What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-14 compared with 2024-05-15 · 480 added, 299 removed, 1089 unchanged (42% of the section changed)

3 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Real estate assets:

7 unchanged sentences

Investment in unconsolidated entities 152,327 126,777

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

Real estate-related securities and other, at fair value, net of credit loss allowances of $ 40,091 and $ 35,808 as of June 30, 2024 and December 31, 2023, respectively

404,379 519,714

8 unchanged sentences

Accrued interest receivable 23,842 27,682

Assets held for sale 41,074 —

Total assets $ 5,909,930 $ 6,446,476

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES, REDEEMABLE COMMON STOCK AND EQUITY

Repurchase facilities, notes payable and credit facilities, net $ 3,777,227 $ 3,923,723

7 unchanged sentences

Redeemable common stock 167,682 168,703

STOCKHOLDERS’ EQUITY

Preferred stock, $ 0.01 par value per share;

1 unchanged sentence

Common stock, $ 0.01 par value per share;

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

490,000,000 shares authorized, 437,117,869 and 437,254,715 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Capital in excess of par value 3,531,522 3,529,973

2 unchanged sentences

Total stockholders’ equity 1,878,221 2,266,077

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

Non-controlling interests 50 —

Total equity 1,878,271 2,266,077

Total liabilities, redeemable common stock and equity $ 5,909,930 $ 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 March 31,

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

2024 2023 2024 2023

Rental and other property income $ 23,562 $ 25,682 $ 48,136 $ 64,463

11 unchanged sentences

Increase in provision for credit losses

216,898 49,637 284,015 51,090

Total expenses 372,116 144,266 540,530 254,728

Other (expense) income:

Other income (expense):

Gain on disposition of real estate and condominium developments, net 2,468 26,563 3,250 46,186

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

Gain on investment in unconsolidated entities 2,742 5,806 5,267 5,036

Unrealized (loss) gain on equity securities ( 4,229 ) 3,096 ( 15,642 ) 5,354

1 unchanged sentence

Loss on extinguishment of debt — ( 894 ) — ( 4,539 )

Total other (expense) income

Total other income (expense)

4,444 35,421 ( 113 ) 53,211

10 unchanged sentences

(in thousands) (Unaudited)

Three Months Ended March 31,

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

2024 2023 2024 2023

Net (loss) income $ ( 245,801 ) $ 31,875 $ ( 284,343 ) $ 86,067

Other comprehensive income (loss)

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

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

Other comprehensive (loss) income

Unrealized loss on CMBS ( 11,471 ) ( 5,606 ) ( 6,516 ) ( 31,916 )

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

Total other comprehensive (loss) income ( 11,471 ) 7,988 ( 6,516 ) ( 18,322 )

Comprehensive (loss) income ( 257,272 ) 39,863 ( 290,859 ) 67,745

3 unchanged sentences

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except share amounts) (Unaudited)

3 unchanged sentences

Stockholders’

Equity Non-Controlling Interests Total Equity

Shares Par Value

11 unchanged sentences

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

Issuance of common stock 1,765,256 20 10,731 — — 10,751 — 10,751

Equity-based compensation — — 701 — — 701 — 701

Distributions declared on common stock — $ 0.11 per common share

— — — ( 49,271 ) — ( 49,271 ) — ( 49,271 )

Redemptions of common stock ( 1,889,369 ) ( 19 ) ( 11,503 ) — — ( 11,522 ) — ( 11,522 )

Changes in redeemable common stock — — 772 — — 772 — 772

Contributions from non-controlling interests

— — — — — — 50 50

Comprehensive loss

— — — ( 245,801 ) ( 11,471 ) ( 257,272 ) — ( 257,272 )

Balance as of June 30, 2024

437,117,869 $ 4,375 $ 3,531,522 $ ( 1,570,017 ) $ ( 87,659 ) $ 1,878,221 $ 50 $ 1,878,271

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

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

Common Stock Capital in Excess

1 unchanged sentence

Distributions in Excess of Earnings Accumulated

Other Comprehensive Loss

Other Comprehensive (Loss) Income

Stockholders’

12 unchanged sentences

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

Issuance of common stock 1,637,602 $ 16 $ 10,743 $ — $ — $ 10,759 $ — $ 10,759

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

Distributions declared on common stock — $ 0.11 per common share

— — — ( 45,927 ) — ( 45,927 ) — ( 45,927 )

Redemptions of common stock ( 1,685,438 ) ( 16 ) ( 11,057 ) — — ( 11,073 ) — ( 11,073 )

Changes in redeemable common stock — — 315 — — 315 — 315

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

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

2 unchanged sentences

(in thousands) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net (loss) income $ ( 284,343 ) $ 86,067

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

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization, net 16,831 24,376

8 unchanged sentences

Loss on sale of credit investments, net 1,578 690

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

Gain on investment in unconsolidated entities ( 5,267 ) ( 5,036 )

Unrealized loss (gain) on equity securities 15,642 ( 5,354 )

29 unchanged sentences

(in thousands) (Unaudited) — Continued

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

3 unchanged sentences

Repayments of borrowings, and prepayment penalties ( 196,550 ) ( 679,322 )

Contributions from non-controlling interests 50 —

Deferred financing costs paid ( 815 ) ( 3,983 )

21 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited)

June 30, 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 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.

As of June 30, 2024, the Company’s loan portfolio consisted of 210 loans with a net book value of $ 3.8 billion, and investments in real estate-related securities and other of $ 404.4 million.

