What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 479 added, 363 removed, 990 unchanged (46% of the section changed)

3 unchanged sentences

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Real estate assets:

18 unchanged sentences

LIABILITIES AND STOCKHOLDERS’ EQUITY

Credit facilities, notes payable and repurchase facilities, net $ 2,540,809 $ 2,144,993

Notes payable, repurchase facilities and credit facilities, net $ 2,776,215 $ 2,144,993

Accrued expenses and accounts payable 36,935 30,419

2 unchanged sentences

Distributions payable 10,985 10,969

Deferred rental income, derivative liabilities and other liabilities 19,686 27,361

Deferred rental income and other liabilities 11,666 27,361

Total liabilities 2,875,923 2,261,183

5 unchanged sentences

Common stock, $ 0.01 par value per share;

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

490,000,000 shares authorized, 362,545,190 and 362,001,968 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Capital in excess of par value 2,991,308 3,157,859

7 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

11 unchanged sentences

Real estate impairment 891 476 5,268 15,983

Provision for credit losses 123 7,905 691 25,682

(Decrease) increase in provision for credit losses ( 1,792 ) 7,355 ( 1,101 ) 33,037

Total operating expenses 57,949 54,422 192,069 192,519

Gain on disposition of real estate and condominium developments, net 34,033 3,219 80,502 20,120

Merger-related expenses, net ( 398 ) ( 1,207 ) ( 398 ) ( 1,207 )

Operating income 66,235 20,232 159,229 40,339

12 unchanged sentences

(in thousands) (Unaudited)

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Net income (loss) $ 42,603 $ 4,179 $ 97,637 $ ( 11,742 )

Other comprehensive income (loss)

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

Other comprehensive (loss) income

Unrealized (loss) gain on real estate-related securities ( 813 ) 41 1,239 61

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

Unrealized loss on interest rate swaps ( 84 ) ( 35 ) ( 13 ) ( 11,645 )

Amount of (gain) loss reclassified from other comprehensive (loss) income into income (loss) as interest expense and other, net ( 170 ) 3,979 3,033 8,299

Total other comprehensive (loss) income ( 1,067 ) 3,985 3,611 ( 3,285 )

Comprehensive income (loss) $ 41,536 $ 8,164 101,248 ( 15,027 )

25 unchanged sentences

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

Issuance of common stock

1,334,145 13 9,591 — — 9,604

Equity-based compensation

— — 62 — — 62

Distributions declared on common stock — $ 0.09 per common share

— — — ( 32,967 ) — ( 32,967 )

Redemptions of common stock

( 1,712,796 ) ( 17 ) ( 12,315 ) — — ( 12,332 )

Changes in redeemable common stock

— — 2,999 — — 2,999

Comprehensive income (loss) — — — 42,603 ( 1,067 ) 41,536

Balance as of September 30, 2021 362,545,190 $ 3,625 $ 2,991,308 $ ( 962,190 ) $ 1,564 $ 2,034,307

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts) (Unaudited) — Continued

Common Stock Capital in Excess

30 unchanged sentences

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

Issuance of common stock

746,001 8 5,409 — — 5,417

Equity-based compensation — — 40 — — 40

Distributions declared on common stock — $ 0.09 per common share

— — — ( 28,181 ) — ( 28,181 )

Redemptions of common stock

( 1,289,203 ) ( 13 ) ( 9,347 ) — — ( 9,360 )

Changes in redeemable common stock

— — 170,912 — — 170,912

Comprehensive income — — — 4,179 3,985 8,164

Balance as of September 30, 2020 309,405,505 $ 3,094 $ 2,774,027 $ ( 919,510 ) $ ( 7,193 ) $ 1,850,418

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

2 unchanged sentences

(in thousands) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

11 unchanged sentences

Gain on disposition of real estate assets and condominium developments, net ( 80,502 ) ( 20,120 )

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

(Gain) loss on sale of credit investments, net ( 902 ) 562

Amortization of fair value adjustment and gain on interest rate swaps ( 2,887 ) ( 11 )

Loss on interest rate caps 171 —

Impairment of real estate assets 5,268 15,983

Provision for credit losses 691 25,682

(Decrease) increase in provision for credit losses ( 1,101 ) 33,037

Write-off of deferred financing costs 2,951 633

21 unchanged sentences

Net cash used in investing activities ( 347,316 ) ( 488,898 )

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (Unaudited) — Continued

Nine Months Ended September 30,

Cash flows from financing activities:

1 unchanged sentence

Distributions to stockholders ( 82,541 ) ( 62,529 )

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

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

Proceeds from notes payable, repurchase facilities and credit facilities 2,217,489 461,194

Repayments of notes payable, repurchase facilities and credit facilities ( 1,633,426 ) ( 223,351 )

Termination of interest rate swaps ( 6,401 ) —

Payment of loan deposits ( 650 ) ( 65 )

9 unchanged sentences

Total cash and cash equivalents and restricted cash $ 326,602 $ 181,149

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

Distributions declared and unpaid $ 10,985 $ 9,375

Accrued capital expenditures $ 1,374 $ 365

Accrued deferred financing costs $ 40 $ 251

Real estate acquired via foreclosure $ 191,990 $ —

Foreclosure of assets securing the mezzanine loans $ ( 79,968 ) $ —

Mortgage notes payable assumed in connection with foreclosure of assets securing the mezzanine loans $ 102,553 $ —

Mortgage note payable assumed by buyer in connection with disposition of real estate assets $ ( 31,801 ) $ —

Change in interest income capitalized to loans held-for-investment $ ( 9,469 ) $ 539

Common stock issued through distribution reinvestment plan $ 16,264 $ 34,191

Change in fair value of derivative instruments $ 5,907 $ ( 3,335 )

Change in fair value of real estate-related securities $ 591 $ —

Supplemental Cash Flow Disclosures:

Interest paid $ 52,200 $ 45,297

Cash paid for taxes $ 1,851 $ 1,555

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited)

September 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 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.

As of September 30, 2021, the Company owned 403 properties, comprising 17.6 million rentable square feet of commercial space located in 40 states.

As of September 30, 2021, the rentable square feet at these properties was 94.2 % leased, including month-to-month agreements, if any.

As of September 30, 2021, the Company’s loan portfolio consisted of 273 loans with a net book value of $ 1.5 billion, and investments in real estate-related securities with a net book value of $ 185.2 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.

As of September 30, 2021, the Company owned condominium developments with a net book value of $ 189.3 million.

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.

2 unchanged sentences

Headquartered in Los Angeles, California, CIM has offices across the United States and in Tokyo, Japan.

CCO Group, LLC owns and controls CMFT Management, the Company’s manager, and is the indirect owner of CCO Capital, LLC (“CCO Capital”), the Company’s dealer manager, and CREI Advisors, LLC (“CREI Advisors”), the Company’s property manager.

CCO Group, LLC is a subsidiary of CIM and owns and controls CMFT Management, the Company’s manager, and is the indirect owner of CCO Capital, LLC (“CCO Capital”), the Company’s dealer manager, and CREI Advisors, LLC (“CREI Advisors”), the Company’s property manager.

CCO Group, LLC and its subsidiaries (collectively, “CCO Group”) serve as the Company’s sponsor and as a sponsor to CIM Income NAV, Inc.

