What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 512 added, 620 removed, 876 unchanged (56% of the section changed)

3 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Real estate assets:

7 unchanged sentences

Investment in unconsolidated entities 138,285 126,777

Real estate-related securities, at fair value, net of credit loss allowances of $ 25,748 and $ 0 as of September 30, 2023 and December 31, 2022, respectively

Real estate-related securities and other, at fair value, net of credit loss allowances of $ 35,562 and $ 35,808 as of March 31, 2024 and December 31, 2023, respectively

513,474 519,714

5 unchanged sentences

Rents and tenant receivables, net 17,951 17,082

Prepaid expenses, derivative assets and other assets 8,024 26,243

Prepaid expenses and other assets 8,357 9,423

Deferred costs, net 11,213 12,121

Accrued interest receivable 26,377 27,682

Assets held for sale 41,074 —

Total assets $ 6,324,493 $ 6,446,476

13 unchanged sentences

Common stock, $ 0.01 par value per share;

490,000,000 shares authorized, 437,267,415 and 437,397,414 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

490,000,000 shares authorized, 437,241,982 and 437,254,715 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Capital in excess of par value 3,530,821 3,529,973

2 unchanged sentences

Total stockholders’ equity 2,184,062 2,266,077

Non-controlling interests — ( 8 )

Total equity 2,374,424 2,456,075

Total liabilities, redeemable common stock, non-controlling interests and stockholders’ equity $ 6,688,042 $ 7,132,054

Total liabilities, redeemable common stock, and stockholders’ equity $ 6,324,493 $ 6,446,476

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

2 unchanged sentences

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

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

2023 2022 2023 2022

Three Months Ended March 31,

Rental and other property income $ 24,574 $ 38,781

11 unchanged sentences

Increase in provision for credit losses

50,219 5,664 101,309 15,315

Total expenses 168,414 110,462

Other income (expense):

Other (expense) income:

Gain on disposition of real estate and condominium developments, net 782 19,623

Gain on investment in unconsolidated entities 3,136 2,195 8,172 8,858

Unrealized (loss) gain on equity security ( 2,073 ) ( 9,030 ) 3,281 ( 15,440 )

Gain (loss) on investment in unconsolidated entities 2,525 ( 770 )

Unrealized (loss) gain on equity securities ( 11,413 ) 2,258

Other income, net 3,549 324

Loss on extinguishment of debt — ( 3,645 )

Total other income (loss)

Total other (expense) income

( 4,557 ) 17,790

10 unchanged sentences

(in thousands) (Unaudited)

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

2023 2022 2023 2022

Three Months Ended March 31,

Net (loss) income $ ( 38,542 ) $ 54,192

Other comprehensive loss

Unrealized loss on real estate-related securities ( 944 ) ( 8,709 ) ( 32,860 ) ( 24,496 )

Amount of loss reclassified from other comprehensive loss into income as an increase in provision for credit losses — — 13,594 —

Unrealized gain on interest rate swaps — 78 — 2,361

Amount of gain reclassified from other comprehensive loss into income as interest expense, net — ( 2,613 ) — ( 2,551 )

Total other comprehensive loss ( 944 ) ( 11,244 ) ( 19,266 ) ( 24,686 )

Other comprehensive income (loss)

Unrealized gain (loss) on CMBS 4,955 ( 26,310 )

Total other comprehensive income (loss) 4,955 ( 26,310 )

Comprehensive (loss) income ( 33,587 ) 27,882

9 unchanged sentences

Stockholders’

Equity Non-Controlling Interests Total Equity

Shares Par Value

Balance as of January 1, 2024

Issuance of common stock 1,637,923 17 10,746 — — 10,763 — 10,763

Equity-based compensation — — 120 — — 120 — 120

Distributions declared on common stock — $ 0.11 per common share

437,254,715 $ 4,372 $ 3,529,973 $ ( 1,187,125 ) $ ( 81,143 ) $ 2,266,077

Redemptions of common stock ( 1,605,529 ) ( 16 ) ( 10,532 ) — — ( 10,548 ) — ( 10,548 )

Changes in redeemable common stock — — ( 213 ) — — ( 213 ) — ( 213 )

Comprehensive income (loss) — — — 54,184 ( 26,310 ) 27,874 8 27,882

Balance as of March 31, 2023 437,429,808 $ 4,374 $ 3,529,644 $ ( 1,021,032 ) $ ( 74,836 ) $ 2,438,150 $ — $ 2,438,150

Issuance of common stock 1,742,240 19 10,846 — — 10,865

4 unchanged sentences

Changes in redeemable common stock — — 249 — — 249

Comprehensive income — — — 31,875 7,988 39,863 — 39,863

Balance as of June 30, 2023 437,381,972 $ 4,374 $ 3,529,765 $ ( 1,035,084 ) $ ( 66,848 ) $ 2,432,207 $ — $ 2,432,207

Issuance of common stock 1,612,843 16 10,579 — — 10,595 — 10,595

Equity-based compensation — — 120 — — 120 — 120

Distributions declared on common stock — $ 0.11 per common share

Comprehensive (loss) income

— — — ( 38,542 ) 4,955 ( 33,587 )

Redemptions of common stock ( 1,727,400 ) ( 17 ) ( 11,332 ) — — ( 11,349 ) — ( 11,349 )

Changes in redeemable common stock — — 753 — — 753 — 753

Comprehensive loss

Balance as of March 31, 2024

437,241,982 $ 4,374 $ 3,530,821 $ ( 1,274,945 ) $ ( 76,188 ) $ 2,184,062

Balance as of September 30, 2023 437,267,415 $ 4,373 $ 3,529,885 $ ( 1,092,042 ) $ ( 67,792 ) $ 2,374,424 $ — $ 2,374,424

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

Common Stock Capital in Excess

1 unchanged sentence

Distributions in Excess of Earnings Accumulated

Other Comprehensive Income (Loss) Total

Other Comprehensive Loss

Stockholders’

2 unchanged sentences

Balance as of January 1, 2023

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

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

Distributions declared on common stock — $ 0.09 per common share

437,397,414 $ 4,373 $ 3,529,523 $ ( 1,029,287 ) $ ( 48,526 ) $ 2,456,083 $ ( 8 ) $ 2,456,075

Redemptions of common stock ( 1,345,814 ) ( 13 ) ( 9,676 ) — — ( 9,689 ) — ( 9,689 )

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

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

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

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

Issuance of common stock 1,637,923 17 10,746 — — 10,763 — 10,763

4 unchanged sentences

Changes in redeemable common stock — — ( 213 ) — — ( 213 ) — ( 213 )

Distributions to non-controlling interests — — — — — — ( 16 ) ( 16 )

Comprehensive income (loss) — — — 54,184 ( 26,310 ) 27,874 8 27,882

Balance as of June 30, 2022 437,311,071 $ 4,373 $ 3,529,285 $ ( 975,820 ) $ ( 10,493 ) $ 2,547,345 $ 980 $ 2,548,325

Issuance of common stock 1,326,177 13 9,535 — — 9,548 — 9,548

Equity-based compensation — — 120 — — 120 — 120

Distributions declared on common stock — $ 0.09 per common share

Balance as of March 31, 2023

437,429,808 $ 4,374 $ 3,529,644 $ ( 1,021,032 ) $ ( 74,836 ) $ 2,438,150 $ — $ 2,438,150

Redemptions of common stock ( 1,374,510 ) ( 13 ) ( 9,884 ) — — ( 9,897 ) — ( 9,897 )

Changes in redeemable common stock — — 348 — — 348 — 348

Distributions to non-controlling interests — — — — — — ( 1,117 ) ( 1,117 )

Comprehensive income (loss) — — — 15,410 ( 11,244 ) 4,166 129 4,295

Balance as of September 30, 2022 437,262,738 $ 4,373 $ 3,529,404 $ ( 1,000,420 ) $ ( 21,737 ) $ 2,511,620 $ ( 8 ) $ 2,511,612

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

2 unchanged sentences

(in thousands) (Unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 75,025 $ 128,253

Net (loss) income $ ( 38,542 ) $ 54,192

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

9 unchanged sentences

Loss on sale of credit investments, net 416 64

Gain on investment in unconsolidated entities ( 8,172 ) ( 8,858 )

Gain on sale of marketable security — ( 22 )

Unrealized (gain) loss on equity security ( 3,281 ) 15,462

Amortization of fair value adjustment and gain on interest rate swaps — ( 2,417 )

Loss (gain) on interest rate caps 5,022 ( 4,252 )

(Gain) loss on investment in unconsolidated entities ( 2,525 ) 770

Unrealized loss (gain) on equity securities 11,413 ( 2,258 )

Loss on interest rate caps — 1,960

Impairment of real estate assets — 4,814

17 unchanged sentences

Investment in corporate senior loans ( 11,822 ) ( 16,763 )

Investment in first mortgage loans ( 212,703 ) ( 1,310,406 )

Origination and funding of first mortgage loans ( 23,602 ) ( 17,007 )

Origination and exit fees received on loans held-for-investment 329 —

1 unchanged sentence

Principal payments received on real estate-related securities 3,245 48,975

Net proceeds from sale of real estate-related securities — 132

Net proceeds from disposition of real estate assets and condominium developments 12,231 775,144

Net proceeds from sale of liquid corporate senior loans 74,080 8,311

Redemption of investment in unconsolidated entities — 60,663

Proceeds from the settlement of insurance claims — 619

Net cash provided by (used in) investing activities $ 678,750 $ ( 494,783 )

Net cash provided by investing activities $ 79,466 $ 886,406

CIM REAL ESTATE FINANCE TRUST, INC.

1 unchanged sentence

(in thousands) (Unaudited) — Continued

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities:

3 unchanged sentences

Repayments of borrowings, and prepayment penalties ( 82,763 ) ( 519,069 )

Termination of interest rate swaps — ( 239 )

Distributions to non-controlling interests — ( 1,147 )

Deferred financing costs paid ( 767 ) ( 3,457 )

Net cash (used in) provided by financing activities ( 516,082 ) 413,016

Net cash used in financing activities ( 85,358 ) ( 514,483 )

Net increase in cash and cash equivalents and restricted cash 44,777 437,041

10 unchanged sentences

Accrued deferred financing costs $ — $ 174

Mortgage notes payable assumed by buyer in connection with disposition of real estate assets $ — $ ( 356,477 )

Equity security received in connection with disposition of real estate assets $ — $ ( 53,388 )

Common stock issued through distribution reinvestment plan $ 10,865 $ 10,763

Change in fair value of derivative instruments $ — $ 2,252

Change in fair value of real estate-related securities $ 4,955 $ ( 26,309 )

Conversion of preferred units to loans held-for-investment $ — $ 68,242

Conversion of loan held-for-investment to equity securities $ ( 1,993 ) $ —

Supplemental Cash Flow Disclosures:

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited)

March 31, 2024 (Unaudited)

NOTE 1 — ORGANIZATION AND BUSINESS

3 unchanged sentences

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 September 30, 2023, the Company’s loan portfolio consisted of 346 loans with a net book value of $ 4.1 billion, and investments in real estate-related securities of $ 639.1 million.

