 691,000 net increase to the provision for credit losses related to its senior loans and broadly syndicated loans to reflect the estimated fair value of such loans, bringing the total allowance for credit losses to $ 13.0 million as of June 30, 2021.

The Company recorded a decrease in the provision for credit losses related to its broadly syndicated loans during the three months ended June 30, 2021 due to the ongoing market recovery from COVID-19 and the resulting improvement in the performance of the collateral assets underlying the portfolio.

As further described in Note 2 — Summary of Significant Accounting Policies, the Company evaluates its loans held-for-investment portfolio on a quarterly basis.

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

June 30, 2021 (Unaudited) – (Continued)

The Company’s primary credit quality indicator is its risk ratings, which are further discussed above.

The following table presents the net book value of the Company’s loans held-for-investment portfolio as of March 31, 2021 by year of origination, loan type, and risk rating (dollar amounts in thousands):

The following table presents the net book value of the Company’s loans held-for-investment portfolio as of June 30, 2021 by year of origination, loan type, and risk rating (dollar amounts in thousands):

Amortized Cost of Loans Held-For-Investment by Year of Origination (1)

As of March 31, 2021

As of June 30, 2021

Number of Loans 2021 2020 2019 Total

1 unchanged sentence

1 — $ — $ — $ — $ —

3 10 521,699 234,248 116,241 872,188

Total senior loans 10 521,699 234,248 116,241 872,188

13 unchanged sentences

In the normal course of business, the Company uses certain types of derivative instruments for the purpose of managing or hedging its interest rate risk.

During the three months ended March 31, 2021, one of the Company’s interest rate swap agreements matured.

As of March 31, 2021, the Company had four interest rate swap agreements designated as hedging instruments.

The following table summarizes the terms of the Company’s interest rate swap agreements designated as hedging instruments as of March 31, 2021 and December 31, 2020 (dollar amounts in thousands):

Outstanding Notional Fair Value of Liabilities as of

Balance Sheet Amount as of Interest Effective Maturity March 31, December 31,

Location March 31, 2021 Rates (1)

Dates Dates 2021 2020

During the six months ended June 30, 2021, two of the Company’s interest rate swap agreements matured.

Additionally, the Company entered into four interest rate cap agreements during the six months ended June 30, 2021.

As of June 30, 2021, the Company had three interest rate swap agreements designated as hedging instruments and four non-designated interest rate cap agreements.

The following table summarizes the terms of the Company’s interest rate swap agreements and interest rate cap agreements as of June 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Outstanding Notional Fair Value of Assets (Liabilities) as of

Balance Sheet Amount as of Interest Effective Maturity June 30, December 31,

Location June 30, 2021 Rates Dates Dates 2021 2020

Interest Rate Caps Prepaid expenses and other assets $ 102,553 5.45 % (1) 5/7/2021

5/9/2022 $ — $ —

Interest Rate Swaps Deferred rental income, derivative liabilities and other liabilities $ 241,500 2.55 % to 4.50 %

3 unchanged sentences

____________________________________

(1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of March 31, 2021.

(1) The interest rate consists of the underlying index capped to a fixed rate as of June 30, 2021.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

June 30, 2021 (Unaudited) – (Continued)

(2) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of June 30, 2021.

Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements.

The notional amount under the interest rate swap agreements is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.

The notional amount under the derivative instruments is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

The Company designated the interest rate swaps as cash flow hedges in order to hedge the variability of the anticipated cash flows on its variable rate debt.

The Company has interest rate caps that are used to manage exposure to interest rate movements, but do not meet the requirements to be designated as hedging instruments.

The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings in interest expense and other, net on the accompanying condensed consolidated statements of operations.

The Company has interest rate swaps that are designated as cash flow hedges in order to hedge the variability of the anticipated cash flows on its variable rate debt.

The change in fair value of the derivative instruments that are designated as hedges is recorded in other comprehensive income (loss), with a portion of the amount subsequently reclassified to interest expense as interest payments are made on the Company’s variable rate debt.

For the three months ended March 31, 2021 and 2020, the amount of losses reclassified from other comprehensive income (loss) as an increase to interest expense was $ 3.1 million and $ 977,000 , respectively.

The total unrealized gain on interest rate swaps was $ 61,000 as of March 31, 2021, and the total unrealized loss on interest rate swaps was $ 3.2 million as of December 31, 2020, which are included in accumulated other comprehensive income (loss) in the accompanying condensed consolidated statement of stockholders’ equity.

For the three and six months ended June 30, 2021, the amount of losses reclassified from other comprehensive income (loss) as an increase to interest expense was $ 71,000 and $ 3.2 million, respectively.

For the three and six months ended June 30, 2020, the amount of losses reclassified from other comprehensive income (loss) as an increase to interest expense was $ 3.3 million and $ 4.3 million, respectively.

The total unrealized gain on interest rate swaps was $ 80,000 as of June 30, 2021, and the total unrealized loss on interest rate swaps was $ 3.2 million as of December 31, 2020, which are included in accumulated other comprehensive (loss) income in the accompanying condensed consolidated statement of stockholders’ equity.

During the next 12 months, the Company estimates that $ 59,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense.

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The Company has agreements with each of its derivative counterparties that contain provisions whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment.

If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value, inclusive of interest payments and accrued interest, of $ 7.7 million as of March 31, 2021.

In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties.

1 unchanged sentence

The Company records credit risk valuation adjustments on its interest rate swaps based on the credit quality of the Company and the respective counterparty.

There were no termination events or events of default related to the interest rate swaps as of March 31, 2021.

