What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-11 compared with 2021-11-15 · 584 added, 694 removed, 775 unchanged (62% of the section changed)

3 unchanged sentences

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Real estate assets:

6 unchanged sentences

Total real estate assets, net 2,477,915 2,612,606

Real estate-related securities 185,247 38,194

Investments in unconsolidated entities 78,443 109,547

Real estate-related securities ($ 186,070 and $ 41,981 held at fair value as of March 31, 2022 and December 31, 2021, respectively)

254,313 105,471

Loans held-for-investment and related receivables, net 3,346,198 2,624,101

Allowance for credit losses ( 11,219 ) ( 70,358 )

Current expected credit losses ( 19,150 ) ( 15,201 )

Total loans held-for-investment and related receivables, net 3,327,048 2,608,900

7 unchanged sentences

LIABILITIES AND STOCKHOLDERS’ EQUITY

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

Repurchase facilities, notes payable and credit facilities, net $ 4,181,313 $ 4,143,205

Accrued expenses and accounts payable 29,979 45,872

2 unchanged sentences

Distributions payable 13,339 13,252

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

Deferred rental income, derivative liabilities and other liabilities 11,383 21,282

Total liabilities 4,273,151 4,263,101

5 unchanged sentences

Common stock, $ 0.01 par value per share;

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

490,000,000 shares authorized, 437,357,992 and 437,373,981 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Capital in excess of par value 3,529,163 3,529,126

Accumulated distributions in excess of earnings ( 1,009,487 ) ( 1,008,561 )

Accumulated other comprehensive income (loss) 1,564 ( 2,047 )

Accumulated other comprehensive (loss) income ( 448 ) 2,949

Total stockholders’ equity 2,523,602 2,527,888

Total liabilities, redeemable common stock and stockholders’ equity $ 5,080,859 $ 4,459,609

Non-controlling interests 1,068 1,073

Total equity 2,524,670 2,528,961

Total liabilities, redeemable common stock, non-controlling interests and stockholders’ equity $ 6,968,420 $ 6,962,776

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

2 unchanged sentences

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Rental and other property income $ 73,736 $ 76,930

10 unchanged sentences

Real estate impairment 3,291 4,300

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

Increase in provision for credit losses 4,709 568

Total operating expenses 62,104 71,614

Gain on disposition of real estate and condominium developments, net 32,574 —

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

Operating income 75,669 17,269

Other expense:

Gain on investment in unconsolidated entities 5,340 —

Interest expense and other, net ( 31,037 ) ( 20,022 )

2 unchanged sentences

Net income (loss) $ 39,101 $ ( 2,753 )

Net income allocated to noncontrolling interest 9 —

Net income (loss) attributable to the Company $ 39,092 $ ( 2,753 )

Weighted average number of common shares outstanding:

4 unchanged sentences

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands) (Unaudited)

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

2021 2020 2021 2020

Three Months Ended March 31,

Net income (loss) $ 39,101 $ ( 2,753 )

1 unchanged sentence

Unrealized (loss) gain on real estate-related securities ( 4,878 ) 122

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

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

Unrealized gain on interest rate swaps 1,488 123

Amount of (gain) loss reclassified from other comprehensive (loss) income into income (loss) as interest expense and other, net ( 7 ) 3,132

Total other comprehensive (loss) income ( 3,397 ) 3,377

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

Comprehensive income 35,704 624

Comprehensive income attributable to noncontrolling interest 9 —

Comprehensive income attributable to the Company $ 35,695 $ 624

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

4 unchanged sentences

of Par Value Accumulated

Distributions in Excess of Earnings Accumulated Other Comprehensive (Loss) Income Total

Distributions in Excess of Earnings Accumulated Other Comprehensive Income (Loss) Total

Stockholders’

Equity Non-Controlling Interests Total Equity

Shares Par Value

Balance as of January 1, 2022 437,373,981 $ 4,374 $ 3,529,126 $ ( 1,008,561 ) $ 2,949 $ 2,527,888 $ 1,073 $ 2,528,961

Equity-based compensation

— — 40 — — 40

Distributions declared on common stock — $ 0.09 per common share

— — — ( 32,906 ) — ( 32,906 )

Comprehensive (loss) income — — — ( 2,753 ) 3,377 624

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

Issuance of common stock 1,329,825 13 9,561 — — 9,574 — 9,574

917,769 9 6,651 — — 6,660

Equity-based compensation — — 37 — — 37 — 37

4,104 — 49 — — 49

Distributions declared on common stock — $ 0.09 per common share

— — — ( 40,018 ) — ( 40,018 ) — ( 40,018 )

Changes in redeemable common stock

— — ( 173,628 ) — — ( 173,628 )

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

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

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 ( 1,345,814 ) ( 13 ) ( 9,676 ) — — ( 9,689 ) — ( 9,689 )

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

Changes in redeemable common stock — — 115 — — 115 — 115

— — 2,999 — — 2,999

Distributions to non-controlling interests — — — — — — ( 14 ) ( 14 )

Comprehensive income (loss) — — — 39,092 ( 3,397 ) 35,695 9 35,704

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

Balance as of March 31, 2022 437,357,992 $ 4,374 $ 3,529,163 $ ( 1,009,487 ) $ ( 448 ) $ 2,523,602 $ 1,068 $ 2,524,670

Common Stock Capital in Excess

3 unchanged sentences

Stockholders’

Equity Non-Controlling Interests Total Equity

Shares Par Value

Balance as of January 1, 2021 362,001,968 $ 3,620 $ 3,157,859 $ ( 961,006 ) $ ( 2,047 ) $ 2,198,426 $ — $ 2,198,426

Cumulative effect of accounting changes — — — ( 2,002 ) — ( 2,002 )

Issuance of common stock

2,223,298 22 19,209 — — 19,231

Equity-based compensation — — 40 — — 40 — 40

— — 40 — — 40

Distributions declared on common stock — $ 0.09 per common share

— — — ( 32,906 ) — ( 32,906 ) — ( 32,906 )

Redemptions of common stock

( 2,256,037 ) ( 22 ) ( 19,492 ) — — ( 19,514 )

Changes in redeemable common stock

— — 283 — — 283

Comprehensive loss — — — ( 12,175 ) ( 9,828 ) ( 22,003 )

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

Issuance of common stock

1,242,475 12 9,531 — — 9,543

Equity-based compensation

— — 40 — — 40

Distributions declared on common stock — $ 0.04 per common share

— — — ( 13,072 ) — ( 13,072 )

Redemptions of common stock

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

Changes in redeemable common stock

— — 9,643 — — 9,643

Comprehensive (loss) income — — — ( 2,753 ) 3,377 624 — 624

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

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

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

2 unchanged sentences

(in thousands) (Unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

12 unchanged sentences

(Gain) loss on sale of credit investments, net ( 65 ) 111

Gain on investment in unconsolidated entities ( 5,340 ) —

Gain on sale of marketable security ( 22 ) —

Unrealized loss on equity securities 2,368 —

Amortization of fair value adjustment and gain on interest rate swaps 92 ( 1,431 )

Loss on interest rate caps 171 —

Gain on interest rate caps ( 1,176 ) —

Impairment of real estate assets 3,291 4,300

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

Increase in provision for credit losses 4,709 568

Write-off of deferred financing costs 7,068 —

Return on investment in unconsolidated entities 531 —

Changes in assets and liabilities:

6 unchanged sentences

Cash flows from investing activities:

Investment in unconsolidated entities ( 24,750 ) —

Investment in real estate-related securities ( 155,618 ) ( 28,509 )

Investment in broadly syndicated loans ( 266,978 ) ( 474,990 )

Investment in liquid senior loans ( 61,030 ) ( 82,144 )

Investment in real estate assets and capital expenditures ( 9,533 ) ( 10,864 )

Investment in corporate senior loan ( 10,000 ) —

Origination and acquisition of loans held-for-investment, net ( 784,129 ) ( 185,652 )

4 unchanged sentences

Net proceeds from disposition of real estate assets and condominium developments 923,400 3,511

Net proceeds from sale of broadly syndicated loans 55,224 25,837

Payment of property escrow deposits — ( 550 )

Refund of property escrow deposits — 250

Proceeds from the settlement of insurance claims 58 —

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

Net proceeds from sale of liquid senior loans 23,834 7,445

Redemption of investment in unconsolidated entities 48,500 —

Net cash provided by (used in) investing activities $ 62,821 $ ( 242,510 )

CIM REAL ESTATE FINANCE TRUST, INC.

1 unchanged sentence

(in thousands) (Unaudited) — Continued

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities:

1 unchanged sentence

Distributions to stockholders ( 30,357 ) ( 32,906 )

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 )

Proceeds from repurchase facilities, notes payable and credit facilities 903,060 282,323

Repayments of repurchase facilities, notes payable and credit facilities ( 857,815 ) ( 85,298 )

Termination of interest rate swaps ( 101 ) —

Payment of loan deposits ( 650 ) ( 65 )

Refund of loan deposits — 65

Distributions to non-controlling interests ( 14 ) —

Deferred financing costs paid ( 4,550 ) ( 907 )

25 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited)

March 31, 2022 (Unaudited)

NOTE 1 — ORGANIZATION AND BUSINESS

CIM Real Estate Finance Trust, Inc.

(the “Company”) is a non-exchange traded real estate investment trust (“REIT”) formed as a Maryland corporation on July 27, 2010, that elected to be taxed, and currently qualifies, as a REIT for U.S.

(the “Company”) is a non-exchange traded real estate investment trust (“REIT”) formed as a Maryland corporation on July 27, 2010, that elected to be taxed, and operates its business to qualify, as a REIT for U.S.

federal income tax purposes beginning with its taxable year ended December 31, 2012.

The Company operates a diversified portfolio of core commercial real estate assets primarily consisting of net leased properties located throughout the United States.

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

The Company operates a diversified portfolio of core commercial real estate primarily consisting of net leased properties located throughout the United States and short duration senior secured loans and other credit investments.

As of March 31, 2022, the Company owned 445 properties, including two properties owned through a consolidated joint venture arrangement (the “Consolidated Joint Venture”), comprised of 15.4 million rentable square feet of commercial space located in 45 states.