As of September 30, 2023, the Company owned 194 properties, comprising approximately 6.2 million rentable square feet of commercial space located in 37 states.

As of September 30, 2023, the rentable square feet at these properties was 99.8 % leased, including month-to-month agreements, if any.

As of September 30, 2023, the Company owned condominium developments with a net book value of $ 106.5 million.

As of March 31, 2024, the Company’s loan portfolio consisted of 254 loans with a net book value of $ 4.1 billion, and investments in real estate-related securities and other of $ 513.5 million.

The Company expects to conduct its commercial real estate lending business through CIM Commercial Lending REIT (“CLR”), a Maryland statutory trust and subsidiary of the Company which the Company expects to be taxed as a REIT for U.S.

federal income tax purposes.

As of March 31, 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 March 31, 2024, the Company owned 192 properties, comprising approximately 6.2 million rentable square feet of commercial space located in 37 states.

As of March 31, 2024, the rentable square feet at these properties was 99.9 % leased, including month-to-month agreements, if any.

As of March 31, 2024, the Company owned condominium developments with a net book value of $ 80.1 million.

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

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 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, New York, NY, Orlando, FL, Phoenix, AZ and Tokyo, Japan.

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

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.

12 unchanged sentences

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

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

The Company began to

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Offering in meeting their customer account reporting obligations under Financial Industry Regulatory Authority Rule 2231.

March 31, 2024 (Unaudited) – (Continued)

issue shares under the Secondary DRIP Offering on August 2, 2016 and continues to issue shares under the Secondary DRIP Offering.

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 September 30, 2023, the estimated per share NAV of the Company’s common stock was $ 6.57 , which was established by the Board on December 19, 2022 using a valuation date of September 30, 2022.

On November 9, 2023, the Board established an updated estimated per share NAV of the Company’s common stock, using a valuation date of September 30, 2023, of $ 6.31 per share.

Commencing on November 14, 2023, distributions are reinvested in shares of the Company’s common stock under the DRIP at a price of $ 6.31 per share and $ 6.31 per share serves as the most recent estimated per share NAV for purposes of the share redemption program.

As of March 31, 2024, the estimated per share NAV of the Company’s common stock was $ 6.09 , which was established by the Board on February 29, 2024 using a valuation date of January 31, 2024.

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.

13 unchanged sentences

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 condensed consolidated financial statements.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Reclassifications

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

The Company has chosen to break out the details of $ 43.0 million and $ 105.7 million of interest expense, net from other income, net into expenses in the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2022, 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.

In addition, the Company has chosen to break out the details of $ 17.7 million of accrued interest receivable from prepaid expenses, derivative assets and other assets in the Company’s condensed consolidated balance sheet as of September 30, 2022, which resulted in a corresponding breakout of $ 13.2 million from prepaid expenses and other assets to accrued interest receivable in the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2022.

The reclassifications had no effect on previously reported totals or subtotals.

Use of Estimates

1 unchanged sentence

Actual results could differ from those estimates.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Real Estate Assets

19 unchanged sentences

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

During the nine months ended September 30, 2023, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $ 11.6 million related to five properties due to sales prices or revised cash flow estimates that were less than their respective carrying values.

Additionally, during the nine months ended September 30, 2023, one condominium unit was deemed to be impaired and its carrying value was reduced to its estimated fair value, resulting in impairment charges of $ 156,000 .

The Company’s impairment assessment as of September 30, 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.

During the nine months ended September 30, 2022, the Company recorded impairment charges of $ 11.9 million related to 19 properties, all of which was due to sales prices that were less than their respective carrying values.

Additionally, during the nine months ended September 30, 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 $ 7.9 million.

The assumptions and uncertainties utilized in the evaluation of the impairment of real

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

estate assets are discussed in detail in Note 3 — Fair Value Measurements.

The Company’s impairment assessment as of March 31, 2024 was based on the most current information available to the Company.

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.

2 unchanged sentences

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

As of September 30, 2023, the Company did not identify any real estate assets as held for sale.

Dispositions of Real Estate Assets

1 unchanged sentence

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

Given the Company’s current asset portfolio and strategy, the Company’s dispositions during the nine months ended September 30, 2023 and 2022 did not qualify for discontinued operations presentation and thus, the results of the properties and condominiums that were sold will remain in operating income, and any associated gains or losses from the dispositions are included in gain on disposition of real estate and condominium developments, net.

See Note 4 — Real Estate Assets for a discussion of the disposition of individual properties and condominiums during the nine months ended September 30, 2023.

Given the Company’s current asset portfolio and strategy, the Company’s dispositions during the three months ended March 31, 2024 and 2023 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 three months ended March 31, 2024.

Allocation of Purchase Price of Real Estate Assets

4 unchanged sentences

The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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.

4 unchanged sentences

Investment in Unconsolidated Entities

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

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 92 % 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 46 % of the outstanding equity of the NewPoint JV on a fully diluted basis.

2 unchanged sentences

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

The Company recorded a gain of $ 3.1 million and $ 8.2 million, respectively,

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

which represented its share of NP JV Holdings’ gain, during the three and nine months ended September 30, 2023, respectively, in the condensed consolidated statements of operations.

The Company recorded a gain of $ 2.2 million and $ 3.7 million, respectively, which represented its share of NP JV Holdings’ gain, during the three and nine months ended September 30, 2022.

During the nine months ended September 30, 2023, the Company contributed an additional $ 14.5 million in NP JV Holdings.

The Company also received $ 12.4 million in distributions during the nine months ended September 30, 2023, $ 5.8 million of which can be called back by NewPoint JV through NP JV Holdings as a capital call on a future date.

As of September 30, 2023 and December 31, 2022, the Company’s aggregate investment in NP JV Holdings of $ 110.8 million and $ 100.6 million, respectively, is included in investment in unconsolidated entities on the condensed consolidated balance sheets.

For more information, refer to Note 6 — Investment in Unconsolidated Entities.

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.

During the nine months ended September 30, 2022, the Company recorded its share of CIM UII Onshore’s gain totaling $ 5.2 million.

The Company received distributions of $ 531,000 related to its investment in CIM UII Onshore, all of which was recognized as a return on investment during the nine months ended September 30, 2022.

Restricted Cash

The Company had $ 23.3 million and $ 57.6 million in restricted cash as of September 30, 2023 and December 31, 2022, respectively.

Included in restricted cash was $ 1.7 million and $ 15.4 million held by lenders in lockbox accounts, as of September 30, 2023 and December 31, 2022, respectively.

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

Also included in restricted cash was $ 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 September 30, 2023 and December 31, 2022, respectively.

In addition, the Company had a $ 19.6 million deposit held as cash collateral included in restricted cash as of September 30, 2023 and December 31, 2022 to be applied by Barclays Bank PLC (“Barclays”) as repayment of certain eligible assets transferred under the master repurchase agreement with Barclays.

Subsequent to September 30, 2023, Barclays applied the $ 19.6 million deposit held as cash collateral as repayment towards certain eligible assets financed under the repurchase facility 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 had $ 4.1 million and $ 13.1 million in restricted cash as of March 31, 2024 and December 31, 2023, respectively.

Included in restricted cash was $ 2.1 million and $ 1.9 million held by lenders in lockbox accounts, as of March 31, 2024 and December 31, 2023, 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 of construction reserves, amounts held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement as of March 31, 2024 and December 31, 2023.

In addition, the Company had a $ 9.2 million deposit held as cash collateral included in restricted cash as December 31, 2023, that was applied by Barclays Bank PLC (“Barclays”) as repayment of certain eligible assets transferred under the Master Repurchase Agreement with Barclays (as described in more detail in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities) during the three months ended March 31, 2024.

Real Estate-Related Securities and Other

Real estate-related securities and other 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 September 30, 2023, the Company classified its investments in CMBS as available-for-sale as the Company is not actively trading the securities;

As of March 31, 2024, 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.

During the nine months ended September 30, 2023, the Company invested $ 143.2 million in CMBS.

As of September 30, 2023, the Company had investments in 24 CMBS with an estimated aggregate fair value of $ 597.6 million.

The amortized cost of the Company’s available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method.

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

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.

The Company’s investments in equity securities of public and private companies are carried at their estimated fair values with unrealized gains and losses reported on the condensed consolidated statements of operations.

Dividend income is included in other income, net on the condensed consolidated statements of operations, of which the Company recorded $ 1.5 million and $ 1.4 million, respectively, during the three months ended March 31, 2024 and 2023.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

In addition, the Company had an investment in an equity security with an estimated aggregate fair value of $ 41.5 million as of September 30, 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.

GNL) (“GNL”) and The Necessity Retail REIT, Inc.

RTL) (“RTL”), among others.

The RTL Common Stock was cancelled in accordance with the terms of the aforementioned agreement and plan of merger and was converted into 0.670 shares of GNL Common Stock during the three months ended September 30, 2023.

This investment is carried at its estimated fair value with unrealized gains and losses reported on the condensed consolidated statements of operations.

During the three and nine months ended September 30, 2023, the Company recorded $ 1.4 million and $ 4.1 million, respectively, of dividend income on GNL Common Stock.

During the three and nine months ended September 30, 2022, the Company recorded $ 1.4 million and $ 2.7 million, respectively, of dividend income on GNL Common Stock.

Dividend income is included in other income, net on the condensed consolidated statements of operations.

The Company also recorded $ 2.1 million of unrealized loss and $ 3.3 million of unrealized gain on GNL Common Stock during the three and nine months ended September 30, 2023, respectively, and recorded $ 9.0 million and $ 15.5 million of unrealized loss on GNL Common Stock during the three and nine months ended September 30, 2022, respectively, all of which is included in unrealized (loss) gain on equity security in the condensed consolidated statements of operations.

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

March 31, 2024 (Unaudited) – (Continued)

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 condensed consolidated statements of operations.

