CIM GROUP, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of December 31, 2023 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures, as of December 31, 2023, were effective at a reasonable assurance level. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 75 Table of Contents framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2023. Changes in Internal Control Over Financial Reporting No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the three months ended December 31, 2023, none of our directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408 of Regulation S-K of the Exchange Act. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 76 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item will be presented in our definitive proxy statement for our 2024 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2023, and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item will be presented in our definitive proxy statement for our 2024 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2023, and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item will be presented in our definitive proxy statement for our 2024 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2023, and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item will be presented in our definitive proxy statement for our 2024 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2023, and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item will be presented in our definitive proxy statement for our 2024 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2023, and is incorporated herein by reference. 77 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Financial Statements The list of the consolidated financial statements contained herein is set forth on page F-1 hereof. Financial Statement Schedules Schedule III – Real Estate Assets and Accumulated Depreciation is set forth beginning on page S-1 hereof. Schedule IV – Mortgage Loans on Real Estate is set forth beginning on page S- 8 hereof. All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are not applicable and therefore have been omitted. Exhibits The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2023 (and are numbered in accordance with Item 601 of Regulation S-K). Incorporated by Reference Exhibit No. Description Form File No. Exhibit Filing Date 2.1 Agreement and Plan of Merger, dated as of August 30, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor II Merger Sub, LLC and Cole Office & Industrial REIT (CCIT II), Inc. 8-K 000-54939 2.1 8/31/2020 2.1.1 Amendment to Agreement and Plan of Merger, dated as of October 22, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor II Merger Sub, LLC and Cole Office & Industrial REIT (CCIT II), Inc. 8-K 000-54939 2.3 10/28/2020 2.1.2 Amendment to Agreement and Plan of Merger, dated as of October 24, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor II Merger Sub, LLC and Cole Office & Industrial REIT (CCIT II), Inc. 8-K 000-54939 2.4 10/28/2020 2.2 Agreement and Plan of Merger, dated as of August 30, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor III Merger Sub, LLC and Cole Office & Industrial REIT (CCIT III), Inc. 8-K 000-54939 2.2 8/31/2020 2.2.1 Amendment No. 1 to Agreement and Plan of Merger, dated as of November 3, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor III Merger Sub, LLC and Cole Office & Industrial REIT (CCIT III), Inc. 8-K 000-54939 2.1 11/4/2020 2.3 Agreement and Plan of Merger, dated as of August 30, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor V Merger Sub, LLC and Cole Credit Property Trust V, Inc. 8-K 000-54939 2.3 8/31/2020 2.3.1 Amendment to Agreement and Plan of Merger, dated as of October 22, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor V Merger Sub, LLC and Cole Credit Property Trust V, Inc. 8-K 000-54939 2.1 10/28/2020 2.3.2 Amendment to Agreement and Plan of Merger, dated as of October 24, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor V Merger Sub, LLC and Cole Credit Property Trust V, Inc. 8-K 000-54939 2.2 10/28/2020 2.3.3 Amendment No. 3 to Agreement and Plan of Merger, dated as of October 29, 2020, by and among CIM Real Estate Finance Trust, Inc., Thor V Merger Sub, LLC and Cole Credit Property Trust V, Inc. 8-K 000-54939 2.1 11/2/2020 2.4 Agreement and Plan of Merger, dated as of September 21, 2021, by and among CIM Real Estate Finance Trust, Inc., Cypress Merger Sub, LLC and CIM Income NAV, Inc. 8-K 000-54939 2.1 9/22/2021 3.1 Articles of Amendment and Restatement of CIM Real Estate Finance Trust, Inc. 8-K 000-54939 3.1 8/20/2019 3.2 Second Amended and Restated Bylaws of CIM Real Estate Finance Trust, Inc. 10-K 000-54939 3.2 3/28/2023 4.1 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. 10-K 000-54939 4.1 3/30/2020 4.2 Second Amended and Restated Distribution Reinvestment Plan. 8-K 000-54939 4.1 5/1/2020 4.3 Master Indenture, dated as of July 28, 2021, by and among CMFT Net Lease Master Issuer, LLC, as issuer, and Citibank N.A., as indenture trustee. 8-K 000-54939 4.1 8/3/2021 4.4 Series 2021-1 Indenture Supplement, dated as of July 28, 2021, by and among CMFT Net Lease Master Issuer, LLC, as issuer, and Citibank N.A., as indenture trustee. 8-K 000-54939 4.2 8/3/2021 10.1 Second Amended and Restated Management Agreement by and between CIM Real Estate Finance Trust, Inc. and CIM Real Estate Finance Management, LLC, dated March 22, 2023. 10-K 000-54939 10.1 3/28/2023 10.2 Amended and Restated Agreement of Limited Partnership of Cole Operating Partnership IV, LP, by and between Cole Credit Property Trust IV, Inc. and the limited partners thereto. S-11 333-169533 10.2 1/24/2012 10.3 First Amendment to the Amended and Restated Agreement of Limited Partnership of CIM Real Estate Finance Operating Partnership, LP, dated August 15, 2019. 8-K 000-54939 10.2 8/20/2019 10.4 Credit and Security Agreement, dated December 31, 2019, by and between CMFT Corporate Credit Securities, LLC, as borrower, CMFT Securities Investments, LLC, as collateral manager and equityholder, the lenders from time to time party thereto, Citibank, N.A., as administrative agent, Citibank, N.A. (acting through its Agency & Trust division), as custodian and as collateral agent, and Virtus Group, LP, as collateral administrator. 8-K 000-54939 10.1 1/7/2020 10.4.1 Amendment No. 1 to Credit and Security Agreement, dated March 19, 2020, by and between CMFT Corporate Credit Securities, LLC, as borrower, CMFT Securities Investments, LLC, as collateral manager and equityholder, Citibank, N.A., as administrative agent and as lender, Citibank, N.A. (acting through its Agency & Trust division), as collateral custodian and as collateral agent, and Virtus Group, LP, as collateral administrator. 8-K 000-54939 10.1 3/24/2020 10.4.2 Amendment No. 2 to Credit and Security Agreement, dated October 4, 2021, by and between CMFT Corporate Credit Securities, LLC, as borrower, CMFT Securities Investments, LLC, as collateral manager and equityholder, Citibank, N.A., as administrative agent and as lender, Citibank, N.A. (acting through its Agency & Trust division), as collateral custodian and as collateral agent, and Virtus Group, LP, as collateral administrator. 8-K 000-54939 10.1 10/8/2021 10.4.3 Amendment No. 3 to Credit and Security Agreement, dated June 23, 2022, by and between CMFT Corporate Credit Securities, LLC, as borrower, CMFT Securities Investments, LLC, as collateral manager and equityholder, Citibank, N.A., as administrative agent and as lender, Citibank, N.A. (acting through its Agency & Trust division), as collateral custodian and as collateral agent, and Virtus Group, LP, as collateral administrator. 8-K 000-54939 10.1 6/29/2022 10.5 Amended and Restated CIM Real Estate Finance Trust, Inc. 2022 Equity Incentive Plan. 10-Q 000-54939 10.5 8/12/2022 10.6 C IM Real Estate Finance Trust, In c. 2024 Manager Equity Incentive Plan 8-K 000-54939 10.1 1/12/2024 10.7 Investment Advisory and Management Agreement by and between CMFT Securities Investments, LLC and CIM Capital IC Management, LLC, dated December 6, 2019. 8-K 000-54939 10.1 12/12/2019 10.8 Sub-Advisory Agreement by and between CIM Capital IC Management, LLC and OFS Capital Management, LLC, dated December 6, 2019. 8-K 000-54939 10.2 12/12/2019 10.9 Form of Indemnification Agreement. 8-K 000-54939 10.1 8/14/2020 10.10 Amended and Restated Master Repurchase Agreement, dated December 19, 2023, by and between CMFT RE Lending RF Sub CB, LLC, and Citibank, N.A. 8-K 000-54939 10.1 12/26/2023 10.11 Master Repurchase Agreement, dated December 19, 2023, by and between CLR RE Lending RF Sub CB, LLC and Citibank, N.A. 8-K 000-54939 10.2 12/26/2023 10.12 Guaranty, dated as of June 4, 2020, by CIM Real Estate Finance Trust, Inc. for the benefit of Citibank, N.A. 8-K 000-54939 10.2 6/9/2020 10.13 Guaranty, dated as of July 28, 2021, by CIM Real Estate Finance Operating Partnership, LP for the benefit of Citibank N.A., as indenture trustee. 8-K 000-54939 10.1 8/3/2021 10.14 Guaranty, dated as of December 19, 2023, by CIM Real Estate Finance Trust, Inc. and CIM Commercial Lending REIT for the benefit of Citibank, N.A. 8-K 000-54939 10.3 12/26/2023 10.15 A mended and Restated Master Repurchase Agreemen t, dated December 4, 2023, by and between CMFT RE L ending RF Sub BB, LLC and Barclays Bank PLC . 8-K 000-54939 10.1 12/8/2023 10.16 Master Repurchase Agreement, dated December 4, 2023, by and between CLR RE Lending RF Sub BB, LLC and Barclays Bank PLC. 8-K 000-54939 10.2 12/8/2023 10.17 Guaranty, dated as of September 21, 2020, by CIM Real Estate Finance Trust, Inc. for the benefit of Barclays Bank PLC. 8-K 000-54939 10.2 9/24/2020 10.18 Guaranty, dated as of December 4, 2023, by CIM Real Estate Finance Trust, Inc. and CIM Commercial Lending REIT for the benefit of Barclays Bank PLC. 8-K 000-54939 10.3 12/8/2023 10.19 Master Repurchase Agreement, dated May 20, 2021, by and between CMFT RE Lending RF Sub WF, LLC and Wells Fargo Bank, N.A. 8-K 000-54939 10.1 5/26/2021 10.19.1 First Amendment to Master Repurchase Agreement, dated October 28, 2021, by and between CMFT RE Lending RF Sub WF, LLC and Wells Fargo Bank, N.A. 8-K 000-54939 10.1 11/3/2021 10.19.2 Second Amendment to Master Repurchase Agreement, dated March 4, 2022, by and between CMFT RE Lending RF Sub WF, LLC and Wells Fargo Bank, N.A. 8-K 000-54939 10.1 3/10/2022 10.19.3 Third Amendment to Master Repurchase and Securities Contract and Termination of Preferred Equity Related Pledge and Security Agreement, dated August 31, 2022, by and among CMFT RE Lending RF Sub WF, LLC, as seller, Wells Fargo Bank, N.A., as buyer, and CMFT Securities Investments, LLC, and preferred equity pledgor. 8-K 000-54939 10.1 9/7/2022 10.20 Guaranty and Subordination Agreement, dated as of May 20, 2021, by CIM Real Estate Finance Trust, Inc. for the benefit of Wells Fargo Bank, N.A. 8-K 000-54939 10.2 5/26/2021 10.21 Loan and Servicing Agreement, dated as of March 16, 2022, among CMFT RE Lending Sub MM Holdco, LLC, as Holdings, CMFT RE Lending Sub MM, LLC, as the Borrower, Massachusetts Mutual Life Insurance Company and the other lenders from time to time party hereto, Trimont Real Estate Advisors, LLC, as the Administrative Agent, Massachusetts Mutual Life Insurance Company, as the Facility Servicer, and CMFT RE Lending Sub MM, LLC, as the Portfolio Asset Servicer. 10-Q 000-54939 10.6 8/12/2022 10.22* Loan and Security Agreement, dated as of June 16, 2023, by and among CMFT RE Lending Sub CBSQ, LLC, as Borrower, Citibank, N.A., as Class A Lender, and CMFT RE Lending Sub CBSQ Holdco, LLC, as Subordinated Lender, and CIM Commercial Lending REIT, as EU/UK Retention Holder. 10.23* Loan and Security Agreeme nt, dated as of October 20, 2023, by and amo ng CMFT RE Lending S ub BBSQ, LLC, as Borrower, Barclays Bank PLC, as Class A Lender, CMFT RE Lending S ub BBSQ Holdco, LLC, as Subordinated Lender, and CIM Commercial Lending REIT, as EU/ UK Retention Holder. 10.24 Property Management Agreement, dated as of July 28, 2021, by and among CMFT Net Lease Master Issuer, LLC, as issuer, CIM Real Estate Finance Operating Partnership, LP, as issuer manager, CREI Advisors, LLC, as property manager and special servicer, KeyBank National Association, as back-up manager, and Citibank N.A., as indenture trustee. 8-K 000-54939 10.2 8/3/2021 10.25 Master Repurchase Agreement, dated October 8, 2021, by and between CMFT RE Lending RF Sub DB, LLC and Deutsche Bank AG, New York Branch. 8-K 000-54939 10.1 10/14/2021 10.25.1 Amended and Restated Master Repurchase Agreement, dated December 23, 2021, by and between CMFT RE Lending RF Sub DB, LLC and Deutsche Bank AG, New York Branch. 8-K 000-54939 10.1 12/29/2021 10.25.2* F irst Amendment to Amended and Restated Master Repurchase Agreement, dated September 15, 2023 , by and between CMFT RE L ending RF Su b DB, LLC, as seller, CMFT RE L endin g Sub DB Holdco, LLC, as member , and Deutsche Bank AG , New York Bran ch, as buyer. 10.25.3 S e c ond Amendment to Amended and R estated Master Repurchase Agreement, dated December 22, 2023, by and between CMFT RE Lending RF Sub DB, LLC, as seller, CMFT RE Lending Sub DB Holdco, LLC, as member, and Deutsche Bank AG, New York B ranch, as buyer. 8-K 000-54939 10.1 12/28/2023 10.26 Amended and Restated Guaranty, dated as of December 22, 2023, by CIM Real Estate Finance Trust, Inc. and CIM Comme rcial Lending REIT for the benefit of Deutsche Bank AG, New York B ranch. 8-K 000-54939 10.2 12/28/2023 10.27 Master Repurchase Agreement, dated June 1, 2022, by and between CMFT Real Estate Securities I, LLC and J.P. Morgan Securities LLC. 8-K 000-54939 10.1 6/2/2022 10.28 Loan and Security Agreement, dated February 10, 2023, by and between CMFT CL Lending Sub AB, LLC, as borrower, each of the lenders from time to time party t hereto, Ally Bank, as administrative agent and arranger, U.S. Bank Trust Company, National Association, as collateral custodian, and U.S. Bank National Association, as document custodian. 8-K 000-54939 10.1 2/16/2023 10.28.1* Loan and Secu rity Agreement , dated February 10, 2023 , and c onformed through the First Amendment to the Loan and Security Agreement , d ate d December 13, 2023 , by a nd between CMFT CL Lending Sub AB, LLC, as borrower, each of the lenders from time to time party hereto, Ally B ank, as administrative agent and a rranger , U.S. Bank Trust Company, National Association, as collateral custodian, and U.S. Bank National Asso ciat ion, as doc ument custodian . 10.29 Modification Agreement and Limited Consent, dated December 21, 2020 by and between Cole Operating Partnership V, LP, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders. 10-K 000-54939 10.17 3/31/2021 10.30 Modification Agreement and Limited Consent, dated December 21, 2020 by and between CIM Real Estate Finance Operating Partnership, LP, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders. 10-K 000-54939 10.18 3/31/2021 10.31 Modification Agreement and Limited Consent, dated December 16, 2021, by and among CIM Income NAV Operating Partnership, LP, the Lenders party thereto, and JPMorgan Chase, N.A., as administrative agent for the Lenders. 10-Q 000-54939 10.4 5/11/2022 10.32 Agreement of Purchase and Sale, dated as of December 20, 2021, by and among certain indirect subsidiaries of CIM Real Estate Finance Trust, Inc., American Finance Operating Partnership, L.P., ARG SSSTRPA001, LLC, ARG SMSHPPA001, LLC, ARG CCCARPA001, LLC and American Finance Trust, Inc. 8-K 000-54939 10.1 12/20/2021 10.33 Agreement of Purchase and Sale, dated as of December 29, 2022, by and between certain indirect subsidiaries of CIM Real Estate Finance Trust, Inc. and certain subsidiaries of Realty Income Corporation. 8-K 000-54939 10.1 12/30/2022 21.1* Subsidiaries of the Registrant. 23.1* Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm. 31.1* Certifications of the Principal Executive Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certifications of the Principal Financial Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certifications of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS* XBRL Instance Document. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as InLine XBRL and contained in Exhibit 101). ____________________________________ * Filed herewith. ** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. ITEM 16. FORM 10-K SUMMARY None. 78 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized this 28 th day of March, 2024. CIM Real Estate Finance Trust, Inc. (Registrant) By: /s/ NATHAN D. DEBACKER Nathan D. DeBacker Chief Financial Officer, Principal Accounting Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. Signature Title Date /s/ RICHARD S. RESSLER Chairman of the Board of Directors, Chief Executive Officer and President March 28, 2024 Richard S. Ressler (Principal Executive Officer) /s/ NATHAN D. DEBACKER Chief Financial Officer, Principal Accounting Officer and Treasurer March 28, 2024 Nathan D. DeBacker (Principal Financial Officer and Principal Accounting Officer) /s/ T. PATRICK DUNCAN Independent Director March 28, 2024 T. Patrick Duncan /s/ W. BRIAN KRETZMER Independent Director March 28, 2024 W. Brian Kretzmer /s/ HOWARD A. SILVER Independent Director March 28, 2024 Howard A. Silver /s/ JASON SCHREIBER Director March 28, 2024 Jason Schreiber 79 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F- 5 Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022 and 2021 F- 6 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2023, 2022 and 2021 F- 7 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023, 2022 and 2021 F- 8 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021 F- 9 Notes to Consolidated Financial Statements F- 11 Schedule III - Real Estate Assets and Accumulated Depreciation S- 1 Schedule IV - Mortgage Loans on Real Estate S- 8 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of CIM Real Estate Finance Trust, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of CIM Real Estate Finance Trust, Inc. and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Real Estate Assets: Determination of Impairment Indicators — Refer to Notes 2 and 4 to the financial statements Critical Audit Matter Description The Company’s evaluation of real estate assets for impairment involves an initial assessment of each real estate asset to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of real estate assets are no longer recoverable. Possible indications of impairment may include bankruptcy or other credit concerns of a property’s major tenants, vacancies, changes in anticipated holding periods, a reduction in prevailing market values for assets being considered for disposition, or other circumstances. When events or changes in circumstances exist, the Company evaluates its real estate assets for impairment by comparing undiscounted future cash flows expected to be generated over the life of each asset to the respective carrying amount. If the carrying amount of an asset exceeds the undiscounted future cash flows, an analysis is performed to determine the fair value of the asset, and real estate assets will be adjusted to their respective fair values, recognizing an impairment loss. The Company makes significant assumptions to evaluate real estate assets for possible indications of impairment. Changes in these assumptions could result in additional impairment charges in the future. F-2 Table of Contents Given the Company’s evaluation of possible indications of impairment of real estate assets requires management to make significant assumptions, performing audit procedures to evaluate whether management appropriately identified events or changes in circumstances indicating that the carrying amounts of real estate assets may not be recoverable required a high degree of auditor judgment. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the evaluation of real estate assets for possible indications of impairment included the following, among others: • We evaluated management’s impairment indicator analysis by testing real estate assets for possible indications of impairment, including searching for adverse asset-specific and/or market conditions, such as vacancies, tenant bankruptcies and other credit concerns, among others, as well as assessing changes in anticipated holding periods, including expected asset dispositions. • We independently searched market values for assets considered for disposition, to determine whether a reduction in market values was present and indicative of impairment. • We performed inquiries with management, including property accounting and portfolio oversight, to determine whether factors were identified in the current period that may be an impairment indicator, including changes in anticipated holding periods, or changes in lease rates, and corroborated these inquiries through review of third-party market reports and inspection of meeting minutes of the Board of Directors . Assessment of Current Expected Credit Losses (“CECL”) Reserve – Refer to Notes 2, 7 and 8 to the financial statements Critical Audit Matter Description The Company estimates its CECL reserve using the Weighted Average Remaining Maturity (“WARM”) method for its first mortgage loans and the probability of default and loss given default method for its liquid corporate senior loans and corporate senior loans. For collateral-dependent loans, the Company measures its CECL reserve based on the fair value of the collateral and the amortized cost basis of the loan. Significant judgments are required in determining the CECL reserve, including the evaluation of historical loan loss data, the impact of expected economic conditions on the loan portfolio, and determining collateral fair values of collateral-dependent loans. For commercial mortgage-backed securities (“CMBS”), the Company determines whether a decline in fair value below the amortized cost basis of the security has resulted from a credit loss by considering a variety of factors, including, but not limited to, recent events specific to the security, failure to make scheduled payments, and changes to external credit ratings. Credit losses are estimated by calculating the difference between the present value of estimated cash flows and the amortized cost basis of the security. Significant judgments are required in estimating expected future cash flows for CMBS. We identified the assessment of the CECL reserve as a critical audit matter because of the subjectivity, complexity, and estimation uncertainty in determining the impact of the significant judgment required when determining the CECL reserve. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our specialists when evaluating the CECL methodology, analytical models, and key inputs and assumptions used in the models. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the CECL reserve for the loans held-for-investment and CMBS portfolio included the following, among others: • We tested the impact of expected economic conditions on the loan portfolio, and other assumptions used in determining the CECL reserve. • We evaluated the service auditor's report for the third-party WARM method CECL model, which is used to calculate the expected loss for its first mortgage loans. • With the assistance of our fair value specialists for selected collateral-dependent loans, we evaluated the reasonableness of the valuation methodology and significant assumptions made, including whether the significant inputs used to determine the fair value were appropriate and consistent with what market participants would use to value the collateral. • We evaluated the appropriateness of each model and significant assumptions used and independently calculated each model’s computational accuracy, and utilized our credit specialists to assist us with these evaluations specific to the WARM method CECL model. F-3 Table of Contents • With the assistance of our fair value specialists, we developed independent fair value estimates for selected CMBS determined to have a credit loss, and compared our estimates to management’s estimates. /s/ Deloitte & Touche LLP Tempe, Arizona March 28, 2024 We have served as the Company’s auditor since 2010. F-4 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 ASSETS Real estate assets: Land $ 317,844 $ 578,970 Buildings, fixtures and improvements 818,151 1,462,726 Intangible lease assets 154,217 276,684 Condominium developments 87,581 130,494 Total real estate assets, at cost 1,377,793 2,448,874 Less: accumulated depreciation and amortization ( 169,163 ) ( 270,946 ) Total real estate assets, net 1,208,630 2,177,928 Investment in unconsolidated entities 126,777 100,604 Real estate-related securities, at fair value, net of credit loss allowances of $ 35,808 and $ 0 as of December 31, 2023 and 2022, respectively 519,714 576,391 Loans held-for-investment and related receivables, net 4,397,063 4,043,898 Less: Current expected credit losses ( 132,598 ) ( 42,344 ) Total loans held-for-investment and related receivables, net 4,264,465 4,001,554 Cash and cash equivalents 247,500 118,978 Restricted cash 13,082 57,616 Rents and tenant receivables, net 17,082 33,968 Prepaid expenses, derivative assets and other assets 9,423 26,243 Deferred costs, net 12,121 16,429 Accrued interest receivable 27,682 22,343 Total assets $ 6,446,476 $ 7,132,054 LIABILITIES AND STOCKHOLDERS’ EQUITY Repurchase facilities, notes payable and credit facilities, net $ 3,923,723 $ 4,422,833 Accrued expenses and accounts payable 40,240 25,666 Due to affiliates 13,897 16,086 Intangible lease liabilities, net 13,354 19,054 Distributions payable 16,047 14,828 Deferred rental income and other liabilities 4,435 7,274 Total liabilities 4,011,696 4,505,741 Commitments and contingencies (Note 12) Redeemable common stock 168,703 170,238 STOCKHOLDERS’ EQUITY Preferred stock, $ 0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding — — Common stock, $ 0.01 par value per share; 490,000,000 shares authorized, 437,254,715 and 437,397,414 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively 4,372 4,373 Capital in excess of par value 3,529,973 3,529,523 Accumulated distributions in excess of earnings ( 1,187,125 ) ( 1,029,287 ) Accumulated other comprehensive loss ( 81,143 ) ( 48,526 ) Total stockholders’ equity 2,266,077 2,456,083 Non-controlling interests — ( 8 ) Total equity 2,266,077 2,456,075 Total liabilities, redeemable common stock, non-controlling interests and stockholders’ equity $ 6,446,476 $ 7,132,054 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) Year Ended December 31, 2023 2022 2021 Revenues: Rental and other property income $ 115,379 $ 213,389 $ 295,164 Interest income 453,480 238,757 70,561 Total revenues 568,859 452,146 365,725 Expenses: General and administrative 17,572 15,364 15,078 Interest expense, net 260,768 165,210 84,049 Property operating 13,350 20,790 47,559 Real estate tax 4,838 12,612 34,943 Expense reimbursements to related parties 13,285 16,567 11,624 Management fees 50,975 52,564 47,020 Transaction-related 3,653 534 315 Depreciation and amortization 42,532 70,606 95,190 Real estate impairment 35,079 32,321 18,078 Increase in provision for credit losses 134,289 29,476 2,881 Total expenses 576,341 416,044 356,737 Other income (expense): Gain on disposition of real estate and condominium developments, net 53,341 121,902 83,045 Gain on investment in unconsolidated entities 11,723 11,952 606 Unrealized gain (loss) on equity security 4,751 ( 15,117 ) — Other (expense) income, net ( 26,459 ) 8,671 150 Loss on extinguishment of debt ( 7,788 ) ( 19,644 ) ( 4,895 ) Merger-related expenses, net — — ( 1,404 ) Total other income 35,568 107,764 77,502 Net income 28,086 143,866 86,490 Net income allocated to non-controlling interest 8 66 — Net income attributable to the Company $ 28,078 $ 143,800 $ 86,490 Weighted average number of common shares outstanding: Basic and diluted 437,375,332 437,343,624 365,726,453 Net income per common share: Basic and diluted $ 0.06 $ 0.33 $ 0.24 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) Year Ended December 31, 2023 2022 2021 Net income $ 28,086 $ 143,866 $ 86,490 Other comprehensive (loss) income Unrealized (loss) gain on real estate-related securities ( 85,623 ) ( 51,304 ) 231 Reclassification adjustment for realized loss included in income as other income 39,412 — 1,419 Amount of loss transferred from other comprehensive loss into income as an increase in provision for credit loss 13,594 — — Unrealized gain on interest rate swaps — 2,361 32 Amount of (gain) loss reclassified from other comprehensive (loss) income into income as interest expense, net — ( 2,532 ) 3,314 Total other comprehensive (loss) income ( 32,617 ) ( 51,475 ) 4,996 Comprehensive (loss) income ( 4,531 ) 92,391 91,486 Comprehensive income allocated to non-controlling interest 8 66 — Comprehensive (loss) income attributable to the Company $ ( 4,539 ) $ 92,325 $ 91,486 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Common Stock Capital in Excess of Par Value Accumulated Distributions in Excess of Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity Non-Controlling Interests Total Equity Number of Shares Par Value Balance, January 1, 2021 362,001,968 $ 3,620 $ 3,157,859 $ ( 961,006 ) $ ( 2,047 ) $ 2,198,426 $ — $ 2,198,426 Issuance of common stock 3,574,120 36 25,748 — — 25,784 — 25,784 Issuance of common stock in connection with the CIM Income NAV Merger 74,819,899 748 537,955 — — 538,703 — 538,703 Equity-based compensation 39,000 — 289 — — 289 — 289 Distributions declared on common stock — $ 0.364 per common share — — — ( 134,045 ) — ( 134,045 ) — ( 134,045 ) Redemptions of common stock ( 3,061,006 ) ( 30 ) ( 22,011 ) — — ( 22,041 ) — ( 22,041 ) Changes in redeemable common stock — — ( 170,714 ) — — ( 170,714 ) — ( 170,714 ) Non-controlling interests assumed in connection with the CIM Income NAV Merger — — — — — — 1,073 1,073 Comprehensive income — — — 86,490 4,996 91,486 — 91,486 Balance, December 31, 2021 437,373,981 $ 4,374 $ 3,529,126 $ ( 1,008,561 ) $ 2,949 $ 2,527,888 $ 1,073 $ 2,528,961 Issuance of common stock 5,404,510 54 38,858 — — 38,912 — 38,912 Equity-based compensation 89,559 — 397 — — 397 — 397 Distributions declared on common stock — $ 0.376 per common share — — — ( 164,526 ) — ( 164,526 ) — ( 164,526 ) Redemptions of common stock ( 5,470,636 ) ( 55 ) ( 39,334 ) — — ( 39,389 ) — ( 39,389 ) Changes in redeemable common stock — — 476 — — 476 — 476 Distributions to non-controlling interests — — — — — — ( 1,147 ) ( 1,147 ) Comprehensive income (loss) — — — 143,800 ( 51,475 ) 92,325 66 92,391 Balance, December 31, 2022 437,397,414 $ 4,373 $ 3,529,523 $ ( 1,029,287 ) $ ( 48,526 ) $ 2,456,083 $ ( 8 ) $ 2,456,075 Issuance of common stock 6,549,117 65 42,814 — — 42,879 — 42,879 Equity-based compensation 73,059 — 480 — — 480 — 480 Distributions declared on common stock — $ 0.425 per common share — — — ( 185,916 ) — ( 185,916 ) — ( 185,916 ) Redemptions of common stock ( 6,764,875 ) ( 66 ) ( 44,379 ) — — ( 44,445 ) — ( 44,445 ) Changes in redeemable common stock — — 1,535 — — 1,535 — 1,535 Comprehensive income (loss) — — — 28,078 ( 32,617 ) ( 4,539 ) 8 ( 4,531 ) Balance, December 31, 2023 437,254,715 $ 4,372 $ 3,529,973 $ ( 1,187,125 ) $ ( 81,143 ) $ 2,266,077 $ — $ 2,266,077 The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2023 2022 2021 Cash flows from operating activities: Net income $ 28,086 $ 143,866 $ 86,490 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, net 42,344 70,688 92,988 Amortization of deferred financing costs 10,297 12,143 10,073 Amortization of fair value adjustments of mortgage notes payable assumed — — ( 149 ) Amortization and accretion on deferred loan fees ( 8,229 ) ( 9,896 ) ( 2,998 ) Amortization of premiums and discounts on credit investments ( 22,111 ) ( 11,609 ) ( 8,144 ) Capitalized interest income on real estate-related securities and loans held-for-investment ( 1,170 ) ( 1,172 ) ( 974 ) Equity-based compensation 480 397 289 Straight-line rental income ( 3,062 ) ( 6,149 ) ( 5,723 ) Write-offs for uncollectible lease-related receivables ( 336 ) ( 894 ) ( 694 ) Gain on disposition of real estate assets and condominium developments, net ( 53,341 ) ( 121,902 ) ( 83,045 ) Loss on sale of credit investments, net 40,071 1,057 1,378 Gain on investment in unconsolidated entities ( 11,723 ) ( 11,952 ) ( 606 ) Gain on sale of marketable security — ( 22 ) — Unrealized (gain) loss on equity security ( 4,751 ) 15,139 — Amortization of fair value adjustment and gain on interest rate swaps — ( 2,398 ) ( 2,814 ) Impairment of real estate assets 35,079 32,321 18,078 Increase in provision for credit losses 134,289 29,476 2,881 Loss (gain) on interest rate caps 5,040 ( 4,586 ) 42 Return on investment in unconsolidated entities 11,723 7,312 497 Write-off of deferred financing costs 6,770 8,100 3,815 Changes in assets and liabilities: Rents and tenant receivables, net 5,536 68,172 28,109 Prepaid expenses and other assets 11,780 ( 10,172 ) 67 Accrued interest receivable ( 5,339 ) ( 17,893 ) ( 2,484 ) Accrued expenses and accounts payable 7,375 ( 1,277 ) 8,388 Deferred rental income and other liabilities ( 2,839 ) ( 11,542 ) 3,541 Due to affiliates ( 2,189 ) 1,492 ( 831 ) Net cash provided by operating activities 223,780 178,699 148,174 Cash flows from investing activities: Cash acquired in connection with mergers — — 10,244 Investment in unconsolidated entities ( 40,031 ) ( 86,300 ) ( 53,525 ) Return of investment in unconsolidated entities 13,858 39,221 — Investment in real estate-related securities ( 163,881 ) ( 558,218 ) ( 321,169 ) Investment in liquid corporate senior loans ( 121,287 ) ( 179,714 ) ( 406,694 ) Investment in corporate senior loans ( 154,060 ) ( 74,801 ) — Investment in real estate assets and capital expenditures ( 12,505 ) ( 23,776 ) ( 76,283 ) Investment in first mortgage loans ( 477,275 ) ( 1,333,298 ) ( 1,805,324 ) Origination, modification and exit fees received on loans held-for-investment 2,449 13,978 17,030 Principal payments received on loans held-for-investment 196,980 172,602 326,062 Principal payments received on real estate-related securities 60,159 17,161 38 Net proceeds from sale of real estate-related securities 77,385 132 256,841 Net proceeds from disposition of real estate assets and condominium developments 966,874 1,315,176 513,528 Net proceeds from sale of liquid corporate senior loans 210,807 60,027 69,959 Redemption of investment in unconsolidated entities — 60,663 — Proceeds from the settlement of insurance claims — 619 63 Net cash provided by (used in) investing activities 559,473 ( 576,528 ) ( 1,469,230 ) F-9 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) — Continued Year Ended December 31, 2023 2022 2021 Cash flows from financing activities: Redemptions of common stock $ ( 44,445 ) $ ( 39,389 ) $ ( 22,041 ) Distributions to stockholders ( 141,818 ) ( 124,038 ) ( 105,978 ) Proceeds from borrowings 545,865 2,492,110 3,159,650 Repayments of borrowings, and prepayment penalties ( 1,051,669 ) ( 1,874,690 ) ( 1,648,775 ) Termination of interest rate swaps — ( 239 ) ( 6,401 ) Payment of loan deposits — — ( 800 ) Refund of loan deposits — — 865 Deferred financing costs paid ( 7,198 ) ( 22,357 ) ( 39,699 ) Distributions to non-controlling interests — ( 1,147 ) — Net cash (used in) provided by financing activities ( 699,265 ) 430,250 1,336,821 Net increase in cash and cash equivalents and restricted cash 83,988 32,421 15,765 Cash and cash equivalents and restricted cash, beginning of period 176,594 144,173 128,408 Cash and cash equivalents and restricted cash, end of period $ 260,582 $ 176,594 $ 144,173 Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets: Cash and cash equivalents $ 247,500 $ 118,978 $ 107,381 Restricted cash 13,082 57,616 36,792 Total cash and cash equivalents and restricted cash $ 260,582 $ 176,594 $ 144,173 The accompanying notes are an integral part of these consolidated financial statements. F-10 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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 seeks to attain attractive risk-adjusted returns and create long term value for its investors by investing in a diversified portfolio of senior secured mortgage loans, creditworthy long-term net-leased property investments and other senior loan and liquid credit investments. As of December 31, 2023, the Company’s loan portfolio consisted of 291 loans with a net book value of $ 4.3 billion, and investments in real estate-related securities of $ 519.7 million. The Company expects to conduct its commercial real estate lending business through CIM Commercial Lending REIT (“CLR”), a Maryland statutory trust and currently wholly owned subsidiary of the Company which the Company expects to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. As of February 29, 2024, CLR holds a diversified portfolio of approximately $ 1.6 billion of the Company’s senior secured mortgage loans and commercial mortgage-backed securities. As of December 31, 2023 the Company owned 192 properties, comprising approximately 6.2 million rentable square feet of commercial space located in 37 states. As of December 31, 2023, the rentable square feet at these properties were 99.9 % leased, including month-to-month agreements, if any. As of December 31, 2023, the Company owned condominium developments with a net book value of $ 87.6 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. The Company is externally managed by CIM Real Estate Finance Management, LLC, a Delaware limited liability company (“CMFT Management”), which is an affiliate of CIM Group, LLC (“CIM Group”). CIM Group is a vertically-integrated community-focused real estate and infrastructure owner, operator, lender and developer. CIM Group is headquartered in Los Angeles, CA, with offices in Atlanta, GA, Chicago, IL, Dallas, TX, London, UK, New York, NY, Orlando, FL, Phoenix, AZ, and Tokyo, Japan. CIM Group also maintains additional offices across the United States and in South Korea to support its platform. 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 and certain other investments. Collectively, CMFT Management, the Company’s manager, and the Investment Advisor, together with certain other affiliates of CIM Group, serve as the Company’s sponsor, which is referred to as the Company’s “sponsor” or “CIM”. 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 “Initial Offering”). The Company ceased issuing shares in the Initial Offering on April 4, 2014. At the completion of the Initial Offering, a total of approximately 297.4 million shares of common stock had been issued, including approximately 292.3 million shares of common stock sold to the public pursuant to the primary portion of the Initial Offering and approximately 5.1 million shares of common stock issued pursuant to the distribution reinvestment plan (“DRIP”) portion of the Initial Offering. The remaining approximately 404,000 unsold shares from the Initial Offering were deregistered. The Company registered $ 247.0 million of shares of common stock under the DRIP (the “Initial DRIP Offering”) pursuant to a Registration Statement on Form S-3 (Registration No. 333-192958), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 19, 2013 and automatically became effective with the SEC upon filing. The Company ceased issuing shares under the Initial DRIP Offering effective as of June 30, 2016. At the completion of the Initial DRIP Offering, a total of approximately $ 241.7 million of shares of common stock had been issued. The remaining $ 5.3 million of unsold shares from the Initial DRIP Offering were deregistered. The Company registered an additional $ 600.0 million of shares of common stock under the DRIP (the “Secondary DRIP Offering,” and together with the Initial DRIP Offering, the “DRIP Offerings,” and the DRIP Offerings collectively with the Initial Offering, the “Offerings”) pursuant to a Registration Statement on Form S-3 (Registration No. 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 continues to issue shares under the Secondary DRIP Offering. F-11 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The Company’s board of directors (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 Initial Offering in meeting their customer account reporting obligations under Financial Industry Regulatory Authority Rule 2231. Distributions are reinvested in shares of the Company’s common stock for participants in 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 December 31, 2023, the estimated per share NAV of the Company’s common stock was $ 6.31 , which was established by the Board on November 9, 2023 using a valuation date of September 30, 2023. Subsequent to December 31, 2023, the Board established an updated estimated per share NAV of the Company’s common stock on February 29, 2024, using a valuation date of January 31, 2024, of $ 6.09 per share. Commencing on March 1, 2024, distributions are reinvested in shares of the Company’s common stock under the DRIP at a price of $ 6.09 per share and $ 6.09 per share serves as the most recent estimated per share NAV for purposes of the share redemption program. The Company’s estimated per share NAVs are not audited or reviewed by its independent registered public accounting firm. NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In determining whether the Company has controlling interests in an entity and is required to consolidate the accounts in that entity, the Company analyzes its credit and real estate investments in accordance with standards set forth in GAAP to determine whether the entities 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 credit and real estate investments on the Company’s consolidated financial statements. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. The Company has chosen to break out the details of $ 165.2 million and $ 84.0 million of interest expense, net from other (expense) income, net into expenses in the Company’s consolidated statements of operations for the years ended December 31, 2022 and December 31, 2021, respectively, driven by the Company’s current investment portfolio composition being predominantly comprised of credit investments. This reclassification of interest expense, net did not have an impact on net income or cash flow from operating activities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Assets Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows: F-12 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Buildings 40 years Site improvements 15 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term Recoverability of Real Estate Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, lease concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; significant increases to budgeted costs for units under development; and a reduction in prevailing market values for assets being considered for disposition. 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. 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. The Company’s impairment assessment as of December 31, 2023 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 assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in detail in Note 3 — Fair Value Measurements. See also Note 4 — Real Estate Assets for further discussion regarding real estate investment activity. Assets Held for Sale When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. 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 December 31, 2023 and 2022, the Company did not identify any real estate assets as held for sale. 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. Given the Company’s current asset portfolio and strategy, the Company’s dispositions during the years ended December 31, 2023 and 2022 did not qualify for discontinued operations presentation and thus, the results of the properties and condominiums that were sold will not be reported as discontinued operations, 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 year ended December 31, 2023. Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their relative fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. The fair values of above- and below-market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is F-13 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including, for below-market leases, any bargain renewal periods. The above- and below-market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above-market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, the remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above- or below-market lease intangibles relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income, which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include leasing commissions, legal and other related expenses and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. The Company has acquired, and may continue to acquire, certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrowed funds to the Company or the seller or a combination thereof. The Company estimates the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable are initially recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance is amortized or accreted to interest expense over the term of the respective mortgage note payable. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. 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. Certain acquisition-related expenses related to asset acquisitions are capitalized and allocated to tangible and intangible assets and liabilities, as described above. Acquisition-related manager expense reimbursements are expensed as incurred and are included in expense reimbursements to related parties in the accompanying consolidated statements of operations. Other acquisition-related expenses continue to be expensed as incurred and are included in transaction-related expenses in the accompanying consolidated statements of operations. Investment in Unconsolidated Entities 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, indirectly through CMFT MT JV Holdings, LLC and CLR NP Holdings, LLC, a subsidiary of CLR, approximately 50 % of the outstanding equity. Through the Unconsolidated Joint Venture, which holds approximately 91 % of the membership interest in NewPoint JV, LLC (the “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 approximately 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 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, including unrealized gains and losses as a result of changes in fair value of the NewPoint JV. 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 consolidated balance sheet and such share is recognized as a profit or loss on the consolidated statements of operations. F-14 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) On March 31, 2022, the Company fully redeemed its $ 60.7 million investment in CIM UII Onshore, L.P. (“CIM UII Onshore”). 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 consolidated balance sheet and such share is recognized as a profit or loss on the consolidated statements of operations. For more information, refer to Note 6 — Investment in Unconsolidated Entities. Non-controlling Interest in Consolidated Joint Venture From December 2021 to July 2022, the Company determined it had a controlling interest in a consolidated joint venture arrangement (the “Consolidated Joint Venture”) and, therefore, met the requirements for consolidation. During the year ended December 31, 2022, the Company recorded net income of $ 66,000 and paid distributions of $ 1.1 million to the non-controlling interest. During the year ended December 31, 2022, the Company disposed of the underlying properties previously owned through the Consolidated Joint Venture, as further discussed in Note 4 — Real Estate Assets. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in bank accounts, as well as investments in highly-liquid money market funds. The Company deposits cash with several high-quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. Included in cash and cash equivalents was $ 2.2 million and $ 19.8 million of unsettled liquid corporate senior loan purchases as of December 31, 2023 and 2022, respectively. The Company had $ 13.1 million and $ 57.6 million in restricted cash as of December 31, 2023 and December 31, 2022, respectively. Included in restricted cash was $ 1.9 million and $ 15.4 million held by lenders in lockbox accounts, as of December 31, 2023 and 2022, respectively. As part of certain of the Company’s debt agreements, rents from certain encumbered properties and interest income from certain first mortgage loans 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 $ 2.0 million and $ 22.6 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 December 31, 2023 and 2022, respectively. In addition, the Company had a $ 9.2 million and a $ 19.6 million deposit held as cash collateral included in restricted cash as of December 31, 2023 and December 31, 2022, respectively, to be applied by Barclays Bank PLC (“Barclays”) as repayment of certain eligible assets transferred under the Master Repurchase Agreement (as defined in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities) with Barclays. Real Estate-Related Securities Real estate-related securities consists primarily of the Company’s investments in commercial mortgage-backed securities (“CMBS”) 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 December 31, 2023, 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. The amortized cost of the Company’s CMBS is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. In addition, the Company had an investment in an equity security as of December 31, 2023, which is comprised of Global Net Lease, Inc.’s common stock (“GNL Common Stock”). The GNL Common Stock was converted from RTL Common Stock, which was received as consideration in connection with the RTL Purchase and Sale Agreement (both of which are defined in Note 4 — Real Estate Assets), upon the consummation of the transactions pursuant to the agreement and plan of merger by and among Global Net Lease, Inc. (NASDAQ: GNL) (“GNL”) and The Necessity Retail REIT, Inc. (NASDAQ: RTL) (“RTL”), among others. The RTL Common Stock was cancelled in accordance with the terms of the aforementioned agreement and plan F-15 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) of merger and was converted into 0.670 shares of GNL Common Stock during the year ended December 31, 2023. This investment is carried at its estimated fair value with unrealized gains and losses reported on the consolidated statements of operations. During the years ended December 31, 2023 and 2022, the Company earned $ 5.6 million and $ 4.1 million, respectively, of dividend income on GNL Common Stock, which is included in other (expense) income, net on the consolidated statements of operations. The Company monitors its CMBS for changes in fair value. A loss 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, such as market conditions. Such losses that are credit related are recorded as a current expected credit loss in increase in provision for credit losses on the Company’s consolidated statements of operations. Subsequent cumulative adverse changes in expected cash flows on the Company’s CMBS are recognized as an increase to current expected credit losses. However, the allowance is limited to the amount by which the CMBS’ amortized cost exceeds its fair value. Favorable changes in expected cash flows are recognized as a decrease to current expected credit losses. For additional information regarding the Company’s process for estimating current expected credit losses for its real estate-related securities, see the Current Expected Credit Losses section below. Interest earned is either received in cash or capitalized to CMBS in the Company’s consolidated balance sheets. Interest is capitalized when certain conditions are met as specified in each security agreement. Loans Held-for-Investment The Company’s loans held-for-investment include loans related to real estate assets, as well as credit investments, including commercial mortgage loans 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 consolidated balance sheets at amortized cost, net of any current expected credit losses and are adjusted for amortization of premiums and accretion of discounts to maturity. Interest earned is either received in cash or capitalized to loans held-for-investment and related receivables, net in the Company’s consolidated balance sheets. Interest is capitalized when certain conditions are met as specified in each loan agreement. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status. See the Revenue Recognition section below for additional information regarding the Company’s revenue from lending activities. 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. 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 and CMBS included in the consolidated balance sheets. Changes to current expected credit losses are recognized through net income on the Company’s 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 should 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 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. 1. 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. For such loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date. For F-16 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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 and the amortized cost basis of the loan. For the Company’s liquid corporate 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. Quarterly, the Company evaluates the risk of all loans held-for-investment and assigns a risk rating based on a variety of factors, grouped as follows: (i) loan and credit structure, including the as-is loan-to-value (“LTV”) ratio and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, dynamics of the geography, property type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: 1- Outperform — Most satisfactory asset quality and liquidity, good leverage capacity. A “1” rating maintains predictable and strong cash flows from operations. The trends and outlook for the credit's operations, balance sheet, and industry are neutral to favorable. Collateral, if appropriate, exceeds performance metrics; 2- Meets or Exceeds Expectations — Acceptable asset quality, moderate excess liquidity, modest leverage capacity. A “2” rating could have some financial/non-financial weaknesses which are offset by strengths; 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. Collateral performance, if appropriate, meets or exceeds substantially all performance metrics included in original or current underwriting / business plan; 3- Satisfactory — Acceptable asset quality, somewhat strained liquidity, minimal leverage capacity. A “3” rating is at times characterized by acceptable cash flows from operations. The trends and conditions of the credit’s operations and balance sheet are neutral. Collateral performance, if appropriate, meets or is on track to meet underwriting; business plan can reasonably be achieved; 4- Underperformance — The debt investment possesses credit deficiencies or potential weaknesses which deserve management’s close and continued attention. The portfolio company’s operations and/or balance sheet have demonstrated an adverse trend or deterioration which, while serious, has not reached the point where the liquidation of debt is jeopardized. These weaknesses are generally considered correctable by the borrower in the normal course of business but may weaken the asset or inadequately protect the Company’s credit position if not checked or corrected. Collateral performance, if appropriate, falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and 5- Default/Possibility of Loss — The debt investment is protected inadequately by the current enterprise value or paying capacity of the obligor or of the collateral, if any. The underlying company’s operations have well-defined weaknesses based upon objective evidence, such as recurring or significant decreases in revenues and cash flows. Major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable; risk of principal loss. Collateral performance, if appropriate, is significantly worse than underwriting. The Company generally assigns a risk rating of “3” to all newly originated or acquired loans held-for-investment during a most recent quarter, except in the case of specific circumstances warranting an exception. In estimating credit losses related to real estate-related securities, management considers a variety of factors, including, but not limited to, the extent to which the fair value is less than the amortized cost basis, recent events specific to the security, industry or geographic area, the payment structure of the security, the failure of the issuer of the security to make scheduled interest or principal payments, and external credit ratings and recent changes in such ratings. Credit losses, if any, are estimated by calculating the difference between (i) the present value of estimated cash flows expected to be collected from the security discounted at the yield determined as of the initial acquisition date or, if since revised, as of the last date previously revised, and (ii) the net amortized cost basis of the security. Significant judgment is used in estimating future cash flows for the Company’s real estate-related securities. F-17 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the straight-line method, which approximates the effective interest method. Unamortized deferred financing costs are written off when the associated debt is extinguished or repaid before maturity. The presentation of all deferred financing costs, other than those associated with the revolving loan portion of the credit facilities, are classified such that the debt issuance costs related to a recognized debt liability are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability rather than as an asset. Debt issuance costs related to securing a revolving line of credit are presented as an asset and amortized ratably over the term of the line of credit arrangement. As such, the Company’s current and corresponding prior period total deferred costs, net in the accompanying consolidated balance sheets relate only to the revolving loan portion of the credit facilities and the historical presentation, amortization and treatment of unamortized costs are still applicable. As of December 31, 2023 and 2022, the Company had $ 12.1 million and $ 16.4 million, respectively, of deferred financing costs, net of accumulated amortization, related to the revolving loan portion of the credit facilities. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined the financing will not close. Due to Affiliates CMFT Management, and certain of its affiliates, received and will continue to receive, fees, reimbursements and compensation in connection with services provided relating to the Offerings and the acquisition, management, financing and leasing of the properties of the Company. Derivative Instruments and Hedging Activities The Company accounts for its derivative instruments at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. The change in fair value of the derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income. The changes in fair value for derivative instruments that are not designated as hedges or that do not meet the hedge accounting criteria are recorded as a gain or loss to operations. Redeemable Common Stock Under the Company’s share redemption program, the Company’s obligation to redeem shares of its outstanding common stock is limited, among other things, to the net proceeds received by the Company from the sale of shares under the DRIP, net of shares redeemed to date. The Company records the maximum amount that is redeemable under the share redemption program as redeemable common stock outside of permanent equity in its consolidated balance sheets. Changes in the amount of redeemable common stock from period to period are recorded as an adjustment to capital in excess of par value. Leases The Company has lease agreements with lease and non-lease components. The Company has elected to not separate non-lease components from lease components for all classes of underlying assets (primarily real estate assets) and will account for the combined components as rental and other property income. Non-lease components included in rental and other property income include certain tenant reimbursements for maintenance services (including common-area maintenance services or “CAM”), real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. As a lessor, the Company has further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. The Company is not a party to any material leases where it is the lessee. Significant judgments and assumptions are inherent in not only determining if a contract contains a lease, but also the lease classification, terms, payments, and, if needed, discount rates. 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. Lease costs represent the initial direct costs incurred in the origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third-party costs and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are expensed as incurred. Upon successful lease execution, leasing commissions are capitalized. F-18 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Development Activities 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. For additional information, refer to Note 4 — Real Estate Assets. Revenue Recognition Revenue from leasing activities Rental and other property income is primarily derived from fixed contractual payments from operating leases and, therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. Variable rental and other property income consists primarily of tenant reimbursements for recoverable real estate taxes and operating expenses which are included in rental and other property income in the period when such costs are incurred, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the 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. The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants are probable. The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable. Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate. 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. Revenue from lending activities Interest income from the Company’s loans held-for-investment and CMBS is recognized using the effective interest method (or the modified straight-line method when it is materially consistent with the effective interest method). Interest income is comprised of interest earned on credit investments and the accretion and amortization of net loan origination fees and discounts recognized through the life of each investment. 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 liquid corporate senior loans and corporate senior loans is accrued as earned beginning on the settlement date. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method. Accrual of interest income is suspended on nonaccrual loans. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status. Interest collected is recognized on a cash basis when received or as a reduction in the amortized cost basis, based on specific facts and circumstances, until accrual is resumed when the loan becomes contractually current and the Company believes all future principal and interest will be received according to the contractual loan terms. Income Taxes The Company elected to be taxed, and currently qualifies, as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2012. The Company will generally not be subject to federal corporate income tax to the extent it distributes its taxable income to its stockholders, and so long as it, among other things, distributes at least 90% of its annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the Company maintains its qualification for taxation as a REIT, it or its subsidiaries may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Earnings (Loss) and Distributions Per Share Earnings (loss) per share are calculated based on the weighted average number of shares of common stock outstanding during each period presented. Diluted income (loss) per share considers the effect of any potentially dilutive share equivalents, F-19 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) of which the Company had no ne for each of the years ended December 31, 2023, 2022 or 2021. Distributions per share are calculated based on the authorized monthly distribution rate. Reportable Segments 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 primarily floating rate first and second lien mortgage loans, either directly or through co-investments in joint ventures, related to real estate assets. This segment also includes investments in real estate-related securities, liquid corporate senior loans and corporate senior loans. Real estate — engages primarily in acquiring and managing geographically diversified income-producing retail, industrial and office properties that are primarily single-tenant properties, which are leased to creditworthy tenants under long-term net leases. See Note 18 — Segment Reporting for a further discussion regarding these segments. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. 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 consolidated financial statements. On March 31, 2022, the FASB issued ASU No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures (Topic 326) (“ASU 2022-02”). ASU 2022-02 eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) and, instead, requires that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The ASU also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The ASU became effective for the Company beginning January 1, 2023 and is generally to be applied prospectively. ASU 2022-02 did not have an impact on the Company’s consolidated financial statements for the year ended December 31, 2023. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). The amendments in this update clarify the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual sale restrictions and introduce new disclosure requirements related to such equity securities. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those annual periods, with early adoption permitted. The Company does not believe the adoption of ASU 2022-03 will have an impact on its consolidated financial statements and disclosures. In August 2023, the FASB issued ASU No. 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement (“ASU 2023-05”). ASU 2023-05 applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to reduce diversity in practice and provide users of joint venture financial statements with more decision-useful information. The amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. The Company does not believe the adoption of ASU 2023-05 will have a material impact on its consolidated financial statements and disclosures. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis. ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, for interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements and disclosures. NOTE 3 — FAIR VALUE MEASUREMENTS GAAP defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. F-20 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities: Real estate-related securities — The Company generally determines the fair value of its CMBS by utilizing broker-dealer quotations, reported trades or valuation estimates from pricing models to determine the reported price. Pricing models for CMBS are generally discounted cash flow models that usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. Depending upon the significance of the fair value inputs used in determining these fair values, these securities are valued using Level 1, Level 2 or Level 3 inputs. A breakout of the Company’s CMBS Level 2 and Level 3 positions as of December 31, 2023 and 2022 can be found in the tables under Items Measured at Fair Value on a Recurring Basis below. The Company’s equity security investment is valued using Level 1 inputs. The estimated fair value of the Company’s equity security 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. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. These financial instruments are valued using Level 2 inputs. As of December 31, 2023, the estimated fair value of the Company’s debt was $ 3.83 billion, compared to a carrying value of $ 3.94 billion. The estimated fair value of the Company’s debt as of December 31, 2022 was $ 4.32 billion, compared to a carrying value of $ 4.44 billion. Derivative instruments — The Company’s derivative instruments were comprised of interest rate caps. All derivative instruments were carried at fair value and were valued using Level 2 inputs. The fair value of these instruments was determined using interest rate market pricing models. In addition, credit valuation adjustments were incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties. 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 December 31, 2023 and 2022, 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. Loans held-for-investment — The Company’s loans held-for-investment are recorded at cost upon origination, net of loan origination fees and discounts. 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 commercial real estate (“CRE”) loans held-for-investment and corporate senior loans are classified in Level 3 of the fair value hierarchy. The Company’s liquid corporate 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 December 31, 2023, $ 445.7 million and $ 70.2 million of the Company’s liquid corporate senior F-21 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively. As of December 31, 2022, $ 494.4 million and $ 168.0 million of the Company’s liquid corporate senior loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively. As of December 31, 2023, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 4.32 billion, compared to its carrying value of $ 4.26 billion. As of December 31, 2022, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 3.98 billion, compared to its carrying value of $ 4.00 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. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. 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. 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 that are required to be measured at fair value on a recurring basis as of December 31, 2023 and 2022 (in thousands): Balance as of December 31, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets: CMBS $ 476,715 $ — $ 347,634 $ 129,081 Equity security 42,999 42,999 — — Total financial assets $ 519,714 $ 42,999 $ 347,634 $ 129,081 Balance as of December 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 $ 538,142 $ — $ 348,241 $ 189,901 Equity security 38,249 38,249 — — Interest rate caps 5,040 — 5,040 — Total financial assets $ 581,431 $ 38,249 $ 353,281 $ 189,901 F-22 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the years ended December 31, 2023 and 2022 (in thousands): Level 3 Beginning Balance, January 1, 2022 $ 105,361 Total gains and losses: Unrealized loss included in other comprehensive (loss) income, net ( 13,426 ) Purchases and payments received: Conversion of preferred units (1) ( 68,243 ) Purchases 4,752 Discounts, net 1,254 Capitalized interest income 1,110 Net transfers (2) 159,093 Balance, December 31, 2022 $ 189,901 Total gains and losses: Unrealized loss included in other comprehensive (loss) income, net ( 43,258 ) Current expected credit losses (3) ( 28,789 ) Purchases and payments received: Discounts, net 10,067 Capitalized interest income 1,160 Ending Balance, December 31, 2023 $ 129,081 ____________________________________ (1) Reflects the Company’s investment in preferred units which matured during the year ended December 31, 2022 and was redeemed in exchange for an investment in a first mortgage loan. Refer to Note 8 — Loans Held-For-Investment for further discussion. (2) One of the Company’s CMBS instruments in two different tranches was transferred into Level 3 during the year ended December 31, 2022 due to a decrease in transparency of inputs and observable prices in the market. (3) Does not include $ 7.1 million of unrealized losses recognized prior to January 1, 2023 that were reclassified from other comprehensive loss on the consolidated statements of comprehensive (loss) income to increase in provision for credit losses on the consolidated statements of operations during the year ended December 31, 2023. Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges) Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The Company’s process for identifying and recording impairment related to credit investments, real estate assets and intangible assets is discussed in Note 2 — Summary of Significant Accounting Policies. As of December 31, 2023, the Company had an aggregate $ 57.8 million asset-specific credit loss reserve related to two of the Company’s first mortgage loans with an aggregate carrying value of $ 263.4 million. The asset-specific credit loss reserve was recorded based on the Company’s estimation of the fair value of the first mortgage loans’ aggregate underlying collateral as of December 31, 2023. These loans are therefore measured at fair value on a nonrecurring basis using significant unobservable inputs, and are classified as Level 3 assets in the fair value hierarchy. The Company considered a variety of inputs including property performance, market data and comparable sales, as applicable. The significant unobservable inputs used include the terminal capitalization rate, which ranged from 7.5 % to 8.0 %, and the discount rate, which ranged from 8.5 % to 9.5 %. For additional information regarding the first mortgage loans, refer to Note 8 — Loans Held-For-Investment. During the years ended December 31, 2022 and December 31, 2021, the Company had no asset-specific credit loss reserves related to the Company’s first mortgage loans. As discussed in Note 4 — Real Estate Assets, during the year ended December 31, 2023, real estate assets related to six properties were deemed to be impaired due to sales prices or revised cash flow estimates that were less than their respective carrying values, and their carrying values were reduced to an estimated fair value of $ 79.8 million, resulting in impairment charges of $ 20.4 million. Additionally, during the year ended December 31, 2023, certain condominium units were deemed to be impaired, primarily due to a decrease in expected sales prices and an increase in budgeted costs for certain units under development, and their carrying values were reduced to their estimated fair value, resulting in impairment charges of F-23 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) $ 14.7 million. During the year ended December 31, 2022, real estate assets related to 23 properties were deemed to be impaired, all of which were due to sales prices that were less than their respective carrying values, and their carrying values were reduced to an estimated fair value of $ 123.9 million, resulting in impairment charges of $ 16.2 million. Additionally, during the year ended December 31, 2022, certain condominium units were deemed to be impaired, primarily due to a decrease in list prices and an increase in budgeted costs for certain units under development, and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 16.1 million. During the year ended December 31, 2021, real estate assets related to 12 properties were deemed to be impaired, of which impairment at eight properties was due to sales prices that were less than their respective carrying values and impairment at four properties was due to vacancy, and their carrying values were reduced to an estimated fair value of $ 48.9 million, resulting in impairment charges of $ 6.0 million. Additionally, during the year ended December 31, 2021, certain condominium units were deemed to be impaired due to an increase in budgeted costs for certain units under development, and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 12.1 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. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) terminal capitalization rates; (2) discount rates; (3) the number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions, including the number of months to re-lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and the future performance and sustainability of the Company’s tenants. 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 years ended December 31, 2023 and 2022 : Year Ended December 31, 2023 Year Ended December 31, 2022 Discount Rate Terminal Capitalization Rate Discount Rate Terminal Capitalization Rate 7.5 % - 11.9 % 7.0 % - 11.4 % 8.0 % - 9.7 % 7.5 % - 9.2 % The following table presents the impairment charges by asset class recorded during the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Asset class impaired: Land $ 4,980 $ 3,553 $ 1,089 Buildings, fixtures and improvements 13,841 11,081 4,755 Intangible lease assets 1,568 1,550 311 Intangible lease liabilities 15 — ( 162 ) Condominium developments 14,675 16,137 12,085 Total impairment loss $ 35,079 $ 32,321 $ 18,078 NOTE 4 — REAL ESTATE ASSETS Property Acquisitions During the years ended December 31, 2023 and 2022, the Company did not acquire any properties. During the year ended December 31, 2021, the Company acquired 115 commercial properties in connection with the merger with CIM Income NAV, Inc. (the “CIM Income NAV Merger”) for an aggregate purchase price of $ 911.3 million (the “2021 Property Acquisitions”), which includes $ 5.0 million of external acquisition-related expenses that were capitalized. The Company funded the 2021 Property Acquisitions acquired in connection with the CIM Income NAV Merger with the consideration received in connection with the CIM Income NAV Merger. Five of the 2021 Property Acquisitions with a fair value of $ 66.5 million were classified as held for sale in connection with the RTL Purchase and Sale Agreement (as defined below) as of December 31, 2021. The following table summarizes the purchase price allocation for the 2021 Property Acquisitions (in thousands): F-24 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 2021 Property Acquisitions Land $ 160,364 Buildings, fixtures and improvements 591,908 Acquired in-place leases and other intangibles (1) 94,118 Acquired above-market leases (2) 6,831 Intangible lease liabilities (3) ( 8,425 ) Assets held for sale 66,466 Total purchase price $ 911,262 ____________________________________ (1) The amortization period for acquired in-place leases and other intangibles is 10.2 years. (2) The amortization period for acquired above-market leases is 13.5 years. (3) The amortization period for acquired intangible lease liabilities is 14.8 years. During the year ended December 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 December 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 In connection with the foreclosure, the Company assumed $ 102.6 million of mortgage notes payable related to the assets. Condominium Development Project During the years ended December 31, 2023 and 2022, the Company capitalized $ 12.0 million and $ 14.0 million, respectively, of expenses associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying consolidated balance sheets. Included in the amounts capitalized during the years ended December 31, 2023 and 2022 was $ 1.0 million and $ 1.7 million, respectively, of capitalized interest expense. Condominium Dispositions During the year ended December 31, 2023, the Company disposed of condominium units for an aggregate sales price of $ 51.2 million, resulting in proceeds of $ 47.1 million after closing costs and a gain of $ 3.6 million. During the year ended December 31, 2022, the Company disposed of condominium units for an aggregate sales price of $ 40.7 million, resulting in proceeds of $ 33.0 million after closing costs and a gain of $ 4.1 million. During the year ended December 31, 2021, the Company disposed of condominium units for an aggregate sales price of $ 42.3 million, resulting in proceeds of $ 37.8 million after closing costs and a gain of $ 5.9 million. The Company has no continuing involvement that would preclude sale treatment with these condominium units. The gain on sale of condominium units is included in gain on disposition of real estate and condominium developments, net in the consolidated statements of operations. 2023 Property Dispositions On December 29, 2022, certain subsidiaries of the Company entered into an Agreement of Purchase and Sale (the “Realty Income Purchase and Sale Agreement”) with certain subsidiaries of Realty Income Corporation (NYSE: O) (“Realty Income”), to sell to Realty Income 185 single-tenant net lease properties encompassing approximately 4.6 million gross rentable square feet of commercial space across 34 states for total consideration of $ 894.0 million. The consideration was paid in cash. During the year ended December 31, 2023, the Company disposed of 188 properties, including 184 retail properties, three industrial properties and one office building, for an aggregate gross sales price of $ 925.9 million, resulting in net proceeds of $ 914.4 million after closing costs and a net gain of $ 44.4 million. The sale of 178 of these properties closed pursuant to the F-25 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Realty Income Purchase and Sale Agreement for total consideration of $ 861.0 million, resulting in proceeds of $ 852.6 million after closing costs and a gain of $ 32.3 million. No properties are remaining to be sold pursuant to the Realty Income Purchase and Sale Agreement. The Company has no continuing involvement that would preclude sale treatment 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 consolidated statements of operations. 2022 Property Dispositions On December 20, 2021, certain subsidiaries of the Company entered into an Agreement of Purchase and Sale, as amended (the “RTL Purchase and Sale Agreement”), with American Finance Trust, Inc. (subsequently RTL), American Finance Operating Partnership, L.P. (subsequently 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 included the Purchaser’s option to seek the assumption of certain existing debt, and the 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”) (now GNL Common Stock; refer to Note 2 — Summary of Significant Accounting Policies for additional information), or Class A units in RTL OP (“RTL OP Units”), subject to certain limits described more fully in the RTL Purchase and Sale Agreement. During the year ended December 31, 2022, the Company disposed of 134 properties, including 69 retail properties, 56 anchored shopping centers, six industrial properties and three office buildings, and an outparcel of land for an aggregate gross sales price of $ 1.69 billion, resulting in net proceeds of $ 1.69 billion after closing costs and a gain of $ 117.8 million. Included in this amount of properties disposed were the two properties previously owned through the Consolidated Joint Venture. The sale of 81 of these properties closed pursuant to the RTL Purchase and Sale Agreement for total consideration of $ 1.33 billion, which consisted of $ 1.28 billion in cash proceeds and $ 53.4 million of RTL Common Stock, which shares were subsequently registered and are now freely tradable. Such shares are included in real estate-related securities in the consolidated balance sheets. During the year ended December 31, 2022, the Company recognized earnout income of $ 70.0 million related to the disposition of properties pursuant to the RTL Purchase and Sale Agreement, and recorded a related receivable of $ 12.2 million, which is included in prepaid expenses and other assets in the consolidated balance sheets as of December 31, 2022. Subsequent to December 31, 2022, the Company collected the $ 12.2 million earnout income related receivable in full. The Company has no continuing involvement that would preclude sale treatment with these properties. 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 consolidated statements of operations. During the year ended December 31, 2023, the Company received $ 5.3 million in additional earnout proceeds upon the settlement of earnout claims related to the disposition of the properties pursuant to the RTL Purchase and Sale Agreement, which is included in gain on disposition of real estate and condominium developments, net in the consolidated statements of operations. 2021 Property Dispositions During the year ended December 31, 2021, the Company disposed of 117 properties, consisting of 113 retail properties, three anchored shopping centers and one industrial property, and an outparcel of land for an aggregate gross sales price of $ 490.3 million, resulting in net proceeds of $ 475.8 million after closing costs and a gain of $ 77.2 million. The Company has no continuing involvement with these properties that would preclude sale treatment. The gain on sale of real estate is included in gain on disposition of real estate and condominium developments, net in the consolidated statements of operations. Impairment The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate that the carrying value of certain of its real estate assets may not be recoverable. 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 year ended December 31, 2023, six properties totaling approximately 377,000 square feet with a carrying value of $ 100.2 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 79.8 million, resulting in impairment charges of $ 20.4 million, which were recorded in the consolidated statements of operations. Additionally, during the year ended December 31, 2023, certain condominium units were deemed to be impaired F-26 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 14.7 million, which were recorded in the consolidated statements of operations. During the year ended December 31, 2022, 23 properties totaling approximately 962,000 square feet with a carrying value of $ 140.1 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 123.9 million, resulting in impairment charges of $ 16.2 million, which were recorded in the consolidated statements of operations. Additionally, during the year ended December 31, 2022, certain condominium units were deemed to be impaired and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 16.1 million, which were recorded in the consolidated statements of operations. During the year ended December 31, 2021, 12 properties totaling approximately 275,000 square feet with a carrying value of $ 54.9 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 48.9 million, resulting in impairment charges of $ 6.0 million, which were recorded in the consolidated statements of operations. Additionally, during the year ended December 31, 2021, certain condominium units were deemed to be impaired and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 12.1 million, which were recorded in the consolidated statements of operations. See Note 3 — Fair Value Measurements for a further discussion regarding impairment charges during the years ended December 31, 2023, 2022 and 2021. NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES Intangible lease assets and liabilities consisted of the following as of December 31, 2023 and 2022 (in thousands, except weighted average life remaining): As of December 31, 2023 2022 Intangible lease assets: In-place leases and other intangibles, net of accumulated amortization of $ 49,737 and $ 86,881 , respectively (with a weighted average life remaining of 11.2 years and 11.1 years, respectively) $ 97,537 $ 174,954 Acquired above-market leases, net of accumulated amortization of $ 3,029 and $ 4,210 , respectively (with a weighted average life remaining of 11.1 years and 12.9 years, respectively) 3,914 10,639 Total intangible lease assets, net $ 101,451 $ 185,593 Intangible lease liabilities: Acquired below-market leases, net of accumulated amortization of $ 5,136 and $ 5,575 , respectively (with a weighted average life remaining of 12.1 years and 12.4 years, respectively) $ 13,354 $ 19,054 Amortization of the above-market leases is recorded as a reduction to rental and other property income, and amortization expense for the in-place leases and other intangibles is included in depreciation and amortization in the accompanying consolidated statements of operations. Amortization of below-market leases is recorded as an increase to rental and other property income in the accompanying consolidated statements of operations. The following table summarizes the amortization related to the intangible lease assets and liabilities for the years ended December 31, 2023, 2022, and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 In-place lease and other intangible amortization $ 13,889 $ 24,629 $ 28,994 Above-market lease amortization $ 574 $ 1,152 $ 2,379 Below-market lease amortization $ 1,348 $ 1,990 $ 5,393 F-27 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) As of December 31, 2023, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands): Amortization Year Ending December 31, In-Place Leases and Other Intangibles Above-Market Leases Below-Market Leases 2024 $ 11,052 $ 424 $ 1,126 2025 10,658 424 1,120 2026 9,468 379 1,120 2027 9,073 356 1,120 2028 8,099 343 1,120 Thereafter 49,187 1,988 7,748 Total $ 97,537 $ 3,914 $ 13,354 NOTE 6 — INVESTMENT IN UNCONSOLIDATED ENTITIES During the year ended December 31, 2021, the Company entered into the Unconsolidated Joint Venture, of which the Company owns, indirectly through CMFT MT JV Holdings, LLC and CLR NP Holdings, LLC, a subsidiary of CLR, approximately 50 % of the outstanding equity. The Unconsolidated Joint Venture holds approximately 91 % of the membership interest in the NewPoint JV. Through the Unconsolidated Joint Venture, the Company has an approximate 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 December 31, 2023 and 2022, the carrying value of the Company’s investment in NP JV Holdings was $ 126.8 million and $ 100.6 million, respectively, which approximates fair value and is included in investment in unconsolidated entities on the consolidated balance sheets. The Company recorded a gain totaling $ 11.7 million and $ 6.8 million, which represented its share of NP JV Holdings’ gain, during the years ended December 31, 2023 and 2022, respectively, in the consolidated statements of operations. During the year ended December 31, 2023, the Company contributed an additional $ 40.0 million in NP JV Holdings. The Company also received $ 25.6 million in distributions during the year ended December 31, 2023, $ 15.8 million of which can be called back by NewPoint JV through NP JV Holdings as a capital call on a future date. Further, of the $ 25.6 million in distributions received during the year ended December 31, 2023, $ 11.7 million was recognized as a return on investment and $ 13.9 million was recognized as a return of investment and reduced the invested capital and the carrying amount. As of December 31, 2023, the Company had $ 88.4 million of unfunded commitments related to NewPoint JV. These commitments are not reflected in the accompanying consolidated balance sheets. The Company provided a limited guaranty to NewPoint JV, under which the Company agreed to guarantee the Unconsolidated Joint Venture’s cross indemnity and its share of capital contribution obligations under the agreement with NewPoint JV. On December 16, 2021, as a result of 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 years ended December 31, 2022 and 2021, the Company recognized an equity method net gain of $ 5.2 million and $ 606,000 , respectively, related to its investment in CIM UII Onshore, in the consolidated statements of operations. The Company recognized distributions of $ 531,000 related to its investment in CIM UII Onshore during the year ended December 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. NOTE 7 — REAL ESTATE-RELATED SECURITIES As of December 31, 2023, the Company had real estate-related securities with an aggregate estimated fair value of $ 519.7 million, which included 22 CMBS investments and an investment in a publicly-traded equity security. The CMBS investments have initial maturity dates ranging from December 2023 through June 2058 and have interest rates ranging from 6.9 % to 12.7 % as of December 31, 2023, with one CMBS earning a zero coupon rate. As of December 31, 2023, two tranches of a CMBS position held by the Company did not mature as anticipated in December 2023 and were therefore in maturity default as of F-28 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) December 31, 2023. The following is a summary of the Company’s real estate-related securities as of December 31, 2023 (in thousands): Real Estate-Related Securities Amortized Cost Basis Unrealized Loss CECL Fair Value CMBS $ 593,647 $ ( 81,124 ) $ ( 35,808 ) $ 476,715 Equity security 53,388 ( 10,389 ) — 42,999 Total real estate-related securities $ 647,035 $ ( 91,513 ) $ ( 35,808 ) $ 519,714 The following table provides the activity for the real estate-related securities during the years ended December 31, 2023 and 2022 (in thousands): Amortized Cost Basis Unrealized Gain (Loss) CECL Fair Value Real estate-related securities as of January 1, 2022 $ 102,674 $ 2,797 $ — $ 105,471 Face value of real estate-related securities acquired 640,793 — — 640,793 Investment in preferred units, net (1) ( 63,490 ) — — ( 63,490 ) Premiums and discounts on purchase of real estate-related securities, net of acquisition costs ( 33,939 ) — — ( 33,939 ) Amortization of discount on real estate-related securities 10,160 — — 10,160 Realized gain on sale of real estate-related securities ( 110 ) ( 22 ) — ( 132 ) Capitalized interest income on real estate-related securities 1,110 — — 1,110 Principal payments received on real estate-related securities ( 17,161 ) — — ( 17,161 ) Unrealized loss on real estate-related securities — ( 66,421 ) — ( 66,421 ) Real estate-related securities as of January 1, 2023 640,037 ( 63,646 ) — 576,391 Face value of real estate-related securities acquired 166,835 — — 166,835 Discounts on purchase of real estate-related securities, net of acquisition costs ( 2,953 ) — — ( 2,953 ) Amortization of discount on real estate-related securities 18,912 — — 18,912 Sale of real estate-related securities ( 116,797 ) 39,412 — ( 77,385 ) Capitalized interest income on real estate-related securities 1,160 — — 1,160 Principal payments received on real estate-related securities (2) ( 60,159 ) — — ( 60,159 ) Unrealized loss on real estate-related securities, net — ( 67,279 ) — ( 67,279 ) Current expected credit losses — — ( 35,808 ) ( 35,808 ) Real estate-related securities as of December 31, 2023 $ 647,035 $ ( 91,513 ) $ ( 35,808 ) $ 519,714 ____________________________________ (1) Included in this balance is $ 68.2 million of the Company’s investment in preferred units which were redeemed during the year ended December 31, 2022 in exchange for an investment in a first mortgage loan, as further discussed in Note 8 — Loans Held-For-Investment. (2) Includes the repayment of the Company’s position in two different tranches of a CMBS instrument prior to their stated maturity dates. During the year ended December 31, 2023, the Company invested $ 163.9 million in CMBS. During the same period, the Company sold four CMBS with an aggregate amortized cost basis of $ 116.8 million, resulting in net proceeds of $ 77.4 million and a loss of $ 39.4 million, the loss of which was reclassified from other comprehensive (loss) income as an increase to other (expense) income, net in the accompanying consolidated statements of operations. Unrealized gains and losses on CMBS are recorded in other comprehensive (loss) income, with a portion of the amount subsequently reclassified into other income, net in the accompanying consolidated statements of operations as securities are sold and gains and losses are recognized. Unrealized gains and losses on the equity security are reported on the consolidated statements of operations. During the year ended December 31, 2023, the Company recorded $ 67.3 million of net unrealized loss on its real estate-related securities, $ 39.4 million of which was realized as a loss in the accompanying consolidated statements of operations upon the sale of CMBS as noted above. The remaining $ 27.8 million of net unrealized loss is comprised of a $ 32.6 million unrealized loss on CMBS, which is included in other comprehensive (loss) income in the accompanying consolidated statements of comprehensive (loss) income and a $ 4.8 million unrealized gain on the Company’s equity security, which is included in F-29 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) unrealized gain (loss) on equity security in the accompanying consolidated statements of operations. During the year ended December 31, 2022, the Company recorded $ 66.4 million of unrealized loss on its real estate-related securities, $ 51.3 million of which is included in other comprehensive (loss) income in the accompanying consolidated statements of comprehensive (loss) income. The remaining $ 15.1 million of unrealized loss on the Company’s equity security is included in unrealized gain (loss) on equity security in the accompanying consolidated statements of operations. The scheduled maturities of the Company’s CMBS as of December 31, 2023 are as follows (in thousands): CMBS Amortized Cost Estimated Fair Value Due within one year $ 460,300 $ 356,075 Due after one year through five years 89,494 89,683 Due after five years through ten years 12,332 8,580 Due after ten years 31,521 22,377 Total $ 593,647 $ 476,715 Actual maturities of real estate-related securities can differ from contractual maturities because borrowers on certain corporate credit securities may have the right to prepay their respective debt obligations at any time. In addition, factors such as prepayments and interest rates may affect the yields on such securities. Current Expected Credit Losses Current expected credit losses reflect the Company’s current estimate for potential credit losses related to real estate-related securities included in the Company’s consolidated balance sheets. Current expected credit losses are recorded in increase in provision for credit losses on the Company’s consolidated statements of operations. 