16 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

September 30, 2021 (Unaudited) – (Continued)

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

(“CCPT V”) (the “Mergers”).

(“CCPT V”) (the “CCIT III and CCPT V Mergers”).

On March 25, 2021, the Board reinstated the Secondary DRIP Offering, effective April 1, 2021.

2 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 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.

As of September 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.

1 unchanged sentence

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

Pending Merger

On September 21, 2021, the Company, CIM Income NAV and Cypress Merger Sub, LLC, a wholly owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”).

Subject to the terms and conditions of the Merger Agreement, CIM Income NAV will merge with and into Merger Sub (the “CIM Income NAV Merger”), with Merger Sub surviving the CIM Income NAV Merger, such that following the CIM Income NAV Merger, the surviving entity will continue as a wholly owned subsidiary of the Company.

In accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of CIM Income NAV shall cease.

At the effective time of the CIM Income NAV Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of CIM Income NAV’s Class D common stock, $ 0.01 par value per share (the “Class D Common Stock”), will be converted into the right to receive 2.574 shares of the Company’s common stock, $ 0.01 par value per share (the “CMFT Common Stock”), each issued and outstanding share of CIM Income NAV’s Class T common stock, $ 0.01 par value per share (the “Class T Common Stock”), will be converted into the right to receive 2.510 shares of CMFT Common Stock, each issued and outstanding share of CIM Income NAV’s Class S common stock, $ 0.01 par value per share (the “Class S Common Stock”), will be converted into the right to receive 2.508 shares of CMFT Common Stock, and each issued and outstanding share of CIM Income NAV’s Class I common stock, $ 0.01 par value per share (the “Class I Common Stock” and, together with the Class D Common Stock, Class T Common Stock and Class S Common Stock, the “CIM Income NAV Common Stock”), will be converted into the right to receive 2.622 shares of CMFT Common Stock, in each case, subject to the treatment of fractional shares in accordance with the Merger Agreement (the “Merger Consideration”).

At the effective time of the CIM Income NAV Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of CIM Income NAV Common Stock granted under CIM Income NAV’s 2018 Equity Incentive Plan, whether vested or unvested, will be cancelled in exchange for an amount equal to the Merger Consideration for the applicable share class.

The Merger Agreement contains customary representations, warranties and covenants, including covenants relating to the conduct of CIM Income NAV’s and the Company’s respective businesses during the period between the execution of the Merger Agreement and the completion of the CIM Income NAV Merger, subject to certain exceptions.

CIM Income NAV has agreed not to solicit or enter into an agreement regarding an Acquisition Proposal (as defined in the Merger Agreement), and, subject to certain exceptions, is not permitted to enter into discussions or negotiations concerning, or provide nonpublic information to a third party in connection with, any Acquisition Proposal.

However, prior to obtaining Stockholder Approval (as defined below), CIM Income NAV may engage in discussions or negotiations and provide nonpublic information to a third party which has made an unsolicited, bona fide written Acquisition Proposal if the special committee of CIM Income NAV’s board of directors determines in good faith, after consultation with outside legal counsel and outside financial advisors, that such Acquisition Proposal either constitutes or could reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement).

The Merger Agreement also provides that prior to the Stockholder Approval, the board of directors may, under specified circumstances, make an Adverse Recommendation Change (as defined in the Merger Agreement), including withdrawing its recommendation of the CIM Income NAV Merger, subject to complying with certain conditions set forth in the Merger Agreement.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

The Merger Agreement may be terminated under certain circumstances, including but not limited to, by either the Company or CIM Income NAV if the CIM Income NAV Merger has not been consummated on or before 11:59 p.m.

New York City time on May 30, 2022 (the “Outside Date”), if a final and non-appealable order is entered permanently restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement, if the Stockholder Approval has not been obtained at the stockholders meeting to be called to consider the CIM Income NAV Merger or upon a material uncured breach of the respective obligations, covenants or agreements by the other party that would cause the closing conditions in the Merger Agreement not to be satisfied.

In addition, CIM Income NAV may terminate the Merger Agreement in order to enter into an “Alternative Acquisition Agreement” with respect to a “Superior Proposal” (each as defined in the Merger Agreement) at any time prior to receipt by CIM Income NAV of the Stockholder Approval pursuant to and subject to the terms and conditions of the Merger Agreement.

The Company may terminate the Merger Agreement at any time prior to the receipt of the Stockholder Approval, in certain limited circumstances, including upon (i) an Adverse Recommendation Change, (ii) a tender offer or exchange offer that is commenced which CIM Income NAV’s board of directors fails to recommend against or (iii) a breach by CIM Income NAV, in any material respect, of its obligations under the no solicitation provisions set forth in the Merger Agreement.

If the Merger Agreement is terminated because the CIM Income NAV Merger was not consummated before the Outside Date or because the Stockholder Approval was not obtained, and (i) an Acquisition Proposal has been publicly announced or otherwise communicated to CIM Income NAV stockholders prior to the CIM Income NAV Stockholders Meeting (as defined in the Merger Agreement) and (ii) within 12 months after the date of such termination (A) CIM Income NAV consummates or enters into an agreement (that is thereafter consummated) in respect of an Acquisition Proposal for 50 % or more of CIM Income NAV’s equity or 75 % or more of CIM Income NAV’s assets or (B) the board of directors of CIM Income NAV recommends or fails to recommend against an Acquisition Proposal structured as a tender or exchange offer for 75 % or more of CIM Income NAV’s equity and such Acquisition Proposal is actually consummated, then CIM Income NAV must pay the Company a termination payment of $ 14.78 million and up to $ 2.68 million as reimbursement for CMFT’s Expenses (as defined in the Merger Agreement).

The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, CIM Income NAV may be required to pay to the Company a termination payment of $ 14.78 million and reimburse CMFT’s Expenses up to an amount equal to $ 2.68 million.

However, the termination payment payable by CIM Income NAV to the Company will be $ 6.72 million if the Merger Agreement is terminated before the end of the “Window Period End Time” by (i) CIM Income NAV in order for CIM Income NAV to accept a Superior Proposal from a Qualified Bidder (as defined in the Merger Agreement) or (ii) the Company in response to an Adverse Recommendation Change with respect to or as a result of a Superior Proposal by a Qualified Bidder.

The term “Window Period End Time” in the Merger Agreement means, with respect to a Qualified Bidder, the later of (i) 11:59 p.m.

(New York City time) on October 21, 2021, and (ii) 11:59 p.m.

(New York City time) on the first (1st) business day after the end of a required notice period with respect to a Superior Proposal by such Qualified Bidder provided that such notice period (as may be extended) began on or prior to 11:59 p.m.

(New York City Time) on October 21, 2021.

The obligation of each party to consummate the CIM Income NAV Merger is subject to a number of customary conditions, including receipt of the approval of the CIM Income NAV Merger (and of an amendment to the CIM Income NAV charter that is required to consummate the CIM Income NAV Merger) by holders of a majority of the outstanding shares of the CIM Income NAV Common Stock entitled to vote thereon (the “Stockholder Approval”), delivery of certain documents and legal opinions, the truth and correctness of the representations and warranties of the parties (subject to the materiality standards contained in the Merger Agreement), the effectiveness of the registration statement on Form S-4 (Registration No.