Subsequent cumulative adverse changes in expected cash flows on the Company’s available-for-sale securities are recognized as an increase to current expected credit losses.

However, the allowance is limited to the amount by which the available-for-sale security’s amortized cost exceeds its fair value.

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 real estate-related securities in the Company’s condensed consolidated balance sheets.

Interest earned is either received in cash or capitalized to CMBS in the Company’s condensed consolidated balance sheets.

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

During the three and nine months ended September 30, 2023, the Company capitalized $ 292,000 and $ 863,000 , respectively, of interest income to real estate-related securities.

During the three and nine months ended September 30, 2022, the Company capitalized $ 280,000 and $ 826,000 , respectively, of interest income to real estate-related securities.

Loans Held-for-Investment

1 unchanged sentence

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

Loans held-for-investment are carried on the Company’s condensed consolidated balance sheets at amortized cost, net of any current expected credit losses, and is adjusted for amortization of premiums and accretion of discounts to maturity.

Loans held-for-investment are carried on the Company’s condensed 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 condensed consolidated balance sheets.

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

During the nine months ended September 30, 2022, the Company capitalized $ 62,000 of interest income to loans held-for-investment.

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.

As of September 30, 2023, the Company had two first mortgage loan investments on nonaccrual status with an aggregate carrying value of $ 206.0 million, which represented approximately 8 % of the carrying value of the Company’s first mortgage loan portfolio.

As of September 30, 2023, one of the Company’s liquid corporate senior loan investments was on a nonaccrual status with a carrying value of $ 2.9 million, which represented less than 1 % of the carrying value of the Company’s liquid corporate senior loans portfolio.

For more information regarding these loans, refer to Note 8 — Loans Held-For-Investment.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Current Expected Credit Losses

4 unchanged sentences

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

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

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.

2 unchanged sentences

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

For the Company’s 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

The Company only expects to charge-off impairment losses as a reduction to current expected credit losses and as a reduction to the respective loan balance if and when such amounts are deemed non-recoverable.

This is generally at the time a loan is repaid or foreclosed.

However, non-recoverability may also be concluded if, in the Company’s determination, it is nearly certain that all amounts due will not be collected.

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:

19 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

liquidation of debt is jeopardized.

The obligor’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.

11 unchanged sentences

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, to (ii) the net amortized cost basis of the security.

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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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

11 unchanged sentences

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

During the nine months ended September 30, 2023 and 2022, the Company capitalized $ 9.1 million and $ 10.9 million, respectively, of expenses associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

Included in the amounts capitalized during the nine months ended September 30, 2023 and 2022 was $ 1.0 million and $ 1.1 million, respectively, of capitalized interest expense.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

For additional information, refer to Note 4 — Real Estate Assets.

Revenue Recognition

10 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Revenue from lending activities

Interest income from the Company’s loans held-for-investment and available-for-sale securities 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 loans and the accretion and amortization of net loan origination fees and discounts recognized through the life of each investment.

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 is accrued as earned beginning on the settlement date.

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.

6 unchanged sentences

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.

This segment also includes investments in real estate-related securities, equity 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.

2 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements.

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 condensed consolidated financial statements for the nine months ended September 30, 2023.

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

In June 2022, the FASB issued ASU No.

2 unchanged sentences

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, with early adoption permitted.

The Company does not believe the adoption of ASU 2022-03 will have an impact on its condensed consolidated financial statements and disclosures.

The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those annual periods, with early adoption permitted.

The ASU became effective for the Company beginning January 1, 2024.

ASU 2022-03 did not have a material impact on the Company’s condensed consolidated financial statements and disclosures during the three months ended March 31, 2024.

In August 2023, the FASB issued ASU No.

5 unchanged sentences

The Company does not believe the adoption of ASU 2023-05 will have a material impact on its condensed 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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

expect the adoption of ASU 2023-07 to have a material impact on its condensed consolidated financial statements and disclosures.

NOTE 3 — FAIR VALUE MEASUREMENTS

9 unchanged sentences

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.

Real estate-related securities and other — 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.

As of September 30,

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

2023, the Company concluded that $ 438.1 million of its CMBS fell under Level 2 and $ 159.6 million of its CMBS fell under Level 3.

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.

A breakout of the Company’s CMBS Level 2 and Level 3 positions as of March 31, 2024 and December 31, 2023 can be found in the tables under Items Measured at Fair Value on a Recurring Basis below.

The Company’s equity securities are valued using Level 1, Level 2 or Level 3 inputs depending upon the significance of the fair value inputs used in determining the respective fair values.

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

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

1 unchanged sentence

These financial instruments are valued using Level 2 inputs.

As of September 30, 2023, the estimated fair value of the Company’s debt was $ 3.95 billion, compared to a carrying value of $ 4.07 billion.

As of March 31, 2024, the estimated fair value of the Company’s debt was $ 3.80 billion, compared to a carrying value of $ 3.90 billion.

The estimated fair value of the Company’s debt as of December 31, 2023 was $ 3.83 billion, compared to a carrying value of $ 3.94 billion.

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

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

Derivative instruments — In the normal course of business, the Company uses certain types of derivative instruments, such as interest rate swaps and interest rate caps, for the purpose of managing or hedging its interest rate risk.

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

The fair value of these instruments is determined using interest rate market pricing models.

In addition, credit valuation adjustments are 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 September 30, 2023 and December 31, 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.

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Loans held-for-investment — The Company’s loans held-for-investment are recorded at cost upon origination, net of loan origination fees and discounts.

2 unchanged sentences

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 September 30, 2023, $ 576.7 million and $ 65.6 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 March 31, 2024, $ 352.7 million and $ 51.7 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, $ 445.7 million and $ 70.2 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 September 30, 2023, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 4.14 billion, compared to its carrying value of $ 4.11 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.

As of March 31, 2024, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 4.11 billion, which approximated its net book value of $ 4.11 billion.

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 net book value of $ 4.26 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.

4 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Items Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets that are required to be measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 (in thousands):

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 March 31, 2024 and December 31, 2023 (in thousands):

Balance as of

September 30, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

March 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial assets:

CMBS $ 479,895 $ — $ 348,834 $ 131,061

Equity security 41,530 41,530 — —

Interest rate cap

Equity securities

33,579 33,579 — —

Total financial assets $ 513,474 $ 33,579 $ 348,834 $ 131,061

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)

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:

1 unchanged sentence

Equity security 42,999 42,999 — —

Interest rate caps 5,040 — 5,040 —

Total financial assets

$ 519,714 $ 42,999 $ 347,634 $ 129,081

The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2023 (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2024 (in thousands):

Beginning Balance, January 1, 2024

Total gains and losses:

Unrealized loss included in other comprehensive loss, net ( 21,681 )

Current expected credit losses (1)

Unrealized gain included in other comprehensive income (loss), net

Reversal of current expected credit losses

Purchases and payments received:

1 unchanged sentence

Capitalized interest income 297

Ending Balance, September 30, 2023

____________________________________

(1) Does not include $ 7.1 million of unrealized losses recognized prior to January 1, 2023 that were reclassified from other comprehensive loss on the condensed consolidated statements of comprehensive (loss) income to increase in provision for credit losses on the condensed consolidated statements of operations during the nine months ended September 30, 2023.

Ending Balance, March 31, 2024

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 real estate assets and intangible assets is discussed in Note 2 — Summary of Significant Accounting Policies.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

As discussed in Note 4 — Real Estate Assets, during the nine months ended September 30, 2023, real estate assets related to five properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 38.6 million, resulting in impairment charges of $ 11.6 million.

During the nine months ended September 30, 2022, real estate assets related to 19 properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 114.1 million, resulting in impairment charges of $ 11.9 million.

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 March 31, 2024, the Company had an aggregate $ 141.9 million asset-specific credit loss reserve related to three of the Company’s first mortgage loans with an aggregate carrying value of $ 438.0 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 March 31, 2024.

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 8.8 %, and the discount rate, which ranged from 9.5 % to 10.8 %.

For additional information regarding the first mortgage loans, refer to Note 8 — Loans Held-For-Investment.

As discussed in Note 4 — Real Estate Assets, during the three months ended March 31, 2024, no properties were deemed to be impaired.

During the three months ended March 31, 2023, real estate assets related to one property were deemed to be impaired and its carrying value was reduced to an estimated fair value of $ 4.8 million, resulting in impairment charges of $ 4.8 million.

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

7 unchanged sentences

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

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

Discount Rate Terminal Capitalization Rate Discount Rate Terminal Capitalization Rate

7.5 % - 11.9 %

7.0 % – 11.4 %

8.0 % – 9.7 %

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the three months ended March 31, 2023:

Three Months Ended March 31,

Discount Rate Terminal Capitalization Rate

7.5 % – 9.2 %

The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2023 and 2022 (in thousands):

Nine Months Ended September 30,

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

The following table presents the impairment charges by asset class recorded during the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Asset class impaired:

2 unchanged sentences

Intangible lease assets — 18

Intangible lease liabilities — ( 4 )

Condominium developments 156 7,945

Total impairment loss $ — $ 4,814

1 unchanged sentence

Property Acquisitions

During the nine months ended September 30, 2023 and 2022, the Company did no t acquire any properties.

During the three months ended March 31, 2024 and 2023, the Company did no t acquire any properties.

Condominium Development Project

During the nine months ended September 30, 2023 and 2022, the Company capitalized $ 9.1 million and $ 10.9 million, respectively, of expenditures associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

During the three months ended March 31, 2024 and 2023, the Company capitalized $ 4.5 million and $ 2.7 million, respectively, of expenditures associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.

Such capitalized expenditures included $ 458,000 of capitalized interest expense during the three months ended March 31, 2023.

No capitalized interest was included in the capitalized expenditures during the three months ended March 31, 2024.

Condominium Dispositions

During the nine months ended September 30, 2023, the Company disposed of condominium units for an aggregate sales price of $ 43.1 million, resulting in proceeds of $ 39.1 million after closing costs and a gain of $ 3.0 million.

During the nine months ended September 30, 2022, the Company disposed of condominium units for an aggregate sales price of $ 24.2 million, resulting in proceeds of $ 22.0 million after closing costs and a gain of $ 3.1 million.

The Company has no continuing

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

involvement that would preclude sale treatment with these condominium units.

During the three months ended March 31, 2024, the Company disposed of condominium units for an aggregate sales price of $ 13.2 million, resulting in proceeds of $ 12.2 million after closing costs and a gain of $ 782,000 .