There were no termination events or events of default related to the interest rate swaps as of June 30, 2021.

NOTE 9 — CREDIT FACILITIES, NOTES PAYABLE AND REPURCHASE FACILITIES

As of March 31, 2021, the Company had $ 2.4 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 1.6 years and a weighted average interest rate of 2.8 %.

As of June 30, 2021, the Company had $ 2.5 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 1.6 years and a weighted average interest rate of 2.8 %.

The weighted average years to maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable.

The weighted average interest rate is computed using the interest rate in effect until the scheduled repayment date.

The following table summarizes the debt balances as of March 31, 2021 and December 31, 2020, and the debt activity for the three months ended March 31, 2021 (in thousands):

During the Three Months Ended March 31, 2021

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

The following table summarizes the debt balances as of June 30, 2021 and December 31, 2020, and the debt activity for the six months ended June 30, 2021 (in thousands):

During the Six Months Ended June 30, 2021

Balance as of December 31, 2020 Debt Issuances & Assumptions (1)

Repayments & Modifications Accretion and (Amortization) Balance as of

March 31, 2021

Repayments & Modifications (2)

Accretion and (Amortization) Balance as of

June 30, 2021

Notes payable – fixed rate debt $ 578,096 $ — $ ( 54,534 ) $ — $ 523,562

12 unchanged sentences

(1) Includes deferred financing costs incurred during the period.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

(2) In connection with the repayment of certain mortgage notes, the Company recognized a loss on extinguishment of debt of $ 1.5 million during the six months ended June 30, 2021.

(3) Net premiums on mortgage notes payable were recorded upon the assumption of the respective debt instruments.

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Notes Payable

As of March 31, 2021, the fixed rate debt outstanding of $ 577.9 million included $ 53.6 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt.

As of June 30, 2021, the fixed rate debt outstanding of $ 523.6 million included $ 21.5 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt.

The fixed rate debt has interest rates ranging from 2.6 % to 4.6 % per annum.

The fixed rate debt outstanding matures on various dates from April 2021 to December 2024.

The fixed rate debt outstanding matures on various dates from July 2021 to December 2024.

Should a loan not be repaid by its scheduled repayment date, the applicable interest rate may increase as specified in the respective loan agreement.

The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $ 984.4 million as of March 31, 2021.

The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $ 904.5 million as of June 30, 2021.

Each of the mortgage notes payable comprising the fixed rate debt is secured by the respective properties on which the debt was placed.

Upon completing foreclosure to take control of the assets which previously secured the Company’s mezzanine loans in January 2021, the Company assumed $ 102.6 million in variable rate debt related to the underlying properties.

As of March 31, 2021, the variable rate debt outstanding had a weighted average interest rate of 5.5 %.The variable rate debt outstanding is set to mature on May 9, 2021;

however, the Company may elect to extend the maturity date for one 12 -month period to May 9, 2022, which was elected subsequent to March 31, 2021.

As of June 30, 2021, the variable rate debt outstanding of $ 94.2 million had a weighted average interest rate of 5.5 %.The variable rate debt outstanding matures on May 9, 2022.

Credit Facilities

The Company has a second amended and restated unsecured credit agreement (the “CMFT Second Amended and Restated Credit Agreement”) with JPMorgan Chase Bank, N.A.

as administrative agent (“JPMorgan Chase”), and the other lenders party thereto that provides for borrowings of up to $ 1.24 billion as of March 31, 2021, which includes an $ 885.0 million unsecured term loan (the “CMFT Term Loan”) and up to $ 350.0 million in unsecured revolving loans (the “CMFT Revolving Loans” and, collectively with the CMFT Term Loan, the “CMFT Credit Facility”).

as administrative agent (“JPMorgan Chase”), and the other lenders party thereto that provides for borrowings of up to $ 1.24 billion as of June 30, 2021, which includes an $ 885.0 million unsecured term loan (the “CMFT Term Loan”) and up to $ 350.0 million in unsecured revolving loans (the “CMFT Revolving Loans” and, collectively with the CMFT Term Loan, the “CMFT Credit Facility”).

The CMFT Credit Facility matures on March 15, 2022.

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or (c) the one-month LIBOR multiplied by the statutory reserve rate plus 1.00 %.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

On December 21, 2020, as a result of CCPT V’s merger with the Company, a subsidiary of the Company assumed CCPT V’s obligations pursuant to the credit agreement by and among Cole Operating Partnership V, LP, the operating partnership of CCPT V (“CCPT V OP”), JPMorgan Chase, as administrative agent, and the lender parties thereto (the “CCPT V Credit Agreement”), including as guarantor under a guaranty provided by CCPT V, and as modified by a modification agreement dated as of May 31, 2018 and subsequently modified following the consummation of CCPT V’s merger with the Company by a second modification agreement on December 21, 2020.

The CCPT V Credit Agreement allows for borrowings of up to $ 350.0 million (the “CCPT V Credit Facility”).

The CCPT V Credit Facility includes $ 220.0 million in term loans (the “CCPT V Term Loans”) and up to $ 130.0 million in revolving loans (the “CCPT V Revolving Loans”).

The CCPT V Credit Facility includes $ 220.0 million in term loans outstanding (the “CCPT V Term Loans”) and up to $ 130.0 million in revolving loans (the “CCPT V Revolving Loans,” and, collectively with the CMFT Revolving Loans, the “Revolving Loans”).

The CCPT V Credit Facility matures on March 15, 2022.

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or (c) the Adjusted LIBO Rate for a period of one month plus 1.0 %.