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 related to its position in one of two different tranches of a CMBS instrument for the year ended December 31, 2023 and 2022 (in thousands): CMBS Current expected credit losses as of January 1, 2022 $ — Provision for credit losses — Current expected credit losses as of January 1, 2023 — Provision for credit losses 35,808 Current expected credit losses as of December 31, 2023 $ 35,808 During the year ended December 31, 2023, the loan collateralizing one of the Company’s CMBS positions was transferred from the master servicer to a special servicer due to payment default generated by halted rent payments on the underlying office properties being mortgaged. In March 2023, the underlying collateral of the loan was appraised by the special servicer, resulting in an appraisal reduction representing approximately 44 % of one of the CMBS position’s tranches in which the Company is invested. Though the appraisal reduction was subsequently reversed during the year ended December 31, 2023, the initial appraisal reduction resulted in reduced cash flows received from the respective CMBS investment during the year ended December 31, 2023. The Company considered various factors, including the factors noted above, in determining whether a credit loss existed. The present value of cash flows expected to be collected from the CMBS position did not exceed its amortized cost basis, and as such the Company determined the security had incurred a credit loss. In addition, as of December 31, 2023, the CMBS position was in maturity default as it did not mature as anticipated on the initial maturity date during December 2023. The Company does not intend to sell the CMBS position and it is not considered more likely than not that the Company will be forced to sell the security prior to recovering the amortized cost. As a result of the credit loss incurred, the Company reclassified $ 13.6 million of unrealized loss from other comprehensive (loss) income on the consolidated statements of comprehensive (loss) income to increase in provision for credit losses on the consolidated statements of operations during the year ended December 31, 2023, and recorded an incremental $ 22.2 million to increase in provision for credit losses on the consolidated statements of operations identified as part of the Company’s quantitative credit loss assessment during the year ended December 31, 2023. As of December 31, 2023, the amortized cost basis of the CMBS position identified as having incurred a credit loss was $ 47.8 million. The Company will continue to monitor for changes in expected cash flows in order to continue to measure the credit loss. F-30 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) As of December 31, 2023, there were 15 CMBS positions with unrealized losses reflected in other comprehensive (loss) income in the accompanying consolidated statements of comprehensive (loss) income. Upon evaluating these securities, the Company concluded that the unrealized losses included in other comprehensive (loss) income as of December 31, 2023 were noncredit-related and would be recovered from the securities’ estimated future cash flows. The Company considered various factors in reaching this conclusion, including that the Company did not intend to sell the securities, it was not considered more likely than not that the Company would be forced to sell the securities prior to recovering the amortized cost, and there were no material credit events that would have caused the Company to conclude that the amortized cost would not be recovered. NOTE 8 — LOANS HELD-FOR-INVESTMENT The Company’s loans held-for-investment consisted of the following as of December 31, 2023 and 2022 (dollar amounts in thousands): As of December 31, 2023 2022 First mortgage loans (1) $ 3,648,351 $ 3,285,193 Total CRE loans held-for-investment and related receivables, net 3,648,351 3,285,193 Liquid corporate senior loans 537,990 701,540 Corporate senior loans 210,722 57,165 Loans held-for-investment and related receivables, net $ 4,397,063 $ 4,043,898 Less: Current expected credit losses ( 132,598 ) ( 42,344 ) Total loans held-for-investment and related receivables, net $ 4,264,465 $ 4,001,554 ____________________________________ (1) As of December 31, 2023, first mortgage loans included $ 20.2 million of contiguous mezzanine loan components that, as a whole, have expected credit quality similar to that of a first mortgage loan. The following table details overall statistics for the Company’s loans held-for-investment as of December 31, 2023 and 2022 (dollar amounts in thousands): CRE Loans (1) (2) Liquid Corporate Senior Loans Corporate Senior Loans As of December 31, As of December 31, As of December 31, 2023 2022 2023 2022 2023 2022 Number of loans 33 29 237 317 21 4 Principal balance $ 3,669,116 $ 3,306,411 $ 543,837 $ 708,254 $ 214,650 $ 57,918 Net book value $ 3,539,111 $ 3,264,841 $ 518,252 $ 680,345 $ 207,102 $ 56,368 Weighted-average interest rate (3) 8.7 % 7.6 % 9.3 % 8.0 % 11.9 % 10.5 % Weighted-average maximum years to maturity 2.8 (4) 3.6 4.2 4.7 3.8 4.6 Unfunded loan commitments (5) $ 241,708 304,649 $ 152 $ 1,425 $ 30,592 $ 4,324 ____________________________________ (1) As of December 31, 2023, 100 % of the Company’s CRE loans by principal balance earned a floating rate of interest, indexed to the Secured Overnight Financing Rate (“SOFR”). (2) Maximum maturity date assumes all extension options are exercised by the borrowers and assumes all relevant conditions are met for such extensions; however, the loans may be repaid prior to such date. (3) The weighted-average interest rate is based on the relevant floating benchmark plus a spread. (4) As of December 31, 2023, two of the Company’s first mortgage loans were in maturity default. During January 2024, the loans were refinanced, each with a fully extended maturity date of January 7, 2028 and are no longer in maturity default. Upon the closings of each refinance, the accrued default interest was waived. (5) Unfunded loan commitments are subject to the satisfaction of borrower milestones and are not reflected in the accompanying consolidated balance sheets. This balance does not include unsettled liquid corporate senior loan purchases of $ 2.2 million that are included in cash and cash equivalents in the accompanying consolidated balance sheets. F-31 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Activity relating to the Company’s loans held-for-investment portfolio was as follows for the years ended December 31, 2023 and 2022 (dollar amounts in thousands): CRE Loans Liquid Corporate Senior Loans Corporate Senior Loans Total Loan Portfolio Balance, January 1, 2022 $ 1,958,655 $ 650,245 $ — $ 2,608,900 Loan originations and acquisitions (1) 1,401,539 184,513 75,851 1,661,903 Sale of loans — ( 60,027 ) — ( 60,027 ) Principal repayments received ( 80,911 ) ( 73,758 ) ( 17,933 ) ( 172,602 ) Capitalized interest 62 — — 62 Deferred fees and other items (2) ( 13,978 ) ( 5,856 ) ( 1,050 ) ( 20,884 ) Accretion and amortization of fees and other items 9,896 1,152 297 11,345 Current expected credit losses (3) ( 10,422 ) ( 15,924 ) ( 797 ) ( 27,143 ) Balance, January 1, 2023 3,264,841 680,345 56,368 4,001,554 Loan originations and acquisitions 483,099 125,107 157,918 766,124 Sale of loans — ( 210,807 ) — ( 210,807 ) Principal repayments received (4) ( 120,394 ) ( 75,389 ) ( 1,196 ) ( 196,979 ) Capitalized interest — — 10 10 Deferred fees and other items (2) ( 8,273 ) ( 4,480 ) ( 3,858 ) ( 16,611 ) Accretion and amortization of fees and other items 8,726 2,019 683 11,428 Current expected credit losses (3) ( 88,888 ) 1,457 ( 2,823 ) ( 90,254 ) Balance, December 31, 2023 $ 3,539,111 $ 518,252 $ 207,102 $ 4,264,465 ____________________________________ (1) The Company’s investment in preferred units, which was previously recorded in real estate-related securities on the accompanying consolidated balance sheets, was redeemed during the year ended December 31, 2022 in exchange for an investment in a first mortgage loan. As of December 31, 2023, the converted investment in preferred units has an outstanding balance of $ 67.0 million and is included in the CRE loans balance with an all-in-rate of 12.2 % and an initial maturity date of October 9, 2024. (2) Other items primarily consist of purchase discounts or premiums and deferred origination expenses. (3) Does not include current expected losses for unfunded or unsettled loan commitments. Such amounts are included in accrued expenses and accounts payable on the accompanying consolidated balance sheets. (4) Includes the repayment of a $ 105.0 million first mortgage loan prior to the maturity date. F-32 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) As of December 31, 2023, our CRE loans had the following characteristics based on carrying values (dollar amounts in thousands): Collateral Property Type As of December 31, 2023 Office $ 1,848,219 50.5 % Multifamily 1,171,128 32.1 % Industrial 344,772 9.5 % Hospitality 89,797 2.5 % Mixed Use 68,966 1.9 % Retail 64,747 1.8 % Self-Storage 60,722 1.7 % Total first mortgage loans $ 3,648,351 100 % Less: current expected credit losses ( 109,240 ) Total first mortgage loans, net $ 3,539,111 Geographic Location As of December 31, 2023 South $ 1,429,721 39.2 % West 1,126,178 30.9 % East 767,626 21.0 % Various 324,826 8.9 % Total first mortgage loans $ 3,648,351 100 % Less: current expected credit losses ( 109,240 ) Total first mortgage loans, net $ 3,539,111 Current Expected Credit Losses Current expected credit losses reflect the Company’s current estimate of potential credit losses related to loans held-for-investment included in the Company’s 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 related to loans held-for-investment by loan type for the year ended December 31, 2023 and 2022 (dollar amounts in thousands): First Mortgage Loans Unfunded First Mortgage Loans (1) Liquid Corporate Senior Loans Unfunded or Unsettled Liquid Corporate Senior Loans (1) Corporate Senior Loans Unfunded Corporate Senior Loans (1) Total Current expected credit losses as of December 31, 2021 $ 9,930 $ — $ 5,271 $ — $ — $ — $ 15,201 Provision for credit losses 10,422 1,890 15,924 377 797 66 29,476 Current expected credit losses as of December 31, 2022 20,352 1,890 21,195 377 797 66 44,677 Provision for (reversal of) credit losses 88,888 8,172 ( 1,457 ) ( 374 ) 2,823 429 98,481 Current expected credit losses as of December 31, 2023 $ 109,240 $ 10,062 $ 19,738 $ 3 $ 3,620 $ 495 $ 143,158 ____________________________________ (1) Current expected losses for unfunded or unsettled loan commitments are included in accrued expenses and accounts payable on the accompanying consolidated balance sheets. F-33 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Changes to current expected credit losses are recognized through net income on the Company’s consolidated statements of operations. During the year ended December 31, 2023, the Company recorded a net increase of $ 98.5 million in the current expected credit loss reserve against the loans held-for-investment portfolio, bringing the total current expected credit loss reserve on funded and unfunded commitments to $ 143.2 million. During the year ended December 31, 2022, the Company recorded a net increase of $ 29.5 million in the current expected credit loss reserve against the loans held-for-investment portfolio, bringing the total current expected credit loss reserve on funded and unfunded commitments to $ 44.7 million. The current expected credit loss reserve reflects certain loans assessed for impairment as well as macroeconomic and current portfolio conditions. As of December 31, 2023, the Company had two collateral dependent risk-rated 5 first mortgage loan investments on nonaccrual status: (i) a $ 134.2 million commercial first mortgage loan on an office building in Massachusetts primarily due to a decrease in rent collection, reduced leasing activity, and stabilization costs required; and (ii) a $ 129.2 million commercial first mortgage loan on an office building in Virginia primarily due to slower than anticipated leasing activity driven by COVID-accelerated office trends and decreased in-place occupancy. Future interest collections related to these loans will be recognized as interest income on a cash basis. During the year ended December 31, 2023, the Company collected all anticipated interest payments from the first mortgage loans noted above and as such, were considered current on interest payments as of December 31, 2023. As of December 31, 2023, the Company’s asset-specific credit loss reserve totaled $ 72.4 million, which related to the Company’s impaired risk-rated 5 first mortgage loans and liquid corporate senior loans. As of December 31, 2022, the Company’s asset-specific credit loss reserve totaled $ 1.7 million, which related to the Company’s impaired risk-rated 5 liquid corporate senior loan. The asset-specific credit loss reserve is recorded based on the Company’s estimation of the fair value of each loan’s underlying collateral as of December 31, 2023. Risk Ratings 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 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. F-34 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (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 December 31, 2023 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 December 31, 2023 Number of Loans 2023 2022 2021 2020 2019 Total First mortgage loans by internal risk rating: 1 — $ — $ — $ — $ — $ — $ — 2 1 — — — 90,173 — 90,173 3 27 401,147 1,203,118 1,205,859 71,510 50,536 2,932,170 4 3 — 80,668 281,961 — — 362,629 5 2 — — 263,379 — — 263,379 Total first mortgage loans 33 401,147 1,283,786 1,751,199 161,683 50,536 3,648,351 Liquid corporate senior loans by internal risk rating: 1 — — — — — — — 2 2 — — — 5,246 — 5,246 3 223 69,366 101,774 251,968 85,105 — 508,213 4 7 1,094 1,905 8,347 2,880 — 14,226 5 5 (2) — 7,241 3,064 — — 10,305 Total liquid corporate senior loans 237 70,460 110,920 263,379 93,231 — 537,990 Corporate senior loans by internal risk rating: 1 — — — — — — — 2 — — — — — — — 3 21 154,146 56,576 — — — 210,722 4 — — — — — — — 5 — — — — — — — Total corporate senior loans 21 154,146 56,576 — — — 210,722 Less: Current expected credit losses ( 132,598 ) Total loans-held-for-investment and related receivables, net 291 $ 4,264,465 Weighted Average Risk Rating (3) 3.2 ____________________________________ (1) Date loan was originated or acquired by the Company. Origination dates are subsequently updated to reflect material loan modifications. (2) As of December 31, 2023, five of the Company’s liquid corporate senior loan investments were on nonaccrual status with an aggregate carrying value of $ 10.3 million, which represented less than 2 % of the carrying value of the Company’s liquid corporate senior loans portfolio. (3) Weighted average risk rating calculated based on carrying value at period end. NOTE 9 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 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 year ended December 31, 2023, the Company’s remaining two interest rate cap agreements matured. As such, the Company did not have any non-designated interest rate cap agreements as of December 31, 2023. As of December 31, 2022, the Company had two non-designated interest rate cap agreements with an aggregate fair value of $ 5.0 million. Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements. The notional amount under the derivative instruments is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks. Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company had interest rate caps during the year ended December 31, 2023, which were used to manage exposure to interest rate movements, but did not meet the requirements to be designated as a hedging instrument. The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings in other F-35 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (expense) income, net on the accompanying consolidated statements of operations. Interest rate swaps are designated as cash flow hedges in order to hedge the variability of the anticipated cash flows on the Company’s 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. During the year ended December 31, 2022, two of the Company’s interest rate swap agreements matured and three interest rate swap agreements were terminated prior to their respective maturity dates. For the year ended December 31, 2023, no amounts were reclassified from other comprehensive (loss) income as a change to interest expense. For the year ended December 31, 2022, the amount of gain reclassified from other comprehensive (loss) income as a decrease to interest expense was $ 2.5 million. For the year ended December 31, 2021, the amount of loss reclassified from other comprehensive (loss) income as an increase to interest expense was $ 3.3 million. The total unrealized gain on interest rate swaps of $ 152,000 as of December 31, 2021 is included in accumulated other comprehensive (loss) income in the accompanying consolidated statements of stockholders’ equity. No such unrealized amounts on interest rate swaps were remaining in other comprehensive (loss) income as of December 31, 2023 and December 31, 2022. The Company includes cash flows from interest rate swap agreements in net cash flows provided by operating activities on its 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 consolidated statements of cash flows as the category for cash flows from the hedged items. The Company had agreements with each of its derivative counterparties that contained provisions whereby if the Company defaulted 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. 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 derivative instruments based on the credit quality of the Company and the respective counterparty. There were no events of default related to the derivative instruments during the year ended December 31, 2023. NOTE 10 — REPURCHASE FACILITIES, NOTES PAYABLE AND CREDIT FACILITIES As of December 31, 2023, the Company had $ 3.9 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 2.9 years and a weighted average interest rate of 6.4 %. 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 December 31, 2023 and 2022, and the debt activity for the year ended December 31, 2023 (in thousands): During the Year Ended December 31, 2023 Balance as of December 31, 2022 Debt Issuances & Assumptions (1) Repayments & Modifications (2) Amortization Balance as of December 31, 2023 Notes payable – fixed rate debt $ 36,538 $ — $ ( 36,538 ) $ — $ — Notes payable – variable rate debt 465,517 204,593 ( 47,269 ) — 622,841 First lien mortgage loan 121,940 — ( 121,940 ) — — ABS mortgage notes 763,035 — ( 4,515 ) — 758,520 Credit facilities 738,500 110,000 ( 358,000 ) — 490,500 Repurchase facilities 2,318,381 231,272 ( 482,389 ) — 2,067,264 Total debt 4,443,911 545,865 ( 1,050,651 ) — 3,939,125 Deferred costs – credit facility (3) ( 740 ) — 679 (4) 61 — Deferred costs – fixed rate debt and first lien mortgage loan ( 1,109 ) — 702 (4) 407 — Deferred costs – variable rate debt ( 5,261 ) ( 710 ) 2,397 (4) 758 ( 2,816 ) Deferred costs – ABS mortgage notes ( 13,968 ) ( 697 ) — 2,079 ( 12,586 ) Total debt, net $ 4,422,833 $ 544,458 $ ( 1,046,873 ) $ 3,305 $ 3,923,723 ____________________________________ (1) Includes deferred financing costs incurred during the period. F-36 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (2) In connection with the repayment of certain mortgage notes and the termination of the CMFT Credit Facility (defined below), the Company recognized a loss on extinguishment of debt of $ 7.8 million during the year ended December 31, 2023, which included approximately $ 1.0 million in prepayment penalties. (3) Deferred costs related to the term portion of the CMFT Credit Facility. (4) In connection with the repayment of certain mortgage notes and the termination of the CMFT Credit Facility, the Company wrote off $ 3.8 million of unamortized deferred loan costs. For more information regarding the Company’s debt activity during the year ended December 31, 2022, see Notes to Con s o lidated Fin ancial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Notes Payable During the year ended December 31, 2023, the Company legally defeased a mortgage loan with an outstanding balance of $ 23.7 million, resulting in a $ 205,000 loss on extinguishment of debt in the Company’s consolidated statement of operations during the year ended December 31, 2023, and repaid the remaining $ 12.8 million of fixed rate debt outstanding, both in connection with the disposition of the underlying properties securing the fixed rate debt. As of December 31, 2023, the Company had $ 622.8 million of variable rate debt outstanding, the borrowings of which are financed through note on note financing arrangements with Massachusetts Mutual Life Insurance Company (the “Mass Mutual Financing”), Citibank, N.A. (“Citibank” and such financing, the “Citibank Financing”), and Barclays (the “Barclays Financing”) to provide financing for the Company’s CRE mortgage loans (the “Note on Note Financing Arrangements”). The following table is a summary of the Note on Note Financing Arrangements as of December 31, 2023 (dollar amounts in thousands): Note on Note Financing Arrangement Date of Agreement Maturity Date Remaining Extension Options (1) Weighted Average Interest Rate Loans Financed under Note on Note Financing Amount Financed Citibank 6/16/2023 8/9/2024 3 / 1 yr. 6.7 % $ 98,149 $ 73,612 Barclays 10/20/2023 8/9/2024 3 / 1 yr. 6.7 % 171,281 128,460 Mass Mutual 3/16/2022 (2) N/A 7.5 % 533,739 420,769 Total $ 803,169 $ 622,841 ____________________________________ (1) Represents the number of extension options remaining and the term of each option. (2) Borrowings under the Mass Mutual Financing mature on various dates from July 2027 through January 2028. In addition, 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 (the “Assumed Variable Rate Debt”), which the Company subsequently refinanced and paid down the original outstanding balance of the Assumed Variable Rate Debt during the year ended December 31, 2022. During the year ended December 31, 2023, the Company paid down the $ 43.1 million outstanding balance on the refinanced Assumed Variable Rate Debt and terminated the Assumed Variable Rate Debt. 