During the three months ended March 31, 2023, the Company disposed of one condominium unit for a sales price of $ 1.6 million, resulting in proceeds of $ 1.5 million after closing costs and a gain of $ 60,000 .

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 condensed consolidated statements of operations.

2023 Property Dispositions

Property Dispositions and Real Estate Assets Held for Sale

During the three months ended March 31, 2024, the Company did not dispose of any properties.

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:

1 unchanged sentence

The consideration was paid in cash.

During the nine months ended September 30, 2023, the Company disposed of 186 properties, including 183 retail properties and three industrial properties, for an aggregate gross sales price of $ 913.5 million, resulting in proceeds of $ 903.7 million after closing costs and a gain of $ 43.9 million.

During the three months ended March 31, 2023, the Company disposed of 152 properties, including 150 retail properties and two industrial properties, for an aggregate gross sales price of $ 781.2 million, resulting in proceeds of $ 773.7 million after closing costs and a gain of $ 19.6 million.

The sale of 151 of these properties closed pursuant to the Realty Income Purchase and Sale Agreement for total consideration of $ 779.0 million, resulting in proceeds of $ 771.5 million after closing costs and a gain of $ 19.5 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 condensed 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 known as 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 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 known as 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 nine months ended September 30, 2022, the Company disposed of 130 properties, including 65 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 $ 1.71 billion, resulting in proceeds of $ 1.67 billion after closing costs and a gain of $ 115.0 million.

Included in this amount of properties disposed were two properties previously owned through a consolidated joint venture arrangement.

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 are subject to certain registration rights as described in the RTL Purchase and Sale Agreement.

During the nine months ended September 30, 2022, the Company recognized earnout income of $ 68.7 million related to the disposition of these properties pursuant to the RTL Purchase and Sale Agreement, and recorded a related receivable of $ 20.3 million in prepaid expenses and other assets in the condensed consolidated balance sheets.

The Company has no continuing involvement with these properties that would preclude sale treatment.

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

During the three and nine months ended September 30, 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 condensed consolidated statements of operations.

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.

As of March 31, 2024, the Company identified one property with a fair value of $ 41.1 million as held for sale.

Subsequent to March 31, 2024, the Company disposed of this property on April 30, 2024 for $ 41.5 million, as further discussed in Note 17 — Subsequent Events.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

During the nine months ended September 30, 2023, five properties totaling approximately 240,000 square feet with a carrying value of $ 50.2 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 38.6 million, resulting in impairment charges of $ 11.6 million, which were recorded in the condensed consolidated statements of operations.

During the nine months ended September 30, 2022, 19 properties totaling approximately 832,000 square feet with a carrying value of $ 126.0 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 114.1 million, resulting in impairment charges of $ 11.9 million, which were recorded in the condensed consolidated statements of operations.

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

March 31, 2024 (Unaudited) – (Continued)

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

During the three months ended March 31, 2024, no properties were deemed to be impaired.

During the three months ended March 31, 2023, one property totaling approximately 45,000 square feet with a carrying value of $ 9.6 million was deemed to be impaired and its carrying value was reduced to an estimated fair value of $ 4.8 million, resulting in impairment charges of $ 4.8 million, which were recorded in the condensed consolidated statements of operations.

See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges during the three months ended March 31, 2024 and 2023.

NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES

Intangible lease assets and liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands, except weighted average life remaining):

September 30, 2023 December 31, 2022

Intangible lease assets and liabilities consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands, except weighted average life remaining):

March 31, 2024 December 31, 2023

Intangible lease assets:

8 unchanged sentences

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

The following table summarizes the amortization related to the intangible lease assets and liabilities for the three and nine months ended September 30, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

The following table summarizes the amortization related to the intangible lease assets and liabilities for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

In-place lease and other intangible amortization $ 2,695 $ 5,082

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

As of September 30, 2023, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

March 31, 2024 (Unaudited) – (Continued)

As of March 31, 2024, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

In-Place Leases and

8 unchanged sentences

NOTE 6 — INVESTMENT IN UNCONSOLIDATED ENTITIES

During the year ended December 31, 2021, the Company entered into the Unconsolidated Joint Venture, of which the Company owns 50 % of the outstanding equity.

During the year ended December 31, 2021, the Company entered into the Unconsolidated Joint Venture, of which the Company currently owns as of March 31, 2024, 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 92 % of the membership interest in the NewPoint JV.

1 unchanged sentence

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 September 30, 2023, the carrying value of the Company’s investment in NP JV Holdings was $ 110.8 million, which approximates fair value and is included in investment in unconsolidated entities on the condensed consolidated balance sheets.

The Company received $ 12.4 million in distributions related to its investment in NP JV Holdings during the nine months ended September 30, 2023, $ 7.6 million of which was recognized as a return on investment and $ 4.8 million of which was recognized as a return of investment and reduced the invested capital and the carrying amount.

As of September 30, 2023, the Company had $ 104.0 million of unfunded commitments related to NewPoint JV.

As of March 31, 2024 and December 31, 2023, the carrying value of the Company’s investment in NP JV Holdings was $ 138.3 million and $ 126.8 million, respectively, which approximates fair value and is included in investment in unconsolidated entities on the condensed consolidated balance sheets.

The Company recorded a gain totaling $ 2.5 million, which represented its share of NP JV Holdings’ gain, during the three months ended March 31, 2024, in the condensed consolidated statements of operations.

The Company recorded a loss totaling $ 770,000 , which represented its share of NP JV Holdings’ loss, during the three months ended March 31, 2023, in the condensed consolidated statements of operations.

During the three months ended March 31, 2024, the Company contributed an additional $ 12.0 million in NP JV Holdings.

The Company also received $ 3.0 million in distributions during the three months ended March 31, 2024, $ 2.5 million of which was recognized as a return on investment and $ 491,000 of which was recognized as a return of investment and reduced the invested capital and the carrying amount.

As of March 31, 2024, the Company had $ 76.7 million of unfunded commitments related to NewPoint JV.

These commitments are not reflected in the accompanying condensed 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 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.

During the nine months ended September 30, 2022, the Company recognized an equity method net gain of $ 5.2 million related to its investment in CIM UII Onshore.

The Company recognized distributions of $ 531,000 related to its investment in CIM UII Onshore during the nine months ended September 30, 2022, all of which was recognized as a return on investment.

NOTE 7 — REAL ESTATE-RELATED SECURITIES

As of September 30, 2023, the Company had real estate-related securities with an aggregate estimated fair value of $ 639.1 million, which included 24 CMBS investments and an investment in a publicly-traded equity security.

The CMBS have initial maturity dates ranging from December 2023 through June 2058 and have interest rates ranging from 6.6 % to 12.4 % as of September 30, 2023, with one CMBS earning a zero coupon rate.

The following is a summary of the Company’s real estate-related securities as of September 30, 2023 (in thousands):

Real Estate-Related Securities

Amortized Cost Basis Unrealized Loss CECL Fair Value

CMBS $ 691,136 $ ( 67,774 ) $ ( 25,748 ) $ 597,614

Equity security 53,388 ( 11,858 ) — 41,530

Total real estate-related securities $ 744,524 $ ( 79,632 ) $ ( 25,748 ) $ 639,144

NOTE 7 — REAL ESTATE-RELATED SECURITIES AND OTHER

As of March 31, 2024, the Company had real estate-related securities and equity securities with an aggregate estimated fair value of $ 513.5 million, which included 22 CMBS investments and three equity securities.

The CMBS investments have initial maturity dates ranging from December 2023 through June 2058 and have interest rates ranging from 6.8 % to 12.7 % as of March 31, 2024, with one CMBS earning a zero coupon rate.

As of March 31, 2024, 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 March 31, 2024.

The following is a summary of the Company’s real estate-related securities and equity securities as of March 31, 2024 (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

The following table provides the activity for the real estate-related securities during the nine months ended September 30, 2023 (in thousands):

March 31, 2024 (Unaudited) – (Continued)

Real Estate-Related Securities and Other

Gross Unrealized

Amortized Cost Basis Gains

CECL Fair Value

CMBS $ 591,626 $ 978 $ ( 77,147 ) $ ( 35,562 ) $ 479,895

Equity securities

55,381 — ( 21,802 ) — 33,579

Total real estate-related securities and other

$ 647,007 $ 978 $ ( 98,949 ) $ ( 35,562 ) $ 513,474

The following table provides the activity for the real estate-related securities and other during the three months ended March 31, 2024 (in thousands):

Amortized Cost Basis Unrealized Loss CECL Fair Value

Real estate-related securities as of January 1, 2023

Real estate-related securities and other as of January 1, 2024

$ 647,035 $ ( 91,513 ) $ ( 35,808 ) $ 519,714

Face value of real estate-related securities acquired 146,037 — — 146,037

Discounts on purchase of real estate-related securities, net of acquisition costs

Converted equity securities

1,993 — — 1,993

3 unchanged sentences

( 3,245 ) — — ( 3,245 )

Unrealized loss on real estate-related securities, net

— ( 15,986 ) — ( 15,986 )

Current expected credit losses — — ( 25,748 ) ( 25,748 )

Real estate-related securities as of September 30, 2023

Unrealized loss on real estate-related securities and other, net

— ( 6,458 ) — ( 6,458 )

Reversal of credit losses

Real estate-related securities and other as of March 31, 2024

$ 647,007 $ ( 97,971 ) $ ( 35,562 ) $ 513,474

(1) Includes the repayment of the Company’s position in two different tranches of a CMBS instrument prior to their stated maturity dates.

During the nine months ended September 30, 2023, the Company invested $ 143.2 million in CMBS.

Unrealized gains and losses on CMBS are recorded in other comprehensive loss, with a portion of the amount subsequently reclassified into other income, net in the accompanying condensed 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 condensed consolidated statements of operations.

During the nine months ended September 30, 2023, the Company recorded $ 16.0 million of net unrealized loss on its real estate-related securities, comprised of a $ 19.3 million unrealized loss on CMBS, which is included in other comprehensive loss in the accompanying condensed consolidated statements of comprehensive (loss) income and a $ 3.3 million unrealized gain on the Company’s equity security, which is included in unrealized (loss) gain on equity security in the accompanying condensed consolidated statements of operations.

The scheduled maturities of the Company’s CMBS as of September 30, 2023 are as follows (in thousands):

During the three months ended March 31, 2024, the Company received $ 2.0 million in equity securities through the equitization of an existing liquid corporate senior loan position, comprised of a $ 927,000 preferred equity security and $ 1.1 million in common equity, both of which are included in real estate-related securities and other on the Company’s condensed consolidated balance sheets.