The Company conducts and expects to continue 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.

As of June 30, 2024, CLR holds a diversified portfolio of approximately $ 1.5 billion of the Company’s senior secured mortgage loans and commercial mortgage-backed securities.

As of June 30, 2024, the Company owned 190 properties, comprising approximately 6.0 million rentable square feet of commercial space located in 36 states.

As of June 30, 2024, the rentable square feet at these properties was 100.0 % leased, including month-to-month agreements, if any.

As of June 30, 2024, the Company owned condominium developments with a net book value of $ 70.0 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.

3 unchanged sentences

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.

The Company relies upon CIM Capital IC Management, LLC, the Company’s investment advisor (the “Investment Advisor”), to provide substantially all of the day-to-day management of its subsidiary, CMFT Securities Investments, LLC, with respect to investments in securities and certain other investments held by CMFT Securities Investments, LLC and its subsidiaries.

Collectively, CMFT Management, the Company’s manager, and the Investment Advisor, together with certain other affiliates of CIM Group, serve as the Company’s sponsor, which is referred to as the Company’s “sponsor” or “CIM”.

14 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

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

2 unchanged sentences

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

As of 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.

As of June 30, 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.

13 unchanged sentences

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

The Company will reassess its initial evaluation of whether an entity is a VIE when certain reconsideration events occur.

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.

As of June 30, 2024, CLR is a VIE that is consolidated by the Company as the primary beneficiary, as the Company has the ability to direct the activities of CLR and the obligation to absorb CLR’s losses through its guarantee of their indebtedness, which is significant to CLR.

The non-controlling interest on the condensed consolidated balance sheets represents the equity interests in CLR owned by outside investors.

As of June 30, 2024, CLR’s loan portfolio consisted of senior secured mortgage loans with a net book value of $ 1.1 billion and investments in real estate-related securities of $ 257.3 million.

In addition, as of June 30, 2024, the carrying value of CLR’s investment in NP JV Holdings was $ 144.0 million.

CLR had $ 945.1 million of debt outstanding, including net deferred financing costs, as of June 30, 2024.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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.

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

The Company’s impairment assessment as of June 30, 2024 was based on the most current information available to the Company, including expected holdings periods.

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

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

6 unchanged sentences

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

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.

Given the Company’s current asset portfolio and strategy, the Company’s dispositions during the six months ended June 30, 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 six months ended June 30, 2024 and 2023.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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.

11 unchanged sentences

Restricted Cash

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.

The Company had $ 3.4 million and $ 13.1 million in restricted cash as of June 30, 2024 and December 31, 2023, respectively.

Included in restricted cash was $ 1.4 million and $ 1.9 million held by lenders in lockbox accounts, as of June 30, 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

1 unchanged sentence

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

As of March 31, 2024, the Company classified its investments in CMBS as available-for-sale as the Company is not actively trading the securities;

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

As of June 30, 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 income (loss).

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

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

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

March 31, 2024 (Unaudited) – (Continued)

Dividend income is included in other income, net on the condensed consolidated statements of operations, of which the Company recorded $ 1.2 million and $ 2.7 million, respectively, during the three and six months ended June 30, 2024.

During the three and six months ended June 30, 2023, the Company recorded $ 1.4 million and $ 2.7 million of dividend income, respectively.

The Company monitors its CMBS for changes in fair value.

2 unchanged sentences

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.

However, the allowance is limited to the amount by which the CMBS’s amortized cost exceeds its fair value.

Favorable changes in expected cash flows are recognized as a decrease to current expected credit losses.

11 unchanged sentences

Current Expected Credit Losses

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

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

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

Current expected credit losses (“CECL”) required under the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification Topic 326, Financial Instruments - Credit Losses (“ASC 326”), reflects the Company’s current estimate of potential credit losses related to the Company’s loans held-for-investment and CMBS included in the condensed consolidated balance sheets.

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

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

In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model 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.

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

While ASC 326 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, ASC 326 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.

This method requires the Company to reference historic loan loss data across a comparable data

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

set and apply such loss rate to each loan investment over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe.

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

2 unchanged sentences

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

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.

34 unchanged sentences

Collateral performance, if appropriate, is significantly worse than underwriting.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

2 unchanged sentences

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.

18 unchanged sentences

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

The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants are probable.

The Company continually reviews whether collection of future lease payments and current and future operating expense reimbursements from tenants are probable.

The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.

Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable.

Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable.

Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate.

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

Upon the determination that the collectability of future lease payments is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable.

Revenue from leases where collection is deemed to be not

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

probable is recorded on a cash basis until collectability becomes probable.

Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate.

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

Revenue from lending activities

Interest income from the Company’s loans held-for-investment and CMBS is recognized using the effective interest method (or the modified straight-line method when it is materially consistent with the effective interest method).

Interest income is comprised of interest earned on credit investments and the accretion and amortization of net loan origination fees and discounts recognized through the life of each investment.

Interest income is comprised of interest earned on credit investments and the accretion and amortization of net loan origination fees, other 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.

14 unchanged sentences

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

In June 2022, the FASB issued ASU No.

In June 2022, the FASB issued Accounting Standards Update (“ASU”) No.

2022-03, Fair Value Measurement (Topic 820):

3 unchanged sentences

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.

ASU 2022-03 did not have a material impact on the Company’s condensed consolidated financial statements and disclosures during the six months ended June 30, 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

In November 2023, the FASB issued ASU No.

3 unchanged sentences

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.