333-260358) filed by the Company on October 19, 2021 to register the shares of the CMFT Common Stock to be issued as consideration in the CIM Income NAV Merger, and the absence of a CIM Income NAV Material Adverse Effect or CMFT Material Adverse Effect (as each term is defined in the Merger Agreement).

Concurrently with the entry into the Merger Agreement, CIM Income NAV, its operating partnership and its advisor entered into a letter agreement (the “Termination Agreement”).

Pursuant to the Termination Agreement, the advisory agreement between CIM Income NAV and its advisor (the “Advisory Agreement”) will be terminated at the effective time of the CIM Income NAV Merger.

Also pursuant to the Termination Agreement, CIM Income NAV’s advisor agreed to waive any Performance Fee (as defined in the Advisory Agreement) it otherwise would be entitled to pursuant to the Advisory Agreement related to the CIM Income NAV Merger.

In the event the Merger Agreement is terminated in accordance with its terms, the Termination Agreement will be automatically terminated.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 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.

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

Other than as shown below, the reclassifications 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 nine months ended September 30, 2020 as follows (in thousands):

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020

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

4 unchanged sentences

Expense reimbursements to related parties $ — $ 1,439 $ 1,439 $ — $ 6,674 $ 6,674

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

Condensed Consolidated Statements of Cash Flows

Accrued expenses and accounts payable $ 5,344 $ 4,208 $ 9,552

Net cash provided by operating activities $ 67,558 $ 4,208 $ 71,766

Repayments of notes payable, repurchase facilities and credit facilities $ (219,143) $ (4,208) $ (223,351)

Net cash provided by financing activities $ 129,134 $ (4,208) $ 124,926

Additionally, the Company reclassified $ 1.2 million of merger-related expenses, net that were previously included in operating expenses in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020.

This reclassification had no effect on previously reported operating income in the condensed consolidated statements of operations.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

Use of Estimates

20 unchanged sentences

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

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.

During the nine months ended September 30, 2021, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $ 5.3 million related to 11 properties, of which impairment at seven properties was due to sales prices that were less than their respective carrying values and impairment at four properties was due to vacancy.

The Company’s impairment assessment as of September 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 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.

During the nine months ended September 30, 2020, the Company recorded impairment charges of $ 16.0 million related to 10 properties due to revised cash flow estimates as a result of market 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 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.

As of September 30, 2021, the Company identified one property with a fair value of $ 1.3 million as held for sale, which was sold subsequent to September 30, 2021 at a gain of $ 16,000 .

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 nine months ended September 30, 2021.

No gain or loss was recognized on this disposition.

2 unchanged sentences

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 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.

The Company’s dispositions during the nine months ended September 30, 2021 and 2020 did not qualify for discontinued operations

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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 nine months ended September 30, 2021.

Allocation of Purchase Price of Real Estate Assets

10 unchanged sentences

Restricted Cash

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.

The Company had $ 36.8 million and $ 7.0 million in restricted cash as of September 30, 2021 and December 31, 2020, respectively.

Included in restricted cash was $ 6.9 million and $ 3.6 million held by lenders in lockbox accounts, as of September 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 $ 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)

Also included in restricted cash was $ 29.8 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 September 30, 2021 and December 31, 2020, respectively.

Real Estate-Related Securities

Real estate-related securities consists primarily of the Company’s investment in commercial mortgage-backed securities (“CMBS”).

Real estate-related securities consists primarily of the Company’s investment in commercial mortgage-backed securities (“CMBS”) and preferred units.

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

As of September 30, 2021, the Company classified its investments in CMBS 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 six months ended June 30, 2021, the Company invested $ 28.5 million in CMBS.

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

During the nine months ended September 30, 2021, the Company invested $ 108.4 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.

As of September 30, 2021, the Company had investments in 15 CMBS with an estimated aggregate fair value of $ 121.8 million.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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

5 unchanged sentences

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

During the nine months ended September 30, 2021, the Company invested $ 63.5 million in preferred units related to a multi-family, office and retail building in Fort Lauderdale, Florida with a preferred dividend rate of 8.9 % and a maturity date of June 1, 2022.

As of September 30, 2021, the Company classified the investment as held-to-maturity as the Company has the intent and ability to hold the preferred units to maturity and included the investment in real estate-related securities on the condensed consolidated balance sheets.

Investments classified as held-to-maturity are initially recognized at cost and are subsequently measured using amortized cost.

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 income.

2 unchanged sentences

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

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.

During the three and nine months ended September 30, 2021, the Company capitalized $ 703,000 of interest income to real estate-related securities.

No such amounts were capitalized during the three and nine months ended September 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 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.

During the three and nine months ended September 30, 2020, the Company recorded $ 6.6 million and $ 19.4 million, respectively, in interest income on its credit investments, $ 539,000 of which was capitalized during the nine months ended September 30, 2020.

No such amounts were capitalized during the three months ended September 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 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)

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

Allowance for Credit Losses

3 unchanged sentences

The initial allowance for credit losses recorded on January 1, 2020 is reflected as a direct charge to retained earnings on the Company’s condensed consolidated statements of stockholders’ equity;

however, subsequent changes to the allowance for credit losses are recognized through net income on the Company’s condensed consolidated statements of operations.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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

While ASU 2016-13 does not require any particular method for determining the allowance for credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan.

28 unchanged sentences

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

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.

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

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

2 unchanged sentences

The portfolio company’s operations and/or balance sheet have demonstrated an adverse trend or deterioration which, while serious, has not reached the point where the liquidation of debt is jeopardized.

These weaknesses are generally considered correctable by the borrower in the normal course of business but may weaken the asset or inadequately protect the Company’s credit position if not checked or corrected.

These weaknesses are generally considered correctable by the borrower in the

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

normal course of business but may weaken the asset or inadequately protect the Company’s credit position if not checked or corrected.

Collateral performance, if appropriate, falls short of original underwriting, material differences exist from business plan, or both;

16 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 June 30, 2021 and December 31, 2020.

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 $ 2.3 million and $ 2.4 million was recorded as of September 30, 2021 and December 31, 2020, respectively.

See Note 14 — 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 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)

During the nine months ended September 30, 2021, the Company capitalized $ 1.4 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 nine months ended September 30, 2020.

Revenue Recognition

2 unchanged sentences

When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation.

Variable rental and other property income consists primarily of tenant reimbursements for recoverable real estate taxes and operating expenses which are included in rental and other property income in the period when such costs are incurred, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the condensed consolidated statements of operations.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

respectively, within the condensed consolidated statements of operations.

The Company defers the recognition of variable rental and other property income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved.

5 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.

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.

During the nine months ended September 30, 2021, the Company identified certain tenants where collection was no longer probable.

For these tenants, the Company made the determination to record revenue on a cash basis and wrote off a net total of outstanding receivables of $ 109,000 for the nine months ended September 30, 2021.

These write-offs reduced rental and other property income during the nine months ended September 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.

In April 2020, the Financial Accounting Standards Board (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.

1 unchanged sentence

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).

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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).

The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

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 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.

During the three and nine months ended September 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 November 8, 2021 , the Company has collected approximately 99 % of rental payments billed to tenants during the three months ended September 30, 2021.

During the three months ended September 30, 2021, the Company granted an additional $ 104,000 in rent deferrals.

As of November 8, 2021 , the Company collected $ 6.4 million of deferred rent, representing approximately 97 % of amounts due through September 30, 2021.