As of March 31, 2021, there was $ 50.0 million outstanding under the CMFT Revolving Loans at a weighted average interest rate of 1.9 %, and there were no amounts outstanding under the CCPT V Revolving Loans (collectively, the “Revolving Loans”).

As of March 31, 2021, the CMFT Term Loan and CCPT V Term Loans (collectively the “Term Loans”) outstanding totaled $ 1.11 billion, $ 220.0 million of which is subject to interest rate swap agreements (the “Swapped Term Loans”).

As of June 30, 2021, there were no amounts outstanding under the Revolving Loans.

As of June 30, 2021, the CMFT Term Loan and CCPT V Term Loans (collectively the “Term Loans”) outstanding totaled $ 1.11 billion, $ 220.0 million of which is subject to interest rate swap agreements (the “Swapped Term Loans”).

The interest rate swap agreements had the effect of fixing the Eurodollar Rate per annum of the Swapped Term Loans at an all-in rate of 4.2 %.

As of March 31, 2021, the Company had $ 1.16 billion outstanding under the CMFT Credit Facility and CCPT V

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

Credit Facility (collectively the “Credit Facilities”) at a weighted average interest rate of 2.3 % and $ 430.0 million in unused capacity, subject to borrowing availability.

The Company had available borrowings of $ 44.2 million as of March 31, 2021.

As of June 30, 2021, the Company had $ 1.11 billion outstanding under the CMFT Credit Facility and CCPT V Credit Facility (collectively the “Credit Facilities”) at a weighted average interest rate of 2.5 % and $ 480.0 million in unused capacity, subject to borrowing availability.

The Company had available borrowings of $ 12.2 million as of June 30, 2021.

The CMFT Second Amended and Restated Credit Agreement and the CCPT V Credit Agreement (collectively, the “Credit Agreements”) contain provisions with respect to covenants, events of default and remedies customary for facilities of this nature.

2 unchanged sentences

Each of the Credit Agreements require a fixed charge coverage ratio greater than 1.50 , an unsecured debt to unencumbered asset value ratio equal to or less than 60 %, an unsecured debt service coverage ratio greater than 1.75 , a secured debt ratio equal to or less than 40 % and the amount of secured debt that is recourse debt at no greater than 15 % of total asset value.

The Company believes it was in compliance with the financial covenants under the CMFT Second Amended and Restated Credit Agreement and the CCPT V Credit Agreement, as well as the financial covenants under the Company’s various fixed and variable rate debt agreements, as of March 31, 2021.

On December 31, 2019 (the “Closing Date”), CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Company, entered into a revolving credit and security agreement (the “Credit and Security Agreement”) with the lenders from time to time parties thereto, Citibank, N.A.

1 unchanged sentence

The Credit and Security Agreement provides for borrowings in an aggregate principal amount up to $ 500.0 million (the “Credit Securities Revolver”), which may be increased from time to time pursuant to the Credit and Security Agreement.

As of March 31, 2021, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 256.5 million at a weighted average interest rate of 1.9 %.

As of June 30, 2021, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 316.5 million at a weighted average interest rate of 1.8 %.

Subsequent to June 30, 2021, the Company received borrowings in an aggregate principal amount of $ 50.0 million under the Credit and Security Agreement, as discussed in Note 17 — Subsequent Events.

Borrowings under the Credit and Security Agreement will bear interest equal to the three-month LIBOR for the relevant interest period, plus an applicable rate.

3 unchanged sentences

(i) the date that the Credit Securities Revolver is paid down and (ii) the second anniversary after the Reinvestment Period concludes.

Borrowings under the Credit and Security Agreement are secured by substantially all of the assets held by CMFT Corporate Credit Securities, LLC, which shall primarily consist of broadly-syndicated senior secured loans subject to certain eligibility criteria under the Credit and Security Agreement.

Repurchase Facilities

On June 4, 2020, CMFT RE Lending RF Sub CB, LLC, an indirect wholly-owned subsidiary of the Company, entered into a Master Repurchase Agreement with Citibank (the “Citibank Repurchase Agreement”), which provides up to $ 300.0 million of financing primarily through Citibank’s purchase of the Company’s CRE mortgage loans and future funding advances (the “Citibank Repurchase Facility”).

Additionally, on September 21, 2020, CMFT RE Lending RF Sub BB, LLC, an indirect wholly-owned subsidiary of the Company, entered into a second Master Repurchase Agreement with Barclays Bank PLC (“Barclays”) (the “Barclays Repurchase Agreement”), which provides up to $ 500.0 million of financing primarily through Barclays’ purchase of the Company’s CRE mortgage loans and future funding advances (the “Barclays Repurchase Facility”, and collectively with the Citibank Repurchase Facility, the “Repurchase Facilities”).

The Citibank Repurchase Agreement and the Barclays Repurchase Agreement (collectively, the “Repurchase Agreements”) provide for simultaneous agreements by Citibank and Barclays to re-sell such purchased CRE mortgage loans back to CMFT RE Lending RF Sub CB, LLC and CMFT RE Lending RF Sub BB, LLC (collectively, the “CMFT Lending Subs”) at a certain future date or upon demand.

Advances under the Repurchase Agreements accrue interest at per annum rates based on the one-month LIBOR, plus a spread ranging from 2.00 % to 2.40 % to be determined on a case-by-case basis between Citibank or Barclays and the CMFT Lending Subs.

The Repurchase Facilities mature on various dates between June 2023 and September 2023, with two one-year extension options, subject to certain conditions set forth in the Repurchase Agreements.