The Company does not 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

12 unchanged sentences

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

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

A breakout of the Company’s CMBS Level 2 and Level 3 positions as of June 30, 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.

3 unchanged sentences

These financial instruments are valued using Level 2 inputs.

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.

As of June 30, 2024, the estimated fair value of the Company’s debt was $ 3.70 billion, compared to a carrying value of $ 3.79 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.

3 unchanged sentences

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 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)

June 30, 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 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 June 30, 2024, $ 282.0 million and $ 41.0 million of the Company’s liquid corporate senior loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively.

As of December 31, 2023, $ 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 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 June 30, 2024, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $ 3.96 billion, compared to its net book value of $ 3.79 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.

6 unchanged sentences

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 March 31, 2024 and December 31, 2023 (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 June 30, 2024 and December 31, 2023 (in thousands):

Balance as of

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

June 30, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial assets:

11 unchanged sentences

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):

June 30, 2024 (Unaudited) – (Continued)

The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the six months ended June 30, 2024 (in thousands):

Beginning Balance, January 1, 2024

Total gains and losses:

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

Reversal of current expected credit losses

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

Current expected credit losses

Purchases and payments received:

Conversion to equity security (1)

Discounts, net 1,189

Capitalized interest income 598

Ending Balance, March 31, 2024

Ending Balance, June 30, 2024

____________________________________

(1) During the six months ended June 30, 2024, one of the Company’s defaulted liquid corporate senior loans was equitized into a Level 3 equity security, as further discussed in Note 7 — Real Estate-Related Securities and Other.

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

1 unchanged sentence

The Company’s process for identifying and recording impairment related to 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.

As of June 30, 2024, the Company had an aggregate $ 339.0 million asset-specific credit loss reserve on funded and unfunded commitments related to eight of the Company’s first mortgage loans with an aggregate carrying value of $ 1.1 billion.

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, less costs to sell the underlying collateral, as of June 30, 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.

2 unchanged sentences

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.

As discussed in Note 4 — Real Estate Assets, during the six months ended June 30, 2024, seven properties were deemed to be impaired due to sales prices or revised cash flow estimates that were less than their respective carrying values, and their carrying values were reduced to an estimated fair value of $ 115.3 million, resulting in impairment charges of $ 51.5 million.

The revised cash flow estimates were a result of continued deterioration of fundamentals at certain office properties, including weakened leasing activity and increased capitalization rates, and a revision in assumed holding periods at certain properties.

Additionally, during the six months ended June 30, 2024, certain condominium units were deemed to be impaired, primarily due to a decrease in expected sales prices for certain units, and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 5.5 million.

During the six months ended June 30, 2023, real estate assets related to one property were deemed to be impaired and their 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 three months ended March 31, 2023:

Three Months Ended March 31,

Discount Rate Terminal Capitalization Rate

7.5 % – 9.2 %

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the six months ended June 30, 2024 and 2023:

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,

June 30, 2024 (Unaudited) – (Continued)

Six Months Ended June 30,

Discount Rate Terminal Capitalization Rate

8.6 % - 11.0 %

8.1 % – 9.5 %

7.0 % – 9.2 %

The following table presents the impairment charges by asset class recorded during the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended June 30,

Asset class impaired:

2 unchanged sentences

Intangible lease assets 3,918 18

Intangible lease liabilities 5 —

Condominium developments 5,463 —

Total impairment loss $ 56,932 $ 4,814

1 unchanged sentence

Property Acquisitions

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

During the six months ended June 30, 2024 and 2023, the Company did no t acquire any properties.

Condominium Development Project

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.

During the six months ended June 30, 2024 and 2023, the Company capitalized $ 10.8 million and $ 5.3 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 $ 848,000 of capitalized interest expense during the six months ended June 30, 2023.

No capitalized interest was included in the capitalized expenditures during the six months ended June 30, 2024.

Condominium Dispositions

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 .

During the six months ended June 30, 2024, the Company disposed of condominium units for an aggregate sales price of $ 27.1 million, resulting in proceeds of $ 25.1 million after closing costs and a gain of $ 3.3 million.

During the six months ended June 30, 2023, the Company disposed of condominium units for an aggregate sales price of $ 29.0 million, resulting in proceeds of $ 26.1 million after closing costs and a gain of $ 2.4 million.

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

1 unchanged sentence

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.

During the six months ended June 30, 2024, the Company disposed of two properties, including one retail property and one office property, for an aggregate gross sales price of $ 53.9 million, resulting in proceeds of $ 52.6 million after closing costs.

No gain or loss was recorded.

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

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.

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.

During the six months ended June 30, 2023, the Company disposed of 185 properties, including 183 retail properties and two industrial properties, for an aggregate gross sales price of $ 909.3 million, resulting in proceeds of $ 899.7 million after closing costs and a gain of $ 43.8 million.

The sale of 178 of these properties closed pursuant to the Realty Income Purchase and

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

Sale Agreement for total consideration of $ 861.0 million, resulting in proceeds of $ 852.6 million after closing costs and a gain of $ 32.3 million.

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.

As of June 30, 2024 and 2023, the Company did not identify any real estate assets as held for sale.

The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate that the carrying value of certain of its real estate assets may not be recoverable.

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

During the 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.

During the six months ended June 30, 2024, seven properties totaling approximately 824,000 square feet with a carrying value of $ 166.8 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 115.3 million, resulting in impairment charges of $ 51.5 million, which were recorded in the condensed consolidated statements of operations.