As of March 31, 2022, the rentable square feet at these properties was 97.2 % leased, including month-to-month agreements, if any.

As of March 31, 2022, the Company’s loan portfolio consisted of 332 loans with a net book value of $ 3.3 billion, and investments in real estate-related securities of $ 254.3 million.

As of March 31, 2022, the Company owned condominium developments with a net book value of $ 158.1 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.

1 unchanged sentence

CIM is a community-focused real estate and infrastructure owner, operator, lender and developer.

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

CIM is headquartered in Los Angeles, CA, with offices in Atlanta, GA, Bethesda, MD, Chicago, IL, Dallas, TX, New York, NY, Orlando, FL, Phoenix, AZ, and Tokyo, Japan.

CIM also maintains additional offices across the Unites States, as well as in Korea, Hong Kong, and the United Kingdom to support its platform.

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.

(“CIM Income NAV”).

The Company relies upon CIM Capital IC Management, LLC, the Company’s investment advisor (the “Investment Advisor”), to provide substantially all of the Company’s day-to-day management with respect to investments in securities.

CCO Group, LLC and its subsidiaries (collectively, “CCO Group”) serve as the Company’s sponsor.

On January 26, 2012, the Company commenced its initial public offering on a “best efforts” basis of up to a maximum of $ 2.975 billion in shares of common stock (the “Offering”).

10 unchanged sentences

333-212832), which was filed with the SEC on August 2, 2016 and automatically became effective with the SEC upon filing.

The Company began to issue shares under the Secondary DRIP Offering on August 2, 2016 and continued to issue shares under the Secondary DRIP Offering until, on August 30, 2020, the Company’s board of directors (the “Board”) suspended the Secondary DRIP Offering in connection with the entry of the Company into the merger agreements with Cole Office & Industrial REIT (CCIT III), Inc.

The Company began to issue shares under the Secondary DRIP Offering on August 2, 2016 and will continue to issue shares under the Secondary DRIP Offering.

The Board establishes an updated estimated per share net asset value (“NAV”) of the Company’s common stock on at least an annual basis for purposes of assisting broker-dealers that participated in the Offering in meeting their customer account reporting obligations under Financial Industry Regulatory Authority Rule 2231.

Distributions are reinvested in shares of the

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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

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

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

Distributions are reinvested in shares of the Company’s common stock under the DRIP at the estimated per share NAV as determined by the Board.

March 31, 2022 (Unaudited) – (Continued)

Company’s common stock under the DRIP at the estimated per share NAV as determined by the Board.

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 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.

As of March 31, 2022, 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

7 unchanged sentences

The condensed consolidated financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and the Consolidated Joint Venture in which the Company has a controlling financial interest.

All intercompany balances and transactions have been eliminated in consolidation.

In determining whether the Company has controlling interests in an entity and the requirement to consolidate the accounts in that entity, the Company analyzes its investments in real estate in accordance with standards set forth in GAAP to determine whether they are variable interest entities (“VIEs”), and if so, whether the Company is the primary beneficiary.

The Company’s judgment with respect to its level of influence or control over an entity and whether the Company is the primary beneficiary of a VIE involves consideration of various factors, including the form of the Company’s ownership interest, the Company’s voting interest, the size of the Company’s investment (including loans), and the Company’s ability to participate in major policy-making decisions.

The Company’s ability to correctly assess its influence or control over an entity affects the presentation of these investments in real estate on the Company’s condensed consolidated financial statements.

As of March 31, 2022, the Company has determined that the Consolidated Joint Venture is considered a VIE.

Applying the consolidation requirements for VIEs, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits and therefore met the requirements for consolidation.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (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.

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

Other than as shown below, these reclassifications had no effect on previously reported totals or subtotals.

The reclassifications have been made to the condensed consolidated balance sheet as of December 31, 2021, and to the condensed consolidated statements of operations and condensed consolidated statement of cash flows for the three months ended March 31, 2021 as follows (in thousands):

As of December 31, 2021

As previously reported Reclassifications As Revised

Condensed Consolidated Balance Sheets

Rents and tenant receivables, net $ 61,468 $ ( 2,520 ) $ 58,948

Prepaid expenses and other assets $ 13,759 $ 2,520 $ 16,279

Three Months Ended March 31, 2021

As previously reported Reclassifications As Revised

Condensed Consolidated Statements of Operations

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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)

Rents and tenant receivables, net $ 7,151 $ 882 $ 8,033

Prepaid expenses and other assets $ ( 4,175 ) $ ( 882 ) $ ( 5,057 )

Use of Estimates

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reduced lease rates;

and changes in anticipated holding periods.

When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition.

changes in anticipated holding periods;

and significant increases to budgeted costs for units under development.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

and their eventual disposition.

In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss.

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

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.

During the three months ended March 31, 2022, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $ 3.3 million related to seven properties, all of which was due to sales prices that were less than their respective carrying values.

The Company’s impairment assessment as of March 31, 2022 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 2022 or in future periods.

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.

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

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

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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 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.

Disposition of Real Estate Assets

As of March 31, 2022, the Company identified 26 properties with a carrying value of $ 487.5 million as held for sale, 25 of which are in connection with the Purchase and Sale Agreement (as defined in Note 4 — Real Estate Assets).

The Company has mortgage notes payable of $ 344.2 million that are related to the held for sale properties, all of which the Company expects to repay or transfer to the buyer in connection with the disposition of the underlying held for sale properties.

The Company disposed of certain of these properties in phases subsequent to March 31, 2022, as further discussed in Note 17 — Subsequent Events.

As of December 31, 2021, in connection with the Purchase and Sale Agreement, the Company identified 81 properties with a carrying value of $ 1.3 billion as held for sale, of which 56 such properties closed during the three months ended March 31, 2022.

Dispositions of Real Estate Assets

Gains and losses from dispositions are recognized once the various criteria relating to the terms of sale and any subsequent involvement by the Company with the asset sold are met.

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 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.

The Company’s dispositions during the three months ended March 31, 2022 and 2021 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 dispositions 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 three months ended March 31, 2022.

Allocation of Purchase Price of Real Estate Assets

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The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

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

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

Investments in Unconsolidated Entities

On March 31, 2022, the Company fully redeemed its $ 60.7 million investment in CIM UII Onshore, L.

(“CIM UII Onshore”) and received redemption proceeds of $ 48.5 million as of March 31, 2022.

The remaining $ 12.2 million redemption proceeds were included in prepaid expenses and other assets in the condensed consolidated balance sheets as of March 31, 2022.

Prior to redemption, the Company had less than 5 % ownership of CIM UII Onshore and accounted for its investment under the equity method.

The equity method of accounting requires the investment to be initially recorded at cost, including transaction costs incurred to finalize the investment, and subsequently adjusted for the Company’s share of equity in CIM UII Onshore’s earnings and distributions.

Prior to redemption, the Company recorded its share of CIM UII Onshore’s profits or losses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s condensed consolidated balance sheet and such share is recognized as a profit or loss on the condensed consolidated statements of operations.

The Company recorded its share of CIM UII Onshore’s gain, totaling $ 5.2 million during the three months ended March 31, 2022, in the condensed consolidated statements of operations.

During the three months ended March 31, 2022, the Company received distributions of $ 531,000 related to its investment in CIM UII Onshore, all of which was recognized as a return on investment.

As of December 31, 2021, the Company’s investment in CIM UII Onshore had a carrying value of $ 56.0 million.

CMFT MT JV Holdings, LLC, an indirect wholly-owned subsidiary of the Company, is engaged in an unconsolidated joint venture arrangement through CIM NP JV Holdings, LLC (“NP JV Holdings”) (the “Unconsolidated Joint Venture”) of which it owns 50 % of the outstanding equity.

Through the Unconsolidated Joint Venture, which holds 90 % of the membership interest in NewPoint JV, LLC (“NewPoint JV”) pursuant to the terms of the Operating Agreement entered into between the Unconsolidated Joint Venture and NewPoint Bridge Lending, LLC, the Company indirectly owns 45 % of the outstanding equity of the NewPoint JV on a fully diluted basis.

The Company accounts for its investment under the equity method.

The Company has elected the fair value option (“FVO”) for its equity method investment and therefore reports this investment at fair value.

The equity method of accounting requires the investment to be initially recorded at cost, including transaction costs incurred to finalize the investment, and is subsequently adjusted for the Company’s share of equity in NP JV Holdings’ earnings and distributions.

The Company records its share of NP JV Holdings’ profits or losses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s condensed consolidated balance sheet and such share is recognized as a profit or loss on the condensed consolidated statements of operations.

The Company recorded a gain totaling $ 168,000 , which represented its share of NP JV Holdings’ gain, during the three months ended March 31, 2022 in the condensed consolidated statements of operations.

During the three months ended March 31, 2022, the Company contributed an additional $ 24.8 million in NP JV Holdings.

As of March 31, 2022, the Company’s aggregate investment in NP JV Holdings of $ 78.4 million is included in investment in unconsolidated entities on the condensed consolidated balance sheets.

The Company did not receive any distributions related to its investment in the NP JV Holdings during the three months ended March 31, 2022.

Noncontrolling Interest in Consolidated Joint Venture

The Company has a controlling interest in the Consolidated Joint Venture and, therefore, meets the requirements for consolidation.

The Company recorded net income of $ 9,000 and paid distributions of $ 14,000 to the noncontrolling interest during the three months ended March 31, 2022.

The Company recorded the noncontrolling interest of $ 1.1 million as of both March 31, 2022 and December 31, 2021 on the condensed consolidated balance sheets.

Restricted Cash

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.

The Company had $ 72.5 million and $ 36.8 million in restricted cash as of March 31, 2022 and December 31, 2021, respectively.

Included in restricted cash was $ 15.9 million and $ 7.8 million held by lenders in lockbox accounts, as of March 31, 2022 and December 31, 2021, 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 $ 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.

Also included in restricted cash was $ 56.6 million and $ 29.0 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 March 31, 2022 and December 31, 2021, respectively.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

Real Estate-Related Securities

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

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

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

As of March 31, 2022, 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 (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 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)

During the three months ended March 31, 2022, the Company invested $ 97.5 million in CMBS.