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

Unrealized gains and losses on equity securities are reported on the condensed consolidated statements of operations.

During the three months ended March 31, 2024, the Company recorded $ 6.5 million of net unrealized loss on its real estate-related securities and equity securities, comprised of a $ 4.9 million unrealized gain on CMBS, which is included in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive (loss) income and an $ 11.4 million unrealized loss on the Company’s equity securities, which is included in unrealized (loss) gain on equity securities in the accompanying condensed consolidated statements of operations.

During the three months ended March 31, 2023, the Company recorded $ 26.3 million of unrealized loss on its CMBS, which is included in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive (loss) income, and recorded $ 2.3 million of unrealized gain on the Company’s equity security, which is included in unrealized (loss) gain on equity securities in the accompanying condensed consolidated statements of operations.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

The scheduled maturities of the Company’s CMBS as of March 31, 2024 are as follows (in thousands):

Amortized Cost Estimated Fair Value

10 unchanged sentences

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 nine months ended September 30, 2023 (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

The following table presents the activity in the Company’s current expected credit losses related to its positions in one of two different tranches of a CMBS instrument for the three months ended March 31, 2024 and 2023 (in thousands):

Current expected credit losses as of January 1, 2024

Provision for credit losses —

Reversal of credit losses

Current expected credit losses as of March 31, 2024

Provision for credit losses 23,452

Current expected credit losses as of June 30, 2023 23,452

Current expected credit losses as of January 1, 2023

Provision for credit losses

Current expected credit losses as of September 30, 2023 $ 25,748

During the nine months ended September 30, 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 the Company is invested in.

Though the appraisal reduction was subsequently reversed during the nine months ended September 30, 2023, the initial appraisal reduction resulted in reduced cash flows received from the respective CMBS investment during the nine months ended September 30, 2023.

Current expected credit losses as of March 31, 2023

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.

Though the appraisal reduction was partially 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.

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 one of the two tranches of the security the Company is invested in had incurred a credit loss.

In addition, as of March 31, 2024, 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 on the condensed consolidated statements of comprehensive (loss) income to increase in provision for credit losses on the condensed consolidated statements of operations during the nine months ended September 30, 2023, and recorded an incremental $ 12.1 million to increase in provision for credit losses on the condensed consolidated statements of operations identified as part of the Company’s quantitative credit loss assessment.

The Company will continue to monitor for changes in expected cash flows in order to continue to measure the credit loss.

As of September 30, 2023, there were 15 CMBS positions with unrealized losses reflected in other comprehensive loss in the accompanying condensed consolidated statements of comprehensive (loss) income.

Upon evaluating these securities, the Company concluded that the unrealized losses included in other comprehensive loss as of September 30, 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.

The Company determined the tranche with a higher subordination level had not incurred a credit loss as of March 31, 2024.

As a result of the credit loss incurred, the Company reclassified $ 13.6 million of unrealized loss from other comprehensive income (loss) on the condensed consolidated statements of comprehensive (loss) income to increase in provision for credit losses on the condensed 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 condensed consolidated statements of operations identified as part of the Company’s quantitative credit loss assessment during the year ended December 31, 2023.

During the three months ended March 31, 2024, the Company recorded a $ 246,000 decrease to the provision for credit losses on the

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

condensed consolidated statements of operations.

As of March 31, 2024, the amortized cost basis of the CMBS position identified as having incurred a credit loss was $ 47.9 million.

The Company will continue to monitor for changes in expected cash flows in order to continue to measure the credit loss.

As of March 31, 2024, there were 13 CMBS positions with an aggregate fair value of $ 347.6 million with unrealized losses reflected in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive (loss) income.

Upon evaluating these securities at the individual security level, the Company concluded that the unrealized losses included in other comprehensive income (loss) as of March 31, 2024 were noncredit-related and would be recovered from the securities’ estimated future cash flows.

NOTE 8 — LOANS HELD-FOR-INVESTMENT

The Company’s loans held-for-investment consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

As of September 30, As of December 31,

The Company’s loans held-for-investment consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

As of March 31, As of December 31,

First mortgage loans (1)

7 unchanged sentences

____________________________________

(1) As of September 30, 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 September 30, 2023 and December 31, 2022 (dollar amounts in thousands):

(1) As of March 31, 2024 and 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 March 31, 2024 and December 31, 2023 (dollar amounts in thousands):

CRE Loans (1) (2)

Liquid Corporate Senior Loans Corporate Senior Loans

September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

Number of loans 33 33 198 237 23 21

2 unchanged sentences

Weighted-average interest rate (3)

8.7 % 8.7 % 9.3 % 9.3 % 11.8 % 11.9 %

Weighted-average maximum years to maturity

3 unchanged sentences

____________________________________

(1) As of September 30, 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;

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

(3) Unfunded loan commitments are subject to the satisfaction of borrower milestones and are not reflected in the accompanying condensed consolidated balance sheets.

This balance does not include unsettled liquid corporate senior loan purchases of $ 9.3 million that are included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

(1) As of March 31, 2024, 100 % of the Company’s CRE loans by principal balance earned a floating rate of interest primarily 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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

March 31, 2024 (Unaudited) – (Continued)

(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 condensed consolidated balance sheets.

Activity relating to the Company’s loans held-for-investment portfolio was as follows for the three months ended March 31, 2024 (in thousands):

CRE Loans Liquid Corporate Senior Loans Corporate Senior Loans Total Loan Portfolio

1 unchanged sentence

$ 3,539,111 $ 518,252 $ 207,102 $ 4,264,465

Loan originations and acquisitions 214,828 107,833 108,540 431,201

Loan originations, acquisitions and funding (1)

23,604 6,019 12,250 41,873

Sale of loans — ( 74,080 ) — ( 74,080 )

1 unchanged sentence

( 5,707 ) ( 39,991 ) ( 593 ) ( 46,291 )

Capitalized interest — — 9 9

Conversion to equity securities (2)

— ( 1,993 ) — ( 1,993 )

Write-offs charged (3)

— ( 1,649 ) — ( 1,649 )

Deferred fees and other items (4)

3 unchanged sentences

( 77,564 ) 5,368 ( 249 ) ( 72,445 )

Balance, September 30, 2023

Balance, March 31, 2024

$ 3,480,614 $ 411,778 $ 218,495 $ 4,110,887

____________________________________

(1) Includes the repayment of a $ 105.0 million first mortgage loan prior to the maturity date.

(1) Includes a $ 181,000 protective advance on one of the Company’s risk-rated 5 first mortgage loans.

(2) During the three months ended March 31, 2024, one of the Company’s defaulted liquid corporate senior loans was partially equitized into shares of common equity and a preferred equity security, as further discussed in Note 7 — Real Estate-Related Securities and Other.

(3) Includes a $ 1.6 million write-off on two liquid corporate senior loans as a result of distressed restructurings of both positions, which is included in increase in provision for credit losses on the Company’s condensed consolidated statements of operations.

(4) Other items primarily consist of purchase discounts or premiums and deferred origination expenses.

1 unchanged sentence

Such amounts are included in accrued expenses and accounts payable on the accompanying condensed consolidated balance sheets.

As of March 31, 2024, the Company’s CRE loans had the following characteristics based on carrying value (dollar amounts in thousands):

Collateral Property Type

As of March 31, 2024

$ 1,850,351 50.4 %

Multifamily 1,171,619 31.9 %

Industrial 347,514 9.5 %

Hospitality 103,245 2.8 %

Mixed Use 69,177 1.9 %

Retail 64,767 1.8 %

Self-Storage 60,745 1.7 %

Total first mortgage loans

$ 3,667,418 100 %

current expected credit losses

Total first mortgage loans, net

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Geographic Location

As of March 31, 2024

$ 1,490,793 40.6 %

1,141,571 31.1 %

768,260 20.9 %

266,794 7.4 %

Total first mortgage loans

$ 3,667,418 100 %

current expected credit losses

Total first mortgage loans, net

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 condensed consolidated balance sheets.

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

The following table presents the activity in the Company’s current expected credit losses related to loans held-for-investment by loan type for the nine months ended September 30, 2023 (in thousands):

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 three months ended March 31, 2024 and 2023 (in thousands):

First Mortgage Loans Unfunded First Mortgage Loans (1)

4 unchanged sentences

Provision for (reversal of) credit losses

77,564 ( 6,653 ) ( 3,719 ) ( 1 ) 249 ( 78 ) 67,362

Charge-offs of CECL

— — ( 1,649 ) — — — ( 1,649 )

Current expected credit losses as of March 31, 2024

$ 186,804 $ 3,409 $ 14,370 $ 2 $ 3,869 $ 417 $ 208,871

Provision for credit losses 22,468 2,140 551 3 764 259 26,185

Current expected credit losses as of June 30, 2023

Current expected credit losses as of January 1, 2023

$ 20,352 $ 1,890 $ 21,195 $ 377 $ 797 $ 66 $ 44,677

Provision for (reversal of) credit losses 1,949 138 ( 914 ) ( 121 ) 400 1 1,453

45,651 5,030 ( 2,841 ) ( 259 ) 338 4 47,923

Current expected credit losses as of September 30, 2023

Current expected credit losses as of March 31, 2023

$ 22,301 $ 2,028 $ 20,281 $ 256 $ 1,197 $ 67 $ 46,130

1 unchanged sentence

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

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

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

During the three months ended March 31, 2024, the Company recorded a net increase of $ 65.7 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 $ 208.9 million.

The current expected credit loss reserve reflects certain loans assessed for impairment as well as macroeconomic and current portfolio conditions.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

During the three months ended September 30, 2023, the Company recorded a net increase of $ 47.9 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 $ 120.2 million.

The current expected credit loss reserve reflects certain loans assessed for impairment as well as macroeconomic and current portfolio conditions.

As of September 30, 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 $ 128.9 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.

As of September 30, 2023, the Company’s asset-specific credit loss reserve totaled $ 63.9 million, which related to the Company’s impaired risk-rated 5 first mortgage loans.

The asset-specific credit loss reserve is recorded based on the Company’s estimation of the fair value of each of the loan’s underlying collateral as of September 30, 2023.