Additionally, during the six months ended June 30, 2024, certain condominium units were deemed to be impaired and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $ 5.5 million, which were recorded in the condensed consolidated statements of operations.

During the six months ended June 30, 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 six months ended June 30, 2024 and 2023.

Property Concentrations

As of June 30, 2024, one of the Company’s tenants, CVS, accounted for 10 % of the Company’s 2024 annualized rental income across 33 properties.

As of June 30, 2024, the Company had properties located in Ohio, which accounted for 17 % of the Company’s 2024 annualized rental income.

In addition, the Company had tenants in the health and personal care stores, manufacturing, and sporting goods, hobby, and musical instrument retailers industries, which accounted for 15 %, 12 %, and 12 %, respectively, of the Company’s 2024 annualized rental income.

NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES

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 and liabilities consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands, except weighted average life remaining):

June 30, 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 months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

The following table summarizes the amortization related to the intangible lease assets and liabilities for the three and six months ended June 30, 2024 and 2023 (in thousands):

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

2024 2023 2024 2023

In-place lease and other intangible amortization $ 2,635 $ 3,014 $ 5,330 $ 8,096

1 unchanged sentence

Below-market lease amortization $ 281 $ 313 $ 566 $ 746

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

As of June 30, 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 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.

During the year ended December 31, 2021, the Company entered into the Unconsolidated Joint Venture, of which the Company currently owns as of June 30, 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.

Through the Unconsolidated Joint Venture, the Company has an approximate 46 % interest in the NewPoint JV and accounts for its investment under the equity method.

Through the Unconsolidated Joint Venture, the Company holds an approximate 46 % interest in the NewPoint JV and accounts for its investment under the equity method.

The primary purpose of the NewPoint JV is to source, underwrite, close and service on an ongoing basis multifamily bridge loans, participation interests, and other debt instruments such as loans.

As of March 31, 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.

As of June 30, 2024 and December 31, 2023, the carrying value of the Company’s investment in NP JV Holdings was $ 152.3 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 $ 2.7 million and $ 5.3 million, which represented its share of NP JV Holdings’ gain, during the three and six months ended June 30, 2024, respectively, in the condensed consolidated statements of operations.

The Company recorded a gain totaling $ 5.8 million and $ 5.0 million, which represented its share of NP JV Holdings’ gain, during the three and six months ended June 30, 2023, respectively, in the condensed consolidated statements of operations.

During the six months ended June 30, 2024, the Company contributed an additional $ 26.8 million in NP JV Holdings.

The Company also received $ 6.5 million in distributions during the six months ended June 30, 2024, $ 5.3 million of which was recognized as a return on investment and $ 1.3 million of which was recognized as a return of investment and reduced the invested capital and the carrying amount.

As of June 30, 2024, the Company had $ 61.9 million of unfunded commitments related to NewPoint JV.

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

1 unchanged sentence

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):

As of June 30, 2024, the Company had real estate-related securities and equity securities with an aggregate estimated fair value of $ 404.4 million, which included 17 CMBS investments and four equity securities.

The CMBS investments have initial maturity dates ranging from July 2024 through June 2058 and have interest rates ranging from 0.2 % to 12.7 % as of June 30, 2024, with one CMBS earning a zero coupon rate.

The following is a summary of the Company’s real estate-related securities and equity securities as of June 30, 2024 (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

Real Estate-Related Securities and Other

7 unchanged sentences

$ 558,141 $ 542 $ ( 114,213 ) $ ( 40,091 ) $ 404,379

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

The following table provides the activity for the real estate-related securities and other during the six months ended June 30, 2024 (in thousands):

Amortized Cost Basis Unrealized Loss CECL Fair Value

9 unchanged sentences

— ( 22,158 ) — ( 22,158 )

Reversal of credit losses

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

Provision for credit losses

— — ( 4,283 ) ( 4,283 )

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.

Real estate-related securities and other as of June 30, 2024

$ 558,141 $ ( 113,671 ) $ ( 40,091 ) $ 404,379

During the six months ended June 30, 2024, the Company received $ 5.1 million in equity securities through the equitization of two existing liquid corporate senior loan positions, comprised of a $ 927,000 preferred equity security and $ 4.1 million in two common equity securities, all of which are included in real estate-related securities and other on the Company’s condensed consolidated balance sheets.

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.

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

During the six months ended June 30, 2024, the Company recorded $ 22.2 million of net unrealized loss on its real estate-related securities and equity securities, comprised of a $ 6.6 million unrealized loss on CMBS, which is included in other comprehensive (loss) income in the accompanying condensed consolidated statements of comprehensive (loss) income and a $ 15.6 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 six months ended June 30, 2023, the Company recorded $ 13.0 million of net unrealized loss on its real estate-related securities, comprised of an $ 18.3 million unrealized loss on CMBS, which is included in other comprehensive (loss) income in the accompanying condensed consolidated statements of comprehensive (loss) income and a $ 5.4 million 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):

June 30, 2024 (Unaudited) – (Continued)

The scheduled maturities of the Company’s CMBS as of June 30, 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 positions in one of two different tranches of a CMBS instrument for the three months ended March 31, 2024 and 2023 (in thousands):

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 six months ended June 30, 2024 and 2023 (in thousands):

Current expected credit losses as of January 1, 2024

1 unchanged sentence

Current expected credit losses as of March 31, 2024

Provision for credit losses

Current expected credit losses as of June 30, 2024

Current expected credit losses as of January 1, 2023

1 unchanged sentence

Current expected credit losses as of March 31, 2023

Provision for credit losses

Current expected credit losses as of June 30, 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.