In January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”).

13 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:

1 unchanged sentence

Pricing models for real estate-related securities are generally discounted cash flow models that usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available.

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

Depending upon the

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

significance of the fair value inputs used in determining these fair values, these securities are valued using Level 1, Level 2 or Level 3 inputs.

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

As of September 30, 2021, the estimated fair value of the Company’s debt was $ 2.74 billion, compared to a carrying value of $ 2.81 billion.

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.

4 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 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.

However, as of September 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 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 September 30, 2021, $ 474.9 million and $ 96.8 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 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 September 30, 2021, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 1.47 billion, compared to its carrying value of $ 1.45 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 June 30, 2021 and December 31, 2020, there have been no transfer s of financial assets or liabilities between fair value hierarchy levels.

As of September 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

June 30, 2021 (Unaudited) – (Continued)

September 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 June 30, 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 September 30, 2021 and December 31, 2020 (in thousands):

Balance as of

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

September 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:

2 unchanged sentences

Total financial assets $ 121,807 $ 47,750 $ 32,184 $ 41,873

Financial liabilities:

Interest rate swaps

$ ( 6,289 ) $ — $ ( 6,289 ) $ —

Total financial liabilities

$ ( 6,289 ) $ — $ ( 6,289 ) $ —

Balance as of

7 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 six months ended June 30, 2021 (in thousands):

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

Beginning Balance, January 1, 2021

5 unchanged sentences

Principal payments received

Ending Balance, June 30, 2021

Ending Balance, September 30, 2021

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

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2021 (Unaudited) – (Continued)

As discussed in Note 4 — Real Estate Assets, during the nine months ended September 30, 2021, real estate assets related to 11 properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 43.1 million, resulting in impairment charges of $ 5.3 million.

During the nine months ended September 30, 2020, real estate assets related to 11 properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 71.5 million, resulting in impairment charges of $ 16.0 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 six months ended June 30, 2021:

Six Months Ended June 30, 2021

Discount Rate Terminal Capitalization Rate

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 nine months ended September 30, 2021:

Nine Months Ended September 30,

Discount Rate Terminal Capitalization Rate Discount Rate Terminal Capitalization Rate

8.0 % – 9.7 %

7.5 % – 9.2 %

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,

7.9 % – 9.7 %

7.4 % – 9.2 %

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

Nine Months Ended September 30,

Asset class impaired:

6 unchanged sentences

2021 Property Acquisitions

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

During the nine months ended September 30, 2021, the Company did no t acquire any properties.

Assets Acquired Via Foreclosure

No land was acquired in connection with the foreclosure.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

September 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

As of September 30, 2021

Buildings, fixtures and improvements $ 192,182

2 unchanged sentences

Total purchase price $ 191,990

In connection with the foreclosure, the Company assumed $ 102.6 million of mortgage notes payable related to the assets, as further discussed in Note 9 — Credit Facilities, Notes Payable and Repurchase Facilities.

In connection with the foreclosure, the Company assumed $ 102.6 million of mortgage notes payable related to the assets, as further discussed in Note 9 — Notes Payable, Repurchase Facilities and Credit Facilities.

2021 Condominium Development Project

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.

During the nine months ended September 30, 2021, the Company capitalized $ 5.9 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.

During the nine months ended September 30, 2021, the Company disposed of condominium units for an aggregate sales price of $ 28.6 million, resulting in proceeds of $ 26.5 million after closing costs and a gain of $ 4.9 million.

The Company has no continuing involvement with these condominium units.

1 unchanged sentence

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.

During the nine months ended September 30, 2021, the Company disposed of 113 properties, including 109 retail properties, three anchored shopping centers, one industrial property and an outparcel of land for an aggregate gross sales price of $ 484.4 million, resulting in proceeds of $ 470.2 million after closing costs and a gain of $ 75.6 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.

As of September 30, 2021, there was one property classified as held for sale with a carrying value of $ 1.3 million included in assets held for sale in the accompanying condensed consolidated balance sheets.

Subsequent to September 30, 2021, the Company disposed of this property, as further discussed in Note 16 — 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 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.

During the nine months ended September 30, 2021, 11 properties totaling approximately 260,000 square feet with a carrying value of $ 48.4 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 43.1 million, resulting in impairment charges of $ 5.3 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.

2020 Property Acquisitions

During the nine months ended September 30, 2020, the Company acquired three commercial properties for an aggregate purchase price of $ 14.5 million (the “2020 Property Acquisitions”), which includes $ 111,000 of external acquisition-related expenses that were capitalized.

The Company funded the 2020 Property Acquisitions 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

September 30, 2021 (Unaudited) – (Continued)

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

2020 Property Acquisitions

Buildings, fixtures and improvements 8,415

4 unchanged sentences

2020 Property Dispositions

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.

During the nine months ended September 30, 2020, the Company disposed of 19 properties, consisting of 12 retail properties and seven anchored shopping centers, for an aggregate gross sales price of $ 199.2 million, resulting in proceeds of $ 194.7 million after closing costs and disposition fees due to CMFT Management or its affiliates, and a gain of $ 20.1 million.

The Company has no continuing involvement with these properties.

1 unchanged sentence

2020 Impairment

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.

During the nine months ended September 30, 2020, 11 properties totaling approximately 699,000 square feet with a carrying value of $ 87.5 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 71.5 million, resulting in impairment charges of $ 16.0 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.

NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES

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

September 30, 2021 December 31, 2020

Intangible lease assets:

9 unchanged sentences

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 and six months ended June 30, 2021 and 2020 (in thousands):

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

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):

September 30, 2021 (Unaudited) – (Continued)

As of September 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 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):

As of September 30, 2021, the Company had CMBS investment securities and an investment in preferred units with an aggregate estimated fair value of $ 185.2 million.

The CMBS mature on various dates from September 2023 through June 2058 and have interest rates ranging from 1.2 % to 13.0 %, with one CMBS earning a zero coupon rate.

The preferred units mature on June 1, 2022 and have an interest rate of 8.9 %.

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

Real Estate-Related Securities

1 unchanged sentence

CMBS $ 120,019 $ 1,738 $ 121,757

Preferred units 63,490 — 63,490

Total real estate-related securities $ 183,509 $ 1,738 $ 185,247

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

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

Amortized Cost Basis Unrealized Gain Fair Value

Real estate-related securities as of January 1, 2021

$ 37,047 $ 1,147 $ 38,194

Face value of real estate-related securities acquired 114,373 — 114,373

Investment in preferred units 63,490 — 63,490

Premiums and discounts on purchase of real estate-related securities, net of acquisition costs

5 unchanged sentences

Unrealized gain on real estate-related securities — 1,239 1,239

Real estate-related securities as of June 30, 2021

Real estate-related securities as of September 30, 2021

$ 183,509 $ 1,738 $ 185,247

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

During the nine months ended September 30, 2021, the Company invested $ 171.9 million in CMBS and preferred units.

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 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).