March 31, 2024 (Unaudited) – (Continued)

As of March 31, 2024, the Company had three collateral dependent risk-rated 5 first mortgage loan investments on nonaccrual status:

(i) a $ 134.3 million commercial first mortgage loan on an office building in Massachusetts primarily due to a decrease in rent collection, reduced leasing activity, stabilization costs required, and past due interest payments during the three months ended March 31, 2024;

(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, decreased in-place occupancy, and past due interest payments during the three months ended March 31, 2024;

and (iii) a $ 174.6 million commercial first mortgage loan on an office building in California primarily due to being past due on its interest payment during the three months ended March 31, 2024.

During the three months ended March 31, 2024, the Company recognized $ 960,000 , $ 982,000 , and $ 1.6 million, respectively, of interest income on each of the first mortgage loans prior to payment default.

As of March 31, 2024, the three risk-rated 5 first mortgage loans noted above were less than 90 days past due on their interest payments.

Future interest collections related to these loans will be accounted for on a cash basis when received or as a reduction in the amortized cost basis, based on specific facts and circumstances at the time of payment.

As of March 31, 2024, the Company’s asset-specific credit loss reserve totaled $ 147.9 million, which related to the Company’s impaired risk-rated 5 first mortgage loans and liquid corporate senior loans.

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 March 31, 2024.

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

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

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

The following table presents the net book value of the Company’s loans held-for-investment portfolio as of September 30, 2023 by year of origination, loan type, and risk rating (dollar amounts in thousands):

The following table presents the net book value of the Company’s loans held-for-investment portfolio as of March 31, 2024 by year of origination, loan type, and risk rating (dollar amounts in thousands):

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

As of September 30, 2023

Number of Loans 2023 2022 2021 2020 2019 Total

As of March 31, 2024

Number of Loans 2024 2023 2022 2021 2020 Prior

First mortgage loans by internal risk rating:

22 unchanged sentences

Weighted Average Risk Rating (3)

Gross charge-offs (4)

— — — ( 749 ) ( 900 ) — $ ( 1,649 )

____________________________________

(1) Date loan was originated or acquired by the Company.

Origination dates are subsequently updated to reflect material loan modifications.

(2) As of September 30, 2023, one of the Company’s liquid corporate senior loan investments was on nonaccrual status with a carrying value of $ 2.9 million, which represented less than 1 % of the carrying value of the Company’s liquid corporate senior loans portfolio.

(2) As of March 31, 2024, four of the Company’s liquid corporate senior loan investments were on nonaccrual status with a carrying value of $ 7.3 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 nine months ended September 30, 2023, one of the Company’s interest rate cap agreements matured.

As of September 30, 2023, the Company had one non-designated interest rate cap agreement.

(4) Represents gross charge-offs by year of origination during the three months ended March 31, 2024.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

The following table summarizes the terms of the Company’s interest rate cap agreement as of September 30, 2023 and December 31, 2022 (dollar amounts in thousands):

Outstanding Notional Fair Value of Assets as of

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

Location September 30, 2023 Rate

Interest Rate Cap

Prepaid expenses, derivative assets and other assets $ 62,000 4.00 % (1)

____________________________________

(1) The index used for this derivative instrument is 1-Month Term SOFR.

March 31, 2024 (Unaudited) – (Continued)

Loan Modifications

The Company may amend or modify a loan depending on the loan’s specific facts and circumstances.

Such modifications generally provide borrowers with additional time to refinance or sell the collateral property, interest payment adjustments, deferral of scheduled principal repayments, and/or adjustments or waivers of performance tests that are prerequisite to the extension of a loan maturity.

During the three months ended March 31, 2024, the Company made modifications to one first mortgage loan, which was collateralized by an office property.

The loan had a carrying value of $ 273.0 million, representing approximately 7.4 % of the Company’s first mortgage loans as of March 31, 2024.

The loan modification provided for the borrower to exercise the remaining extension options and for an accrual of payment-in-kind interest for any portion of interest exceeding a fixed 6.25 %.

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 of March 31, 2024, the Company did not have any non-designated interest rate cap agreements.

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

1 unchanged sentence

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

The Company has an interest rate cap that is used to manage exposure to interest rate movements, but does not meet the requirements to be designated as a hedging instrument.

The Company had interest rate caps 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 income, net on the accompanying condensed 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, 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 the maturity dates.

For the three and nine months ended September 30, 2023, no amounts were reclassified from other comprehensive loss as a change to interest expense.

For the three and nine months ended September 30, 2022, the amount of gain reclassified from other comprehensive loss as a decrease to interest expense was $ 2.6 million for both periods.

The total unrealized loss on interest rate swaps of $ 20,000 as of September 30, 2022 is included in accumulated other comprehensive loss in the accompanying condensed consolidated statements of stockholders’ equity.

No such unrealized amounts on interest rate swaps were remaining in other comprehensive loss as of September 30, 2023.

Subsequent to September 30, 2023, the Company’s remaining interest rate cap matured.

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

For the three months ended March 31, 2024 and 2023, no amounts were reclassified from other comprehensive income (loss) as a change to interest expense.

No unrealized amounts on interest rate swaps were remaining in other comprehensive income (loss) as of March 31, 2024 and 2023.

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

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

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.

2 unchanged sentences

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 instrument as of September 30, 2023.

NOTE 10 — REPURCHASE FACILITIES, NOTES PAYABLE AND CREDIT FACILITIES

As of September 30, 2023, the Company had $ 4.1 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 3.0 years and a weighted average interest rate of 6.4 %.

As of March 31, 2024, the Company had $ 3.9 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 2.7 years and a weighted average interest rate of 6.3 %.

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

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

The following table summarizes the debt balances as of September 30, 2023 and December 31, 2022, and the debt activity for the nine months ended September 30, 2023 (in thousands):

During the Nine Months Ended September 30, 2023

March 31, 2024 (Unaudited) – (Continued)

The following table summarizes the debt balances as of March 31, 2024 and December 31, 2023, and the debt activity for the three months ended March 31, 2024 (in thousands):

During the Three Months Ended March 31, 2024

Balance as of December 31, 2023 Debt Issuances & Assumptions (1)

1 unchanged sentence

Amortization Balance as of

September 30, 2023

Notes payable – fixed rate debt $ 36,538 $ — $ ( 36,538 )

March 31, 2024

Notes payable – variable rate debt $ 622,841 $ 1,782 $ — $ — $ 624,623

First lien mortgage loan 121,940 — ( 121,940 ) — —

ABS mortgage notes 758,520 — — — 758,520

2 unchanged sentences

Total debt 3,939,125 47,225 ( 82,763 ) — 3,903,587

Deferred costs – credit facility (3)

( 740 ) — 679 (4)

Deferred costs – fixed rate debt and first lien mortgage loan ( 1,109 ) — 702 (4)

Deferred costs – variable rate debt ( 2,816 ) ( 10 ) —

4 unchanged sentences

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

(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 $ 5.6 million during the nine months ended September 30, 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 approximately $ 3.8 million of unamortized deferred loan costs.

For more information regarding the Company’s debt activity during the year ended December 31, 2023, see Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Notes Payable

During the nine months ended September 30, 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 condensed consolidated statement of operations during the nine months ended September 30, 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 September 30, 2023, the Company had $ 494.4 million of variable rate debt outstanding, which included $ 420.8 million of borrowings financed through a note on note financing arrangement with Massachusetts Mutual Life Insurance Company (the “Mass Mutual Financing”) and $ 73.6 million of borrowings financed through a note on note financing arrangement with Citibank, N.A.

(the “Citibank Financing”).

As of September 30, 2023, the Citibank Financing had three one-year extension options remaining, subject to certain conditions set forth in its financing agreement.

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 outstanding balance during the year ended December 31, 2022.

During the nine months ended September 30, 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.

The Company’s outstanding variable rate debt had a weighted average interest rate of 7.4 % as of September 30, 2023, and matures on various dates from August 2024 to January 2028.

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 nine months ended September 30, 2023, the Company paid down the $ 121.9 million outstanding balance on the Mortgage Loan, $ 105.8 million of

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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.

As of March 31, 2024, the Company had $ 624.6 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 March 31, 2024 (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.

6.6 % $ 98,149 $ 73,611

Barclays 10/20/2023 8/9/2024 3 / 1 yr.

6.6 % 173,657 130,243

Mass Mutual 3/16/2022 (2) N/A

7.5 % 553,989 420,769

$ 825,795 $ 624,623

____________________________________

(1) Represents the number of extension options remaining and the term of each option.

Such extension options are subject to certain conditions as set forth within each respective note on note financing agreement.

(2) Borrowings under the Mass Mutual Financing mature on various dates from July 2027 through January 2028.

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:

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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

6 unchanged sentences

$ 774,000,000

____________________________________

(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 $ 963.9 million.

As of September 30, 2023, amounts outstanding on the Class A Notes totaled $ 758.5 million with a weighted average interest rate of 2.8 %.

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

As of March 31, 2024, 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 nine months ended September 30, 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.

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.

4 unchanged sentences

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 September 30, 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 nine months ended September 30, 2023, the Company paid down the $ 240.0 million outstanding balance under the CMFT Credit Facility and terminated the CMFT Credit Facility.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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 to an aggregate principal amount up to $ 550.0 million (the “Credit Securities Revolver”).

As of March 31, 2024, the amounts borrowed and outstanding under the Loan Facility totaled $ 76.0 million at a weighted average interest rate of 8.2 %.

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 increased from time to time pursuant to the Third Amended Credit and Security Agreement.

As of September 30, 2023, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 415.5 million at a weighted average interest rate of 7.4 %.

As of March 31, 2024, 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).

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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”).

2 unchanged sentences

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 September 30, 2023.

The Company believes it was in compliance with the financial covenants under the Company’s various fixed and variable rate debt agreements, as of March 31, 2024.

Repurchase Facilities

As of September 30, 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.

As of March 31, 2024, 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.

1 unchanged sentence

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 September 30, 2023 (dollar amounts in thousands):

The following table is a summary of the Repurchase Facilities as of March 31, 2024 (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 $ 400,000 7.1 % (3)

Citibank 6/4/2020 8/17/2024 2 / 1 yr.

$ 70,485 7.5 % (3)

Barclays 9/21/2020 9/22/2025 1,250,000 7.2 % (3)

$ 196,909 $ 58,264

Wells Fargo 5/20/2021 8/30/2025 750,000 7.0 % (3)

12/19/2023 12/19/2025 3 / 1 yr.

579,515 7.1 % (3)

Deutsche Bank 10/8/2021 10/8/2024 300,000 7.7 % (3)

303,130 230,794

Barclays 9/21/2020 9/22/2025 2 / 1 yr.