As of March 31, 2022, the Company had investments in seven CMBS with an estimated aggregate fair value of $ 135.0 million.

In addition, the Company had investments in equity securities with an estimated aggregate fair value of $ 51.0 million as of March 31, 2022, which is comprised of RTL Common Stock (as defined in Note 4 — Real Estate Assets) received as consideration in connection with the Purchase and Sale Agreement.

These investments are carried at their estimated fair value with unrealized gains and losses reported on the condensed consolidated statements of operations.

Dividends received are recorded in interest income on the condensed consolidated statements of operations.

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

An allowance for credit losses is recorded when the Company acquires CMBS, and any subsequent impairment is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost has resulted from a credit loss or other factors.

The Company records impairments related to credit losses through the allowance for credit losses.

Current expected credit losses are recorded when the Company acquires CMBS, and any subsequent impairment is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost has resulted from a credit loss or other factors.

The Company records impairments related to credit losses through current expected credit losses.

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

2 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.

During the three months ended March 31, 2022 and 2021, the Company did not record current expected credit losses related to CMBS.

As of March 31, 2022, the Company classified its investment 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 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.

Upon maturity, the preferred units will be redeemed in exchange for debt.

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

The Company evaluates their held-to-maturity investments for any other-than-temporary impairment each reporting period.

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 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.

During the three months ended March 31, 2022 and 2021, the Company capitalized $ 272,000 and $ 173,000 , respectively, of interest income to real estate-related securities.

Loans Held-for-Investment

The Company has acquired, and may continue to acquire, loans related to real estate assets.

Additionally, the Company may acquire and originate credit investments, including commercial mortgage loans, mezzanine loans, preferred equity, and other loans and securities related to commercial real estate assets, as well as corporate loan opportunities that are consistent with the Company’s investment strategy and objectives.

The Company’s loans held-for-investment include loans related to real estate assets, as well as credit investments, including commercial mortgage loans, mezzanine loans, preferred equity, and other loans and securities related to commercial real estate assets, as well as corporate loan opportunities that are consistent with the Company’s investment strategy and objectives.

The Company intends to hold the loans held-for-investment for the foreseeable future or until maturity.

Loans held-for-investment are carried on the Company’s condensed consolidated balance sheets at amortized cost, net of any allowance for credit losses.

Loans held-for-investment are carried on the Company’s condensed consolidated balance sheets at amortized cost, net of any current expected credit losses.

Discounts or premiums, origination fees and exit fees are amortized as a component of interest income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method.

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

Interest earned is either received in cash or capitalized to loans held-for-investment and related receivables, net in the Company’s condensed consolidated balance sheets.

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

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.

During the three months ended March 31, 2022, the Company recorded $ 31.5 million in interest income on its credit investments.

No amounts were capitalized during the three months ended March 31, 2022.

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

Allowance for Credit Losses

As of March 31, 2022, the Company did no t have nonaccrual loans.

Current Expected Credit Losses

The Company adopted Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), on January 1, 2020.

The allowance for credit losses required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans held-for-investment included in the condensed consolidated balance sheets.

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;

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.

Current expected credit losses (“CECL”) required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans held-for-investment included in the condensed consolidated balance sheets.

Changes to current expected 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 current expected credit losses, it does specify current expected credit losses 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.

In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.

The Company has elected to use a discounted cash flow model to estimate the allowance for credit losses.

This model requires the Company to develop cash flows which project estimated credit losses over the life of the loan and discount these cash flows at the asset’s effective interest rate.

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

The Company estimates the current expected credit loss for its first mortgage loans primarily using the Weighted Average Remaining Maturity method, which has been identified as an acceptable method for estimating CECL reserves in the Financial Accounting Standards Board (“FASB”) Staff Q&A Topic 326, No.

This method requires the Company to reference historic loan loss data across a comparable data set and apply such loss rate to each loan investment over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe.

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

1 unchanged sentence

For collateral-dependent loans that the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan.

For the Company’s broadly syndicated loans, the Company uses a probability of default and loss given default method using an underlying third-party CMBS/Commercial Real Estate (“CRE”) loan database with historical loan losses from 1998 to 2019.

For the Company’s liquid senior loans and corporate senior loans, the Company uses a probability of default and loss given default method using a comparable data set.

The Company may use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data.

The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost.

Prior to adoption, the Company had no allowance for credit losses on its condensed consolidated balance sheets.

The Company recorded a cumulative-effective adjustment to the opening retained earnings in its condensed consolidated statement of stockholders’ equity as of January 1, 2020 of $ 2.0 million.

Quarterly, the Company evaluates the risk of all loans and assigns a risk rating based on a variety of factors, grouped as follows:

11 unchanged sentences

however, the credit demonstrates an ample current cash flow from operations.

The trends and outlook for the credit's operations, balance sheet, and industry are generally positive or neutral.

The trends and outlook for the credit's operations,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

balance sheet, and industry are generally positive or neutral.

Collateral performance, if appropriate, meets or exceeds substantially all performance metrics included in original or current underwriting / business plan;

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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

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.

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.

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 $ 2.3 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.

Lease costs represent the initial direct costs incurred in the origination, negotiation and processing of a lease agreement.

4 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 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.

During the three months ended March 31, 2022 and 2021, the Company capitalized $ 3.1 million and $ 1.5 million of expenses associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

Included in the amounts capitalized during the three months ended March 31, 2022 and 2021 was $ 387,000 and $ 514,000 , respectively, of capitalized interest expense.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

Revenue Recognition

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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,

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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.

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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 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

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Interest income on loans is accrued as earned, with the accrual of interest suspended when the related loan becomes a nonaccrual loan.

Interest income on the Company’s broadly syndicated loans is accrued as earned beginning on the settlement date.

Interest income on the Company’s liquid senior loans is accrued as earned beginning on the settlement date.

Reportable Segments

During the year ended December 31, 2020, the Company updated its reportable segment information to reflect how the chief operating decision makers regularly review and manage the business and determined that it has two reportable segments:

Credit — engages primarily in acquiring and originating loans related to real estate assets.

The Company’s segment information reflects how the chief operating decision makers review information for operational decision-making purposes.

The Company has two reportable segments:

Credit — engages primarily in acquiring and originating loans, either directly or through co-investments in joint ventures, related to real estate assets.

The Company may acquire first and second lien mortgage loans, mezzanine loans, bridge loans, wraparound mortgage loans, construction mortgage loans on real property and loans on leasehold interest mortgages.

This segment also includes investments in CMBS and broadly syndicated loans.

This segment also includes investments in real estate-related securities, liquid senior loans and a corporate senior loan.

Real estate — engages primarily in acquiring and managing income-producing retail properties that are primarily single-tenant properties or anchored shopping centers, which are leased to creditworthy tenants under long-term net leases.

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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.

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.

While the lease modification guidance in ASU No.

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

Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting

CIM REAL ESTATE FINANCE TRUST, INC.

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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 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.

1 unchanged sentence

The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of the discontinuation of the use of the London Interbank Offered Rate (“LIBOR”) as a benchmark interest rate due to reference rate reform.

ASU 2021-01 is effective immediately for all entities with the option to apply retrospectively as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, and can be applied prospectively to any new contract modifications made on or after January 7, 2021.

ASU 2021-01 is effective immediately for all entities with the option to apply

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

retrospectively as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, and can be applied prospectively to any new contract modifications made on or after January 7, 2021.

The Company currently uses LIBOR as its benchmark interest rate for its derivative instruments, and has not entered into any new contracts on or after the effective date of ASU 2021-01.

13 unchanged sentences

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

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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.

Depending upon the 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.

As of March 31, 2022, the Company concluded that $ 97.5 million of its CMBS fell under Level 2 and $ 37.6 million of its CMBS and $ 68.2 million of its preferred units fell under Level 3.

The Company’s investment in equity securities is valued using Level 1 inputs.

The estimated fair value of the Company’s equity securities is based on quoted market prices that are readily and regularly available in an active market.

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 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.

As of March 31, 2022, the estimated fair value of the Company’s debt was $ 4.12 billion, compared to a carrying value of $ 4.20 billion.

The estimated fair value of the Company’s debt as of December 31, 2021 was $ 4.11 billion, compared to a carrying value of $ 4.17 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 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.

However, as of March 31,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

2022 and December 31, 2021, 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.

1 unchanged sentence

The Company estimates the fair value of its loans held-for-investment by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration the credit risk.

The Company has determined that its CRE loans held-for-investment are classified in Level 3 of the fair value hierarchy.

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 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 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.

The Company has determined that its commercial real estate (“CRE”) loans held-for-investment and corporate senior loan are classified in Level 3 of the fair value hierarchy.

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

As of March 31, 2022, $ 549.7 million and $ 113.6 million of the Company’s liquid senior loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively.

As of December 31, 2021, $ 560.4 million and $ 94.1 million of the Company’s liquid senior loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively.

As of March 31, 2022, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 3.35 billion, compared to their carrying value of $ 3.33 billion.

As of December 31, 2021, the estimated fair value of the Company’s loans held-for-investment was $ 2.63 billion, compared to their carrying value of $ 2.61 billion.

Other financial instruments — The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature.

2 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 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

September 30, 2021 (Unaudited) – (Continued)

The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

The Company does not expect that changes in classifications between levels will be frequent.