In connection with the Repurchase Agreements, the Company (as the guarantor) entered into guaranties with Citibank and Barclays (the “Guaranties”), under which the Company agreed to guarantee up to 25 % of the CMFT Lending Subs’ obligations under the Repurchase Agreements.

As of March 31, 2021, the Company had six senior loans with an aggregate carrying value

Borrowings under the Credit and Security Agreement are secured by

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

of $ 525.4 million financed with $ 357.6 million under the Repurchase Facilities, $ 170.2 million of which was financed under the Barclays Repurchase Facility at a weighted average interest rate of 2.7 %, and $ 187.4 million of which was financed under the Citibank Repurchase Facility at a weighted average interest rate of 2.2 %.

June 30, 2021 (Unaudited) – (Continued)

substantially all of the assets held by CMFT Corporate Credit Securities, LLC, which shall primarily consist of broadly-syndicated senior secured loans subject to certain eligibility criteria under the Credit and Security Agreement.

Repurchase Facilities

On September 21, 2020, CMFT RE Lending RF Sub BB, LLC, an indirect wholly-owned subsidiary of the Company, entered into a second Master Repurchase Agreement with Barclays Bank PLC (“Barclays”) (the “Barclays Repurchase Agreement”), which provides up to $ 500.0 million of financing primarily through Barclays’ purchase of the Company’s CRE mortgage loans and future funding advances (the “Barclays Repurchase Facility”).

Additionally, on May 20, 2021, CMFT RE Lending RF Sub WF, LLC, an indirect wholly-owned subsidiary of the Company, entered into a third Master Repurchase Agreement with Wells Fargo Bank, N.A.

(“Wells Fargo”) (the “Wells Fargo Repurchase Agreement”), which provides up to $ 250.0 million of financing primarily through Wells Fargo’s purchase of the Company’s CRE mortgage notes and future funding advances (the “Wells Fargo Repurchase Facility,” and, collectively with the Citibank Repurchase Facility and Barclays Repurchase Facility, the “Repurchase Facilities”).

The Citibank Repurchase Agreement, the Barclays Repurchase Agreement, and the Wells Fargo Repurchase Agreement (collectively, the “Repurchase Agreements”) provide for simultaneous agreements by Citibank, Barclays and Wells Fargo to re-sell such purchased CRE mortgage loans back to CMFT RE Lending RF Sub CB, LLC, CMFT RE Lending RF Sub BB, LLC and CMFT RE Lending RF Sub WF, LLC (collectively, the “CMFT Lending Subs”) at a certain future date or upon demand.

Advances under the Repurchase Agreements accrue interest at per annum rates based on the one-month LIBOR, plus a spread ranging from 2.10 % to 4.60 % to be determined on a case-by-case basis between Citibank, Barclays or Wells Fargo and the CMFT Lending Subs.

The Repurchase Facilities mature on various dates between June 2023 and May 2024, with two one-year extension options, subject to certain conditions set forth in the Repurchase Agreements.

Subsequent to June 30, 2021, the Company amended the Barclays Repurchase Agreement to extend the maturity date to September 21, 2024, as further discussed in Note 17 — Subsequent Events.

In connection with the Repurchase Agreements, the Company (as the guarantor) entered into guaranties with Citibank, Barclays and Wells Fargo (the “Guaranties”), under which the Company agreed to guarantee up to 25 % of the CMFT Lending Subs’ obligations under the Repurchase Agreements.

As of June 30, 2021, the Company had nine senior loans with an aggregate carrying value of $ 727.4 million financed with $ 505.4 million under the Repurchase Facilities, $ 250.0 million of which was financed under the Barclays Repurchase Facility at a weighted average interest rate of 2.5 %, $ 188.0 million of which was financed under the Citibank Repurchase Facility at a weighted average interest rate of 2.2 %, and $ 67.4 million of which was financed under the Wells Fargo Repurchase Facility at a weighted average interest rate of 1.8 %.

The Repurchase Agreements and the Guaranties contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types.

4 unchanged sentences

and (iv) minimum interest coverage ratio of EBITDA (as defined in the Guaranties) to interest expense equal to or greater than 1.40 .

The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of March 31, 2021.

Liquidity and Financial Condition — As of March 31, 2021, the Company had $ 1.4 billion of debt maturing within the next 12 months following the date these financial statements are issued.

The Company expects to enter into new financing arrangements or refinance existing arrangements to meet its obligations as they become due, which management believes is probable based on the current loan-to-value ratios, the occupancy of the Company’s properties and assessment of the current lending environment.

The Company believes cash on hand, proceeds from real estate asset dispositions, net cash provided by operations, borrowings available under the credit facilities or the entry into new financing arrangements will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these financial statements are issued.

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to March 31, 2021 (in thousands):

The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of June 30, 2021.

Liquidity and Financial Condition — As of June 30, 2021, the Company had $ 1.3 billion of debt maturing within the next 12 months following the date these financial statements are issued.

Subsequent to June 30, 2021, the Company repaid $ 104.1 million of fixed rate debt, including $ 21.5 million of variable rate debt fixed through interest rate swap agreements, and paid down the $ 1.11 billion outstanding under the Credit Facilities, as further discussed in Note 17 — Subsequent Events.

With respect to the remaining $ 99.3 million maturing within the next 12 months, the Company expects to enter into new financing arrangements or refinance existing arrangements to meet its obligations as they become due, which management believes is probable based on the current loan-to-value ratios, the occupancy of the Company’s properties and assessment of the current lending environment.