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, each of which is an affiliate of the Company and is managed on a day-to-day basis by affiliates of CIM. During the year ended December 31, 2023, the Company paid down the $ 121.9 million outstanding balance on the Mortgage Loan, $ 105.8 million of which was in connection with the sale of properties pursuant to the Realty Income Purchase and Sale Agreement. Refer to Note 4 — Real Estate Assets for additional information regarding the sale. F-37 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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) A-1 (AAA) $ 146,400,000 2.09 % July 2028 July 2051 AAA (sf) A-2 (AAA) $ 219,600,000 2.57 % July 2031 July 2051 AAA (sf) A-3 (AA) $ 39,200,000 2.51 % July 2028 July 2051 AA (sf) A-4 (AA) $ 58,800,000 3.04 % July 2031 July 2051 AA (sf) A-5 (A) $ 124,000,000 2.91 % July 2028 July 2051 A (sf) A-6 (A) $ 186,000,000 3.44 % July 2031 July 2051 A (sf) ____________________________________ (1) Reflects credit rating from Standard & Poor’s Financial Services LLC (“Standard & Poor’s”). The collateral pool for the Class A Notes is comprised of 175 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 December 31, 2023, amounts outstanding on the Class A Notes totaled $ 758.5 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 During the year ended December 31, 2023, CMFT CL Lending Sub AB, LLC (the “Borrower”), an indirect wholly owned subsidiary of the Company, entered into a revolving loan and security agreement (the “Loan and Security Agreement”) with each of the lenders from time to time party thereto (the “Lenders”), Ally Bank, as administrative agent and arranger (“Ally Bank”), U.S. Bank Trust Company, National Association, as the collateral custodian, and U.S. Bank National Association as the document custodian, which provides for borrowings in an aggregate principal amount up to $ 300.0 million (the “Loan Facility”), which may be increased during the revolving period (as defined below) to an aggregate principal amount up to $ 500.0 million as agreed to by the Borrower, any applicable Lender and Ally Bank. Borrowings under the Loan and Security Agreement will bear interest equal to SOFR for the relevant interest period, plus an applicable rate. The applicable rate is 2.875 % per annum (and an additional 2.00 % per annum following an event of default under the Loan and Security Agreement). The revolving period began on February 10, 2023 and concludes on the day preceding the earlier to occur of (i) the scheduled revolving period end date of February 10, 2026, (ii) the date of the declaration of the revolving period end date upon the occurrence and continuation of an event of default, and (iii) the termination date. The termination date is the earlier to occur of (i) February 10, 2028 (two years after the revolving period end date) and (ii) the date of the declaration of the termination date or the date of the automatic occurrence of the termination date upon the occurrence and continuation of an event of default. As of December 31, 2023, the amounts borrowed and outstanding under the Loan Facility totaled $ 75.0 million at a weighted average interest rate of 8.2 %. The Company had a credit agreement with the lenders from time to time parties thereto, JPMorgan Chase, as administrative agent, letter of credit issuer and syndication agent, and PNC Bank, N.A., as syndication agent, that provided for borrowings in the initial amount of $ 300.0 million (the “CMFT Credit Facility”). The CMFT Credit Facility was set to mature on July 15, 2025. During the year ended December 31, 2023, the Company paid down the $ 240.0 million outstanding balance under the CMFT Credit Facility and terminated the CMFT Credit Facility. CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Company, has a revolving credit and security agreement (the “Third Amended Credit and Security Agreement”) with the lenders from time to time parties thereto, 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 Third Amended Credit and Security Agreement provides for available borrowings under the revolving credit facility up to an aggregate principal amount of $ 550.0 million (the “Credit Securities Revolver”). The Credit Securities Revolver may be F-38 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) increased from time to time pursuant to the Third Amended Credit and Security Agreement. As of December 31, 2023, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 415.5 million at a weighted average interest rate of 7.3 %. Borrowings under the Third Amended Credit and Security Agreement will bear interest equal to the one-month Term SOFR (as defined in the Third Amended Credit and Security Agreement) for the relevant interest period, plus an applicable rate. The applicable rate is dependent on the type of loan being financed, which includes broadly syndicated, private and middle market loans meeting certain criteria as set forth in the Third Amended Credit and Security Agreement and ranges from 1.90 % to 2.75 % per annum during the first two years of the reinvestment period and 2.00 % to 2.85 % during the last year of the reinvestment period and 2.10 % to 2.95 % per annum during the amortization period (and, in each case, an additional 2.00 % per annum following an event of default under the Third Amended Credit and Security Agreement). The reinvestment period began on December 31, 2019 and concludes on the earlier of (i) the date that is three years after June 23, 2022, the date the third amendment became effective, (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”). The final maturity date is the earliest to occur of: (i) the date that the Credit Securities Revolver is paid down and (ii) the second anniversary after the Reinvestment Period concludes. Borrowings under the Third 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 corporate senior secured loans subject to certain eligibility criteria under the Third 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 December 31, 2023, with the exception of the Credit Securities Revolver where the Company failed to meet the borrowing base covenant under the Third Amended Credit and Security Agreement at December 31, 2023. Non-compliance with the borrowing base covenant triggers an event of default, which was waived by Citibank for the year ended December 31, 2023 and such non-compliance was subsequently cured by the Company. Repurchase Facilities As of December 31, 2023, indirect wholly-owned subsidiaries of the Company (collectively, the “CMFT Lending Subs”), had Master Repurchase Agreements with Citibank, Barclays, Wells Fargo Bank, N.A. (“Wells Fargo”), Deutsche Bank AG (“Deutsche Bank”), and J.P. Morgan Securities LLC (“J.P. Morgan”) (collectively, the “Repurchase Agreements”) to provide financing primarily through each bank’s purchase of the Company’s CRE mortgage loans and CMBS and future funding advances (the “Repurchase Facilities”). The following table is a summary of the Repurchase Facilities as of December 31, 2023 (dollar amounts in thousands): Repurchase Facility Date of Agreement Maturity Date Remaining Extension Options (1) Maximum Facility Size Weighted Average Interest Rate Loans Financed under Repurchase Facility (2) Amount Financed Citibank 6/4/2020 8/17/2024 2 / 1 yr. $ 70,485 7.5 % (3) $ 195,694 $ 63,265 Citibank 12/19/2023 12/19/2025 2 / 1 yr. 579,515 7.1 % (3) 323,873 242,136 Barclays 9/21/2020 9/22/2025 2 / 1 yr. 558,947 7.2 % (3) 861,295 488,759 Barclays 12/4/2023 12/4/2026 2 / 1 yr. 691,053 7.3 % (3) 300,163 215,309 Wells Fargo 5/20/2021 8/30/2025 2 / 1 yr. 750,000 7.0 % (3) 902,051 689,992 Deutsche Bank 10/8/2021 10/8/2024 3 / 1 yr. 300,000 7.7 % (3) 232,720 168,201 J.P. Morgan 6/1/2022 (4) (4) — (4) 6.6 % (5) 347,635 199,602 Total $ 2,950,000 $ 3,163,431 $ 2,067,264 __________________________________ (1) Represents the number of extension options remaining and the term of each option. (2) CRE mortgage loan balances financed under the Repurchase Facilities with Citibank, Barclays, Wells Fargo and Deutsche Bank reflect the aggregate outstanding principal balance while the CMBS balance financed under the J.P. Morgan Repurchase Facility (as defined below) reflects fair value. (3) Advances under the Repurchase Agreements accrue interest at per annum rates based on Term SOFR (as such term is defined in the applicable Repurchase Agreement) or the daily compounded SOFR plus a spread ranging from 1.30 % to 3.00 % to be determined on a case-by-case basis between Citibank, Barclays, Wells Fargo, or Deutsche Bank and the CMFT Lending Subs. F-39 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (4) Facilities under the repurchase facility with J.P. Morgan (“J.P. Morgan Repurchase Facility”) carry a rolling term which is reset monthly. Such facilities carry no maximum facility size. (5) Under the Master Repurchase Agreement with J.P. Morgan, advances under the repurchase agreement may be made based on one-month Term SOFR plus a spread designated by J.P. Morgan, which as of December 31, 2023, ranges from 1.05 % to 1.45 %. The Repurchase Agreements provide for agreements by each of Citibank, Barclays, Wells Fargo, Deutsche Bank and J.P. Morgan to re-sell such purchased CRE mortgage loans and CMBS back to CMFT Lending Subs at a certain future date or upon demand. In connection with certain of the Repurchase Agreements, the Company (as the guarantor) entered into guaranties with Citibank, Barclays, Wells Fargo, and Deutsche Bank (the “Initial Guaranties”), under which the Company agreed to guarantee up to 25 % of the CMFT Lending Subs’ obligations under certain Repurchase Agreements. In addition, in connection with certain of the Repurchase Agreements, the Company (as the “Initial Guarantor”) and certain of the CMFT Lending Subs (individually as a “Replacement Guarantor”, collectively as the “Replacement Guarantors” and together with the Initial Guarantor, the “Guarantors”) entered into or amended guaranties with Citibank, Barclays and Deutsche Bank during the year ended December 31, 2023 (the “2023 Guaranties”, and together with the Initial Guaranties, the “Guaranties”), on a joint and several basis until the satisfaction of certain conditions as set forth in the guaranties, at which point the Replacement Guarantor will become the sole guarantor under the guaranty (the “Guarantor Replacement Event”). Under the 2023 Guaranties, the Initial Guarantor and the Replacement Guarantors agreed to guarantee the respective CMFT Lending Subs’ obligations under the applicable 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. In addition, the Guaranties contain financial covenants that require the Company to maintain: (i) minimum liquidity of not less than the lower of (a) $ 50.0 million and (b) the greater of (A) $ 10.0 million and (B) 5 % of the then-current Guarantors’ recourse indebtedness, as defined in the Guaranties; (ii) minimum consolidated net worth greater than or equal to $ 1.0 billion plus (a) prior to the Guarantor Replacement Event, as applicable, 75 % of the equity issued by the Guarantors following the respective closing dates of the Repurchase Agreements (the “Repurchase Closing Dates”) or, from and after the Guarantor Replacement Event, as applicable, 75 % of the equity issued by the Replacement Guarantor following the Guarantor Replacement Event, as applicable, minus (b) prior to the Guarantor Replacement Event, as applicable, the aggregate amount of any redemptions or similar transaction by the Guarantors from the Repurchase Closing Dates or, from and after the Guarantor Replacement Event, as applicable, the aggregate amount of any redemptions or similar transaction by the Replacement Guarantor following the Guarantor Replacement Event, as applicable; (iii) maximum leverage ratio of total indebtedness to total equity less than or equal to 80 %; and (iv) minimum interest coverage ratio of EBITDA (as defined in the Guaranties) to interest expense equal to or greater than 1.40 . The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of December 31, 2023. Maturities The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to December 31, 2023 (in thousands): Year Ending December 31, Principal Repayments 2024 $ 633,140 2025 1,420,887 2026 215,309 2027 790,429 2028 424,248 Thereafter 455,112 Total $ 3,939,125 F-40 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 11 — SUPPLEMENTAL CASH FLOW DISCLOSURES Supplemental cash flow disclosures for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands): Year Ended December 31, 2023 2022 2021 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Distributions declared and unpaid $ 16,047 $ 14,828 $ 13,252 Accrued capital expenditures $ 544 $ 249 $ 5,902 Construction reserve allocation $ ( 190 ) $ ( 4,299 ) $ — Real estate acquired via foreclosure $ — $ — $ 191,990 Foreclosure of assets securing the mezzanine loans $ — $ — $ ( 79,968 ) Mortgage notes payable assumed in connection with foreclosure of assets securing the mezzanine loans $ — $ — $ 102,553 Mortgage note payable assumed by buyer in connection with disposition of real estate assets $ — $ ( 356,477 ) $ ( 31,801 ) Equity security received in connection with disposition of real estate assets $ — $ ( 53,388 ) $ — Change in interest income capitalized to loans held-for-investment $ — $ — $ ( 9,469 ) Accrued deferred financing costs $ 132 $ 247 $ 12 Common stock issued through distribution reinvestment plan $ 42,879 $ 38,912 $ 25,784 Common stock issued in connection with mergers $ — $ — $ 538,703 Change in fair value of derivative instruments $ — $ 2,252 $ 5,907 Change in fair value of real estate-related securities $ ( 32,617 ) $ ( 51,304 ) $ 1,650 Conversion of preferred units to loans held-for-investment $ — $ 68,242 $ — Interest rate swaps assumed in mergers $ — $ — $ ( 2,719 ) Debt assumed in mergers $ — $ — $ 437,877 Real estate assets acquired in mergers $ — $ — $ 906,254 Assets assumed in mergers $ — $ — $ 69,058 Liabilities assumed in mergers $ — $ — $ 5,184 Non-controlling interest assumed in mergers $ — $ — $ 1,073 Supplemental Cash Flow Disclosures: Interest paid $ 247,521 $ 146,947 $ 72,533 Cash paid for taxes $ 1,115 $ 1,301 $ 1,093 NOTE 12 — COMMITMENTS AND CONTINGENCIES Litigation In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject. Unfunded Commitments As of December 31, 2023, the Company had $ 272.5 million of unfunded loan commitments related to its existing CRE loans held-for-investment, corporate senior loans, and liquid corporate senior loans, and $ 88.4 million of unfunded commitments related to NewPoint JV. These commitments are not reflected in the accompanying consolidated balance sheets. Current expected credit losses for unfunded or unsettled loan commitments are included in accrued expenses and accounts payable on the accompanying consolidated balance sheets. As of December 31, 2023, the Company had $ 2.2 million of unsettled liquid corporate senior loan acquisitions, all of which settled subsequent to December 31, 2023. Additionally, the Company had $ 31.8 million of unsettled liquid corporate senior F-41 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) loan sales as of December 31, 2023, $ 30.7 million of which settled subsequent to December 31, 2023. Unsettled acquisitions are included in cash and cash equivalents in the accompanying consolidated balance sheets and unsettled sales are included in loans held-for-investment and related receivables, net in the accompanying consolidated balance sheets. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. 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. NOTE 13 — 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 March 24, 2023, the Company and CMFT Management entered into the second amended and restated management agreement (the “Management Agreement”), which amended and restated the amended and restated management agreement between the parties dated August 20, 2019. Management, investment advisory fees and incentive compensation 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). 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 and certain other investments made by the Company. The Investment Advisor, a wholly-owned subsidiary of CIM Group, is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Pursuant to the Investment Advisory and Management Agreement, the Investment Advisor manages the day-to-day business affairs of CMFT Securities and its investments in corporate credit and real estate-related securities (collectively, the “Managed Assets”), subject to the supervision of the Board. In connection with the services provided by the Investment Advisor, CMFT Securities pays the Investment Advisor an investment advisory fee (the “Investment Advisory Fee”), payable quarterly in arrears, equal to 1.50 % per annum ( 0.375 % per quarter) of CMFT Securities’ Equity (as defined in the Investment Advisory and Management Agreement). Because the Managed Assets are excluded from the calculation of management fees payable by the Company to CMFT Management pursuant to the Management Agreement, the total management and advisory fees payable by the Company to its external advisors are not increased as a result of the Investment Advisory and Management Agreement. In addition, the Investment Advisor has a sub-advisory agreement dated December 6, 2019 (the “Sub-Advisory Agreement”) with OFS Capital Management, LLC (the “Sub-Advisor”) to act as an investment sub-advisor to CMFT Securities. The Sub-Advisor is registered as an investment adviser under the Advisers Act and is an affiliate of the Investment Advisor. 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 Group. 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 the Sub-Advisor has provided investment management services payable to the Investment Advisor as sub-advisory fees. 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 years ended December 31, 2023, 2022 and 2021, no incentive compensation fees were incurred. F-42 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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. The Company’s subsidiary, CLR, entered into a separate management agreement (“CLR Management Agreement”) with CMFT Management on February 29, 2024 (“CLR Effective Date”) for the day to day management of CLR and its non-securities assets, pursuant to which CLR will pay CMFT Management a base management fee, payable in arrears, equal to 1.25 % of CLR’s net asset value per share (or 0.90 % of its net asset value per share for its founder share classes), plus a performance fee that is, subject to certain adjustment in the calculation for the measurement periods applicable to core earnings during the first four calendar quarters, generally equal to the excess of (A) the product of (I) 10 % and (II) the excess of (y) CLR’s core earnings for the previous 12-month period, over (z) the product of (i) CLR’s average adjusted capital, and (ii) a hurdle rate of 6.5 % ( 7.25 % for its founder share classes, each considered on an annualized basis, over (B) the sum of any performance fee paid to CMFT Management or the Investment Advisor 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). No performance fee shall be payable by CLR to CMFT Management or the Investment Advisor with respect to any calendar quarter unless CLR’s core earnings for the 12 most recently completed calendar months (or such lesser number of completed calendar quarters following the CLR Effective Date) in the aggregate is greater than zero. Once CLR’s core earnings exceed the hurdle rate, CMFT Management is entitled to a “catch-up” fee equal to the amount of core earnings in excess of the hurdle rate, until CLR’s core earnings for the applicable period equal 7.224 % ( 8.0576 % for CLR’s founder share classes, each considered on an annualized basis of CLR’s average adjusted capital. Thereafter, CMFT Management is entitled to receive 10 % of CLR’s core earnings. CLR Securities Investments, LLC (“CLR Securities”), a wholly owned subsidiary of CLR, has an investment advisory and management agreement dated February 29, 2024 (the “CLR Investment Advisory and Management Agreement”) with the Investment Advisor pursuant to which the Investment Advisor manages the day-to-day business affairs of CLR Securities and its investments in real estate-related securities (collectively, the “CLR Managed Assets”), subject to the supervision of the CLR board of trustees. In connection with the services provided by the Investment Advisor, CLR Securities pays the Investment Advisor an investment advisory fee (the “CLR Investment Advisory Fee”), payable quarterly in arrears, equal to the proportion of the base management fee and performance fee calculated pursuant to the CLR Management Agreement that is attributable to the CLR Managed Assets. Because the CLR Managed Assets are excluded from the calculation of management fees payable by CLR to CMFT Management pursuant to the Management Agreement, the total management and advisory fees payable by CLR to its external advisors are not increased as a result of the CLR Investment Advisory and Management Agreement. The CLR Management Agreement and CLR Investment Advisory and Management Agreement (together, the “CLR Advisory Agreements”) each have an initial three-year term and shall be deemed renewed automatically each year thereafter for an additional one-year period unless CLR provides 180 days’ written notice of termination of a CLR Advisory Agreement after the affirmative vote of CLR’s independent trustees. If either CLR Advisory Agreement is terminated without cause, CMFT Management and/or the Investment Advisor, as applicable, shall receive a termination fee pursuant to the terminated CLR Advisory Agreement equal to three times the sum of (a) the average annual management fee and (b) the average annual incentive compensation incurred under the terminated CLR Advisory Agreement during the 24-month period prior to the termination. The Company and CMFT Management have entered into an agreement whereby, (i) for so long as CMFT Management is the external manager of the Company and an affiliate of CIM Group, the Company’s management fee payable to CMFT Management will be reduced by the Company’s proportional share, based on its ownership of CLR, of the base management fee and performance fee payable to CMFT Management by CLR, and (ii) if the Management Agreement and either or both of the CLR Advisory Agreements are simultaneously terminated without cause, the termination fee payable by the Company to the CMFT Manager or the Investment Advisor, as applicable, under the applicable CLR Advisory Agreement shall be reduced by the Company’s proportional share, based on its ownership of CLR, of the termination fee payable to CMFT Management or the Investment Advisor, by CLR under the applicable CLR Advisory Agreement, such that, in each case, the Company will not pay more fees than would otherwise be payable under its Management Agreement or Investment Advisory and Management Agreement, as applicable. The Investment Advisor has engaged the Sub-Advisor to act as an investment sub-advisor with respect to the assets held by CLR Securities. The Sub-Advisor principally provides investment management services with respect to the real estate related securities held by CLR Securities and its subsidiaries. On a quarterly basis, the Investment Advisor designates 50 % of the sum of the CLR Investment Advisory Fee and incentive compensation attributable to the assets for which the Sub-Advisor has F-43 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) provided investment management services payable to the Investment Advisor as sub-advisory fees. The Sub-Advisory Agreement may be terminated by either party with 30 days’ advance written notice to the other party. No management fees or performance fees have been paid by CLR to CMFT Management or the Investment Advisor. Expense reimbursements to related parties 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 (other than the chief financial officer) 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): Year Ended December 31, 2023 2022 2021 Management fees $ 50,975 $ 52,564 $ 47,020 Expense reimbursements to related parties (1) $ 13,285 $ 16,567 $ 11,624 ____________________________________ (1) Excludes $ 1.1 million of expense reimbursements recorded during the year ended December 31, 2022 attributable to earnout leasing costs under the RTL Purchase and Sale Agreement, which are included in gain on disposition of real estate and condominium developments, net in the consolidated statements of operations. Due to Affiliates Of the amounts shown above, $ 13.9 million and $ 16.1 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 years ended December 31, 2023 and 2022, respectively, and such amounts were recorded as liabilities of the Company as of such dates. 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. Upon foreclosure, and with the approval of the Board’s former valuation, compensation and affiliate transactions committee, 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. During the years ended December 31, 2023 and 2022, the Company recorded $ 380,000 and $ 486,000 , respectively, in development management fees. 