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 September 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 March 31, 2022 and December 31, 2021 (in thousands):

Balance as of

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

March 31, 2022 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial assets:

CMBS $ 135,049 $ — $ 97,476 $ 37,573

Preferred units 68,243 — — 68,243

Equity securities 51,021 51,021 — —

Interest rate caps 1,355 — 1,355 —

Total financial assets $ 255,668 $ 51,021 $ 98,831 $ 105,816

Financial liabilities:

Interest rate swaps $ ( 976 ) $ — $ ( 976 ) $ —

Total financial liabilities $ ( 976 ) $ — $ ( 976 ) $ —

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

Balance as of

2 unchanged sentences

CMBS $ 41,871 $ — $ — $ 41,871

Preferred units 63,490 — — 63,490

Marketable security 110 110 — —

Interest rate caps 179 — 179 —

Total financial assets

3 unchanged sentences

Total financial liabilities $ ( 2,466 ) $ — $ ( 2,466 ) $ —

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):

The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2022 (in thousands):

Beginning Balance, January 1, 2022

Total gains and losses:

Unrealized loss included in other comprehensive income (loss), net 1,045

Unrealized loss included in other comprehensive (loss) income, net ( 4,878 )

Purchases and payments received:

1 unchanged sentence

Capitalized interest income 272

Principal payments received

Ending Balance, September 30, 2021

Ending Balance, March 31, 2022

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

1 unchanged sentence

The Company’s process for identifying and recording impairment related to real estate assets and intangible assets is discussed in Note 2 — Summary of Significant Accounting Policies.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

As discussed in Note 4 — Real Estate Assets, during the three months ended March 31, 2022, real estate assets related to seven properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 29.1 million, resulting in impairment charges of $ 3.3 million.

During the three months ended March 31, 2021, real estate assets related to five properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 31.3 million, resulting in impairment charges of $ 4.3 million.

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.

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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 nine months ended September 30, 2021:

Nine Months Ended September 30,

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the three months ended March 31, 2022:

Three Months Ended March 31,

Discount Rate Terminal Capitalization Rate Discount Rate Terminal Capitalization Rate

3 unchanged sentences

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,

The following table presents the impairment charges by asset class recorded during the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

Asset class impaired:

6 unchanged sentences

2022 Property Acquisitions

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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

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

As of September 30, 2021

Buildings, fixtures and improvements $ 192,182

Acquired in-place leases and other intangibles 134

Intangible lease liabilities ( 326 )

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 — Notes Payable, Repurchase Facilities and Credit Facilities.

During the three months ended March 31, 2022, the Company did no t acquire any properties.

2022 Condominium Development Project

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.

During the three months ended March 31, 2022, the Company capitalized $ 3.1 million of expenses associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

2022 Condominium Dispositions

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.

During the three months ended March 31, 2022, the Company disposed of condominium units for an aggregate sales price of $ 21.1 million, resulting in proceeds of $ 19.4 million after closing costs and a gain of $ 3.3 million.

The Company has no continuing involvement with these condominium units.

1 unchanged sentence

2022 Property Dispositions and Real Estate Assets Held for Sale

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.

On December 20, 2021, certain subsidiaries of the Company entered into an Agreement of Purchase and Sale, as amended (the “Purchase and Sale Agreement”), with American Finance Trust, Inc.

(now known as The Necessity Retail REIT, Inc.) (NASDAQ:

RTL) (“RTL”), American Finance Operating Partnership, L.P.

(now known as The Necessity Retail REIT Operating Partnership, L.P.) (“RTL OP”), and certain of their subsidiaries (collectively, the “Purchaser”) to sell to the Purchaser 79 shopping centers and two single-tenant properties encompassing approximately 9.5 million gross rentable square feet of commercial space across 27 states for total consideration of $ 1.32 billion (the “Purchase Price”).

The Purchase Price includes the Purchaser’s option to seek the assumption of certain existing debt, and Purchaser’s issuance of up to $ 53.4 million in value of RTL’s Class A common stock, par value $ 0.01 per share (“RTL Common Stock”), or Class A units in RTL OP (“RTL OP Units”), subject to certain limits described more fully in the Purchase and Sale Agreement.

During the three months ended March 31, 2022, the Company disposed of 69 properties, including 32 retail properties and 37 anchored shopping centers for an aggregate gross sales price of $ 925.3 million, resulting in proceeds of $ 923.2 million after closing costs and a gain of $ 29.2 million.

The sale of 56 of these properties closed pursuant to the Purchase and Sale Agreement for total consideration of $ 811.8 million, which consisted of $ 758.4 million in cash proceeds and $ 53.4 million of RTL Common Stock, which shares are subject to certain registration rights as described in the Purchase and Sale Agreement.

During the three months ended March 31, 2022, the Company recognized earnout income of $ 31.5 million related to the disposition of

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

these properties pursuant to the Purchase and Sale Agreement, and recorded a related receivable of $ 21.3 million in prepaid expenses and other assets in the condensed consolidated balance sheets.

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 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.

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

As of March 31, 2022, the Company identified 26 properties with a carrying value of $ 487.5 million as held for sale, 25 of which are in connection with the Purchase and Sale Agreement.

The Company disposed of certain of these properties in phases subsequent to March 31, 2022, as further discussed in Note 17 — Subsequent Events.

2022 Impairment

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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 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.

During the three months ended March 31, 2022, seven properties totaling approximately 215,000 square feet with a carrying value of $ 32.4 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 29.1 million, resulting in impairment charges of $ 3.3 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.

2021 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

September 30, 2021 (Unaudited) – (Continued)

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

2020 Property Acquisitions

During the three months ended March 31, 2021, the Company did not acquire any properties.

Assets Acquired Via Foreclosure

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

No land was acquired in connection with the foreclosure.

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

As of March 31, 2021

Buildings, fixtures and improvements $ 192,182

Acquired in-place leases and other intangibles 134

Intangible lease liabilities ( 326 )

Total purchase price $ 191,990

______________________

(1) The amortization period for acquired in-place leases and other intangibles is 14.7 years.

2020 Property Dispositions

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.

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.

In connection with the foreclosure, the Company assumed $ 102.6 million of mortgage notes payable related to the assets, as further discussed in Note 10 — Repurchase Facilities, Credit Facilities and Notes Payable.

2021 Condominium Development Project

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

2021 Property Dispositions and Real Estate Assets Held for Sale

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

The Company has no continuing involvement with this property.

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

Subsequent to March 31, 2021, the Company disposed of these properties.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

2021 Impairment

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.

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

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

Consolidated Joint Venture

As of March 31, 2022, the Company had an interest in a Consolidated Joint Venture that owns and manages two properties, with total assets of $ 6.8 million, which included $ 7.2 million of land, building and improvements and $ 641,000 of intangible assets, net of accumulated depreciation and amortization of $ 1.2 million, and total liabilities of $ 47,000 .

The Consolidated Joint Venture did not have any debt outstanding as of March 31, 2022.

The Company has the ability to control operating and financial policies of the Consolidated Joint Venture.

There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of the partner (the “Consolidated Joint Venture Partner”) in accordance with the joint venture agreement for any major transactions.

The Company and the Consolidated Joint Venture Partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls.

NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES

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 and liabilities consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands, except weighted average life remaining):

March 31, 2022 December 31, 2021

Intangible lease assets:

In-place leases and other intangibles, net of accumulated amortization of $ 137,730 and $ 132,967 , respectively (with a weighted average life remaining of 9.3 years and 9.7 years, respectively)

In-place leases and other intangibles, net of accumulated amortization of $ 73,317 and $ 73,923 , respectively (both with a weighted average life remaining of 11.4 years)

$ 211,838 $ 224,931

7 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 nine months ended September 30, 2021 and 2020 (in thousands):

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

2021 2020 2021 2020

The following table summarizes the amortization related to the intangible lease assets and liabilities for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

In-place lease and other intangible amortization $ 6,786 $ 7,773

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

March 31, 2022 (Unaudited) – (Continued)

As of March 31, 2022, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

In-Place Leases and

7 unchanged sentences

Total $ 211,838 $ 12,339 $ 21,086

NOTE 6 — INVESTMENTS IN UNCONSOLIDATED ENTITIES

On December 16, 2021, as a result of the merger with CIM Income NAV, Inc.

(“CIM Income NAV”) (the “CIM Income NAV Merger”), the Company acquired a limited partnership interest in CIM UII Onshore.

CIM UII Onshore’s sole purpose is to invest all of its assets in CIM Urban Income Investments, L.P.

(“CIM Urban Income”), which is a private institutional fund that acquires, owns and operates substantially stabilized, diversified real estate and real estate-related assets in urban markets primarily located throughout North America.

During the three months ended March 31, 2022, the Company recognized an equity method net gain of $ 5.2 million related to its investment in CIM UII Onshore.

The Company recognized distributions of $ 531,000 related to its investment in CIM UII Onshore during the three months ended March 31, 2022, all of which was recognized as a return on investment.

On March 31, 2022, the Company fully redeemed its $ 60.7 million investment in CIM UII Onshore, which represented less than 5 % ownership of CIM UII Onshore and approximated fair value.

As of March 31, 2022, the Company received redemption proceeds of $ 48.5 million.

The remaining $ 12.2 million redemption proceeds were included in prepaid expenses and other assets in the condensed consolidated balance sheets as of March 31, 2022.

Additionally, during the year ended December 31, 2021, the Company entered into the Unconsolidated Joint Venture.

Through the Unconsolidated Joint Venture, the Company has a 45 % interest in the NewPoint JV and accounts for its investment under the equity method.

The primary purpose of the NewPoint JV is to source, underwrite, close and service on an ongoing basis multifamily bridge loans, participation interests, and other debt instruments such as loans.As of March 31, 2022, the carrying value of the Company’s investment in NP JV Holdings was $ 78.4 million, which approximates fair value and is included in investment in unconsolidated entities on the condensed consolidated balance sheets.

The Company did not receive any distributions related to its investment in NP JV Holdings during the three months ended March 31, 2022.

NOTE 7 — REAL ESTATE-RELATED SECURITIES

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.

As of March 31, 2022, the Company had real estate-related securities with an aggregate estimated fair value of $ 254.3 million, which included seven CMBS, equity securities and an investment in preferred units.