4 unchanged sentences

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.

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

As of June 30, 2024, the CMBS position was no longer in maturity default as the CMBS was modified to provide for an extended maturity date of July 2025 plus a six-month extension option, as well as a permanently reduced interest rate to 0.019 % per annum.

The Company does not intend to sell the CMBS position and it is not considered

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

June 30, 2024 (Unaudited) – (Continued)

more likely than not that the Company will be forced to sell the security prior to recovering the amortized cost.

The Company determined the tranche with a higher subordination level had not incurred a credit loss as of June 30, 2024.

As a result of the credit loss incurred, the Company reclassified $ 13.6 million of unrealized loss from other comprehensive (loss) income 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 six months ended June 30, 2024, the Company recorded a $ 4.3 million increase to the provision for credit losses on the condensed consolidated statements of operations.

As of June 30, 2024, the amortized cost basis of the CMBS position identified as having incurred a credit loss was $ 47.9 million prior to any credit loss provisions.

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.

As of June 30, 2024, there were 12 CMBS positions with an aggregate fair value of $ 252.8 million with unrealized losses reflected in other comprehensive (loss) income 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 (loss) income as of June 30, 2024 were noncredit-related and would be recovered from the securities’ estimated future cash flows.

The Company considered various factors in reaching this conclusion, including that the Company did not intend to sell the securities, it was not considered more likely than not that the Company would be forced to sell the securities prior to recovering the amortized cost, and there were no material credit events that would have caused the Company to conclude that the amortized cost would not be recovered.

NOTE 8 — LOANS HELD-FOR-INVESTMENT

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

As of March 31, As of December 31,

The Company’s loans held-for-investment consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):

As of June 30, As of December 31,

First mortgage loans (1)

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____________________________________

(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):

(1) As of June 30, 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

The following table details overall statistics for the Company’s loans held-for-investment as of June 30, 2024 and December 31, 2023 (dollar amounts in thousands):

CRE Loans (1) (2)

Liquid Corporate Senior Loans Corporate Senior Loans

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

June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Number of loans 33 33 159 237 18 21

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____________________________________

(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”).

(1) As of June 30, 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;

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(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

March 31, 2024 (Unaudited) – (Continued)

Excludes loans on nonaccrual status.

(4) As of December 31, 2023, two of the Company’s first mortgage loans were in maturity default.

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(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

Activity relating to the Company’s loans held-for-investment portfolio was as follows for the six months ended June 30, 2024 (in thousands):

CRE Loans (1)

Liquid Corporate Senior Loans Corporate Senior Loans Total Loan Portfolio

Balance, January 1, 2024

15 unchanged sentences

( 289,050 ) 11,811 86 ( 277,153 )

Balance, March 31, 2024

Balance, June 30, 2024

$ 3,254,681 $ 334,424 $ 204,554 $ 3,793,659

____________________________________

(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.

(1) Loan originations, acquisitions and funding include $ 4.9 million in protective advances while principal repayments received include $ 6.6 million of cost-recovery proceeds received on the Company’s nonaccrual first mortgage loans during the six months ended June 30, 2024.

(2) During the six months ended June 30, 2024, two of the Company’s defaulted liquid corporate senior loans were equitized into shares of common equity and a preferred equity security, as further discussed in Note 7 — Real Estate-Related Securities and Other.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

(3) Includes a $ 2.1 million write-off on four liquid corporate senior loans as a result of distressed restructurings of the 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.

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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):

As of June 30, 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

As of June 30, 2024

$ 1,851,024 50.6 %

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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

As of June 30, 2024

$ 1,482,789 40.6 %

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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 six months ended June 30, 2024 and 2023 (in thousands):

First Mortgage Loans Unfunded First Mortgage Loans (1)

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

Provision for (reversal of) credit losses

211,485 7,197 ( 5,963 ) ( 1 ) ( 335 ) ( 13 ) 212,370

Charge-offs of CECL

— — ( 480 ) — — — ( 480 )

Current expected credit losses as of June 30, 2024

$ 398,289 $ 10,606 $ 7,927 $ 1 $ 3,534 $ 404 $ 420,761

Current expected credit losses as of January 1, 2023

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

Provision for credit losses

22,468 2,140 551 3 764 259 26,185

Current expected credit losses as of June 30, 2023

$ 44,769 $ 4,168 $ 20,832 $ 259 $ 1,961 $ 326 $ 72,315

____________________________________

(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 (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.

During the three months ended June 30, 2024, the Company recorded a net increase of $ 211.9 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 $ 420.8 million.

The increase was primarily driven by five additional first mortgage loans, four of which are collateralized by office properties and one of which is collateralized by a multifamily property, that were moved to a risk rating of 5 during the three months ended June 30, 2024 as a result of the increased risk of potential principal loss and as collateral performance was deemed to be worse than underwriting.

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

June 30, 2024 (Unaudited) – (Continued)

As of June 30, 2024, the Company had three collateral dependent risk-rated 5 first mortgage loan investments on nonaccrual status:

(i) a $ 133.7 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 six months ended June 30, 2024;

(ii) a $ 127.2 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 six months ended June 30, 2024;

and (iii) a $ 175.2 million commercial first mortgage loan on an office building in California primarily due to being past due on its interest payments during the six months ended June 30, 2024.