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 of 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. Investments with Affiliates of the Manager In September 2021, the Company co-invested $ 68.4 million in preferred units and $ 138.8 million in a first 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 f und that is advised by affiliates of CMFT Management (“CIM RACR”). The Company redeemed its investment in the preferred units during the year ended December 31, 2022 in exchange for an investment in a first mortgage loan. As of December 31, 2023, $ 199.9 million of the first mortgage loan was outstanding. F-44 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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 December 31, 2023, $ 123.0 million of the first mortgage loan was outstanding. In November 2021, the Company entered into the Unconsolidated Joint Venture (the “MT-FT JV”) with CMMT Holdings, LLC, a fund th at is advised by an affiliate of CMFT Management (“CMMT”), for the purposes of investing in the NewPoint JV. As of December 31, 2023, the Company owned 50 % of the equity interests of the MT-FT JV and has committed to fund capital to the MT-FT JV up to $ 212.5 million, of which $ 124.1 million has been funded, net of $ 55.8 million returned to the Company that can be called back by NewPoint JV through NP JV Holdings as a capital call on a future date. For more information on the NewPoint JV, see Note 2 — Summary of Significant Accounting Policies and Note 6 — Investment in Unconsolidated Entities. 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 December 31, 2023, $ 154.0 million of the first mortgage loan was outstanding. In April 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 of December 31, 2023, $ 145.5 million of the first mortgage loan was outstanding. During the year ended December 31, 2022, the Company and CIM RACR co-invested $ 75.9 million and $ 14.7 million, respectively, in five corporate senior loans to a third party. During the year ended December 31, 2023, the Company and CIM RACR co-invested $ 105.8 million and $ 16.4 million, respectively, in nine corporate senior loans to a third party. As of December 31, 2023, $ 162.1 million of the corporate senior loans was outstanding. The Sub-Advisor provided investment management services related to these corporate senior loans pursuant to the Sub-Advisory Agreement. NOTE 14 — ECONOMIC DEPENDENCY Under various agreements, the Company has engaged and may in the future engage CMFT Management or its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and stockholder relations. As a result of these relationships, the Company is dependent upon CMFT Management or its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services. NOTE 15 — STOCKHOLDERS’ EQUITY As of December 31, 2023, 2022 and 2021, the Company was authorized to issue $ 600.0 million of shares of common stock under the Secondary DRIP Offering. All shares of such stock have a par value of $ 0.01 per share. The par value of stockholder proceeds raised from the DRIP Offerings is classified as common stock, with the remainder allocated to capital in excess of par value. On August 11, 2010, the Company sold 20,000 shares of common stock, at $ 10.00 per share, to Cole Holdings Corporation (“CHC”). On April 5, 2013, the ownership of such shares was transferred to CREInvestments, LLC, an affiliate of CMFT Management. On February 7, 2014, the ownership of such shares was transferred to VEREIT Operating Partnership, L.P. (“VEREIT OP”), a former affiliated entity of the Company’s sponsor. On February 1, 2018, the ownership of such shares was transferred by VEREIT OP to CMFT Management. On December 16, 2021, in connection with the consummation of the CIM Income NAV Merger, the Company issued 74.8 million shares of common stock for consideration of $ 7.20 per share. Distribution Reinvestment Plan Pursuant to the DRIP, the Company allows stockholders to elect to have their distributions reinvested in additional shares of the Company’s common stock at the most recent estimated per share NAV as determined by the Board. The Board may terminate or amend the Secondary DRIP Offering at the Company’s discretion at any time upon ten days ’ prior written notice to the stockholders. During the years ended December 31, 2023, 2022 and 2021, approximately 6.5 million, 5.4 million and 3.6 million shares were purchased under the DRIP Offerings for approximately $ 42.9 million, $ 38.9 million and $ 25.8 million, respectively, which were recorded as redeemable common stock on the consolidated balance sheets. F-45 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Share Redemption Program The Company’s share redemption program permits its stockholders to sell their shares back to the Company after they have held them for at least one year , subject to the significant conditions and limitations described below. The share redemption program provides that the Company will redeem shares of its common stock from requesting stockholders, subject to the terms and conditions of the share redemption program. The Company will limit the number of shares redeemed pursuant to the share redemption program as follows: (1) the Company will not redeem in excess of 5 % of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited, among other things, to the net proceeds the Company receives from the sale of shares under the DRIP Offering, net of shares redeemed to date. In an effort to accommodate redemption requests throughout the calendar year, the Company intends to limit quarterly redemptions to approximately 1.25 % of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds the Company receives from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent the Company from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. The Company will determine whether it has sufficient funds and/or shares available as soon as practicable after the end of each fiscal quarter, but in any event prior to the applicable payment date. Upon receipt of a request for redemption, the Company may conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. If the Company cannot purchase all shares presented for redemption in any fiscal quarter, based upon insufficient cash available from the sale of shares under the DRIP and/or the limit on the number of shares the Company may redeem during any quarter or year, the Company will give priority to the redemption of deceased stockholders’ shares and stockholders with exigent circumstances, as determined in the Company’s sole discretion and accompanied by such evidentiary documentation as the Company may request. While the shares of deceased stockholders and stockholders determined to have exigent circumstances will be included in calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps; therefore, if the volume of requests to redeem deceased stockholders’ shares in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares would be completed in full, assuming sufficient proceeds from the sale of shares under the DRIP, net of shares redeemed to date, were available. If sufficient proceeds from the sale of shares under the DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares and, effective as of April 1, 2023, shareholders deemed to have exigent circumstances would be honored on a pro rata basis. The Company next will give priority to requests for full redemption of accounts with a balance of 250 shares or less at the time the Company receives the request, in order to reduce the expense of maintaining small accounts. Thereafter, the Company will honor the remaining quarterly redemption requests on a pro rata basis. Following such quarterly redemption period, if a stockholder would like to resubmit the unsatisfied portion of the prior request for redemption, such stockholder must submit a new request for redemption of such shares prior to the last day of the new quarter. Unfulfilled requests for redemption will not be carried over automatically to subsequent redemption periods. In addition, the Company reserves the right, in its sole discretion at any time, and from time to time, to reject any request for redemption for any reason. The Company redeems shares no later than the end of the month following the end of each fiscal quarter. Requests for redemption must be received on or prior to the end of the fiscal quarter in order for the Company to repurchase the shares in the month following the end of that fiscal quarter. The Board may choose to amend the terms of, suspend or terminate the share redemption program at any time in its sole discretion if it believes that such action is in the best interest of the Company and its stockholders. Any material modifications or suspension of the share redemption program will be disclosed to the Company’s stockholders as promptly as practicable in the Company’s reports filed with the SEC and via the Company’s website. In connection with the CCIT III and CCPT V Mergers, the Board approved the suspension of the Company’s share redemption program on August 30, 2020, and, therefore, no shares were redeemed from the Company’s stockholders after that date until the share redemption program was reinstated, effective April 1, 2021, by the Board on March 25, 2021. During the years ended December 31, 2023, 2022 and 2021, the Company redeemed approximately 6.8 million, 5.5 million and 3.1 million shares, respectively, under the share redemption program for $ 44.4 million, $ 39.4 million and $ 22.0 million, respectively. During the year ended December 31, 2023, redemption requests relating to approximately 103.3 million shares went unfulfilled. F-46 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Distributions Payable and Distribution Policy The Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, for the periods indicated below: Period Commencing Period Ending Monthly Distribution Amount August 2020 December 2021 $ 0.0303 January 2022 September 2022 $ 0.0305 October 2022 December 2022 $ 0.0339 January 2023 September 2023 $ 0.0350 October 2023 December 2023 $ 0.0367 January 2024 June 2024 $ 0.0375 As of December 31, 2023, the Company had distributions payable of $ 16.0 million. Equity-Based Compensation 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. On April 27, 2022, the Board and the compensation committee of the Board approved the Amended and Restated CIM Real Estate Finance Trust, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) and the 2022 Plan was approved by the Company’s stockholders at the Company’s 2022 Annual Meeting of Stockholders held on July 12, 2022. The 2022 Plan superseded and replaced the 2018 Plan. Awards that are granted on or after the effective date of the 2022 Plan are 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 are 250,000 shares, which is a reduction from 400,000 shares authorized for issuance under the 2018 Plan, and awards of approximately 110,000 shares of common stock are available for future grant at December 31, 2023. 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. Subsequent to December 31, 2023, the Compensation Committee of the Board approved and adopted the CIM Real Estate Finance Trust, Inc. 2024 Manager Equity Incentive Plan (the “Manager Plan”), which provides for the grant of non-qualified stock options, restricted stock awards, restricted stock unit awards, and stock appreciation right awards, and dividend equivalents, to eligible named executive officers (as defined in Item 402 of Regulation S-K) of the Company or to CMFT Management, which in turn will transfer such incentives to employees, advisors, or consultants of CMFT Management and its affiliates who provide services to CMFT Management or its affiliates in support of the Company and its subsidiaries. The maximum number of shares of common stock of the Company that may be subject to awards granted under the Manager Plan is 12,000,000 shares. The Manager Plan will expire on January 9, 2034, unless terminated earlier by the Board of Directors or the Compensation Committee. As of December 31, 2023, the Company has granted awards of approximately 116,000 restricted shares in the aggregate to the independent members of the Board under the 2018 Plan and approximately 140,000 restricted shares in the aggregate to the independent members of the Board under the 2022 Plan. As of December 31, 2023, the 116,000 restricted shares granted under the 2018 plan had vested based on one year of continuous service. In addition, as of December 31, 2023, 67,000 restricted shares granted under the 2022 Plan vested based on one year of continuous service. The remaining 73,000 restricted shares issued had not vested or had been forfeited as of December 31, 2023. 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 $ 480,000 and $ 397,000 for the years ended December 31, 2023 and 2022, respectively, related to the restricted shares which is included in general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2023, there was $ 360,000 of total unrecognized compensation expense related to these restricted shares, which will be recognized ratably over the remaining period of service prior to October 2024. F-47 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 16 — INCOME TAXES For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or nondividend distributions. Nondividend distributions will reduce U.S stockholders’ basis (but not below zero) in their shares. The following table shows the character of the distributions the Company paid on a percentage basis for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, Character of Distributions: 2023 2022 2021 Ordinary dividends 97 % 90 % 22 % Nondividend distributions 3 % 10 % 36 % Capital gain distributions — % — % 42 % Total 100 % 100 % 100 % During the years ended December 31, 2023, 2022 and 2021, the Company incurred state and local income and franchise taxes of $ 1.1 million, $ 1.3 million, and $ 1.1 million, respectively, which were recorded in general and administrative expenses in the consolidated statements of operations. The Company had no unrecognized tax benefits as of or during the years ended December 31, 2023 and 2022. Any interest and penalties related to unrecognized tax benefits would be recognized within the provision for income taxes in the accompanying consolidated statements of operations. The Company files income tax returns in the U.S. federal jurisdiction, as well as various state jurisdictions, and is subject to routine examinations by the respective tax authorities. NOTE 17 — LEASES The Company’s real estate assets are leased to tenants under operating leases for which the terms, expirations and extension options vary. The Company’s operating leases do not convey to the lessee the right to purchase the underlying asset upon expiration of the lease period. To determine whether a contract contains a lease, the Company reviews contracts to determine if the agreement conveys the right to control the use of an asset. The Company accounts for lease and non-lease components as a single, combined operating lease component. Non-lease components primarily consist of maintenance services, including CAM, real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. Non-lease components are considered to be variable rental and other property income and are recognized in the period incurred. As of December 31, 2023, the Company’s leases had a weighted-average remaining term of 10.7 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. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2023, 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): Year Ending December 31, Future Minimum Rental Income 2024 $ 86,900 2025 86,565 2026 83,751 2027 82,688 2028 78,865 Thereafter 557,657 Total $ 976,426 A certain amount of the Company’s rental and other property income is from tenants with leases which are subject to contingent rent provisions. These contingent rents are subject to the tenant achieving periodic revenues in excess of specified F-48 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) levels. For the years ended December 31, 2023, 2022 and 2021, the amount of the contingent rent earned by the Company was not significant. Rental and other property income during the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands): Year Ended December 31, 2023 2022 2021 Fixed rental and other property income (1) $ 106,755 $ 192,982 $ 252,422 Variable rental and other property income (2) 8,624 20,407 42,742 Total rental and other property income $ 115,379 $ 213,389 $ 295,164 __________________________________ (1) Consists primarily of fixed contractual payments from operating leases with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above- and below-market leases, and is net of uncollectible lease-related receivables. (2) Consists primarily of tenant reimbursements for recoverable real estate taxes and property operating expenses, and percentage rent. The Company has one property subject to a non-cancelable operating ground lease with a remaining term of 9.7 years, with a lease liability (in deferred rental income and other liabilities ) and a related right-of-use (“ROU”) asset (in prepaid expenses, derivative assets and other assets ) of $ 2.0 million in the consolidated balance sheets. The lease liability and ROU asset were initially measured at the present value of the future minimum lease payments using a discount rate of 4.3 %. 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 $ 250,000 of ground lease expense during the year ended December 31, 2023, of which $ 242,000 was paid in cash during the period it was recognized. As of December 31, 2023, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 250,000 annually for 2024 through 2028, and $ 1.2 million thereafter through the maturity date of the lease in August 2033. NOTE 18 — SEGMENT REPORTING As of December 31, 2023, the Company determined that it has two reportable segments: Credit and Real Estate. Corporate/other represents all corporate level and unallocated items and includes the Company’s other asset management activities and expenses. F-49 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The following tables present segment reporting for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 Real Estate Credit Corporate/Other (1) Company Total Revenues: Rental and other property income $ 115,056 $ — $ 323 $ 115,379 Interest income — 453,480 — 453,480 Total revenues 115,056 453,480 323 568,859 Expenses: General and administrative 709 3,952 12,911 17,572 Interest expense, net 22,884 233,615 4,269 260,768 Property operating 5,203 — 8,147 13,350 Real estate tax 3,430 — 1,408 4,838 Expense reimbursements to related parties — — 13,285 13,285 Management fees 10,702 40,273 — 50,975 Transaction-related 10 212 3,431 3,653 Depreciation and amortization 42,532 — — 42,532 Real estate impairment 20,404 — 14,675 35,079 Increase in provision for credit losses — 134,289 — 134,289 Total expenses 105,874 412,341 58,126 576,341 Other income (expense) Gain on disposition of real estate and condominium developments, net 49,731 — 3,610 53,341 Gain on investment in unconsolidated entities — 11,723 — 11,723 Unrealized gain on equity security — 4,751 — 4,751 Other (expense) income, net ( 4,380 ) ( 31,984 ) 9,905 ( 26,459 ) Loss on extinguishment of debt ( 1,192 ) ( 2,164 ) ( 4,432 ) ( 7,788 ) Total other income (expense) 44,159 ( 17,674 ) 9,083 35,568 Segment net income (loss) 53,341 23,465 ( 48,720 ) 28,086 Segment net income attributable to non-controlling interest 8 — — 8 Segment net income (loss) attributable to the Company $ 53,333 $ 23,465 $ ( 48,720 ) $ 28,078 Total assets as of December 31, 2023 $ 1,156,761 $ 5,091,365 $ 198,350 $ 6,446,476 __________________________________ (1) Includes condominium and rental units acquired via foreclosure during the year ended December 31, 2021. F-50 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Year Ended December 31, 2022 Real Estate Credit Corporate/Other (1) (2) Company Total Revenues: Rental and other property income $ 213,001 $ — $ 388 $ 213,389 Interest income — 238,757 — 238,757 Total revenues 213,001 238,757 388 452,146 Expenses: General and administrative 553 807 14,004 15,364 Interest expense, net 41,295 110,303 13,612 165,210 Property operating 14,609 — 6,181 20,790 Real estate tax 10,923 — 1,689 12,612 Expense reimbursements to related parties — — 16,567 16,567 Management fees 21,526 31,038 — 52,564 Transaction-related 511 — 23 534 Depreciation and amortization 70,606 — — 70,606 Real estate impairment 16,184 — 16,137 32,321 Increase in provision for credit losses — 29,476 — 29,476 Total expenses 176,207 171,624 68,213 416,044 Other income (expense): Gain on disposition of real estate and condominium developments, net 117,763 — 4,139 121,902 Gain on investment in unconsolidated entities — 6,780 5,172 11,952 Unrealized (loss) gain on equity security — ( 15,139 ) 22 ( 15,117 ) Other income, net 5,012 3,395 264 8,671 Loss on extinguishment of debt ( 18,646 ) — ( 998 ) ( 19,644 ) Total other income (expense) 104,129 ( 4,964 ) 8,599 107,764 Segment net income (loss) 140,923 62,169 ( 59,226 ) 143,866 Segment net income attributable to non-controlling interest 66 — — 66 Segment net income (loss) attributable to the Company $ 140,857 $ 62,169 $ ( 59,226 ) $ 143,800 Total assets as of December 31, 2022 $ 2,118,513 $ 4,794,593 $ 218,948 $ 7,132,054 __________________________________ (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. F-51 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Year Ended December 31, 2021 Real Estate Credit Corporate/Other (1) (2) Company Total Revenues: Rental and other property income $ 294,729 $ — $ 435 $ 295,164 Interest income — 70,561 — 70,561 Total revenues 294,729 70,561 435 365,725 Expenses: General and administrative 317 1,268 13,493 15,078 Interest expense, net 38,553 19,902 25,594 84,049 Property operating 32,033 — 15,526 47,559 Real estate tax 29,109 — 5,834 34,943 Expense reimbursements to related parties — — 11,624 11,624 Management fees 33,248 13,772 — 47,020 Transaction-related 126 — 189 315 Depreciation and amortization 95,190 — — 95,190 Real estate impairment 5,993 — 12,085 18,078 Increase in provision for credit losses — 2,881 — 2,881 Total expenses 234,569 37,823 84,345 356,737 Other income (expense): Gain on disposition of real estate and condominium developments, net 77,178 — 5,867 83,045 Merger-related expenses, net — — ( 1,404 ) ( 1,404 ) Gain on investment in unconsolidated entities — — 606 606 Other income (expense), net 1,531 ( 1,376 ) ( 5 ) 150 Loss on extinguishment of debt ( 1,628 ) — ( 3,267 ) ( 4,895 ) Total other income (expense) 77,081 ( 1,376 ) 1,797 77,502 Segment net income (loss) 137,241 31,362 ( 82,113 ) 86,490 Segment net income (loss) attributable to the Company $ 137,241 $ 31,362 $ ( 82,113 ) $ 86,490 Total assets as of December 31, 2021 $ 3,821,085 $ 2,859,017 $ 282,674 $ 6,962,776 __________________________________ (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. NOTE 19 — SUBSEQUENT EVENTS In addition to subsequent events previously disclosed, the following events also occurred subsequent to December 31, 2023. Redemptions of Shares of Common Stock Subsequent to December 31, 2023, the Company redeemed approximately 1.7 million shares for $ 11.0 million (at an average redemption price of $ 6.31 per share). The remaining redemption requests received during the three months ended December 31, 2023 totaling approximately 27.6 million shares went unfulfilled. Estimated Per Share NAV On February 29, 2024, the Board established an updated estimated per share NAV of the Company’s common stock as of January 31, 2024, of $ 6.09 per share. Commencing on March 1, 2024, distributions will be reinvested in shares of the Company’s common stock under the DRIP at a price of $ 6.09 per share and $ 6.09 serves as the most recent estimated per share NAV for purposes of the share redemption program. F-52 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Departure of Directors On February 29, 2024, Alicia K. Harrison, Calvin E. Hollis, Avraham Shemesh, Roger D. Snell and Emily Vande Krol (each a “Resigning Director” and collectively, the “Resigning Directors”), of whom Messrs. Hollis and Snell and Ms. Harrison are independent directors, resigned