The Company believes cash on hand, proceeds from real estate asset dispositions, net cash provided by

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

operations, borrowings available under the credit facilities or the entry into new financing arrangements will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these financial statements are issued.

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to June 30, 2021 (in thousands):

Principal Repayments

2 unchanged sentences

Total $ 2,544,690

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

NOTE 10 — SUPPLEMENTAL CASH FLOW DISCLOSURES

Supplemental cash flow disclosures for the three months ended March 31, 2021 and 2020 are as follows (in thousands):

Three Months Ended March 31,

Supplemental cash flow disclosures for the six months ended June 30, 2021 and 2020 are as follows (in thousands):

Six Months Ended June 30,

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

7 unchanged sentences

Common stock issued through distribution reinvestment plan $ 6,660 $ 28,774

Change in fair value of interest rate swaps $ 4,686 $ ( 9,823 )

Change in fair value of derivative instruments $ 6,031 $ ( 7,280 )

Change in fair value of real estate-related securities $ 1,404 $ —

6 unchanged sentences

Unfunded Commitments

As of March 31, 2021, the Company had $ 64.4 million of unfunded commitments related to its existing CRE loans held-for-investment.

As of June 30, 2021, the Company had $ 108.3 million of unfunded commitments related to its existing CRE loans held-for-investment.

These commitments are not reflected in the accompanying condensed consolidated balance sheet.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Unsettled Broadly Syndicated Loans

As of March 31, 2021, the Company had $ 34.5 million of unsettled broadly syndicated loan acquisitions, $ 711,000 of which settled subsequent to March 31, 2021.

Additionally, the Company had $ 4.3 million of unsettled broadly syndicated loan sales, $ 1.2 million of which settled subsequent to March 31, 2021.

As of June 30, 2021, the Company had $ 43.2 million of unsettled broadly syndicated loan acquisitions, $35.1 million of which settled subsequent to June 30, 2021.

Additionally, the Company had $ 10.4 million of unsettled broadly syndicated loan sales, $ 6.6 million of which settled subsequent to June 30, 2021.

Unsettled acquisitions are included in cash and cash equivalents in the accompanying condensed consolidated balance sheet.

6 unchanged sentences

The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

NOTE 12 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

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Incentive compensation

CMFT Management is entitled to receive incentive compensation, payable with respect to each quarter, which is generally equal to the excess of (a) the product of (i) 20 % and (ii) the excess of (A) Core Earnings (as defined in the Management Agreement) of the Company for the previous 12-month period, over (B) the product of (1) the Company’s Consolidated Equity (as defined in the Management Agreement) in the previous 12-month period, and (2) 7 % per annum, over (b) the sum of any incentive compensation paid to CMFT Management with respect to the first three calendar quarters of such previous 12-month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable).

During the three months ended March 31, 2021 and 2020, no incentive compensation fees were incurred.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable).

During the three and six months ended June 30, 2021 and 2020, no incentive compensation fees were incurred.

In addition, the Investment Advisor is eligible to receive a portion of the incentive compensation payable to CMFT Management pursuant to the Management Agreement.

1 unchanged sentence

Pursuant to the Investment Advisory and Management Agreement, CMFT Securities reimburses the Investment Advisor for costs and expenses incurred by the Investment Advisor on its behalf.

Operating expenses

Expense reimbursements to related parties

The Company reimburses CMFT Management or its affiliates for certain expenses CMFT Management or its affiliates paid or incurred in connection with the services provided to the Company.

The Company will reimburse CMFT Management or its affiliates for salaries and benefits paid to personnel who provide services to the Company including the Company’s executive officers and any portfolio management, acquisitions or investment professionals.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

Disposition fees

If CMFT Management or its affiliates provided a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of one or more properties (or the Company’s entire portfolio), the Company paid CMFT Management or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such property, not to exceed 1.0 % of the contract price of the property sold;

Pursuant to the Prior Advisory Agreement, through August 20, 2019, if CMFT Management or its affiliates provided a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of one or more properties (or the Company’s entire portfolio), the Company paid CMFT Management or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such property, not to exceed 1.0 % of the contract price of the property sold;

provided, however, in no event would the total disposition fees paid to CMFT Management, its affiliates and unaffiliated third parties exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0 % of the contract sales price.

For the Company’s properties under contract to be sold or specifically identified in a broker agreement as being marketed for sale as of August 20, 2019, CMFT Management was entitled to receive a disposition fee in accordance with the terms of the Prior Advisory Agreement.

The Company recorded fees and expense reimbursements as shown in the table below for services provided by CMFT Management or its affiliates related to the services described above during the periods indicated (in thousands):

Three Months Ended March 31,

Management fees and expenses $ 13,014 $ 11,090

Acquisition fees and expenses $ 181 $ 127

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Management fees $ 11,755 $ 9,750 $ 23,332 $ 19,600

Disposition fees $ — $ — $ — $ 341

Operating expenses $ 1,043 $ 810

Of the amounts shown above, $ 15.4 million and $ 12.6 million had been incurred, but not yet paid, for services provided by CMFT Management or its affiliates in connection with management and operating activities during the three months ended March 31, 2021 and 2020, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

Expense reimbursements to related parties $ 3,210 $ 3,057 $ 5,871 $ 5,235

Of the amounts shown above, $ 16.0 million and $ 13.8 million had been incurred, but not yet paid, for services provided by CMFT Management or its affiliates in connection with management and operating activities during the six months ended June 30, 2021 and 2020, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

Due to Affiliates

As of March 31, 2021 and December 31, 2020, $ 15.4 million and $ 14.7 million, respectively, had been incurred primarily for management fees and operating expenses by CMFT Management or its affiliates, but had not yet been reimbursed by the Company.