The CMBS mature on various dates from March 2024 through June 2058 and have interest rates ranging from 4.1 % to 6.9 %, 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):

The following is a summary of the Company’s real estate-related securities as of March 31, 2022 (in thousands):

Real Estate-Related Securities

Amortized Cost Basis Unrealized Gain Fair Value

Amortized Cost Basis Unrealized Loss Fair Value

CMBS $ 137,130 $ ( 2,081 ) $ 135,049

Equity securities 53,389 ( 2,368 ) 51,021

Preferred units 68,243 — 68,243

Total real estate-related securities $ 258,762 $ ( 4,449 ) $ 254,313

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

The following table provides the activity for the real estate-related securities during the three months ended March 31, 2022 (in thousands):

Amortized Cost Basis Unrealized Gain (Loss) Fair Value

Real estate-related securities as of January 1, 2022

5 unchanged sentences

Amortization of discount on real estate-related securities 308 — 308

Sale of real estate-related securities ( 26,977 ) ( 648 ) ( 27,625 )

Realized gain on sale of real estate-related securities ( 110 ) ( 22 ) ( 132 )

Capitalized interest income on real estate-related securities 272 — 272

Principal payments received on real estate-related securities ( 31 ) — ( 31 )

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

Real estate-related securities as of September 30, 2021

Unrealized loss on real estate-related securities

— ( 7,224 ) ( 7,224 )

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 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

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

Real estate-related securities as of March 31, 2022

$ 258,762 $ ( 4,449 ) $ 254,313

During the three months ended March 31, 2022, the Company invested $ 97.5 million in CMBS and $ 4.8 million in preferred units.

The Company also received $ 53.4 million in equity securities during the three months ended March 31, 2022 as consideration in connection with the Purchase and Sale Agreement.

During the same period, the Company sold one marketable security with an aggregate carrying value of $ 110,000 resulting in net proceeds of $ 132,000 and a gain of $ 22,000 .

Unrealized gains and losses on CMBS and equity securities 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 months ended March 31, 2022, the Company recorded $ 7.2 million of unrealized loss on its real estate-related securities, $ 4.9 million of which is included in other comprehensive (loss) income in the accompanying condensed consolidated statements of comprehensive income.

The remaining $ 2.3 million of unrealized loss on the Company’s equity securities is included in interest expense and other, net in the accompanying condensed consolidated statements of operations.

The scheduled maturities of the Company’s CMBS and preferred units as of March 31, 2022 are as follows (in thousands):

CMBS and Preferred Units

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

As of March 31, 2022, the Company had no credit losses related to real estate-related securities.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

NOTE 8 — LOANS HELD-FOR-INVESTMENT

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

Senior loans 890,804 341,546

The Company’s loans held-for-investment consisted of the following as of March 31, 2022 and December 31, 2021 (dollar amounts in thousands):

As of March 31, As of December 31,

First mortgage loans (1)

$ 2,664,702 $ 1,968,585

Total CRE loans held-for-investment and related receivables, net 2,664,702 1,968,585

Broadly syndicated loans 571,488 473,603

Liquid senior loans 671,569 655,516

Corporate senior loan 9,927 —

Loans held-for-investment and related receivables, net $ 3,346,198 $ 2,624,101

Allowance for credit losses $ ( 11,219 ) $ ( 70,358 )

Current expected credit losses $ ( 19,150 ) $ ( 15,201 )

Total loans held-for-investment and related receivable, net $ 3,327,048 $ 2,608,900

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 .

____________________________________

(1) As of March 31, 2022, first mortgage loans included $ 20.1 million of contiguous mezzanine loan components that, as a whole, have expected credit quality similar to that of a first mortgage loan.

During the three months ended March 31, 2022, the Company invested $ 61.0 million in liquid senior loans and invested $ 10.0 million in a corporate senior loan.

During the same period, the Company received $ 21.5 million of principal payments on liquid senior loans and sold $ 23.9 million of liquid senior loans, resulting in proceeds of $ 23.8 million after closing costs and a gain of $ 65,000 .

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

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.

As of March 31, 2022, the Company had $ 39.5 million of unfunded or unsettled liquid senior loan purchases included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

As of March 31, 2022, the Company had $ 384.7 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

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):

The following table details overall statistics for the Company’s loans held-for-investment as of March 31, 2022 and December 31, 2021 (dollar amounts in thousands):

CRE Loans (1) (2)

Broadly Syndicated Loans

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

Liquid Senior Loans Corporate Senior Loan

March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021

Number of loans 25 22 306 295 1 —

5 unchanged sentences

____________________________________

(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.

(2) Maximum maturity date assumes all extension options are exercised by the borrower;

(1) As of March 31, 2022, 100 % of the Company’s CRE loans by principal balance earned a floating rate of interest, primarily indexed to U.S.

dollar LIBOR and the Secured Overnight Financing Rate (“SOFR”).

(2) Maximum maturity date assumes all extension options are exercised by the borrowers;

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

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

Principal Balance Deferred Fees / Other Items (1)

Loan Fees Receivable Net Book Value

Net Book Value

Balance, January 1, 2022 $ 2,644,728 $ ( 35,828 ) $ 2,608,900

Loan originations and acquisitions 855,693 — 855,693

Cure payments receivable (2)

— ( 7,351 ) — ( 7,351 )

Sale of loans ( 23,854 ) 85 ( 23,769 )

1 unchanged sentence

( 102,540 ) 65 ( 102,475 )

Capitalized interest (2)

( 9,469 ) — — ( 9,469 )

Deferred fees and other items

2 unchanged sentences

— 2,724 2,724

Foreclosure of assets (2)

( 127,320 ) 3,831 ( 7,167 ) ( 130,656 )

Allowance for credit losses (4)

— 59,139 — 59,139

Balance, September 30, 2021

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

____________________________________

(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 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

The allowance for credit losses reflects the Company’s current estimate of potential credit losses related to the loans held-for-investment included in the Company’s condensed consolidated balance sheets.

Refer to Note 2 — Summary of Significant Accounting Policies for further discussion of the Company’s allowance for credit losses.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 January 1, 2021 $ 58,038 $ 2,590 $ 9,730 $ 70,358

Foreclosure of assets (1)

( 58,038 ) — — ( 58,038 )

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

Allowance for credit losses as of March 31, 2021

Current expected credit losses — ( 3,949 ) ( 3,949 )

Balance, March 31, 2022

$ 3,374,027 $ ( 46,979 ) $ 3,327,048

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

Allowance for credit losses as of June 30, 2021

____________________________________

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

Allowance for credit losses as of September 30, 2021

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

(2) Includes the repayment of a $ 80.9 million first mortgage loan prior to the maturity date.

Current Expected Credit Losses

Current expected credit losses reflect the Company’s current estimate of potential credit losses related to the loans held-for-investment included in the Company’s condensed consolidated balance sheets.

Refer to Note 2 — Summary of Significant Accounting Policies for further discussion of the Company’s current expected credit losses.

The following table presents the activity in the Company’s current expected credit losses by loan type for the three months ended March 31, 2022 (dollar amounts in thousands):

First Mortgage Loans Unfunded First Mortgage Loans (1)

Liquid Senior Loans Unfunded or Unsettled Liquid Senior Loans (1)

Corporate Senior Loan Total

Current expected credit losses as of January 1, 2022 $ 9,930 $ — $ 5,271 $ — $ — $ 15,201

Provision for credit losses 1,312 360 2,581 400 56 4,709

Current expected credit losses as of March 31, 2022

$ 11,242 $ 360 $ 7,852 $ 400 $ 56 $ 19,910

____________________________________

(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.

(1) Current expected losses for unfunded or unsettled loan commitments are included in accrued expenses and accounts payable in the condensed consolidated balance sheets.

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

Troubled Debt Restructuring

1 unchanged sentence

Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument.

The allowance for credit losses for financial instruments that are trouble debt restructurings are determined individually.

Current expected credit losses for financial instruments that are troubled debt restructurings are determined individually.

The Company also classifies a financial instrument as a troubled debt restructuring when receivables from third parties, real estate, or other assets are transferred from the debtor to the creditor in order to fully or partially satisfy a debt, such as in the event of a foreclosure or repossession.

2 unchanged sentences

As a result, the Company classified the loans as a troubled debt restructuring and commenced foreclosure proceedings during the year ended December 31, 2020.

Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured the loans, including 75 condominium units and 21 rental units across four buildings.

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

75 condominium units and 21 rental units across four buildings.

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 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.

During the three months ended March 31, 2022, the Company recorded a $ 3.9 million net increase to the provision for credit losses related to its first mortgage loans, liquid senior loans, and its corporate senior loan to reflect the estimated fair value of such loans, bringing the total current expected credit losses to $ 19.2 million as of March 31, 2022.

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

Each quarter, the Company assesses the risk factors of each loan, and assigns a risk rating based on several factors.

Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV, debt yield, collateral performance, and the quality and condition of the sponsor, borrower, and guarantor(s).

Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV ratio, debt yield, collateral performance, and the quality and condition of the sponsor, borrower, and guarantor(s).

Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2 — Summary of Significant Accounting Policies.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 September 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 March 31, 2022 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 September 30, 2021

As of March 31, 2022

Number of Loans 2022 2021 2020 2019 Total

Senior loans by internal risk rating:

First mortgage loans by internal risk rating:

1 — $ — $ — $ — $ — $ —

2 — — — — — —

Total senior loans 11 705,930 137,544 47,330 890,804

Broadly syndicated loans by internal risk rating:

3 25 757,254 1,714,550 145,133 47,765 2,664,702

1 unchanged sentence

5 — — — — — —

Total broadly syndicated loans 262 227,648 340,796 3,044 571,488

Allowance for credit losses ( 11,219 )

Total first mortgage loans 25 757,254 1,714,550 145,133 47,765 2,664,702

Liquid senior loans by internal risk rating:

1 — — — — — —

2 2 — — 5,338 — 5,338

3 298 45,447 347,678 256,586 3,031 652,742

4 6 3,314 — 10,175 — 13,489

5 — — — — — —

Total liquid senior loans 306 48,761 347,678 272,099 3,031 671,569

Corporate senior loan by internal risk rating:

1 — — — — — —

2 — — — — — —

3 1 9,927 — — — 9,927

4 — — — — — —

5 — — — — — —

Total corporate senior loan 1 9,927 — — — 9,927

Current expected credit losses ( 19,150 )

Total loans held-for-investment and related receivables, net 332 $ 3,327,048

3 unchanged sentences

Origination dates are subsequently updated to reflect material loan modifications.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

(2) Weighted average risk rating calculated based on carrying value at period end.

1 unchanged sentence

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 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):

During the three months ended March 31, 2022, one of the Company’s interest rate swap agreements matured, and the Company terminated one interest rate swap agreement prior to the maturity date.