Unrealized gains and losses on CMBS are recorded in other comprehensive (loss) income, 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 and nine months ended September 30, 2021, the Company recorded $ 813,000 and $ 1.2 million, respectively, of unrealized gains on its CMBS included in other comprehensive (loss) income 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

September 30, 2021 (Unaudited) – (Continued)

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

Real estate-related securities

Amortized Cost Estimated Fair Value

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

As of September 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 June 30, 2021 and December 31, 2020 (dollar amounts in thousands):

As of June 30, As of December 31,

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

As of September 30, As of December 31,

Mezzanine loans $ — $ 147,475

5 unchanged sentences

Total loans held-for-investment and related receivable, net $ 1,451,073 $ 892,266

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

During the nine months ended September 30, 2021, the Company invested $ 267.0 million in broadly syndicated loans.

During the same period, the Company received $ 188.1 million of principal payments on broadly syndicated loans and sold $ 55.5 million of broadly syndicated loans, resulting in proceeds of $ 55.2 million after closing costs and a gain of $ 254,000 .

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.

As of September 30, 2021, the Company had $ 87.4 million of unsettled broadly syndicated loan purchases included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

As of September 30, 2021, the Company had $ 123.7 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 sheets.

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):

September 30, 2021 (Unaudited) – (Continued)

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

CRE Loans (1) (2)

Broadly Syndicated Loans

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

September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020

Number of loans 11 12 262 194

5 unchanged sentences

____________________________________

(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.

(1) As of September 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.

4 unchanged sentences

Loan Fees Receivable Net Book Value

Balance, December 31, 2020 $ 959,215 $ ( 74,116 ) $ 7,167 $ 892,266

Balance, January 1, 2021 $ 959,215 $ ( 74,116 ) $ 7,167 $ 892,266

Loan originations and acquisitions 993,841 — — 993,841

3 unchanged sentences

Principal repayments received (3)

( 285,449 ) 345 — ( 285,104 )

Capitalized interest (2)

8 unchanged sentences

— 59,139 — 59,139

Balance, June 30, 2021

Balance, September 30, 2021

$ 1,475,320 $ ( 24,247 ) $ — $ 1,451,073

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 six months ended June 30, 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 six months ended June 30, 2021.

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

(3) Includes the repayment of a $ 69.2 million senior loan prior to the maturity date.

(4) 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 nine months ended September 30, 2021.

Allowance for Credit Losses

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

September 30, 2021 (Unaudited) – (Continued)

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

Mezzanine Loans Senior Loans Broadly Syndicated Loans Total

Allowance for credit losses as of December 31, 2020 $ 58,038 $ 2,590 $ 9,730 $ 70,358

Allowance for credit losses as of January 1, 2021 $ 58,038 $ 2,590 $ 9,730 $ 70,358

Foreclosure of assets (1)

( 58,038 ) — — ( 58,038 )

Provision for credit losses — 1,295 ( 727 ) 568

Provision for (reversal of) credit losses — 1,295 ( 727 ) 568

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

1 unchanged sentence

$ — $ 6,466 $ 6,545 $ 13,011

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

Reversal of provision for credit losses — ( 1,179 ) ( 613 ) ( 1,792 )

Allowance for credit losses as of September 30, 2021

$ — $ 5,287 $ 5,932 $ 11,219

____________________________________

(1) During the nine months ended September 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.

9 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 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.

During the nine months ended September 30, 2021, the Company recorded a $ 1.1 million net decrease 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 $ 11.2 million as of September 30, 2021.

The Company recorded a decrease in the provision for credit losses related to its senior loans and broadly syndicated loans during the three months ended September 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

June 30, 2021 (Unaudited) – (Continued)

September 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 June 30, 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 September 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 June 30, 2021

As of September 30, 2021

Number of Loans 2021 2020 2019 Total

17 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 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):

During the nine months ended September 30, 2021, three of the Company’s interest rate swap agreements matured.

Additionally, in connection with the origination of the Mortgage Loan (as defined below in Note 9 — Notes Payable, Repurchase Facilities and Credit Facilities), the Company terminated its two remaining interest rate swap agreements.

The Company also entered into five interest rate cap agreements during the nine months ended September 30, 2021.

As of September 30, 2021, the Company had five non-designated interest rate cap agreements and no interest rate swap agreements designated as hedging instruments.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

The following table summarizes the terms of the Company’s interest rate cap agreements and interest rate swap agreements as of September 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 %

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

Location September 30, 2021 Rates (1)

Dates Dates 2021 2020 (2)

Interest Rate Caps Prepaid expenses and other assets $ 752,553 2.83 % to 5.45 %

5/7/2021 to 7/15/2021

5/9/2022 to 7/15/2023

$ ( 6,289 ) $ ( 12,308 )

Interest Rate Swaps Deferred rental income and other liabilities $ — — %

$ — $ ( 12,308 )

(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

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.

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

(2) As of December 31, 2020, the Company had five interest rate swap agreements designated as hedging instruments in a liability position with an aggregate outstanding notional amount of $ 1.1 billion and an aggregate fair value balance of $ 12.3 million included in deferred rental income and other liabilities in the accompanying condensed consolidated balance sheets.

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

1 unchanged sentence

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

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 Company had 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 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.

During the three and nine months ended September 30, 2021, the Company had interest rate swaps 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 designated as hedges is recorded in other comprehensive (loss) income, 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 September 30, 2021, the amount of gain reclassified from other comprehensive (loss) income as a decrease to interest expense was $ 170,000 .

For the nine months ended September 30, 2021, the amount of loss reclassified from other comprehensive (loss) income as an increase to interest expense was $ 3.0 million.

For the three and nine months ended September 30, 2020, the amount of losses reclassified from other comprehensive (loss) income as an increase to interest expense was $ 4.0 million and $ 8.3 million, respectively.

The total unrealized loss on interest rate swaps was $ 174,000 and $ 3.2 million as of September 30, 2021 and December 31, 2020, respectively, which are included in accumulated other comprehensive (loss) income in the accompanying condensed consolidated statement of stockholders’ equity.

The Company includes cash flows from interest rate swap agreements in net cash flows provided by operating activities on its condensed consolidated statements of cash flows, as the Company’s accounting policy is to present cash flows from hedging instruments in the same category in its condensed consolidated statements of cash flows as the category for cash flows from the hedged items.

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 $ 6.3 million as of June 30, 2021.

As of September 30, 2021, all derivatives were in an asset position.

Therefore, there was no termination value as of September 30, 2021.

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

The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties.

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 June 30, 2021.

NOTE 9 — CREDIT FACILITIES, NOTES PAYABLE AND REPURCHASE FACILITIES

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 Company records credit risk valuation adjustments on its interest rate caps 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 caps as of September 30, 2021.

NOTE 9 — NOTES PAYABLE, REPURCHASE FACILITIES AND CREDIT FACILITIES

As of September 30, 2021, the Company had $ 2.8 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 3.9 years and a weighted average interest rate of 2.8 %.