558,947 7.2 % (3)

865,796 479,523

12/4/2023 12/4/2026 2 / 1 yr.

691,053 7.3 % (3)

313,753 224,822

Wells Fargo 5/20/2021 8/30/2025 2 / 1 yr.

750,000 7.0 % (3)

897,097 679,286

Deutsche Bank 10/8/2021 10/8/2024 3 / 1 yr.

300,000 7.7 % (3)

233,232 168,201

Morgan 6/1/2022 (4)

2 unchanged sentences

__________________________________

(1) As of September 30, 2023, the repurchase facilities with Citibank and Wells Fargo each have two one-year extension options remaining, the repurchase facility with Barclays has one one-year extension option remaining and the repurchase facility with Deutsche Bank has three one-year extension options remaining.

All repurchase facilities are subject to certain conditions set forth in their respective Repurchase Agreements.

(1) Represents the number of extension options remaining and the term of each option.

Such extension options are subject to certain conditions as set forth within each respective Repurchase Agreement.

(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 reflects fair value.

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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

(4) Facilities under the repurchase facility with J.P.

4 unchanged sentences

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 September 30, 2023, ranges from 1.05 % to 1.45 %.

The Repurchase Agreements provide for simultaneous agreements by Citibank, Barclays, Wells Fargo, Deutsche Bank and J.P.

Morgan, which as of March 31, 2024, ranges from 1.05 % to 1.45 %.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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 “Guaranties”), under which the Company agreed to guarantee up to 25 % of the CMFT Lending Subs’ obligations under certain Repurchase Agreements.

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 Company’s recourse indebtedness, as defined in the Guaranties;

(ii) minimum consolidated net worth greater than or equal to $ 1.0 billion plus (a) 75 % of the equity issued by the Company following the respective closing dates of the Repurchase Agreements (the “Repurchase Closing Dates”) minus (b) the aggregate amount of any redemptions or similar transaction by the Company from the Repurchase Closing Dates;

(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 September 30, 2023.

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2023 (in thousands):

The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of March 31, 2024.

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to March 31, 2024 (in thousands):

Principal Repayments

6 unchanged sentences

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 September 30, 2023, the Company had $ 280.6 million of unfunded loan commitments related to its existing CRE loans held-for-investment, corporate senior loans, and liquid corporate senior loans, and $ 104.0 million of unfunded commitments related to NewPoint JV.

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

As of September 30, 2023, the Company had $ 9.3 million of unsettled liquid corporate senior loan acquisitions, $ 5.9 million of which settled subsequent to September 30, 2023.

Additionally, the Company had $ 89.1 million of unsettled liquid corporate senior loan sales as of September 30, 2023, $ 75.8 million of which settled subsequent to September 30, 2023.

March 31, 2024 (Unaudited) – (Continued)

Unfunded Commitments

As of March 31, 2024, the Company had $ 218.9 million of unfunded loan commitments related to its existing CRE loans held-for-investment, corporate senior loans, and liquid corporate senior loans, and $ 76.7 million of unfunded commitments related to NewPoint JV.

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

Current expected credit losses for unfunded or unsettled loan commitments are included in accrued expenses and accounts payable on the accompanying condensed consolidated balance sheets.

As of March 31, 2024, the Company had $ 6.7 million of unsettled liquid corporate senior loan sales as of March 31, 2024, all of which settled subsequent to March 31, 2024.

Unsettled acquisitions are included in cash and cash equivalents in the accompanying condensed consolidated balance sheets and unsettled sales are included in loans held-for-investment and related receivables, net in the accompanying condensed consolidated balance sheets.

9 unchanged sentences

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 and investment advisory fees

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).

9 unchanged sentences

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.

Incentive compensation

On a quarterly basis, the Investment Advisor designates

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Agreement) of the Company for the previous 12-month period, over (B) the product of (1) the Company’s Consolidated Equity (as defined in the Management Agreement) in the previous 12-month period, and (2) 7 % per annum, over (b) the sum of any incentive compensation paid to CMFT Management with respect to the first three calendar quarters of such previous 12-month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable).

During the three and nine months ended September 30, 2023 and 2022, no incentive compensation fees were incurred.

March 31, 2024 (Unaudited) – (Continued)

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 three months ended March 31, 2024 and 2023, no incentive compensation fees were incurred.

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

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

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 CLR’s Core Earnings (as defined in the “CLR Management Agreement”) 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 CLR’s 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 (the “Offset 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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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 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.

As of March 31, 2024, CLR had incurred $ 473,000 in management fees and $ 602,000 in performance fees.

Pursuant to the Offset Agreement, fees payable by the Company to CMFT Management or the Investment Advisor will be offset by CMFT’s proportional share, based on its ownership of CLR, of the fees payable by CLR or its affiliates under the CLR Management Agreement or CLR Investment Advisory Agreement to CMFT Management or the Investment Advisor.

Expense reimbursements to related parties

2 unchanged sentences

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

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

2023 2022 2023 2022

Three Months Ended March 31,

Management fees $ 12,691 $ 12,579

1 unchanged sentence

$ 2,993 $ 3,568

____________________________________

(1) Excludes $ 984,000 of expense reimbursements recorded during the nine months ended September 30, 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 condensed consolidated statements of operations.

Due to Affiliates

Of the amounts shown above, $ 14.8 million and $ 14.6 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 nine months ended September 30, 2023 and 2022, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

Of the amounts shown above, $ 13.6 million and $ 13.8 million had been incurred, but not yet paid, for services provided by CMFT Management or its affiliates in connection with the management and operating activities during the three months ended March 31, 2024 and 2023, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

Development Management Agreements

2 unchanged sentences

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 nine months ended September 30, 2023 and 2022, the Company recorded $ 311,000 and $ 337,000 , respectively, in development management fees.

During the three months ended March 31, 2024 and 2023, the Company recorded $ 152,000 and $ 76,000 , 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.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Affiliated Investments

March 31, 2024 (Unaudited) – (Continued)

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 fund 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 September 30, 2023, $ 203.7 million of the first mortgage loan was outstanding.

As of March 31, 2024, $ 199.9 million of the first mortgage loan was outstanding.

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 September 30, 2023, $ 123.0 million of the first mortgage loan was outstanding.

As of March 31, 2024, $ 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 that is advised by an affiliate of CMFT Management (“CMMT”), for the purposes of investing in the NewPoint JV.

The Company owns 50 % of the equity interests of the MT-FT JV and has committed to fund capital to the MT-FT JV up to $ 212.5 million, of which $ 108.5 million has been funded, net of $ 45.8 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.

As of March 31, 2024, 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 $ 135.8 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 September 30, 2023, $ 154.0 million of the first mortgage loan was outstanding.

As of March 31, 2024, $ 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 September 30, 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 nine months ended September 30, 2023, the Company and CIM RACR co-invested $ 77.0 million and $ 15.0 million, respectively, in eight corporate senior loans to a third-party.

As of September 30, 2023, $ 133.6 million of the corporate senior loans was outstanding.

As of March 31, 2024, $ 145.5 million of the first mortgage loan was outstanding.

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 March 31, 2024, $ 161.7 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.

Subsequent to September 30, 2023, the Company and CIM RACR co-invested $ 26.1 million and $ 1.5 million, respectively, in one corporate senior loan to a third-party.

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

NOTE 13 — ECONOMIC DEPENDENCY

9 unchanged sentences

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 is 250,000 shares, which is a reduction from 400,000 shares authorized for issuance under the 2018 Plan,

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

The Board or the compensation committee of the Board also has the authority to determine the terms of any award granted

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

and awards of approximately 183,000 shares of common stock are available for future grant at September 30, 2023.

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.

March 31, 2024 (Unaudited) – (Continued)

pursuant to the 2022 Plan, including vesting schedules, restrictions and acceleration of any restrictions.

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

As of September 30, 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 67,000 restricted shares in the aggregate to the independent members of the Board under the 2022 Plan.

As of September 30, 2023, the 116,000 restricted shares granted under the 2018 plan had vested based on one year of continuous service, and on October 1, 2023, the 67,000 restricted shares granted under the 2022 Plan vested based on one year of continuous service.

On January 9, 2024, 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 or the compensation committee.

As of March 31, 2024, the Company has granted awards of approximately 2.4 million restricted stock units in the aggregate to certain eligible named executive officers of the Company and to CMFT Management pursuant to the Manager Plan.

Each restricted stock unit represents a contingent right to receive one share of the Company’s common stock, payable 50 % in the Company’s common stock and 50 % in the cash value thereof.

The restricted stock units vest in three equal annual installments beginning on December 15, 2024.

As of March 31, 2024, there were approximately 9.6 million shares remaining that may be subject to awards granted under the Manager Plan.

As of March 31, 2024, 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 March 31, 2024, the 116,000 restricted shares granted under the 2018 plan had vested based on one year of continuous service.

In addition, as of March 31, 2024, 68,000 of the restricted shares granted under the 2022 Plan vested based on one year of continuous service and 36,000 of the restricted shares vested on an accelerated basis in connection with the resignation of Alicia K.

Harrison, Calvin E.

Hollis, Avraham Shemesh, Roger D.

Snell and Emily Vande Krol (each a “Resigning Director” and collectively, the “Resigning Directors”) from the Company’s Board effective as of the close of the meeting of the Board on February 29, 2024.

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.

The remaining 36,000 restricted shares issued had not vested or had been forfeited as of March 31, 2024.

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 $ 120,000 and $ 360,000 for the three and nine months ended September 30, 2023, respectively, and $ 120,000 and $ 277,000 for the three and nine months ended September 30, 2022, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

All compensation expense related to these restricted shares was recognized ratably over the period of service as of September 30, 2023.

On October 1, 2023, as part of the annual retainers paid to the independent members of the Board and pursuant to the 2022 Plan, the independent members of the Board were each granted 12,177 restricted shares, which will vest on October 1, 2024.

The Company recorded compensation expense of $ 240,000 and $ 120,000 for the three months ended March 31, 2024 and 2023, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of March 31, 2024, there was $ 120,000 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.

NOTE 15 — LEASES

5 unchanged sentences

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

As of September 30, 2023, the Company’s leases had a weighted-average remaining term of 10.9 years.

As of March 31, 2024, the Company’s leases had a weighted-average remaining term of 10.5 years.

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

1 unchanged sentence

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

As of September 30, 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):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

As of March 31, 2024, the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands):

Future Minimum Rental Income

4 unchanged sentences

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

For the three and nine months ended September 30, 2023 and 2022, the amount of the contingent rent earned by the Company was not significant .