As of June 30, 2021 and December 31, 2020, $ 16.0 million and $ 14.7 million, respectively, had been incurred primarily for management fees and operating expenses by CMFT Management or its affiliates, but had not yet been reimbursed by the Company.

These amounts were included in due to affiliates in the condensed consolidated balance sheets for such periods.

2 unchanged sentences

Upon foreclosure, and with the approval of the valuation, compensation and affiliate transactions committee of the Board, CIM NY Management, LLC, an affiliate of the Company’s manager CMFT Management, entered into a Development Management Agreement with the indirect wholly owned subsidiaries of the Company that own each of the four buildings (the “Building Owners”), wherein CIM NY Management, LLC will act as project manager in overseeing the development and construction of property improvements in accordance with each respective Development Management Agreement (the “Development Services”).

In consideration for the Development Services, CIM NY Management, LLC will receive a development management fee from the Building Owners equal to 4 % of the aggregate gross project costs expended during the term of the Development Management Agreement, subject to the conditions in each respective Development Management Agreement.

In consideration for the Development Services, CIM NY Management, LLC will receive a development

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

management fee from the Building Owners equal to 4 % of the aggregate gross project costs expended during the term of the Development Management Agreement, subject to the conditions in each respective Development Management Agreement.

Additionally, CIM NY Management, LLC is reimbursed by the Building Owners for expenses incurred in connection with the Development Services, including services provided that are incidental to but not part thereof the Development Services.

4 unchanged sentences

In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

NOTE 14 — STOCKHOLDERS’ EQUITY

Equity-Based Compensation

On August 10, 2018, the Board approved the adoption of the Company’s 2018 Equity Incentive Plan (the “Plan”), under which 400,000 of the Company’s shares of common stock were reserved for issuance and awards of approximately 345,000 shares of common stock are available for future grant at March 31, 2021.

On August 10, 2018, the Board approved the adoption of the Company’s 2018 Equity Incentive Plan (the “Plan”), under which 400,000 of the Company’s shares of common stock were reserved for issuance and awards of approximately 341,000 shares of common stock are available for future grant at June 30, 2021.

Under the Plan, the Board or a committee designated by the Board has the authority to grant restricted stock awards or deferred stock awards to non-employee directors of the Company, which will further align such directors’ interests with the interests of the Company’s stockholders.

2 unchanged sentences

The Plan expires on August 9, 2028.

As of March 31, 2021, the Company has granted awards of approximately 11,000 restricted shares to each of the independent members of the Board (approximately 54,500 restricted shares in aggregate) under the Plan.

As of March 31, 2021, 32,500 of the restricted shares had vested based on one year of continuous service.

The remaining 22,000 restricted shares issued had not vested or been forfeited as of March 31, 2021.

As of June 30, 2021, the Company has granted awards of approximately 58,700 restricted shares to the independent members of the Board under the Plan.

As of June 30, 2021, 32,500 of the restricted shares had vested based on one year of continuous service.

The remaining 26,200 restricted shares issued had not vested or been forfeited as of June 30, 2021.

The fair value of the Company’s share awards is determined using the Company’s per share NAV on the date of grant.

Compensation expense related to the restricted shares is recognized over the vesting period.

The Company recorded compensation expense of $ 40,000 for each of the three months ended March 31, 2021 and 2020, respectively, related to the restricted shares which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of March 31, 2021, there was $ 80,000 of total unrecognized compensation expense related to these restricted shares, which will be recognized ratably over the remaining period of service prior to October 2021.

The Company recorded compensation expense of $ 49,000 and $ 89,000 for the three and six months ended June 30, 2021, respectively, and $ 40,000 and $ 80,000 for the three and six months ended June 30, 2020, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of June 30, 2021, there was $ 57,000 of total unrecognized compensation expense related to these restricted shares, which will be recognized ratably over the applicable remaining period of service.

NOTE 15 — LEASES

5 unchanged sentences

Non-lease components are considered to be variable rental and other property income and are recognized in the period incurred.

As of March 31, 2021, the Company’s leases had a weighted-average remaining term of 8.7 years.

As of June 30, 2021, the Company’s leases had a weighted-average remaining term of 8.3 years.

Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other negotiated terms and conditions.

1 unchanged sentence

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As of March 31, 2021, the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

As of June 30, 2021, the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands):

Future Minimum Rental Income

4 unchanged sentences

These contingent rents are subject to the tenant achieving periodic revenues in excess of specified levels.

For the three months ended March 31, 2021 and 2020, the amount of the contingent rent earned by the Company was not significant .

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

Rental and other property income during the three months ended March 31, 2021 and 2020 consisted of the following (in thousands):

Three Months Ended March 31,

For the three and six months ended June 30, 2021 and 2020, the amount of the contingent rent earned by the Company was not significant .

Rental and other property income during the three and six months ended June 30, 2021 and 2020 consisted of the following (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Fixed rental and other property income (1)

9 unchanged sentences

This reflects the Company’s incremental borrowing rate, which was calculated based on the interest rate the Company would incur to borrow on a fully collateralized basis over a term similar to the lease.

The Company recognized $ 63,000 of ground lease expense during the three months ended March 31, 2021, of which $ 61,000 was paid in cash during the period it was recognized.

As of March 31, 2021, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 188,000 for the remainder of 2021, $ 250,000 annually for 2022 through 2026, and $ 1.6 million thereafter through the maturity date of the lease in August 2033.