The weighted average years to

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

September 30, 2021 (Unaudited) – (Continued)

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 September 30, 2021 and December 31, 2020, and the debt activity for the nine months ended September 30, 2021 (in thousands):

During the Nine Months Ended September 30, 2021

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

1 unchanged sentence

Accretion and (Amortization) Balance as of

June 30, 2021

September 30, 2021

Notes payable – fixed rate debt $ 578,096 $ — $ ( 190,834 ) $ — $ 387,262

Notes payable – variable rate debt — 102,553 ( 19,710 ) — 82,843

First lien mortgage loan — 650,000 — — 650,000

Net-lease mortgage notes — 774,000 ( 1,290 ) — 772,710

Credit facilities 1,336,500 410,000 ( 1,340,000 ) — 406,500

Repurchase facilities 235,380 383,489 ( 111,615 ) — 507,254

2,149,976 692,735 ( 298,021 ) — 2,544,690

Total debt 2,149,976 2,320,042 ( 1,663,449 ) — 2,806,569

Net premiums (3)

2 unchanged sentences

( 3,543 ) — 1,955 1,588 —

Deferred costs – fixed rate debt ( 1,589 ) — 45 374 ( 1,170 )

Deferred costs – fixed rate debt and first lien mortgage loan ( 1,589 ) ( 13,838 ) 133 1,954 ( 13,340 )

Deferred costs – variable rate debt — ( 1,347 ) — 893 ( 454 )

Deferred costs – net-lease mortgage notes — ( 16,979 ) — 419 ( 16,560 )

Total debt, net $ 2,144,993 $ 2,287,878 $ ( 1,661,361 ) $ 4,705 $ 2,776,215

1 unchanged sentence

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

(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.

(2) In connection with the repayment of certain mortgage notes, the Company recognized a loss on extinguishment of debt of $ 4.7 million during the nine months ended September 30, 2021.

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

2 unchanged sentences

Notes Payable

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.

As of September 30, 2021, the fixed rate debt outstanding was $ 387.3 million.

The fixed rate debt has interest rates ranging from 3.6 % to 4.6 % per annum.

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

The fixed rate debt outstanding matures on various dates from May 2022 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 $ 904.5 million as of June 30, 2021.

The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $ 656.6 million as of September 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 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 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.

Depending upon the type of loan specified and overall leverage ratio, the CMFT Credit Facility bears interest at (i) the one-month, two-month, three-month or six-month LIBOR multiplied by the statutory reserve rate (the “Eurodollar Rate”) plus an interest rate spread ranging from 1.65 % to 2.25 % or (ii) a base rate, ranging from 0.65 % to 1.25 %, plus the greater of:

(a) JPMorgan Chase’s prime rate;

(b) the Federal Funds Effective Rate (as defined in the CMFT Second Amended and Restated Credit Agreement) plus 0.50 %;

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

As of September 30, 2021, the variable rate debt outstanding of $ 82.8 million had a weighted average interest rate of 5.5 %.The variable rate debt outstanding matures on May 9, 2022.

First Lien Mortgage Loan

On July 15, 2021, JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan Chase”), and DBR Investments Co.

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

The Mortgage Loan is secured by, among other things, cross-collateralized and cross-defaulted first priority mortgages, deeds of trust, security agreements or other similar security instruments on the Borrowers’ fee simple interests in 113 properties, comprised of 50 anchored shopping centers, 61 single-tenant retail properties, one office property and one industrial property.

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 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.

Depending upon the type of loan specified and overall leverage ratio, the CCPT V Credit Facility bears interest at (i) the one-month, two-month, three-month or six-month LIBOR multiplied by the statutory reserve rate (the “Adjusted LIBO Rate”) for the interest period plus an applicable rate ranging from 1.30 % to 1.70 %;

or (ii) a base rate ranging from 0.30 % to 0.70 %, plus the greater of:

(a) JPMorgan Chase’s Prime Rate (as defined in the CCPT V Credit Agreement);

(b) the NYFRB Rate (as defined in the CCPT V Credit Agreement) plus 0.50 %;

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

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 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.

In particular, the CMFT Second Amended and Restated Credit Agreement requires the Company to maintain a minimum consolidated net worth greater than or equal to the sum of $ 1.75 billion under the CMFT Second Amended and Restated Credit Agreement, and a leverage ratio less than or equal to 60 %.

The CCPT V Credit Agreement requires a minimum consolidated net worth not less than $ 225.0 million plus 75 % of the equity issued and a net leverage ratio less than or equal to 60 %.

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 June 30, 2021.

September 30, 2021 (Unaudited) – (Continued)

As of September 30, 2021, the aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the notes was $ 1.3 billion.

Amounts outstanding on the Mortgage Loan totaled $ 650.0 million with a weighted average interest rate of 2.8 % as of September 30, 2021.

The Mortgage Loan is a floating-rate, interest-only, non-recourse loan with a two-year initial term ending on August 9, 2023, with three one-year extension options, subject to certain conditions.

Net-Lease Mortgage Notes

On July 28, 2021, the Company issued $ 774.0 million aggregate principal amount of Net-Lease Mortgage Notes, Series 2021-1 (the “Class A Notes”) in six classes, as shown below:

Class of Notes Initial Principal Balance Note Rate Anticipated Repayment Date Rated Final Payment Date Credit Rating (1)

A-1 (AAA) $ 146,400,000 2.09 % July 2028 July 2051 AAA (sf)

A-2 (AAA) $ 219,600,000 2.57 % July 2031 July 2051 AAA (sf)

A-3 (AA) $ 39,200,000 2.51 % July 2028 July 2051 AA (sf)

A-4 (AA) $ 58,800,000 3.04 % July 2031 July 2051 AA (sf)

A-5 (A) $ 124,000,000 2.91 % July 2028 July 2051 A (sf)

A-6 (A) $ 186,000,000 3.44 % July 2031 July 2051 A (sf)

____________________________________

(1) Reflects credit rating from Standard & Poor’s Financial Services LLC (“Standard & Poor’s”).

The collateral pool for the Class A Notes is comprised of 170 of the Company’s double- and triple-net leased single tenant properties, together with the related leases and certain other rights and interests.

The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Class A Notes was $ 1.0 billion.

As of September 30, 2021, amounts outstanding on the Class A Notes totaled $ 772.7 million with a weighted average interest rate of 2.8 %.

The Company may prepay the Class A Notes in full on or after the payment date beginning in July 2026 for the Class A-1 (AAA) Notes, the Class A-3 (AA) Notes and the Class A-5 (A) Notes, and on or after the payment date in July 2028 for the Class A-2 (AAA) Notes, the Class A-4 (AA) Notes and the Class A-6 (A) Notes.

Credit Facilities

The Company had a second amended and restated unsecured credit agreement (the “CMFT Second Amended and Restated Credit Agreement”) with JPMorgan Chase, as administrative agent, and the other lenders party thereto that provided for borrowings of up to $ 1.24 billion (the “CMFT Credit Facility”).

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

The CMFT Credit Facility and the CCPT V Credit Facility (collectively, the “Credit Facilities”) were set to mature on March 15, 2022.

During the nine months ended September 30, 2021, and with the proceeds from the Mortgage Loan and the sale of the Class A Notes, the Company paid down the $ 1.11 billion outstanding balance under the Credit Facilities and terminated the Credit Facilities.

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 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.

As of September 30, 2021, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 406.5 million at a weighted average interest rate of 1.8 %.

Subsequent to September 30, 2021, the Company amended the Credit and Security Agreement by increasing available borrowings under the Credit Securities Revolver up to $ 550.0 million, as discussed in Note 16 — Subsequent Events.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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.

The Company believes it was in compliance with the financial covenants under the Company’s various fixed and variable rate debt agreements, as of September 30, 2021.

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”).

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.

As of September 30, 2021, indirect wholly-owned subsidiaries of the Company (collectively, the “CMFT Lending Subs”), had Master Repurchase Agreements with Citibank, Barclays Bank PLC (“Barclays”) and Wells Fargo Bank, N.A.