During the six months ended June 30, 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 June 30, 2024, the three risk-rated 5 first mortgage loans noted above were more 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 of June 30, 2024, the Company’s asset-specific credit loss reserve totaled $ 341.8 million on funded and unfunded commitments, which related to the Company’s 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, less costs to sell the underlying collateral where applicable, as of June 30, 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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 March 31, 2024 by year of origination, loan type, and risk rating (dollar amounts in thousands):

The following table presents the net book value of the Company’s loans held-for-investment portfolio as of June 30, 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 March 31, 2024

As of June 30, 2024

Number of Loans 2024 2023 2022 2021 2020 Prior

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Origination dates are subsequently updated to reflect material loan modifications.

(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.

(2) As of June 30, 2024, two of the Company’s liquid corporate senior loan investments were on nonaccrual status with an aggregate carrying value of $ 3.3 million, which represented less than 1 % 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.

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

(4) Represents gross charge-offs by year of origination during the six months ended June 30, 2024.

Loan Modifications

The Company may amend or modify a loan depending on the loan’s specific facts and circumstances, which are disclosable under ASU No.

2022-02, Financial Instruments - Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Loan Modifications

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

June 30, 2024 (Unaudited) – (Continued)

Disclosures (“ASU 2022-02”) .

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 %.

Loan modifications that allow for the option to pay interest in-kind (“PIK”) result in the interest being capitalized and added to the outstanding principal balance of the respective loan.

During the six months ended June 30, 2024, the Company modified a first mortgage loan collateralized by an office property.

The loan had a carrying value of $ 261.8 million, representing approximately 7.2 % of the Company’s first mortgage loans as of June 30, 2024.

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

The borrower did not elect to PIK any portion of interest during the six months ended June 30, 2024.

The Company also modified a first mortgage loan collateralized by four office properties during the six months ended June 30, 2024.

The loan had a carrying value of $ 51.3 million, representing approximately 1.4 % of the Company’s first mortgage loans as of June 30, 2024.

The loan modification extended the maturity date from February 1, 2025 to April 1, 2027, with no extension options.

These modified loans are performing in accordance with their respective contractual terms as of June 30, 2024.

As of June 30, 2024, the loans are both risk-rated 5 as a result of the increased risk of potential principal loss and as collateral performance was deemed to be worse than underwriting.

As such, the Company had an asset-specific credit loss reserve recorded for each of the modified first mortgage loans as of June 30, 2024.

NOTE 9 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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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.

As of June 30, 2024, the Company did not have any derivative instruments.

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

4 unchanged sentences

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

For the three and six months ended June 30, 2024 and 2023, no amounts were reclassified from other comprehensive (loss) income as a change to interest expense.

No unrealized amounts on interest rate swaps were remaining in other comprehensive (loss) income as of June 30, 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.

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NOTE 10 — REPURCHASE FACILITIES, NOTES PAYABLE AND CREDIT FACILITIES

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.

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

As of June 30, 2024, the Company had $ 3.8 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 2.5 years and a weighted average interest rate of 6.3 %.

The weighted average years to

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

June 30, 2024 (Unaudited) – (Continued)

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

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

The following table summarizes the debt balances as of June 30, 2024 and December 31, 2023, and the debt activity for the six months ended June 30, 2024 (in thousands):

During the Six Months Ended June 30, 2024

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

1 unchanged sentence

Amortization Balance as of

March 31, 2024

June 30, 2024

Notes payable – variable rate debt $ 622,841 $ 2,045 $ ( 13,192 ) $ — $ 611,694

9 unchanged sentences

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

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.

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

Notes Payable

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.

As of June 30, 2024, the Company had $ 611.7 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):

The following table is a summary of the Note on Note Financing Arrangements as of June 30, 2024 (dollar amounts in thousands):

Note on Note Financing Arrangement

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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)

June 30, 2024 (Unaudited) – (Continued)

Class of Notes Initial Principal Balance Principal Balance as of June 30, 2024

Note Rate Anticipated Repayment Date Rated Final Payment Date Credit Rating (1)

A-1 (AAA) $ 146,400,000 $ 140,208,000 2.09 % July 2028 July 2051 AAA (sf)

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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 %.

As of June 30, 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.

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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 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 %.

As of June 30, 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.

1 unchanged sentence

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

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 %.

As of June 30, 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.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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).

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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 March 31, 2024.

The Company believes it was in compliance with the financial covenants under the Company’s various fixed and variable rate debt agreements, as of June 30, 2024.

Repurchase Facilities

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.

As of June 30, 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 March 31, 2024 (dollar amounts in thousands):

The following table is a summary of the Repurchase Facilities as of June 30, 2024 (dollar amounts in thousands):

Repurchase Facility Date of Agreement Maturity Date

35 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 March 31, 2024, ranges from 1.05 % to 1.45 %.

Morgan, which as of June 30, 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)

June 30, 2024 (Unaudited) – (Continued)

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

9 unchanged sentences

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

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

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

The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of June 30, 2024.

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to June 30, 2024 (in thousands):

Principal Repayments

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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.

As of June 30, 2024, the Company had $ 232.5 million of unfunded loan commitments related to its existing CRE loans held-for-investment, corporate senior loans, and liquid corporate senior loans, and $ 61.9 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.

As of June 30, 2024, the Company had $ 10.5 million of unsettled liquid corporate senior loan acquisitions, $ 8.3 million of which settled subsequent to June 30, 2024.

Additionally, the Company had $ 4.4 million of unsettled liquid corporate senior loan sales as of June 30, 2024, all of which settled subsequent to June 30, 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.