The Company recognized $ 63,000 and $ 125,000 of ground lease expense during the three and six months ended June 30, 2021, respectively, of which $ 61,000 and $ 121,000 was paid in cash during the period it was recognized.

As of June 30, 2021, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 125,000 for the remainder of 2021, $ 250,000 annually for 2022 through 2026, and $ 1.7 million thereafter through the maturity date of the lease in August 2033.

NOTE 16 — SEGMENT REPORTING

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

The following tables present segment reporting for the three months ended March 31, 2021 and 2020 (in thousands):

June 30, 2021 (Unaudited) – (Continued)

The following tables present segment reporting for the three and six months ended June 30, 2021 and 2020 (in thousands):

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Rental and other property income $ 75,203 $ — $ 99 $ 75,302

Interest income — 16,460 — 16,460

Total revenues 75,203 16,460 99 91,762

General and administrative 55 331 3,219 3,605

Property operating 7,613 — 3,743 11,356

Real estate tax 7,196 — 510 7,706

Expense reimbursements to related parties — — 3,210 3,210

Management fees 8,533 3,222 — 11,755

Transaction-related 27 — — 27

Depreciation and amortization 24,647 — — 24,647

Real estate impairment 77 — — 77

Provision for credit losses — 123 — 123

Total operating expenses 48,148 3,676 10,682 62,506

Gain on disposition of real estate and condominium developments, net 44,976 — 1,493 46,469

Operating income (loss) 72,031 12,784 ( 9,090 ) 75,725

Other expense:

Interest expense and other, net ( 3,713 ) ( 3,341 ) ( 9,406 ) ( 16,460 )

Loss on extinguishment of debt ( 1,372 ) — ( 106 ) ( 1,478 )

Segment net income (loss) $ 66,946 $ 9,443 $ ( 18,602 ) $ 57,787

Total assets as of June 30, 2021 $ 3,089,744 $ 1,479,061 $ 280,357 $ 4,849,162

__________________________________

(1) Includes condominium and rental units acquired via foreclosure during the six months ended June 30, 2021.

During the year ended December 31, 2019, the borrower on the Company’s eight mezzanine loans became delinquent on certain required reserve payments.

Throughout 2020, the borrower remained delinquent on the required reserve payments and became delinquent on principal and interest.

As a result, the Company classified the loans as a troubled debt restructuring and commenced foreclosure proceedings.

Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured its mezzanine loans.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Six Months Ended June 30, 2021

Rental and other property income

$ 151,998 $ — $ 234 $ 152,232

Interest income

8 unchanged sentences

15,065 — 4,860 19,925

Management and advisory fees and expenses

9,331 2,246 1,437 13,014

Expense reimbursements to related parties — — 5,871 5,871

Management fees 17,864 5,468 — 23,332

Transaction-related

5 unchanged sentences

102,583 6,872 24,665 134,120

Gain on disposition of real estate and condominium developments, net 44,976 — 1,493 46,469

Operating income (loss)

3 unchanged sentences

( 7,829 ) ( 6,888 ) ( 21,765 ) ( 36,482 )

Loss on extinguishment of debt

( 1,372 ) — ( 106 ) ( 1,478 )

Segment net income (loss)

$ 85,190 $ 14,653 $ ( 44,809 ) $ 55,034

Total assets as of March 31, 2021 $ 3,371,496 $ 1,155,640 $ 194,718 $ 4,721,854

Total assets as of June 30, 2021 $ 3,089,744 $ 1,479,061 $ 280,357 $ 4,849,162

__________________________________

(1) Includes 75 condominium units and 21 rental units acquired via foreclosure during the three months ended March 31, 2021.

(1) Includes condominium and rental units acquired via foreclosure during the six months ended June 30, 2021.

During the year ended December 31, 2019, the borrower on the Company’s eight mezzanine loans became delinquent on certain required reserve payments.

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

June 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other Company Total

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Rental and other property income

10 unchanged sentences

6,748 — — 6,748

Management and advisory fees and expenses

7,981 1,869 1,240 11,090

Expense reimbursements to related parties — — 3,057 3,057

Management fees 8,042 1,708 — 9,750

Transaction-related

Depreciation and amortization

19,696 — — 19,696

Real estate impairment 3,831 — — 3,831

Provision for credit losses — 7,905 — 7,905

Total operating expenses

43,303 10,130 5,510 58,943

Gain on disposition of real estate, net

3,791 — — 3,791

Merger-related expenses, net — — — —

Merger termination fee income — — — —

Operating income (loss)

20,591 ( 2,937 ) ( 5,510 ) 12,144

Other expense:

Interest expense and other, net

( 5,560 ) ( 762 ) ( 9,198 ) ( 15,520 )

Loss on extinguishment of debt ( 12 ) — ( 358 ) ( 370 )

Segment net income (loss)

$ 15,019 $ ( 3,699 ) $ ( 15,066 ) $ ( 3,746 )

Total assets as of June 30, 2020 $ 2,712,707 $ 708,084 $ 243,544 $ 3,664,335

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other Company Total

Six Months Ended June 30, 2020

Rental and other property income

$ 128,539 $ — $ — $ 128,539

Interest income

— 12,764 — 12,764

Total revenues

128,539 12,764 — 141,303

General and administrative

117 524 5,261 5,902

Property operating

11,676 — — 11,676

Real estate tax

13,726 — — 13,726

Expense reimbursements to related parties — — 5,235 5,235

Management fees 17,523 2,077 — 19,600

Transaction-related

Depreciation and amortization

14 unchanged sentences

$ 29,838 $ ( 16,086 ) $ ( 29,673 ) $ ( 15,921 )

Total assets as of March 31, 2020 $ 2,749,026 $ 627,479 $ 224,187 $ 3,600,692

Total assets as of June 30, 2020 $ 2,712,707 $ 708,084 $ 243,544 $ 3,664,335

NOTE 17 — SUBSEQUENT EVENTS

The following events occurred subsequent to March 31, 2021:

Broadly Syndicated Loans

Subsequent to March 31, 2021, the Company settled $ 8.7 million of broadly syndicated loan acquisitions, $ 711,000 of which were traded as of March 31, 2021.