(“Wells Fargo”) (collectively, the “Repurchase Agreements”) to provide financing primarily through each bank’s purchase of the Company’s CRE mortgage loans and future funding advances (the “Repurchase Facilities”).

The following table is a summary of the Repurchase Facilities as of September 30, 2021 (dollar amounts in thousands):

Repurchase Facility Date of Agreement Maturity Date (1)

Maximum Facility Size (2)

Weighted Average Interest Rate Carrying Value of Loans Financed under Repurchase Facility Amount Financed

Citibank 6/4/2020 8/17/2024 $ 400,000 2.2 % $ 291,855 $ 199,216

Barclays 9/21/2020 9/21/2024 500,000 2.5 % 249,334 184,400

Wells Fargo 5/20/2021 5/19/2024 250,000 1.8 % 171,578 123,638

Total $ 1,150,000 $ 712,767 $ 507,254

__________________________________

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

During the nine months ended September 30, 2021, the Company extended the maturity dates of the repurchase facility with Citibank (the “Citibank Repurchase Facility”) and the repurchase facility with Barclays (the “Barclays Repurchase Facility”).

(2) During the nine months ended September 30, 2021, the Company increased the Citibank Repurchase Facility to provide up to $ 400.0 million in financing.

Subsequent to September 30, 2021, the Company increased the repurchase facility with Wells Fargo (the “Wells Fargo Repurchase Facility”) to $ 580.0 million, as discussed in Note 16 — Subsequent Events.

The Repurchase Agreements provide for simultaneous agreements by Citibank, Barclays and Wells Fargo to re-sell such purchased CRE mortgage loans back to 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 1.40 % 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.

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(iii) maximum leverage ratio of total indebtedness to total equity less than or equal to 80 %;

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 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

and (iv) minimum interest coverage ratio of EBITDA (as

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):

September 30, 2021 (Unaudited) – (Continued)

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 September 30, 2021.

Liquidity and Financial Condition — As of September 30, 2021, the Company had $ 88.0 million 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 September 30, 2021 (in thousands):

Principal Repayments

1 unchanged sentence

2023 1,246,984

Thereafter 758,520

Total $ 2,806,569

NOTE 10 — SUPPLEMENTAL CASH FLOW DISCLOSURES

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:

Distributions declared and unpaid $ 10,997 $ 4,990

Accrued capital expenditures $ 4,104 $ 139

Accrued deferred financing costs $ 32 $ —

Real estate acquired via foreclosure $ 191,990 $ —

Foreclosure of assets securing the mezzanine loans $ ( 79,968 ) $ —

Mortgage notes payable assumed in connection with foreclosure of assets securing the mezzanine loans $ 102,553 $ —

Change in interest income capitalized to loans held-for-investment $ ( 9,469 ) $ 539

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

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

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

Supplemental Cash Flow Disclosures:

Interest paid $ 34,183 $ 30,686

Cash paid for taxes $ 1,412 $ 466

NOTE 10 — COMMITMENTS AND CONTINGENCIES

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Unfunded Commitments

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)

As of September 30, 2021, the Company had $ 123.7 million of unfunded commitments related to its existing CRE loans held-for-investment.

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

Unsettled Broadly Syndicated Loans

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.

As of September 30, 2021, the Company had $ 87.4 million of unsettled broadly syndicated loan acquisitions, $ 63.1 million of which settled subsequent to September 30, 2021.

Additionally, the Company had $ 4.4 million of unsettled broadly syndicated loan sales, $ 3.4 million of which settled subsequent to September 30, 2021.

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

Environmental Matters

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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

September 30, 2021 (Unaudited) – (Continued)

Merger Agreement

On September 21, 2021, the Company announced it had entered into the Merger Agreement.

In the event the Merger Agreement is terminated in connection with CIM Income NAV’s acceptance of a Superior Proposal or an Adverse Recommendation Change, then CIM Income NAV must pay to the Company a termination payment of $ 14.78 million, and up to $ 2.68 million as reimbursement for CMFT’s Expenses, subject to certain exceptions set forth in the Merger Agreement.

However, the termination payment payable by CIM Income NAV to the Company will be $ 6.72 million if the Merger Agreement is terminated before the end of the Window Period End Time (as defined in the Merger Agreement) by (i) CIM Income NAV in order for CIM Income NAV to accept a Superior Proposal from a Qualified Bidder (as defined in the Merger Agreement) or (ii) the Company in response to an Adverse Recommendation Change with respect to or as a result of a Superior Proposal by a Qualified Bidder.

If the Merger Agreement is terminated because the CIM Income NAV Merger was not consummated before the Outside Date or because the Stockholder Approval was not obtained, and (i) an Acquisition Proposal has been publicly announced or otherwise communicated to CIM Income NAV’s stockholders prior to the Stockholders Meeting and (ii) within 12 months after the date of such termination (A) CIM Income NAV consummates or enters into an agreement (that is thereafter consummated) in respect of an Acquisition Proposal for 50 % or more of CIM Income NAV’s equity or 75 % or more of CIM Income NAV’s assets or (B) the board of directors of CIM Income NAV recommends or fails to recommend against an Acquisition Proposal structured as a tender or exchange offer for 75 % or more of CIM Income NAV’s equity and such Acquisition Proposal is actually consummated, then CIM Income NAV must pay to the Company a termination payment of $ 14.78 million, and up to $ 2.68 million as reimbursement for CMFT’s Expenses.

No such fees were paid as of September 30, 2021.

NOTE 11 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

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The Sub-Advisor is responsible for providing investment management services with respect to the corporate credit-related securities held by CMFT Securities.

On a quarterly basis, the Investment Advisor designates 50 % of the sum of the Investment Advisory Fee and incentive compensation payable to the Investment Advisor as sub-advisory fees.

On a quarterly basis, the Investment Advisor designates 50 % of the sum of the Investment Advisory Fee and incentive compensation attributable to the assets for which Sub-Advisor has provided investment management services payable to the Investment Advisor as sub-advisory fees.

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

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.

September 30, 2021 (Unaudited) – (Continued)

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 and nine months ended September 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.

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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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

2 unchanged sentences

Expense reimbursements to related parties $ 2,516 $ 1,439 $ 8,387 $ 6,674

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.

Of the amounts shown above, $ 15.1 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 nine months ended September 30, 2021 and 2020, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

Due to Affiliates

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.

As of September 30, 2021 and December 31, 2020, $ 15.1 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.

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

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

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.

September 30, 2021 (Unaudited) – (Continued)

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.

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.

6 unchanged sentences

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 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 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.

As of September 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 September 30, 2021, 32,500 of the restricted shares had vested based on one year of continuous service, and on October 1, 2021, 22,100 of the restricted shares vested based on one year of continuous service.

The remaining 4,100 restricted shares issued had not vested or been forfeited as of September 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 $ 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.

The Company recorded compensation expense of $ 62,000 and $ 151,000 for the three and nine months ended September 30, 2021, respectively, and $ 40,000 and $ 120,000 for the three and nine months ended September 30, 2020, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

All compensation expense related to these restricted shares was recognized ratably over the period of service prior to September 30, 2021.

NOTE 14 — LEASES

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

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

As of September 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.

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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):

September 30, 2021 (Unaudited) – (Continued)

As of September 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

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

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,

For the three and nine months ended September 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 nine months ended September 30, 2021 and 2020 consisted of the following (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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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 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.