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Rental and other property income during the three and nine months ended September 30, 2023 and 2022 consisted of the following (in thousands):

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

2023 2022 2023 2022

For the three months ended March 31, 2024 and 2023, the amount of the contingent rent earned by the Company was not significant .

Rental and other property income during the three months ended March 31, 2024 and 2023 consisted of the following (in thousands):

Three Months Ended March 31,

Fixed rental and other property income (1)

1 unchanged sentence

Variable rental and other property income (2)

1,563 2,684 5,634 17,281

Total rental and other property income $ 24,574 $ 38,781

2 unchanged sentences

(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 9.9 years, with a lease liability (in deferred rental income, derivative liabilities 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 condensed consolidated balance sheets.

The Company has one property subject to a non-cancelable operating ground lease with a remaining term of 9.4 years, with a lease liability (in deferred rental income and other liabilities ) and a related right-of-use (“ROU”) asset (in prepaid expenses and other assets ) of $ 1.9 million in the condensed 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 $ 63,000 and $ 188,000 of ground lease expense during the three and nine months ended September 30, 2023, respectively, of which $ 61,000 and $ 182,000 , respectively, was paid in cash during the period it was recognized.

As of September 30, 2023, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 63,000 for the remainder of 2023, $ 250,000 annually for 2024 through 2028, and $ 1.2 million thereafter through the maturity date of the lease in August 2033.

The Company recognized $ 63,000 of ground lease expense during the three months ended March 31, 2024, of which $ 61,000 was paid in cash during the period it was recognized.

As of March 31, 2024, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 187,000 for the remainder of 2024, $ 250,000 annually for 2025 through 2029, and $ 918,000 thereafter through the maturity date of the lease in August 2033.

NOTE 16 — SEGMENT REPORTING

2 unchanged sentences

Corporate/other represents all corporate level and unallocated items and includes the Company’s other asset management activities and expenses.

There were no changes in the structure of the Company’s internal organization that prompted the change in reportable segments.

Prior period amounts have been revised to conform to the current year presentation shown below.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

The following tables present segment reporting for the three and nine months ended September 30, 2023 and 2022 (in thousands):

March 31, 2024 (Unaudited) – (Continued)

The following tables present segment reporting for the three months ended March 31, 2024 and 2023 (in thousands):

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

Rental and other property income $ 24,457 $ — $ 117 $ 24,574

9 unchanged sentences

Depreciation and amortization 8,542 — — 8,542

Real estate impairment 6,754 — 156 6,910

Increase in provision for credit losses

4 unchanged sentences

Gain on investment in unconsolidated entities — 2,525 — 2,525

Unrealized loss on equity security

Unrealized loss on equity securities

— ( 11,413 ) — ( 11,413 )

Other (expense) income, net ( 385 ) 2,412 3,145 5,172

Loss on extinguishment of debt — — ( 1,085 ) ( 1,085 )

Segment net income (loss) $ 3,110 $ ( 4,521 ) $ ( 9,631 ) $ ( 11,042 )

Total assets as of September 30, 2023

Other income, net

68 2,206 1,275 3,549

Total other income (expense)

68 ( 6,682 ) 2,057 ( 4,557 )

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Nine Months Ended September 30, 2023

Rental and other property income $ 89,311 $ — $ 225 $ 89,536

Interest income — 336,887 — 336,887

Total revenues 89,311 336,887 225 426,423

General and administrative 540 2,594 9,352 12,486

Interest expense, net 16,674 170,337 5,188 192,199

Property operating 4,400 — 7,348 11,748

Real estate tax 2,560 — 1,069 3,629

Expense reimbursements to related parties — — 10,598 10,598

Management fees 8,471 29,783 — 38,254

Transaction-related 107 — 51 158

Depreciation and amortization 33,622 — — 33,622

Real estate impairment 11,568 — 156 11,724

Increase in provision for credit losses — 101,309 — 101,309

Total expenses 77,942 304,023 33,762 415,727

Other income (expense):

Gain on disposition of real estate and condominium developments, net 49,177 — 2,977 52,154

Gain on investment in unconsolidated entities — 8,172 — 8,172

Unrealized gain on equity security — 3,281 — 3,281

Other (expense) income, net ( 4,577 ) 5,420 5,503 6,346

Loss on extinguishment of debt ( 1,192 ) — ( 4,432 ) ( 5,624 )

Segment net income (loss) $ 5,804 $ ( 34,473 ) $ ( 9,873 ) $ ( 38,542 )

Net income allocated to noncontrolling interest 8 — — 8

Segment net income (loss) attributable to the Company $ 54,769 $ 49,737 $ ( 29,489 ) $ 75,017

Total assets as of September 30, 2023

Total assets as of March 31, 2024

$ 1,141,880 $ 4,962,425 $ 220,188 $ 6,324,493

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended September 30, 2022

Three Months Ended March 31, 2023

Rental and other property income

20 unchanged sentences

Other income (expense):

Gain (loss) on disposition of real estate and condominium developments, net 4,604 — ( 150 ) 4,454

Gain on investment in unconsolidated entities — 2,195 — 2,195

Unrealized loss on equity security — ( 9,030 ) — ( 9,030 )

Other income, net 2,423 1,150 57 3,630

(Loss) gain on extinguishment of debt

( 5,615 ) — 2,271 ( 3,344 )

Segment net income (loss)

$ 11,902 $ 13,428 $ ( 9,791 ) $ 15,539

Net income allocated to noncontrolling interest

Segment net income (loss) attributable to the Company $ 11,773 $ 13,428 $ ( 9,791 ) $ 15,410

Total assets as of September 30, 2022

$ 2,189,724 $ 4,725,858 $ 209,196 $ 7,124,778

__________________________________

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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

Company Total

Nine Months Ended September 30, 2022

Rental and other property income

$ 170,509 $ — $ 294 $ 170,803

Interest income

Gain on disposition of real estate and condominium developments, net

19,563 — 60 19,623

Total revenues

Loss on investment in unconsolidated entities

— ( 770 ) — ( 770 )

General and administrative

Unrealized gain on equity security

— 2,258 — 2,258

Interest expense, net 32,281 63,694 9,685 105,660

Property operating

Other (expense) income, net

( 1,842 ) 1,843 323 324

Real estate tax

Loss on extinguishment of debt

( 1,172 ) — ( 2,473 ) ( 3,645 )

Expense reimbursements to related parties — — 10,899 10,899

Management fees 17,176 22,437 — 39,613

Transaction-related

Depreciation and amortization

Total other income (expense)

16,549 3,331 ( 2,090 ) 17,790

Real estate impairment 11,869 — 7,945 19,814

Increase in provision for credit losses — 15,315 — 15,315

Total expenses 139,017 101,692 43,686 284,395

Other income (expense):

Gain on disposition of real estate and condominium developments, net 115,050 — 3,085 118,135

Gain on investment in unconsolidated entities — 3,686 5,172 8,858

Unrealized (loss) gain on equity security — ( 15,462 ) 22 ( 15,440 )

Other income, net 4,754 2,362 91 7,207

Loss on extinguishment of debt ( 18,609 ) — ( 975 ) ( 19,584 )

Segment net income (loss)

2 unchanged sentences

Segment net income (loss) attributable to the Company $ 21,735 $ 46,244 $ ( 13,795 ) $ 54,184

Total assets as of September 30, 2022

Total assets as of March 31, 2023

$ 1,315,426 $ 4,725,168 $ 604,932 $ 6,645,526

1 unchanged sentence

(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 17 — SUBSEQUENT EVENTS

Redemption of Shares of Common Stock

Subsequent to September 30, 2023, the Company redeemed approximately 1.6 million shares for $ 10.7 million (at a redemption price of $ 6.57 per share).

The remaining redemption requests received during the three months ended September 30, 2023 totaling approximately 27.3 million shares went unfulfilled.

Subsequent to March 31, 2024, the Company redeemed approximately 1.8 million shares for $ 11.2 million (at a redemption price of $ 6.09 per share).

The remaining redemption requests received during the three months ended March 31, 2024 totaling approximately 30.2 million shares went unfulfilled.

Investment and Disposition Activity

Subsequent to September 30, 2023, the Company’s investment and disposition activity included the following:

• Disposed of two properties and two condominium units for an aggregate gross sales price of $ 17.3 million, resulting in net proceeds of $ 15.5 million after closing costs and a gain of approximately $ 1.1 million.

• Purchased $ 8.8 million in one CMBS.

Subsequent to March 31, 2024, the Company’s investment and disposition activity included the following:

• Disposed of one property and four condominium units for an aggregate gross sales price of $ 55.4 million, resulting in net proceeds of $ 53.4 million after closing costs and a net gain of approximately $ 2.1 million.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

• Settled $ 6.9 million of liquid corporate senior loan purchases, $ 5.9 million of which were traded as of September 30, 2023, and settled $ 89.9 million of liquid corporate senior loans sales, resulting in a $ 150,000 net loss on sale.

• Invested $ 44.4 million in two corporate senior loans to a third-party.

• Acquired one first mortgage loan with a principal balance of $ 169.4 million.

• Contributed an additional $ 25.6 million in NP JV Holdings.

March 31, 2024 (Unaudited) – (Continued)

• Received $ 7.9 million in net proceeds upon the full redemption of the Company’s investment in two tranches of a CMBS security, which is reflected net of the $ 9.2 million repayment on the underlying J.P.

Morgan Repurchase Facility.

• Settled $ 13.6 million of liquid corporate senior loans sales, $ 6.7 million of which were traded as of March 31, 2024.

• Funded an aggregate amount of $ 13.0 million to six of the Company’s first mortgage loans, and received $ 17.9 million of principal repayments on two of the Company’s first mortgage loans.

Financing Activity

• Barclays applied the $ 19.6 million deposit held as cash collateral as repayment towards certain eligible assets financed under the repurchase facility with Barclays.

• Repaid $ 51.8 million of borrowings under the repurchase facilities with Deutsche Bank, Citibank, Wells Fargo, and J.P.

• Financed a first mortgage loan under a note on note financing arrangement with Barclays for $ 127.1 million.

• Repaid $ 46.4 million of borrowings under the repurchase facilities with Barclays and J.P.

Morgan, inclusive of the $ 9.2 million repayment noted under the Investment and Disposition Activity section directly above.

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

What changed 10-Q

Item 1. Financial Statements