As of March 31, 2022, the Company had five non-designated interest rate cap agreements and three interest rate swap agreements designated as hedging instruments.

The following table summarizes the terms of the Company’s interest rate cap agreements and interest rate swap agreements designated as hedging instruments as of March 31, 2022 and December 31, 2021 (dollar amounts in thousands):

Outstanding Notional Fair Value of Assets (Liabilities) as of

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

Location September 30, 2021 Rates (1)

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

Location March 31, 2022 Rates (1)

Dates Dates 2022 2021

2 unchanged sentences

5/9/2022 to 7/15/2023

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

$ 1,355 $ 179

(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.

Interest Rate Swaps Deferred rental income, derivative liabilities and other liabilities $ 155,800 3.31 % to 4.84 %

6/27/2017 to 9/30/2019

7/1/2022 to 9/6/2022

$ ( 976 ) $ ( 2,466 )

(1) The interest rate consists of the underlying index swapped or capped to a fixed rate as of March 31, 2022.

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

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

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.

During the three months ended March 31, 2022, 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.

For the three months ended March 31, 2022, the amount of gain reclassified from other comprehensive (loss) income as a decrease to interest expense was $ 7,000 .

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

The total unrealized gain on interest rate swaps of $ 1.6 million as of March 31, 2022, and the total unrealized gain on interest rate swaps of $ 152,000 as of December 31, 2021, respectively, is included in accumulated other comprehensive (loss) income in the accompanying condensed consolidated statements of stockholders’ equity.

During the next 12 months, the Company estimates that $ 1.1 million will be reclassified from other comprehensive (loss) income as an increase to interest expense.

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.

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 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

The Company records credit risk valuation adjustments on its derivative instruments based on the credit quality of the Company and the respective counterparty.

There were no termination events or events of default related to the derivative instruments as of March 31, 2022.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable.

March 31, 2022 (Unaudited) – (Continued)

NOTE 10 — REPURCHASE FACILITIES, CREDIT FACILITIES AND NOTES PAYABLE

As of March 31, 2022, the Company had $ 4.2 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 3.2 years and a weighted average interest rate of 2.7 %.

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

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

The following table summarizes the debt balances as of 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

The following table summarizes the debt balances as of March 31, 2022 and December 31, 2021, and the debt activity for the three months ended March 31, 2022 (in thousands):

During the Three Months Ended March 31, 2022

Balance as of December 31, 2021 Debt Issuances & Assumptions (1)

Repayments & Modifications (2)

Accretion and (Amortization) Balance as of

September 30, 2021

Accretion & (Amortization) Balance as of

March 31, 2022

Notes payable – fixed rate debt $ 471,967 $ — $ ( 72,558 ) $ — $ 399,409

1 unchanged sentence

First lien mortgage loan 650,000 — ( 493,839 ) — 156,161

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

ABS mortgage notes 770,775 — ( 1,935 ) — 768,840

Credit facilities 910,000 82,000 ( 218,000 ) — 774,000

1 unchanged sentence

Total debt 4,171,424 903,060 ( 873,262 ) — 4,201,222

Net premiums (3)

149 — — ( 149 ) —

Deferred costs – credit facility (3)

2 unchanged sentences

Deferred costs – variable rate debt ( 271 ) ( 685 ) — 182 ( 774 )

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

Deferred costs – ABS mortgage notes ( 16,127 ) — — 501 ( 15,626 )

Total debt, net $ 4,143,205 $ 902,162 $ ( 866,194 ) $ 2,140 $ 4,181,313

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 $ 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.

Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(4) Deferred costs related to the term portion of the CMFT Credit Facility (as defined below).

(2) In connection with the repayment of certain mortgage notes, the Company recognized a loss on extinguishment of debt of $ 10.9 million during the three months ended March 31, 2022.

(3) Deferred costs related to the term portion of the CIM Income NAV Credit Facility (as defined below).

Notes Payable

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

As of March 31, 2022, the fixed rate debt outstanding of $ 399.4 million included $ 15.8 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt.

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

The fixed rate debt outstanding matures on various dates from May 2022 to December 2024.

The fixed rate debt outstanding matures on various dates from May 2022 through February 2025.

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 $ 656.6 million as of September 30, 2021.

The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $ 685.3 million as of March 31, 2022.

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 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.

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

As of March 31, 2022, the Company had $ 122.5 million of variable rate debt outstanding, which included $ 62.8 million of borrowings financed through a note on note financing arrangement with Massachusetts Mutual Life Insurance Company (the “Mass Mutual Financing”), which had a weighted average interest rate of 3.9 %.The variable rate debt outstanding matures on various dates from May 2022 to July 2027.

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.

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 is managed on a day-to-day basis by affiliates of CIM.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

March 31, 2022 (Unaudited) – (Continued)

March 31, 2022, 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 57 properties, comprised of one anchored shopping center, 54 single-tenant retail properties, one office property and one industrial property.

As of March 31, 2022, the aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the notes was $ 365.9 million.

Amounts outstanding on the Mortgage Loan totaled $ 156.2 million with a weighted average interest rate of 4.8 % as of March 31, 2022.

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:

ABS Mortgage Notes

On July 28, 2021, the Company issued $ 774.0 million aggregate principal amount of asset backed securities (“ABS”) 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)

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The collateral pool for the Class A Notes is comprised of 168 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 aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Class A Notes was $ 977.3 million.

As of March 31, 2022, amounts outstanding on the Class A Notes totaled $ 768.8 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”).

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”).

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.

(“Citibank”), as administrative agent, CMFT Securities Investments, LLC, a wholly-owned subsidiary of the Company (“CMFT Securities”), as equityholder and as collateral manager, Citibank (acting through its Agency & Trust division), as both a collateral agent and as a collateral custodian, and Virtus Group, LP, as collateral administrator.

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 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.

On December 16, 2021, as a result of the CIM Income NAV Merger, a subsidiary of the Company assumed CIM Income NAV’s obligations pursuant to the credit agreement by and among CIM Income NAV Operating Partnership, LP, the operating partnership of CIM Income NAV (“CIM Income NAV OP”), JPMorgan Chase, as administrative agent, and the lender parties thereto (the “CIM Income NAV Credit Agreement”), including as guarantor under a guaranty provided by CIM Income NAV, and as modified by a modification agreement dated as of September 6, 2017 and subsequently modified following the consummation of the CIM Income NAV Merger by a second modification agreement on December 16, 2021.

The CIM Income NAV Credit Agreement allows for borrowings of up to $ 425.0 million (the “CIM Income NAV Credit Facility”).

The CIM Income NAV Credit Facility includes $ 212.5 million in term loans (the “CIM Income NAV Term Loans”) and up to $ 212.5 million in revolving loans (the “CIM Income NAV Revolving Loans”).

The CIM Income NAV Term Loans and the CIM Income NAV Revolving Loans mature on September 6, 2022.

Depending upon the type of loan specified and overall leverage ratio, the CIM Income NAV Credit Facility bears interest at (i) the one-month, three-month or six-month LIBOR multiplied by the statutory reserve rate plus an interest rate spread ranging from 1.60 % to 2.10 % for term loans and 1.70 % to 2.20 % for revolving loans;

or (ii) a base rate ranging from 0.60 % to 1.10 % for term loans and 0.70 % to 1.20 % for revolving loans, plus the greater of:

(a) JPMorgan Chase’s Prime Rate (as defined in the CIM Income NAV Credit Agreement);

(b) the greater of (1) the Federal Funds Effective Rate (as defined in the CIM Income NAV Credit Agreement) and (2) the Overnight Bank Funding Rate (as defined in the CIM Income NAV Credit Agreement) plus 0.50 %;

or (c) the one-month LIBOR multiplied by the statutory reserve rate plus 1.0 %.

As of March 31, 2022, $ 40.0 million was outstanding under the CIM Income NAV Revolving Loans.

As of March 31, 2022, the CIM Income NAV Term Loans outstanding totaled $ 212.5 million, $ 140.0 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

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.

The applicable rate is 1.70 % per annum during the reinvestment period and 2.00 % per annum during the amortization period (and, in each case, an additional 2.00 % per annum following an event of default under the Credit and Security Agreement).

March 31, 2022 (Unaudited) – (Continued)

per annum of the Swapped Term Loans at an all-in rate of 4.4 %.

As of March 31, 2022, the Company had $ 252.5 million outstanding under the CIM Income NAV Credit Facility at a weighted average interest rate of 3.8 % and $ 172.5 million in unused capacity, subject to borrowing availability.

The Company had available borrowings of $ 171.6 million as of March 31, 2022.

The CIM Income NAV Credit Agreement contains provisions with respect to covenants, events of default and remedies customary for facilities of this nature.

In particular, the CIM Income NAV Credit Agreement requires the Company to maintain a minimum consolidated net worth greater than or equal to the total of (i) $ 367.1 million, plus (ii) 75 % of the aggregate increases in stockholders’ equity of the Company, minus (iii) the aggregate amount of any redemptions or similar transactions (but not to exceed the amount in clause (ii) above) and a leverage ratio less than or equal to 60 %.

The CIM Income NAV Credit Agreement requires the Company to maintain a fixed charge coverage ratio greater than 1.50 to 1.00, an unsecured debt to unencumbered asset value ratio equal to or less than 60 %, an unsecured debt service coverage ratio greater than 1.75 to 1.00, a secured debt ratio equal to or less than 40 % and the amount of secured debt that is real estate recourse debt at no greater than 15 % of total asset value.

The Company believes it was in compliance with the financial covenants under the CIM Income NAV Credit Agreement, as well as the financial covenants under the Company’s various fixed and variable rate debt agreements, as of March 31, 2022.

During the year ended December 31, 2021, the Company amended the Credit and Security Agreement (the “Second Amended Credit and Security Agreement”) by increasing available borrowings under the revolving credit facility to an aggregate principal amount up to $ 550.0 million (the “Credit Securities Revolver”).

The Credit Securities Revolver may be increased from time to time pursuant to the Second Amended Credit and Security Agreement.

As of March 31, 2022, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 521.5 million at a weighted average interest rate of 2.5 %.