from the Company’s Board effective as of the close of the meeting of the Board on February 29, 2024. Prior to the resignations, Ms. Harrison served on the Audit Committee, Mr. Hollis and Mr. Snell served on the Compensation Committee and Mr. Snell served on the Investment Risk Management Committee. None of the Resigning Directors’ resignations were a result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices and are a result of the Resigning Directors moving to serve on the Board of Trustees of the Company’s subsidiary, CLR. Following the resignations of the Resigning Directors, the directors reduced the size of the Board to five members. The Company’s Board now consists of the five remaining directors, three of whom are independent directors. In connection with the resignations, the Board approved the acceleration of the vesting of the Resigning Directors’ restricted shares, as applicable, subsequent to December 31, 2023. Investment and Disposition Activity Subsequent to December 31, 2023, the Company’s investment and disposition activity included the following: • Disposed of four condominium units for an aggregate gross sales price of $ 13.2 million, resulting in net proceeds of $ 12.2 million after closing costs and a gain of approximately $ 781,000 . • Settled $ 3.0 million of liquid corporate senior loan purchases, $ 2.2 million of which were traded as of December 31, 2023, and settled $ 56.3 million of liquid corporate senior loan sales, resulting in an approximate $ 536,000 net loss on sale. • Invested $ 12.0 million in five corporate senior loans to a third-party. • Acquired one first mortgage loan with a principal balance of $ 13.6 million and funded an aggregate amount of $ 7.7 million to 10 of the Company’s first mortgage loans. • Refinanced two of the Company’s first mortgage loans to have an initial maturity date of January 7, 2027, each with one one-year extension option. • Three of the Company’s first mortgage loans entered into non-payment default. Financing Activity Subsequent to December 31, 2023, the Company’s financing activity included the following: • Financed a first mortgage loan for $ 9.5 million under the repurchase facility with Barclays and financed a first mortgage loan for $ 20.9 million under the repurchase facility with Citibank. • Repaid $ 36.5 million of borrowings under the Repurchase Facilities. F-53 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION (in thousands) Initial Costs to Company Gross Amount at Which Carried Buildings, Fixtures and Total Adjustment At December 31, 2023 Accumulated Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (e) (f) (g) Acquired Constructed Real Estate Held for Investment the Company has Invested in: AAA Office Park: Hamilton, NJ $ — $ 5,427 $ 22,970 $ — $ 28,397 $ 1,640 12/16/2021 2016 Academy Sports: Cartersville, GA 6,945 4,517 4,574 — 9,091 512 12/21/2020 2014 Actuant Campus: Columbus, WI 13,003 2,090 14,633 — 16,723 1,363 12/21/2020 2014 AK Steel: West Chester, OH — 1,421 21,044 — 22,465 1,310 12/16/2021 2007 Apex Technologies: Mason, OH — 1,288 11,127 — 12,415 681 12/16/2021 2013 Bass Pro Shop: Tallahassee, FL 6,652 945 5,713 — 6,658 1,674 8/20/2013 2013 BJ’s Wholesale Club: Fort Myers, FL 19,838 5,331 21,692 — 27,023 1,791 12/21/2020 2018 Roanoke, VA 15,530 4,509 14,545 — 19,054 1,219 11/25/2020 2018 Bob Evans: Defiance, OH 2,579 501 2,781 — 3,282 168 12/16/2021 2011 Dover, OH 2,535 552 1,930 — 2,482 111 12/16/2021 2013 Dundee, MI 1,846 526 1,298 — 1,824 80 12/16/2021 2011 Gallipolis, OH 2,710 529 2,963 — 3,492 241 12/21/2020 2003 Hagerstown, MD 2,542 490 2,789 — 3,279 237 12/21/2020 1989 Hamilton, OH 1,934 446 2,359 — 2,805 130 12/16/2021 2014 Hummelstown, PA 2,264 1,029 2,283 — 3,312 129 12/16/2021 2013 Mansfield, OH 2,264 495 2,423 — 2,918 212 12/21/2020 2004 Mayfield Heights, OH 1,846 847 1,278 — 2,125 76 12/16/2021 2003 Monroe, MI 2,198 623 2,177 — 2,800 192 12/21/2020 1998 Northwood, OH 2,535 514 2,760 — 3,274 231 12/21/2020 1998 Peoria, IL 894 620 524 — 1,144 64 12/21/2020 1995 Piqua, OH 2,022 413 2,187 — 2,600 187 12/21/2020 1989 Bottom Dollar Grocery: Ambridge, PA — 519 2,985 — 3,504 779 11/5/2013 2012 Burger King: Yukon, OK 1,209 500 1,141 — 1,641 107 12/21/2020 1989 Cabela’s: Acworth, GA 21,691 4,979 18,775 — 23,754 3,237 9/25/2017 2014 Avon, OH 12,373 2,755 10,751 — 13,506 1,884 9/25/2017 2016 La Vista, NE 21,032 3,260 16,923 — 20,183 2,807 9/25/2017 2006 Sun Prairie, WI 15,919 3,373 14,058 — 17,431 2,557 9/25/2017 2015 Caliber Collision Center: Fredericksburg, VA 3,626 1,807 2,292 — 4,099 241 7/22/2020 2019 Lake Jackson, TX 2,894 800 2,974 — 3,774 297 12/21/2020 2006 Richmond, VA 4,234 1,453 3,323 — 4,776 364 7/30/2020 2020 San Antonio, TX 3,938 691 4,458 — 5,149 410 12/21/2020 2019 Williamsburg, VA 3,707 1,418 2,800 — 4,218 297 6/12/2020 2020 Camping World: Fort Myers, FL 11,186 3,226 11,832 — 15,058 1,183 12/21/2020 1987 Cash & Carry: Salt Lake City, UT 3,905 863 4,149 — 5,012 361 12/21/2020 2006 Chick-Fil-A: Dickson City, PA 1,956 1,113 7,946 ( 7,817 ) 1,242 303 6/30/2014 2013 S-1 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued) (in thousands) Initial Costs to Company Gross Amount at Which Carried Buildings, Fixtures and Total Adjustment At December 31, 2023 Accumulated Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (e) (f) (g) Acquired Constructed Costco: Tallahassee, FL $ 8,022 $ 9,497 $ — $ — $ 9,497 $ — 12/11/2012 2006 CVS: Arnold, MO 3,970 2,043 2,367 — 4,410 612 12/13/2013 2013 Asheville, NC 1,875 1,108 1,084 — 2,192 334 4/26/2012 1998 Austin, TX 4,329 1,076 3,475 — 4,551 892 12/13/2013 2013 Bloomington, IN 4,417 1,620 2,957 — 4,577 764 12/13/2013 2012 Blue Springs, MO 2,930 395 2,722 — 3,117 703 12/13/2013 2013 Bridgeton, MO 3,970 2,056 2,362 — 4,418 610 12/13/2013 2013 Charleston, SC 1,692 869 1,009 — 1,878 312 4/26/2012 1998 Chesapeake, VA 3,238 1,044 3,053 — 4,097 805 12/13/2013 2013 Cicero, IN 3,443 487 3,099 — 3,586 799 12/13/2013 2013 Eminence, KY 3,472 872 2,511 — 3,383 640 12/13/2013 2013 Goose Creek, SC 2,828 1,022 1,980 — 3,002 506 12/13/2013 2013 Greenwood, IN 4,212 912 3,549 61 4,522 944 7/11/2013 1999 Hazlet, NJ 5,941 3,047 3,610 — 6,657 928 12/13/2013 2013 Hillcrest Heights, MD 3,839 1,817 2,989 71 4,877 784 9/30/2013 2001 Honesdale, PA 4,102 1,206 3,342 — 4,548 885 12/13/2013 2013 Independence, MO 2,425 359 2,242 — 2,601 581 12/13/2013 2013 Indianapolis, IN 3,362 1,110 2,484 — 3,594 641 12/13/2013 2013 Irving, TX 3,582 745 3,034 — 3,779 874 10/5/2012 2000 Janesville, WI 3,047 736 2,545 — 3,281 656 12/13/2013 2013 Katy, TX 3,128 1,149 2,462 — 3,611 622 12/13/2013 2013 London, KY 4,139 1,445 2,661 — 4,106 705 9/10/2013 2013 North Wilkesboro, NC 2,300 332 2,369 73 2,774 620 10/25/2013 1999 Poplar Bluff, MO 3,699 1,861 2,211 — 4,072 574 12/13/2013 2013 Salem, NH 5,216 3,456 2,351 — 5,807 599 11/18/2013 2013 San Antonio, TX 3,297 1,893 1,848 — 3,741 483 12/13/2013 2013 Sand Springs, OK 3,560 1,765 2,283 — 4,048 594 12/13/2013 2013 Santa Fe, NM 6,219 2,243 4,619 — 6,862 1,173 12/13/2013 2013 Sedalia, MO 2,586 466 2,318 — 2,784 600 12/13/2013 2013 St. John, MO 3,743 1,546 2,601 — 4,147 671 12/13/2013 2013 Vineland, NJ 3,538 813 2,926 — 3,739 779 12/13/2013 2010 Waynesboro, VA 3,260 986 2,708 — 3,694 699 12/13/2013 2013 West Monroe, LA 3,406 1,738 2,136 — 3,874 555 12/13/2013 2013 Wisconsin Rapids, WI 2,198 707 3,262 — 3,969 178 12/16/2021 2013 Dollar General: Parchment, MI — 168 1,162 — 1,330 282 6/25/2014 2014 Duluth Trading: Denton, TX 3,681 1,662 2,918 — 4,580 275 12/21/2020 2017 Madison, AL 3,765 1,174 3,603 — 4,777 333 12/21/2020 2019 Noblesville, IN 3,677 1,212 3,436 — 4,648 347 12/21/2020 2003 Family Dollar: Salina, UT — 211 1,262 — 1,473 139 12/21/2020 2014 Jewel-Osco: Plainfield, IL 8,739 — — 11,151 11,151 1,394 11/14/2018 2001 Spring Grove, IL 7,787 991 11,361 — 12,352 655 12/16/2021 2007 Wood Dale, IL 7,765 4,069 7,800 — 11,869 470 12/16/2021 2005 Kroger: Shelton, WA 8,908 1,180 11,040 — 12,220 3,112 4/30/2014 1994 S-2 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued) (in thousands) Initial Costs to Company Gross Amount at Which Carried Buildings, Fixtures and Total Adjustment At December 31, 2023 Accumulated Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (e) (f) (g) Acquired Constructed Kum & Go: Conway, AR $ 3,187 $ 510 $ 2,577 $ — $ 3,087 $ 624 6/13/2014 2014 LA Fitness: Columbus, OH — 1,013 6,734 — 7,747 1,615 4/29/2015 2014 Pawtucket, RI — 5,945 8,012 ( 3,080 ) 10,877 34 12/16/2021 2015 Rock Hill, SC — 780 7,590 ( 2,044 ) 6,326 37 12/16/2021 2015 Lowe’s: Asheboro, NC 6,959 1,098 6,722 7 7,827 1,731 6/23/2014 1994 Cincinnati, OH 11,662 14,092 — 491 14,583 — 2/10/2014 2001 Covington, LA 9,054 10,233 — — 10,233 — 8/20/2014 2002 Mansfield, OH 7,809 873 8,256 37 9,166 2,179 6/12/2014 1992 North Dartmouth, MA 14,263 6,774 17,384 — 24,158 1,071 12/16/2021 2004 Oxford, AL 10,681 1,668 7,622 369 9,659 2,524 6/28/2013 1999 Tuscaloosa, AL 7,794 4,908 4,786 109 9,803 1,391 10/29/2013 1993 Zanesville, OH 9,098 2,161 8,375 316 10,852 2,326 12/11/2013 1995 McAlister’s Deli: Lawton, OK 2,106 805 1,057 — 1,862 282 5/1/2014 2013 Mister Car Wash: Athens, AL 2,513 383 1,150 — 1,533 209 9/12/2017 2008 Decatur, AL 1,231 257 559 — 816 110 9/12/2017 2005 Decatur, AL 2,798 486 1,253 — 1,739 261 9/12/2017 2014 Decatur, AL 1,436 359 1,152 — 1,511 237 9/12/2017 2007 Hartselle, AL 1,033 360 569 — 929 115 9/12/2017 2007 Hudson, FL 1,971 1,229 1,562 — 2,791 90 12/16/2021 2007 Madison, AL 3,831 562 1,139 — 1,701 241 9/12/2017 2012 National Tire & Battery: Cypress, TX 2,798 910 2,224 — 3,134 520 9/1/2015 2005 Montgomery, IL 3,018 516 2,494 — 3,010 712 1/15/2013 2007 North Richland Hills, TX 2,674 513 2,579 — 3,092 595 9/1/2015 2005 Pasadena, TX 2,857 908 2,307 — 3,215 540 9/1/2015 2005 Natural Grocers: Heber City, UT 4,527 1,286 3,727 — 5,013 336 12/21/2020 2017 Idaho Falls, ID 3,553 833 2,316 — 3,149 606 2/14/2014 2013 O’Reilly Automotive: Bennettsville, SC 1,179 361 1,207 — 1,568 122 12/21/2020 2015 Clayton, GA 1,297 501 945 — 1,446 195 1/29/2016 2015 Flowood, MS 1,341 506 1,288 — 1,794 127 12/21/2020 2014 Iron Mountain, MI 1,209 249 1,400 — 1,649 140 12/21/2020 2014 Popeyes: Independence, MO 1,157 333 680 — 1,013 168 6/27/2014 2005 Raising Cane’s: Avondale, AZ 3,216 1,774 2,381 — 4,155 136 12/16/2021 2013 Reno, NV 3,282 1,841 2,259 — 4,100 209 12/21/2020 2014 Republic Services: Scottsdale, AZ — 11,460 36,231 ( 10,391 ) 37,300 — 12/16/2021 2016 S-3 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued) (in thousands) Initial Costs to Company Gross Amount at Which Carried Buildings, Fixtures and Total Adjustment At December 31, 2023 Accumulated Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (e) (f) (g) Acquired Constructed Safeway: Juneau, AK $ 10,732 $ 6,174 $ 8,791 $ — $ 14,965 $ 831 12/21/2020 2017 Siemens: Milford, OH — 4,137 23,153 — 27,290 3,040 12/21/2020 1991 Spinx: Simpsonville, SC 1,787 591 969 — 1,560 267 1/24/2013 2012 Steinhafels: Greenfield, WI 7,326 1,783 7,643 — 9,426 653 12/21/2020 1991 Madison, WI 11,032 3,227 8,531 — 11,758 509 12/16/2021 2017 Sunoco: Palm City, FL 3,465 667 1,698 — 2,365 457 4/12/2013 2011 SuperValu: Oglesby, IL 12,688 2,505 11,777 — 14,282 857 12/16/2021 1996 Take 5: Andrews, TX 879 230 862 — 1,092 74 12/21/2020 1994 Bedford, TX 897 283 837 — 1,120 87 12/21/2020 2009 Burleson, TX 1,117 471 936 — 1,407 92 12/21/2020 1994 Burleson, TX 824 201 837 — 1,038 75 12/21/2020 2010 Burleson, TX 641 394 407 — 801 72 12/21/2020 2003 Cedar Hill, TX 788 250 705 — 955 65 12/21/2020 1985 Hereford, TX 824 50 995 — 1,045 83 12/21/2020 1993 Irving, TX 458 120 445 — 565 40 12/21/2020 1989 Irving, TX 824 210 818 — 1,028 72 12/21/2020 1987 Lubbock, TX 1,264 151 1,428 — 1,579 116 12/21/2020 2002 Midland, TX 1,667 192 1,861 — 2,053 151 12/21/2020 1995 Mineral Wells, TX 1,117 131 1,263 — 1,394 104 12/21/2020 2019 Teradata: Miami Township, OH — 1,615 5,250 — 6,865 391 12/16/2021 2010 TGI Friday’s: Wilmington, DE 2,740 1,685 969 — 2,654 251 6/27/2014 1991 Time Warner: Streetsboro, OH — 1,009 5,602 — 6,611 342 12/16/2021 2003 Tire Kingdom: Summerville, SC 2,161 1,208 1,233 — 2,441 279 9/1/2015 2005 Tractor Supply: Ashland, VA 3,033 500 2,696 175 3,371 753 11/22/2013 2013 Blytheville, AR 2,564 780 2,660 175 3,615 309 12/21/2020 2002 Cambridge, MN 2,373 807 1,272 203 2,282 491 5/14/2012 2012 Carlyle, IL 2,344 707 2,386 175 3,268 302 12/21/2020 2015 Fortuna, CA 4,483 568 3,819 175 4,562 1,012 6/27/2014 2014 Logan, WV 2,985 597 3,232 175 4,004 324 12/21/2020 2006 Lumberton, NC 2,754 611 2,007 175 2,793 638 5/24/2013 2013 Monticello, FL 2,608 448 1,916 175 2,539 609 6/20/2013 2013 Shelbyville, IL 2,330 586 2,576 175 3,337 293 12/21/2020 2017 South Hill, VA 2,857 630 2,179 175 2,984 650 6/24/2013 2011 Weaverville, NC 4,183 867 3,138 277 4,282 915 9/13/2013 2006 S-4 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued) (in thousands) Initial Costs to Company Gross Amount at Which Carried Buildings, Fixtures and Total Adjustment At December 31, 2023 Accumulated Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (e) (f) (g) Acquired Constructed United Oil: Bellflower, CA $ 1,919 $ 1,246 $ 788 $ — $ 2,034 $ 185 9/30/2014 2001 Brea, CA 2,879 2,393 658 — 3,051 153 9/30/2014 1984 Carson, CA 5,355 2,354 4,821 — 7,175 433 12/21/2020 1958 El Cajon, CA 1,853 1,533 568 — 2,101 133 9/30/2014 2008 El Cajon, CA 1,648 1,225 368 — 1,593 86 9/30/2014 2000 Fallbrook, CA 3,538 1,266 3,458 — 4,724 281 12/21/2020 1958 Harbor City, CA 3,297 1,359 3,047 — 4,406 253 12/21/2020 2014 Hawthorne, CA 1,993 896 1,764 — 2,660 147 12/21/2020 2001 La Habra, CA 2,403 1,971 571 — 2,542 133 9/30/2014 2000 Lakewood, CA 3,663 2,499 2,400 — 4,899 219 12/21/2020 1973 Lawndale, CA 2,198 1,462 862 — 2,324 201 9/30/2014 2001 Long Beach, CA 2,747 1,088 2,582 — 3,670 218 12/21/2020 1990 Los Angeles, CA 3,223 1,927 1,484 — 3,411 347 9/30/2014 2007 Los Angeles, CA 2,747 2,182 701 — 2,883 164 9/30/2014 1964 Los Angeles, CA 3,773 2,435 2,614 — 5,049 220 12/21/2020 1982 Los Angeles, CA 4,117 2,016 3,486 — 5,502 284 12/21/2020 1965 Norco, CA 3,157 1,852 1,489 — 3,341 348 9/30/2014 1995 San Clemente, CA 4,183 2,036 3,561 — 5,597 296 12/21/2020 1973 San Diego, CA 2,264 1,362 1,662 — 3,024 147 12/21/2020 1959 San Diego, CA 3,568 1,547 3,218 — 4,765 266 12/21/2020 2011 San Diego, CA 4,872 2,409 4,105 — 6,514 356 12/21/2020 1976 San Diego, CA 2,608 1,877 883 — 2,760 206 9/30/2014 2006 Santa Ana, CA 2,542 1,629 1,766 — 3,395 156 12/21/2020 2000 Vista, CA 2,264 2,063 334 — 2,397 78 9/30/2014 1986 Vista (Vista), CA 2,198 2,028 418 — 2,446 98 9/30/2014 2010 Whittier, CA 2,469 1,629 985 — 2,614 230 9/30/2014 1997 Vacant: Sanford, FL — 1,031 1,807 ( 1,861 ) 977 72 10/23/2012 1999 Valeo North American HQ: Troy, MI — 1,880 9,813 — 11,693 909 12/16/2021 2007 Valeo Production Facility: East Liberty, OH — 357 4,989 46 5,392 341 12/16/2021 2016 Valvoline HQ: Lexington, KY — 5,558 41,234 — 46,792 3,305 12/16/2021 2016 Walgreens: Austintown, OH 3,568 637 4,173 — 4,810 1,096 8/19/2013 2002 Dearborn Heights, MI 6,058 2,236 3,411 — 5,647 922 7/9/2013 2008 Fort Madison, IA 3,480 514 3,723 — 4,237 988 9/20/2013 2008 Las Vegas, NV 3,861 2,325 3,262 70 5,657 870 9/26/2013 1999 Lawton, OK 2,765 860 2,539 106 3,505 700 7/3/2013 1998 Little Rock, AR 4,395 548 4,676 — 5,224 1,120 6/30/2014 2011 Lubbock, TX 3,535 565 3,257 103 3,925 946 10/11/2012 2000 Metropolis, IL 4,095 284 4,991 — 5,275 1,174 8/8/2014 2009 Sacramento, CA 3,231 324 2,669 — 2,993 668 6/30/2014 2008 S-5 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued) (in thousands) Initial Costs to Company Gross Amount at Which Carried Buildings, Fixtures and Total Adjustment At December 31, 2023 Accumulated Depreciation Date Date Description (a) Encumbrances Land Improvements to Basis (b) (c) (d) (e) (e) (f) (g) Acquired Constructed Walgreens (continued): San Antonio, TX $ 6,904 $ 1,417 $ 7,932 $ — $ 9,349 $ 640 12/21/2020 2005 Suffolk, VA 4,029 1,261 3,461 — 4,722 1,088 5/14/2012 2007 Walmart: Anderson, SC 9,538 2,424 9,719 — 12,143 1,983 11/5/2015 2015 Florence, SC 8,835 2,013 9,225 — 11,238 1,874 11/5/2015 2015 Tallahassee, FL 11,095 14,823 — — 14,823 — 12/11/2012 2008 Weasler Engineering: West Bend, WI 11,677 1,019 13,390 — 14,409 949 12/16/2021 2016 Wendy’s: Grafton, VA 1,583 539 894 — 1,433 223 6/27/2014 1985 $ 758,520 $ 320,729 $ 825,394 $ ( 10,128 ) $ 1,135,995 $ 116,397 ____________________________________ (a) Initial costs exclude subsequent impairment charges. (b) Consists of capital expenditures and real estate development costs, and impairment charges. (c) The aggregate cost for federal income tax purposes was $ 1.1 billion. (d) The following is a reconciliation of total real estate carrying value for the years ended December 31 (in thousands): 2023 2022 2021 Balance, beginning of period $ 2,041,696 $ 2,362,175 $ 3,371,926 Additions Acquisitions — — 752,272 Improvements 619 1,245 3,785 Total additions $ 619 $ 1,245 $ 756,057 Less: Deductions Cost of real estate sold 884,128 305,071 426,436 Other (including provisions for impairment of real estate assets) 22,192 16,653 1,339,372 Total deductions 906,320 321,724 1,765,808 Balance, end of period $ 1,135,995 $ 2,041,696 $ 2,362,175 (e) Gross intangible lease assets of $ 154.2 million and the associated accumulated amortization of $ 52.8 million are not reflected in the table above. S-6 CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE III – REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued) (in thousands) (f) The following is a reconciliation of accumulated depreciation for the years ended December 31 (in thousands): 2023 2022 2021 Balance, beginning of period $ 179,855 $ 158,354 $ 298,364 Additions Acquisitions - Depreciation expense for building, acquisitions costs and tenant improvements acquired 26,011 41,627 61,868 Improvements - Depreciation expense for tenant improvements and building equipment 3,218 5,270 5,140 Total additions $ 29,229 $ 46,897 $ 67,008 Deductions Cost of real estate sold 85,919 22,508 43,600 Other (including provisions for impairment of real estate assets) 6,768 2,888 163,418 Total deductions 92,687 25,396 207,018 Balance, end of period $ 116,397 $ 179,855 $ 158,354 (g) The Company’s assets are depreciated or amortized using the straight-line method over the useful lives of the assets by class. Generally, buildings are depreciated over 40 years, site improvements are amortized over 15 years and tenant improvements are amortized over the remaining life of the lease or the useful life, whichever is shorter. S-7 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATE (in thousands) Principal Carrying Amount of Amount of Loans Subject Final Periodic Face Mortgages at to Delinquent Interest Maturity Payment Prior Amount of December 31, Principal or Loan Type Description / Location Rate (a) Date (b) Terms (c) Liens Mortgages 2023 (d) "Interest" First mortgage loan Office / Duluth, Georgia + 3.25 % 2/1/2025 P/I N/A $ 50,643 $ 50,536 $ — First mortgage loan Office / Dallas, Texas + 3.85 % 9/8/2025 P/I N/A 90,513 90,173 — First mortgage loan Office / Orlando, Florida + 4.10 % 10/9/2025 P/I N/A 71,730 71,510 — First mortgage loan Office / San Diego, California + 4.66 % 12/7/2025 P/I N/A 108,309 107,827 — First mortgage loan (e) Office / Houston, Texas + 2.00 % 11/7/2024 P/I N/A 86,739 86,739 — First mortgage loan (e) Office / Houston, Texas + 2.55 % 11/7/2024 P/I N/A 18,261 18,261 — First mortgage loan Office / Irvine, California + 3.55 % 7/7/2026 P/I N/A 174,769 174,134 — First mortgage loan Office / Bethesda, Maryland + 3.86 % 9/16/2026 P/I N/A 57,508 57,145 — First mortgage loan Multifamily / Fort Lauderdale, Florida + 1.47 % - 6.82 % 10/7/2025 P/I N/A 199,930 199,244 — First mortgage loan Multifamily / Los Angeles, California + 2.60 % 10/7/2025 P/I N/A 123,000 122,855 — First mortgage loan Retail / Glendale, New York + 4.26 % 11/7/2026 P/I N/A 65,000 64,747 — First mortgage loan Multifamily / San Jose, California + 3.00 % 11/7/2024 P/I N/A 146,205 145,836 — First mortgage loan Multifamily / Arlington, Virginia + 2.75 % 12/15/2026 P/I N/A 88,180 87,874 — First mortgage loan Multifamily / Brooklyn, New York + 3.61 % 12/17/2026 P/I N/A 60,750 60,491 — First mortgage loan (f) Multifamily / Brooklyn, New York + 3.61 % 12/17/2026 P/I N/A 20,250 20,164 — First mortgage loan Office / McLean, Virginia + 3.41 % 2/5/2027 P/I N/A 129,977 129,158 — First mortgage loan Multifamily / Gainesville, Florida + 3.20 % 1/7/2027 P/I N/A 70,908 70,661 — First mortgage loan Office / Boston, Massachusetts + 2.90 % 1/7/2027 P/I N/A 135,009 134,220 — First mortgage loan Multifamily / Miami, Florida + 2.60 % 1/7/2027 P/I N/A 154,000 153,485 — First mortgage loan Multifamily / Nashville, Tennessee + 3.00 % 1/7/2027 P/I N/A 118,749 118,358 — First mortgage loan Office / Tampa, Florida + 3.28 % 2/7/2027 P/I N/A 173,690 172,852 — First mortgage loan Office / Atlanta, Georgia + 3.40 % 3/7/2027 P/I N/A 270,269 268,689 — First mortgage loan Office / Phoenix, Arizona + 3.34 % 4/7/2027 P/I N/A 304,703 302,699 — First mortgage loan Mixed-Use / Alpharetta, Georgia + 4.70 % 4/7/2027 P/I N/A 69,355 68,966 — First mortgage loan Multifamily / Phoenix, Arizona + 3.05 % 5/7/2027 P/I N/A 145,519 144,916 — First mortgage loan Office / Washington D.C. + 4.00 % 6/6/2027 P/I N/A 185,350 184,274 — First mortgage loan Industrial / Spanish Fork, Utah + 3.50 % 7/7/2025 P/I N/A 81,000 80,668 — First mortgage loan Self-Storage / Various + 3.95 % 9/7/2027 P/I N/A 61,120 60,722 — First mortgage loan Industrial / Various + 2.40 % 8/9/2027 P/I N/A 269,430 264,104 — First mortgage loan Hospitality / Orlando, Florida + 4.40 % 9/7/2028 P/I N/A 34,950 34,619 — First mortgage loan Hospitality / Tampa, Florida + 4.15 % 8/7/2028 P/I N/A 25,900 25,627 — First mortgage loan Multifamily / Los Angeles, California + 3.25 % 1/5/2029 P/I N/A 47,500 47,245 — S-8 Table of Contents CIM REAL ESTATE FINANCE TRUST, INC. SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATE (in thousands) Principal Carrying Amount of Amount of Loans Subject Final Periodic Face Mortgages at to Delinquent Interest Maturity Payment Prior Amount of December 31, Principal or Loan Type Description / Location Rate (a) Date (b) Terms (c) Liens Mortgages 2023 (d) "Interest" First mortgage loan Hospitality / Philadelphia, Pennsylvania + 4.05 % 1/7/2029 P/I N/A $ 29,900 $ 29,552 $ — Total loans $ 3,669,116 $ 3,648,351 $ — Current expected credit losses (g) — ( 109,240 ) — Total loans, net $ 3,669,116 $ 3,539,111 $ — ____________________________________ (a) Expressed as a spread over the relevant floating benchmark rates, which include Term SOFR, and the 30-day SOFR average, as applicable to each loan. (b) Final maturity date assumes all extension options are exercised. (c) P/I = principal and interest. (d) The tax basis of the loans included above is $ 3.6 billion as of December 31, 2023. (e) As of December 31, 2023, the first mortgage loan was in maturity default. During January 2024, the loan was refinanced with a fully extended maturity date of January 7, 2028 and is no longer in maturity default. Upon closing of the refinance, the accrued default interest was waived. (f) As of December 31, 2023, the first mortgage loan is comprised of contiguous mezzanine loan components that, as a whole, have expected credit quality similar to that of a first mortgage loan. (g) As of December 31, 2023, the Company’s current expected credit losses related to its loans held-for-investment totaled $ 132.6 million, $ 109.2 million of which was related to the CRE loans. The following table reconciles mortgage loans on real estate for the years ended December 31 (in thousands): Year Ended December 31, 2023 2022 2021 Balance, beginning of period $ 3,264,841 $ 1,958,655 $ 428,393 Additions during period: New loans 483,099 1,401,539 1,810,166 Capitalized interest — 62 — Accretion of fees and other items 8,726 9,896 2,998 Total additions $ 491,825 $ 1,411,497 $ 1,813,164 Less: Deductions during period: Collections of principal ( 120,394 ) ( 80,911 ) ( 169,094 ) Capitalized interest — — ( 9,469 ) Foreclosures — — ( 138,006 ) Deferred fees and other items ( 8,273 ) ( 13,978 ) ( 17,031 ) Total deductions $ ( 128,667 ) $ ( 94,889 ) $ ( 333,600 ) (Provision for) reversal of credit losses ( 88,888 ) ( 10,422 ) 50,698 Net balance, end of period $ 3,539,111 $ 3,264,841 $ 1,958,655 S-9