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NOTE 12 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

Management, investment advisory fees and incentive compensation

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

On March 24, 2023, the Company and CMFT Management entered into the second amended and restated management agreement (the “Management Agreement”), which amended and restated the amended and restated management agreement between the parties dated August 20, 2019.

Management, investment advisory fees and incentive compensation

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

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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.

During the three and six months ended June 30, 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.

1 unchanged sentence

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.

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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.

3 unchanged sentences

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.

3 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 March 31,

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

2024 2023 2024 2023

Management fees (1)

$ 12,613 $ 12,859 $ 25,304 $ 25,438

Expense reimbursements to related parties

$ 3,726 $ 3,681 $ 6,719 $ 7,249

__________________________________

(1) Includes management fees incurred by CLR of $ 1.4 million and $ 1.9 million, respectively , a nd $ 1.7 million and $ 2.4 million, respectively, in performance fees, offset by the Company’s proportional share.

Due to Affiliates

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.

Of the amounts shown above, $ 14.3 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 both the six months ended June 30, 2024 and 2023, 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 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.

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

During the six months ended June 30, 2024 and 2023, the Company recorded $ 413,000 and $ 107,000 , respectively, in development management fees.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

Development Services.

Investments with Affiliates of the Manager

1 unchanged sentence

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

As of June 30, 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 March 31, 2024, $ 123.0 million of the first mortgage loan was outstanding.

As of June 30, 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.

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.

As of June 30, 2024, the Company owned approximately 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 $ 150.6 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 March 31, 2024, $ 154.0 million of the first mortgage loan was outstanding.

As of June 30, 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 March 31, 2024, $ 145.5 million of the first mortgage loan was outstanding.

As of June 30, 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.

As of June 30, 2024, $ 146.5 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 June 30, 2024, CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Company, entered into a master participation agreement with OFSI BSL XIV CLO, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands and an affiliate of the Investment Advisor to sell $ 219.6 million of the Company’s portfolio of liquid corporate senior loans.

The transaction is expected to close in August 2024.

NOTE 13 — ECONOMIC DEPENDENCY

8 unchanged sentences

The 2022 Plan superseded and replaced the 2018 Plan.

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

The total number of shares of Company common stock reserved and available for issuance under the 2022 Plan at any time during the term of the 2022 Plan is 250,000 shares, which is a reduction from 400,000 shares authorized for issuance under the 2018 Plan, and awards of approximately 110,000 shares of common stock are available for future grant at March 31, 2024.

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

March 31, 2024 (Unaudited) – (Continued)

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

June 30, 2024 (Unaudited) – (Continued)

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

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

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.

2024 Manager Equity Incentive Plan (the “Manager Plan”) and the Manager Plan was approved by the Company’s stockholders at the Company’s 2024 Annual Meeting of Stockholders held on July 11, 2024.

The Manager Plan 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.

As of June 30, 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.

As of June 30, 2024, there were approximately 9.6 million shares remaining that may be subject to awards granted under the Manager Plan.

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

The Company recorded compensation expense related to restricted stock units of $ 1.3 million and $ 2.4 million, respectively, for the three and six months ended June 30, 2024, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

The Company did not record compensation expense related to restricted stock units for the three and six months ended June 30, 2023.

As of June 30, 2024, there was $ 12.0 million of total unrecognized compensation expense related to these restricted stock units, which will be recognized ratably over the remaining vesting period prior to December 2026.

As of June 30, 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 June 30, 2024, the 116,000 restricted shares granted under the 2018 plan had vested based on one year of continuous service.

In addition, as of June 30, 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.

2 unchanged sentences

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 remaining 36,000 restricted shares issued had not vested or had been forfeited as of June 30, 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 $ 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.

The Company recorded compensation expense of $ 60,000 and $ 300,000 for the three and six months ended June 30, 2024, respectively, and $ 120,000 and $ 240,000 for the three and six months ended June 30, 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 June 30, 2024, there was $ 60,000 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

NOTE 15 — LEASES

5 unchanged sentences

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

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

As of June 30, 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.

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):

As of June 30, 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 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,

For the three and six months ended June 30, 2024 and 2023, the amount of the contingent rent earned by the Company was not significant .

Rental and other property income during the three and six months ended June 30, 2024 and 2023 consisted of the following (in thousands):

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

2024 2023 2024 2023

Fixed rental and other property income (1)

1 unchanged sentence

Variable rental and other property income (2)

1,665 2,647 3,548 4,071

Total rental and other property income $ 23,562 $ 25,682 $ 48,136 $ 64,463

4 unchanged sentences

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 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.

This reflects the Company’s

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

The Company recognized $ 63,000 and $ 125,000 of ground lease expense during the three and six months ended June 30, 2024, respectively, of which $ 61,000 and $ 121,000 , respectively, was paid in cash during the period it was recognized.

As of June 30, 2024, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 125,000 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.