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

The reinvestment period begins on the Closing Date and concludes on the earlier of (i) the date that is three years after the Closing Date, (ii) the final maturity date and (iii) the date on which the total assets under management of the Company and its wholly-owned subsidiaries is less than $ 1.25 billion (the “Reinvestment Period”).

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

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

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.

Borrowings under the Second Amended Credit and Security Agreement are secured by substantially all of the assets held by CMFT Corporate Credit Securities, LLC, which shall primarily consist of liquid senior secured loans subject to certain eligibility criteria under the Second Amended 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 March 31, 2022.

Repurchase Facilities

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):

As of March 31, 2022, indirect wholly-owned subsidiaries of the Company (collectively, the “CMFT Lending Subs”), had Master Repurchase Agreements with Citibank, Barclays Bank PLC (“Barclays”), Wells Fargo Bank, N.A.

(“Wells Fargo”), and Deutsche Bank AG (“Deutsche Bank”) (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 March 31, 2022 (dollar amounts in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

Repurchase Facility Date of Agreement Maturity Date (1)

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Citibank 6/4/2020 8/17/2024 $ 400,000 2.1 % (3)

$ 450,919 $ 322,416

Barclays 9/21/2020 9/21/2024 1,250,000 2.1 % (3)

1,145,974 906,937

Wells Fargo 5/20/2021 5/19/2024 750,000 1.8 % (3)

807,354 657,598

Deutsche Bank 10/8/2021 10/8/2022 300,000 2.3 % (4)

120,256 93,373

Total $ 2,700,000 $ 2,524,503 $ 1,980,324

__________________________________

(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.

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.

(1) The repurchase facilities with Citibank, Barclays, and Wells Fargo were set to mature on various dates between June 2023 and May 2024, with up to two one-year extension options, while the repurchase facility with Deutsche Bank (“Deutsche Bank Repurchase Facility”) is set to mature on October 8, 2022, with four one-year extension options, all of which are subject to certain conditions set forth in the Repurchase Agreements .

(2) During the three months ended March 31, 2022 , the Company increased the Barclays Repurchase Facility and the repurchase facility with Wells Fargo (the “Wells Fargo Repurchase Facility”) to provide up to $ 1.25 billion and $ 750.0 million, respectively, in financing.

(3) Advances under the repurchase agreement accrue interest at per annum rates based on the one-month LIBOR, plus a spread ranging from 1.25 % to 2.15 % to be determined on a case-by-case basis between Citibank, Barclays or Wells Fargo and the CMFT Lending Subs.

(4) Under the Amended and Restated Master Repurchase Agreement with Deutsche Bank, advances under the repurchase agreement may be made based on one-month Term SOFR (as such term is defined in the repurchase agreement) plus a spread designated by Deutsche Bank and the interest rate used for certain existing advances under the existing Deutsche Bank Repurchase Facility may be converted from the one-month LIBOR to one-month SOFR plus a spread ranging from 1.90 % to 2.00 %.

The Repurchase Agreements provide for simultaneous agreements by Citibank, Barclays, Wells Fargo and Deutsche Bank to re-sell such purchased CRE mortgage loans back to CMFT Lending Subs at a certain future date or upon demand.

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

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

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

The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of March 31, 2022.

Liquidity and Financial Condition — The Company had $ 618.1 million of debt maturing within the next 12 months following the date these financial statements are issued.

The Company plans 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 LTV ratios, the occupancy of the Company’s properties and assessment of the current lending environment.

Additionally, in the normal course of business, the Company is in discussions with its lenders to extend, amend or replace any financing facilities which contain near term expirations.

The Company plans to use cash on hand, proceeds from real estate asset dispositions, net cash provided by operations, borrowings available under the credit facilities and the entry into new financing arrangements, which management believes 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

March 31, 2022 (Unaudited) – (Continued)

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to March 31, 2022 (in thousands):

Principal Repayments

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Unfunded Commitments

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 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.

As of March 31, 2022, the Company had $ 384.7 million of unfunded commitments related to its existing CRE loans held-for-investment and $ 16.2 million of unfunded commitments related to NP JV Holdings.

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

Unfunded Liquid Senior Loans

As of March 31, 2022, the Company had $ 39.5 million of unfunded or unsettled liquid senior loan acquisitions, $ 24.3 million of which settled subsequent to March 31, 2022.

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

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 12 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

The Company has incurred fees and expenses payable to CMFT Management and certain of its affiliates in connection with the acquisition, management and disposition of its assets.

On August 20, 2019, the Company and CMFT Management entered into an Amended and Restated Management Agreement (the “Management Agreement”), which amended and restated that certain Advisory Agreement between the parties dated January 24, 2012, as amended (the “Prior Advisory Agreement”).

Management and investment advisory fees

The Company pays CMFT Management a management fee, payable quarterly in arrears, equal to the greater of (a) $ 250,000 per annum ($ 62,500 per quarter) and (b) 1.50 % per annum ( 0.375 % per quarter) of the Company’s Equity (as defined in the Management Agreement).

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

CMFT Securities has an investment advisory and management agreement dated December 6, 2019 (the “Investment Advisory and Management Agreement”) with the Investment Advisor.

CMFT Securities was formed for the purpose of holding any securities investments made by the Company.

CMFT Securities was formed for the purpose of holding any securities investments and certain other investments made by the Company.

The Investment Advisor, a wholly-owned subsidiary of CIM, is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).

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The Sub-Advisor is registered as an investment adviser under the Advisers Act and is an affiliate of the Investment Advisor.

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

The Sub-Advisor principally provides investment management services with respect to the corporate credit-related securities held by CMFT Securities and its subsidiaries.

The Sub-Advisor may allocate a portion of these corporate credit-related securities to its other clients, including affiliates of CIM.

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

During the three months ended March 31, 2022 and 2021, 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.

In the event that the incentive compensation is earned and payable with respect to any quarter, CMFT Management calculates the portion of the incentive compensation that was attributable to the Managed Assets and payable to the Investment Advisor.

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

Expense reimbursements to related parties

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

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

Disposition fees

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

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

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

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

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

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 September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Management fees $ 13,347 $ 11,577

Disposition fees $ — $ 93 $ — $ 434

Expense reimbursements to related parties $ 3,694 $ 2,661

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 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.

Development Management Agreements

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.

Of the amounts shown above, $ 16.1 million and $ 15.4 million had been incurred, but not yet paid, for services provided by CMFT Management or its affiliates in connection with the management and operating activities during the three months ended March 31, 2022 and 2021, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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”).

March 31, 2022 (Unaudited) – (Continued)

Development Management Agreements

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

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

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.

The Development Management Agreement shall remain in effect until the project completion date, and is terminable by either party with fifteen days prior notice to the other party, with or without cause.

Affiliated Investments

In September 2021, the Company co-invested in $ 68.4 million in preferred units and $ 138.8 million in a mortgage loan to a third-party for the purchase of a multi-family, office and retail building in Fort Lauderdale, Florida with CIM Real Assets & Credit Fund, a fund that is advised by affiliates of CMFT Management (“CIM RACR”).

During the three months ended March 31, 2022, the Company and CIM RACR upsized their investment in the preferred units with an additional $ 4.8 million and $ 364,000 , respectively, and upsized their investment in the mortgage loan with an additional $ 6.4 million and $ 490,000 , respectively.

As of March 31, 2022, the Company had $ 68.2 million invested in preferred units and $ 135.3 million invested in the mortgage loan.

In October 2021, the Company invested in a $ 130.0 million first mortgage loan, with an initial advance of $ 119.0 million, to a third-party, the proceeds of which were used to finance the acquisition of a property from a fund that is advised by an affiliate of CMFT Management.

As of March 31, 2022, $ 120.4 million of the first mortgage loan was outstanding.

An affiliate of CMFT Management serves as the property manager for this property and has entered into a subordination agreement with the Company in connection with the loan.

In November 2021, the Company entered into the Unconsolidated Joint Venture (the “MT-FT JV”) with CMMT Holdings, LLC, a fund that is advised by an affiliate of CMFT Management, for the purposes of investing in the Newpoint JV.

The Company owns 50 % of the equity interests of the MT-FT JV and has committed to fund capital to the MT-FT JV up to $ 112.5 million, of which $ 78.3 million has been funded.

For more information on the NewPointJV, see Note 2 — Summary of Significant Accounting Policies.

Subsequent to March 31, 2022, the Company contributed an additional $ 18.7 million in capital to NP JV Holdings.

In December 2021, the Company invested in a $ 155.0 million first mortgage loan, with an initial advance of $ 154.0 million, to a third-party, the proceeds of which were used to finance the acquisition of a property from a fund that is advised by an affiliate of CMFT Management.

As of March 31, 2022, $ 154.0 million of the first mortgage loan was outstanding.

Subsequent to March 31, 2022, the Company invested in a $ 147.0 million first mortgage loan, with an initial advance of $ 143.0 million, to a third-party, which was previously funded by a fund that is advised by an affiliate of CMFT Management.

As a result of the CIM Income NAV Merger, the Company had an investment in CIM UII Onshore, a fund that is advised by an affiliate of CMFT Management, which was fully redeemed for $ 60.7 million on March 31, 2022.

See Note 2 — Summary of Significant Accounting Policies for more information on the CIM UII Onshore investment.

During the three months ended March 31, 2022, the Company and CIM RACR co-invested $ 10.0 million and $ 1.9 million, respectively, in a corporate senior loan to a third-party.

As of March 31, 2022, $ 10.0 million of the corporate senior loan was outstanding.

Subsequent to March 31, 2022, the Company and CIM RACR co-invested $ 17.7 million and $ 5.0 million, respectively, in a corporate senior loan to a third-party.

The Sub-Advisor provided investment management services related to this corporate senior loan pursuant to the Sub-Advisory Agreement.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited) – (Continued)

NOTE 13 — ECONOMIC DEPENDENCY

4 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 September 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.

The Board or a committee designated by the Board also has the authority to determine the terms of any award granted pursuant to the Plan, including vesting schedules, restrictions and acceleration of any restrictions.

The Plan may be amended or terminated by the Board at any time.

The Plan expires on August 9, 2028.

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.

On August 10, 2018, the Board approved the adoption of the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), under which 400,000 of the Company’s shares of common stock were reserved for issuance and awards of approximately 306,000 shares of common stock were available for future grant at March 31, 2022.