The Company recognized $ 63,000 and $ 188,000 of ground lease expense during the three and nine months ended September 30, 2021, respectively, of which $ 61,000 and $ 182,000 was paid in cash during the period it was recognized.

As of September 30, 2021, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 63,000 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 15 — SEGMENT REPORTING

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

September 30, 2021 (Unaudited) – (Continued)

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

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Rental and other property income $ 70,694 $ — $ 100 $ 70,794

9 unchanged sentences

Real estate impairment 891 — — 891

Provision for credit losses — 123 — 123

Decrease in provision for credit losses — ( 1,792 ) — ( 1,792 )

Total operating expenses 47,377 1,463 9,109 57,949

Gain on disposition of real estate and condominium developments, net 30,657 — 3,376 34,033

Merger-related expenses, net — — ( 398 ) ( 398 )

Operating income (loss) 53,974 18,292 ( 6,031 ) 66,235

3 unchanged sentences

Segment net income (loss) $ 40,905 $ 13,175 $ ( 11,477 ) $ 42,603

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

Total assets as of September 30, 2021

$ 2,947,031 $ 1,866,913 $ 266,915 $ 5,080,859

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

__________________________________

(1) Includes condominium and rental units acquired via foreclosure during the nine months ended September 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

September 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Rental and other property income

16 unchanged sentences

Real estate impairment 5,268 — — 5,268

Provision for credit losses — 691 — 691

Decrease in provision for credit losses — ( 1,101 ) — ( 1,101 )

Total operating expenses

1 unchanged sentence

Gain on disposition of real estate and condominium developments, net 75,633 — 4,869 80,502

Merger-related expenses, net — — ( 398 ) ( 398 )

Operating income (loss)

7 unchanged sentences

$ 126,095 $ 27,828 $ ( 56,286 ) $ 97,637

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

Total assets as of September 30, 2021

$ 2,947,031 $ 1,866,913 $ 266,915 $ 5,080,859

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

__________________________________

(1) Includes condominium and rental units acquired via foreclosure during the nine months ended September 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

September 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other Company Total

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Rental and other property income

16 unchanged sentences

Real estate impairment 476 — — 476

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

Increase in provision for credit losses — 7,355 — 7,355

Total operating expenses

3 unchanged sentences

Merger-related expenses, net — — ( 1,207 ) ( 1,207 )

Merger termination fee income — — — —

Operating income (loss)

6 unchanged sentences

$ 23,096 $ ( 4,409 ) $ ( 14,508 ) $ 4,179

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

Total assets as of September 30, 2020

$ 2,673,887 $ 946,827 $ 163,254 $ 3,783,968

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

September 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other Company Total

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Rental and other property income

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Real estate impairment 15,983 — — 15,983

Provision for credit losses — 25,682 — 25,682

Increase in provision for credit losses — 33,037 — 33,037

Total operating expenses

2 unchanged sentences

20,120 — — 20,120

Merger-related expenses, net — — ( 1,207 ) ( 1,207 )

Operating income (loss)

6 unchanged sentences

$ 52,934 $ ( 20,496 ) $ ( 44,180 ) $ ( 11,742 )

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

Total assets as of September 30, 2020

$ 2,673,887 $ 946,827 $ 163,254 $ 3,783,968

NOTE 16 — SUBSEQUENT EVENTS

The following events occurred subsequent to June 30, 2021:

The following events occurred subsequent to September 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.

Subsequent to September 30, 2021, the Company redeemed approximately 1.3 million shares for $ 9.4 million (at a redemption price of $ 7.20 per share).

The remaining redemption requests received during the three months ended September 30, 2021 totaling approximately 27.7 million shares went unfulfilled.

Property Dispositions

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.

Subsequent to September 30, 2021, the Company disposed of two properties for an aggregate gross sales price of $ 2.5 million, resulting in net proceeds of $ 2.4 million after closing costs and a net gain of approximately $ 29,000 .

The Company has no continuing involvement with these properties.

Additionally, the Company disposed of condominium units for an aggregate gross sales price of $ 10.4 million and a net gain of $ 1.1 million.

Subsequent to September 30, 2021, the Company acquired three senior loans with an aggregate principal balance of $ 345.0 million and unfunded commitments of $ 11.9 million, the funding of which is subject to the satisfaction of borrower milestones.

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.

Subsequent to September 30, 2021, the Company settled $ 75.2 million of broadly syndicated loan transactions, $ 59.7 million of which were traded as of September 30, 2021.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021 (Unaudited) – (Continued)

Derivative Instruments and Notes Payable

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.

September 30, 2021 (Unaudited) – (Continued)

CMBS Purchases

Subsequent to September 30, 2021, the Company purchased $ 61.0 million of CMBS.

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.

Subsequent to September 30, 2021, the Company entered into an amendment to the Credit and Security Agreement, pursuant to which available borrowings on the Credit Security Revolver were increased up to $ 550.0 million.

The Company also borrowed an additional $ 50.0 million under the Credit Security Revolver.

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.

Subsequent to September 30, 2021, the Company entered into an amendment to the Wells Fargo Repurchase Agreement to increase the maximum financing amount from $ 250.0 million to $ 580.0 million.

The Company also borrowed an additional $ 431.6 million on its Repurchase Facilities.

Deutsche Bank Repurchase Agreement

Subsequent to September 30, 2021, CMFT RE Lending RF Sub DB, LLC, an indirect wholly-owned subsidiary of the Company, entered into a Master Repurchase Agreement with Deutsche Bank AG, New York Branch (“Deutsche Bank”) (the “Deutsche Bank Repurchase Agreement”), which provides up to $ 300.0 million of financing primarily through Deutsche Bank’s purchase of certain eligible assets from the Company (the “Deutsche Bank Repurchase Facility”).

The Deutsche Bank Repurchase Agreement provides for a simultaneous agreement by Deutsche Bank to re-sell such assets back to the lending subsidiary at a certain future date or upon demand.

The Deutsche Bank Repurchase Facility matures on October 8, 2022, with four one-year extension options, subject to certain conditions set forth in the Deutsche Bank Repurchase Agreement.

In connection with the Deutsche Bank Repurchase Agreement, the Company (as the guarantor) entered into a guaranty with the buyer, under which the Company agreed to guarantee CMFT RE Lending RF Sub DB, LLC’s obligations under the Deutsche Bank Repurchase Agreement.

Subject to certain exceptions, the maximum aggregate liability under the guaranty will not exceed 25 % of the then aggregate repurchase price of all purchased assets.

Registration Statements on Form S-4

In connection with the CIM Income NAV Merger, the Company filed a registration statement on Form S-4 (File No.

333-260358), which was declared effective by the SEC on November 4, 2021, that contains a prospectus of the Company.

The CIM Income NAV Merger is currently anticipated to close by year end 2021 or shortly thereafter.

Board Compensation

On November 8, 2021, the Board approved the acceleration of the vesting of all restricted shares for all non-returning independent directors to the date on which the Company’s 2021 annual meeting (the “Annual Meeting”) is held.

In addition, the Board approved the payment of cash compensation to each of the non-returning independent directors, payable in one lump sum following the Annual Meeting, equal to the cash compensation each non-returning independent director would have received if they had continued to serve as a member of the Board through September 30, 2022.

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