The following tables present segment reporting for the three and six months ended June 30, 2024 and 2023 (in thousands):

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended June 30, 2024

Rental and other property income $ 23,492 $ — $ 70 $ 23,562

Interest income — 98,309 — 98,309

Total revenues 23,492 98,309 70 121,871

General and administrative 117 956 5,038 6,111

Interest expense, net 5,811 58,126 — 63,937

Property operating 765 — 1,558 2,323

Real estate tax 833 — 340 1,173

Expense reimbursements to related parties — — 3,726 3,726

Management fees 2,034 10,579 — 12,613

Transaction-related — 6 — 6

Depreciation and amortization 8,397 — — 8,397

Real estate impairment 51,469 — 5,463 56,932

Increase in provision for credit losses

— 216,898 — 216,898

Total expenses 69,426 286,565 16,125 372,116

Other income (expense):

Gain on disposition of real estate and condominium developments, net

— — 2,468 2,468

Gain on investment in unconsolidated entities — 2,742 — 2,742

Unrealized loss on equity securities

— ( 4,229 ) — ( 4,229 )

Other income, net

80 2,175 1,208 3,463

Total other income

80 688 3,676 4,444

Segment net loss

$ ( 45,854 ) $ ( 187,568 ) $ ( 12,379 ) $ ( 245,801 )

Total assets as of June 30, 2024

$ 1,033,875 $ 4,647,726 $ 228,329 $ 5,909,930

__________________________________

(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

March 31, 2024 (Unaudited) – (Continued)

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

June 30, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Rental and other property income $ 47,949 $ — $ 187 $ 48,136

9 unchanged sentences

Depreciation and amortization 16,939 — — 16,939

Real estate impairment 51,469 — 5,463 56,932

Increase in provision for credit losses

3 unchanged sentences

Gain on disposition of real estate and condominium developments, net

— — 3,250 3,250

Gain on investment in unconsolidated entities — 5,267 — 5,267

5 unchanged sentences

148 ( 5,994 ) 5,733 ( 113 )

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

Total assets as of March 31, 2024

Segment net loss

$ ( 40,050 ) $ ( 222,889 ) $ ( 21,404 ) $ ( 284,343 )

Total assets as of June 30, 2024

$ 1,033,875 $ 4,647,726 $ 228,329 $ 5,909,930

__________________________________

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Rental and other property income

16 unchanged sentences

9,319 — — 9,319

Real estate impairment 4,814 — — 4,814

Increase in provision for credit losses — 49,637 — 49,637

3 unchanged sentences

24,285 — 2,278 26,563

Loss on investment in unconsolidated entities

Gain on investment in unconsolidated entities

— 5,806 — 5,806

5 unchanged sentences

( 24 ) — ( 870 ) ( 894 )

Total other income (expense)

Total other income

21,909 10,068 3,444 35,421

1 unchanged sentence

$ 29,923 $ 8,015 $ ( 6,063 ) $ 31,875

Total assets as of June 30, 2023

$ 1,198,007 $ 4,948,370 $ 518,229 $ 6,664,606

__________________________________

(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

June 30, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Six Months Ended June 30, 2023

Rental and other property income $ 64,305 $ — $ 158 $ 64,463

Interest income — 223,121 — 223,121

Total revenues 64,305 223,121 158 287,584

General and administrative 422 1,559 6,238 8,219

Interest expense, net 11,316 110,066 4,400 125,782

Property operating 2,888 — 2,695 5,583

Real estate tax 1,315 — 733 2,048

Expense reimbursements to related parties — — 7,249 7,249

Management fees 5,891 19,547 — 25,438

Transaction-related 25 — 51 76

Depreciation and amortization 24,429 — — 24,429

Real estate impairment 4,814 — — 4,814

Increase in provision for credit losses

— 51,090 — 51,090

Total expenses 51,100 182,262 21,366 254,728

Other income (expense):

Gain on disposition of real estate and condominium developments, net 43,845 — 2,341 46,186

Gain on investment in unconsolidated entities — 5,036 — 5,036

Unrealized gain on equity securities

— 5,354 — 5,354

Other (expense) income, net

( 4,192 ) 3,007 2,359 1,174

Loss on extinguishment of debt

( 1,195 ) — ( 3,344 ) ( 4,539 )

Total other income

38,458 13,397 1,356 53,211

Segment net income (loss) 51,663 54,256 ( 19,852 ) 86,067

Net income allocated to noncontrolling interest

Segment net income (loss) attributable to the Company

Total assets as of March 31, 2023

$ 51,655 $ 54,256 $ ( 19,852 ) $ 86,059

Total assets as of June 30, 2023

$ 1,198,007 $ 4,948,370 $ 518,229 $ 6,664,606

__________________________________

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

1 unchanged sentence

Redemption of Shares of Common Stock

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.

Subsequent to June 30, 2024, the Company redeemed approximately 1.7 million shares for $ 10.6 million (at an average redemption price of $ 6.09 per share).

The remaining redemption requests received during the three months ended June 30, 2024 totaling approximately 35.2 million shares went unfulfilled.

Investment and Disposition Activity

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.

Subsequent to June 30, 2024, the Company’s investment and disposition activity included the following:

• Disposed of one condominium unit for a gross sales price of $ 2.2 million, resulting in proceeds of $ 2.0 million after closing costs.

No gain or loss was recorded.

• Settled $ 10.9 million of liquid corporate senior loans purchases, $ 8.3 million of which were traded as of June 30, 2024, and settled $ 63.0 million of liquid corporate senior loan sales, $ 4.4 million of which were traded as of June 30, 2024.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

June 30, 2024 (Unaudited) – (Continued)

• Funded an aggregate amount of $ 8.3 million to five of the Company’s first mortgage loans, and received $ 1.6 million of principal repayments on one of the Company’s first mortgage loans.

Financing Activity

• 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.

• Repaid $ 3.8 million of borrowings under the repurchase facility with J.P.

Morgan and $ 1.6 million of borrowings under the note on note financing arrangement with Mass Mutual.

• Extended the maturity date of the note on note financing arrangements with Citibank and Barclays from August 9, 2024 to August 9, 2025.

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