On April 27, 2022, the Board and the compensation committee of the Board approved, subject to stockholder approval, the Amended and Restated CIM Real Estate Finance Trust, Inc.

2022 Equity Incentive Plan (the “2022 Plan”).

The 2022 Plan would supersede and replace the 2018 Plan.

Awards that are granted on or after the effective date of the 2022 Plan will be subject to the terms and provisions of the 2022 Plan.

The total number of shares of Company common stock reserved and available for issuance under the 2022 Plan at any time during the term of the 2022 Plan shall be 250,000 shares, which is a reduction from 400,000 shares authorized for issuance under the 2018 Plan.

Under the 2022 Plan, the Board or the compensation committee of the Board has the authority to grant certain awards to employees, non-employee directors, and consultants or advisors of the Company, including stock option awards, restricted stock awards or deferred stock awards, which awards will further align such persons’ interests with the interests of the Company’s stockholders.

The Board or the compensation committee of the Board also has the authority to determine the terms of any award granted pursuant to the 2022 Plan, including vesting schedules, restrictions and acceleration of any restrictions.

The 2022 Plan may be amended or terminated by the Board or the compensation committee of the Board at any time, subject to the right of the Company’s stockholders to approve certain amendments.

As of March 31, 2022, the Company has granted awards of approximately 94,000 restricted shares in the aggregate to the independent members of the Board under the 2018 Plan.

As of March 31, 2022, 73,000 of the restricted shares had vested based on one year of continuous service.

The remaining 21,000 restricted shares issued had not vested or been forfeited as of March 31, 2022.

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 $ 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.

The Company recorded compensation expense of $ 37,000 and $ 40,000 for the three months ended March 31, 2022 and 2021, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of March 31, 2022, there was $ 76,000 of total unrecognized compensation expense related to these restricted shares, which will be recognized ratably over the remaining period of service prior to October 2022.

NOTE 15 — LEASES

5 unchanged sentences

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

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

As of March 31, 2022, the Company’s leases had a weighted-average remaining term of 9.8 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.

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

March 31, 2022 (Unaudited) – (Continued)

As of March 31, 2022, the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands):

Future Minimum Rental Income

4 unchanged sentences

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

For the three 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

For the three months ended March 31, 2022 and 2021, the amount of the contingent rent earned by the Company was not significant .

Rental and other property income during the three months ended March 31, 2022 and 2021 consisted of the following (in thousands):

Three Months Ended March 31,

Fixed rental and other property income (1)

1 unchanged sentence

Variable rental and other property income (2)

10,763 9,711 32,394 30,154

Total rental and other property income $ 73,736 $ 76,930

5 unchanged sentences

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

The Company recognized $ 63,000 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.

The Company recognized $ 63,000 of ground lease expense during the three months ended March 31, 2022, of which $ 61,000 was paid in cash during the period it was recognized.

As of March 31, 2022, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 187,000 for the remainder of 2022, $ 250,000 annually for 2023 through 2027, and $ 1.4 million thereafter through the maturity date of the lease in August 2033.

NOTE 16 — SEGMENT REPORTING

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 September 30, 2021

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

Interest income — 19,755 — 19,755

Total revenues 70,694 19,755 100 90,549

General and administrative 86 265 2,725 3,076

Property operating 7,555 — 3,602 11,157

Real estate tax 7,325 — 266 7,591

Expense reimbursements to related parties — — 2,516 2,516

Management fees 8,713 2,990 — 11,703

Transaction-related 6 — — 6

Depreciation and amortization 22,801 — — 22,801

Real estate impairment 891 — — 891

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

Other expense:

Interest expense and other, net ( 12,820 ) ( 5,117 ) ( 2,444 ) ( 20,381 )

Loss on extinguishment of debt ( 249 ) — ( 3,002 ) ( 3,251 )

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

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 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.

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

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

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

March 31, 2022 (Unaudited) – (Continued)

The following tables present segment reporting for the three months ended March 31, 2022 and 2021 (in thousands):

Real Estate Credit Corporate/Other (1) (2)

Company Total

Nine Months Ended September 30, 2021

Rental and other property income

$ 222,691 $ — $ 335 $ 223,026

Interest income

— 48,168 — 48,168

Total revenues

222,691 48,168 335 271,194

General and administrative

204 978 9,927 11,109

Property operating

22,297 — 10,335 32,632

Real estate tax

22,390 — 5,126 27,516

Expense reimbursements to related parties — — 8,387 8,387

Management fees 26,577 8,458 — 35,035

Transaction-related

Depreciation and amortization

73,186 — — 73,186

Real estate impairment 5,268 — — 5,268

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

Total operating expenses

149,959 8,335 33,775 192,069

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)

148,365 39,833 ( 28,969 ) 159,229

Other expense:

Interest expense and other, net

( 20,649 ) ( 12,005 ) ( 24,209 ) ( 56,863 )

Loss on extinguishment of debt

( 1,621 ) — ( 3,108 ) ( 4,729 )

Segment net income (loss)

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

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 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.

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

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

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other Company Total

Three Months Ended September 30, 2020

Three Months Ended March 31, 2022

Rental and other property income $ 73,639 $ — $ 97 $ 73,736

$ 66,011 $ — $ — $ 66,011

Interest income — 31,463 — 31,463

— 6,631 — 6,631

Total revenues 73,639 31,463 97 105,199

66,011 6,631 — 72,642

General and administrative 149 230 3,096 3,475

147 522 2,539 3,208

Property operating 7,136 — 591 7,727

5,214 — — 5,214

Real estate tax 6,350 — 363 6,713

6,566 — — 6,566

Expense reimbursements to related parties — — 3,694 3,694

2 unchanged sentences

Depreciation and amortization 19,141 — — 19,141

19,967 — — 19,967

Real estate impairment 3,291 — — 3,291

1 unchanged sentence

Total operating expenses 43,205 11,155 7,744 62,104

41,538 8,906 3,978 54,422

Gain on disposition of real estate, net

3,219 — — 3,219

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

Gain on disposition of real estate and condominium developments, net 29,265 — 3,309 32,574

Operating income (loss) 59,699 20,308 ( 4,338 ) 75,669

27,692 ( 2,275 ) ( 5,185 ) 20,232

Other expense:

Gain on investment in unconsolidated entities — 168 5,172 5,340

Interest expense and other, net ( 13,839 ) ( 13,914 ) ( 3,284 ) ( 31,037 )

( 4,596 ) ( 2,134 ) ( 9,234 ) ( 15,964 )

Loss on extinguishment of debt ( 10,737 ) — ( 134 ) ( 10,871 )

Segment net income (loss) $ 35,123 $ 6,562 $ ( 2,584 ) $ 39,101

Net income allocated to noncontrolling interest 9 — — 9

Segment net income (loss) attributable to the Company 35,114 6,562 ( 2,584 ) 39,092

Total assets as of March 31, 2022

$ 2,919,412 $ 3,767,306 $ 281,702 $ 6,968,420

Total assets as of September 30, 2020

__________________________________

(1) Includes condominium and rental units acquired via foreclosure during the year ended December 31, 2021.

(2) Includes the Company’s investment in CIM UII Onshore.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited) – (Continued)

March 31, 2022 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other Company Total

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Rental and other property income

19 unchanged sentences

46,498 944 24,172 71,614

Gain on disposition of real estate, net

20,120 — — 20,120

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

Operating income (loss)

3 unchanged sentences

( 4,116 ) ( 3,547 ) ( 12,359 ) ( 20,022 )

Loss on extinguishment of debt ( 4,394 ) — ( 447 ) ( 4,841 )

Segment net income (loss)

$ 26,180 $ 7,462 $ ( 36,395 ) $ ( 2,753 )

Total assets as of September 30, 2020

Total assets as of March 31, 2021

$ 3,371,496 $ 1,155,640 $ 194,718 $ 4,721,854

NOTE 17 — SUBSEQUENT EVENTS

The following events occurred subsequent to September 30, 2021:

Redemptions of Shares of Common Stock

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.

Subsequent to March 31, 2022, the Company redeemed approximately 1.4 million shares for $ 9.9 million (at a redemption price of $ 7.20 per share).

The remaining redemption requests received during the three months ended March 31, 2022 totaling approximately 23.8 million shares went unfulfilled.

Property Dispositions

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 .

Subsequent to March 31, 2022, the sale of 23 properties under contract for sale pursuant to the Purchase and Sale Agreement closed for total consideration of $ 289.2 million.

The remaining two properties are expected to close in the second quarter of 2022.

In addition to the properties disposed of pursuant to the Purchase and Sale Agreement, the Company disposed of four properties and a condominium unit subsequent to March 31, 2022 for an aggregate gross sales price of $ 27.3 million, resulting in net proceeds of $ 26.1 million after closing costs and mortgage note payoffs and a net gain of approximately $ 1.8 million.

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 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.

Subsequent to March 31, 2022, the Company originated a first mortgage loan with a principal balance of $ 147.0 million and unfunded commitments of $ 4.0 million, the funding of which is subject to the satisfaction of borrower milestones.

Liquid Senior Loans

Subsequent to March 31, 2022, the Company settled $ 29.4 million of liquid senior loan transactions, $ 24.3 million of which were traded as of March 31, 2022.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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.

March 31, 2022 (Unaudited) – (Continued)

Corporate Senior Loans

Subsequent to March 31, 2022, the Company invested $ 17.7 million in a corporate senior loan to a third-party.

NP JV Holdings

Subsequent to March 31, 2022, the Company contributed an additional $ 18.7 million in capital to NP JV Holdings.

Mortgage Notes Payable

Subsequent to March 31, 2022, the Company extended the maturity date on $ 59.7 million of its mortgage note payable that was set to mature in May 2022, extending the date of maturity to July 11, 2022.

In addition, subsequent to March 31, 2022, one of the Company’s mortgage notes payable matured and the Company repaid in full $ 5.1 million.

Repurchase Facilities

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.

Subsequent to March 31, 2022, one of the Company’s first mortgage loans was financed under the Deutsche Bank Repurchase Facility for $ 45.5 million.

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