Additionally, subsequent to March 31, 2021, the Company settled $ 8.6 million of broadly syndicated loan sales, $ 1.2 million of which were traded as of March 31, 2021.

Subsequent to March 31, 2021, the Company sold $ 24.4 million of CMBS, resulting in proceeds of $ 27.6 million and a gain of $ 660,000 .

Subsequent to March 31, 2021, the Company acquired two senior loans with an aggregate principal balance of $ 92.6 million and unfunded commitments of $ 12.4 million, the funding of which is subject to the satisfaction of borrower milestones.

The senior loans have a weighted average interest rate of 2.1 % and an initial maturity date of November 2021, with three one-year extension options for a final maturity date of November 2024.

The following events occurred subsequent to June 30, 2021:

Redemptions of Shares of Common Stock

Subsequent to June 30, 2021, the Company redeemed approximately 1.7 million shares for $ 12.0 million (at a redemption price of $ 7.20 per share).

The remaining redemption requests relating to approximately 31.1 million shares went unfulfilled.

Property Dispositions

Subsequent to March 31, 2021, the Company disposed of five properties for an aggregate gross sales price of $ 41.5 million.

The property dispositions resulted in proceeds of $ 38.8 million after closing costs and a gain of approximately $ 2.0 million.

In connection with one of the property dispositions, the Company legally defeased a mortgage loan with an outstanding balance of $ 21.9 million.

Subsequent to June 30, 2021, the Company disposed of 61 properties for an aggregate gross sales price of $ 118.8 million, resulting in net proceeds of $ 115.5 million after closing costs and a net gain of approximately $ 27.0 million.

The Company has no continuing involvement with these properties.

Broadly Syndicated Loans

Subsequent to June 30, 2021, the Company settled $ 62.3 million of broadly syndicated loan transactions, $ 28.5 million of which were traded as of June 30, 2021.

Subsequent to June 30, 2021, the Company received a principal repayment of $ 99.6 million in connection with the partial release and modification of one CRE senior loan financed under the Barclays Repurchase Facility.

The Company used the proceeds to repay amounts on the Barclays Repurchase Facility, as discussed below under Repurchase Facilities.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 (Unaudited) – (Continued)

June 30, 2021 (Unaudited) – (Continued)

Derivative Instruments and Notes Payable

Subsequent to March 31, 2021, one of the Company’s interest rate swap agreements matured and the Company repaid in full $ 32.1 million of the underlying mortgage notes payable.

Credit Facilities

Subsequent to March 31, 2021, the Company borrowed $ 60.0 million under the Credit Securities Revolver.

The Credit Securities Revolver bears interest equal to the three-month LIBOR for the relevant interest period, plus an applicable rate of 1.70 % per annum during the reinvestment period and 2.00 % per annum during the amortization period, as discussed in Note 9 — Credit Facilities, Notes Payable and Repurchase Facilities.

Subsequent to March 31, 2021, the Company repaid $ 60.0 million on the CMFT Credit Facility.

Subsequent to June 30, 2021, one of the Company’s interest rate swap agreements matured and the Company repaid in full $ 21.5 million of the underlying mortgage notes payable.

Additionally, in connection with the origination of the Mortgage Loan (as defined below), the Company terminated two interest rate swap agreements and paid down the $ 220.0 million outstanding balance under the CCPT V Credit Facility.

Credit and Security Agreement

Subsequent to June 30, 2021, the Company received borrowings in an aggregate principal amount of $ 50.0 million under the Credit and Security Agreement.

Repurchase Facilities

Subsequent to June 30, 2021, the Company entered into an amendment to the Barclay’s Repurchase Agreement, pursuant to which the maturity date of the Barclays Repurchase Facility was extended to September 21, 2024.

Additionally, the Company repaid $ 66.4 million of the Barclays Repurchase Facility.

First Lien Mortgage Loan

Subsequent to June 30, 2021, JPMorgan Chase and DBR Investments Co.

Limited originated a $ 650.0 million first lien mortgage loan (the “Mortgage Loan”) to 114 single purpose entities, each of which is a wholly-owned subsidiary of the Company and are managed on a day-to-day basis by affiliates of CIM.

The proceeds from the Mortgage Loan were primarily used by the Company to paydown existing debt.

Net-Lease Mortgage Notes

Subsequent to June 30, 2021, the Company issued $ 774.0 million aggregate principal amount of Net-Lease Mortgage Notes, Series 2021-1 (the “Class A Notes”).

The Company used the net proceeds from the sale of the Class A Notes to refinance or repay certain indebtedness and pay fees and expenses related to the issuance.

Credit Facilities and Notes Payable

Subsequent to June 30, 2021, and with the proceeds from the Mortgage Loan and the sale of the Class A Notes, the Company repaid fixed-rate debt of $ 104.1 million, paid down the $ 1.11 billion outstanding balance under the Credit Facilities and terminated the CCPT V Credit Facility and the CMFT Credit Facility.

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 1. Financial Statements