What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 488 added, 365 removed, 1204 unchanged (41% of the section changed)

3 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Real estate assets:

7 unchanged sentences

Investment in unconsolidated entities 154,600 126,777

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

Real estate-related securities and other, at fair value, net of credit loss allowances of $ 87,232 and $ 35,808 as of September 30, 2024 and December 31, 2023, respectively

389,627 519,714

8 unchanged sentences

Accrued interest receivable 27,916 27,682

Assets held for sale 13,298 —

Total assets $ 5,365,847 $ 6,446,476

12 unchanged sentences

Common stock, $ 0.01 par value per share;

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

490,000,000 shares authorized, 437,070,647 and 437,254,715 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Capital in excess of par value 3,532,361 3,529,973

9 unchanged sentences

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

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

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

2024 2023 2024 2023

17 unchanged sentences

Gain on investment in unconsolidated entities 4,608 3,136 9,875 8,172

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

Other income, net 3,463 850 7,012 1,174

Unrealized gain (loss) on equity securities 4,486 ( 2,073 ) ( 11,156 ) 3,281

Other (expense) income, net ( 2,145 ) 5,172 4,867 6,346

Loss on extinguishment of debt ( 950 ) ( 1,085 ) ( 950 ) ( 5,624 )

Total other income (expense)

Total other income

7,209 11,118 7,096 64,329

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

Net income (loss) $ 7,315 $ ( 11,042 ) $ ( 277,028 ) $ 75,025

Net income allocated to noncontrolling interest 3 — 3 8

Net (loss) income attributable to the Company $ ( 245,801 ) $ 31,875 $ ( 284,343 ) $ 86,059

Net income (loss) attributable to the Company $ 7,312 $ ( 11,042 ) $ ( 277,031 ) $ 75,017

Weighted average number of common shares outstanding:

Basic and diluted 437,098,682 437,339,532 437,182,073 437,391,323

Net (loss) income per common share:

Net income (loss) per common share:

Basic and diluted $ 0.02 $ ( 0.03 ) $ ( 0.63 ) $ 0.17

1 unchanged sentence

CIM REAL ESTATE FINANCE TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands) (Unaudited)

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

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

2024 2023 2024 2023

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

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

Net income (loss) $ 7,315 $ ( 11,042 ) $ ( 277,028 ) $ 75,025

Other comprehensive income (loss)

Unrealized gain (loss) on CMBS 1,644 ( 944 ) ( 4,872 ) ( 32,860 )

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

Total other comprehensive income (loss) 1,644 ( 944 ) ( 4,872 ) ( 19,266 )

Comprehensive income (loss) 8,959 ( 11,986 ) ( 281,900 ) 55,759

Comprehensive income attributable to noncontrolling interest 3 — 3 8

Comprehensive (loss) income attributable to the Company $ ( 257,272 ) $ 39,863 $ ( 290,859 ) $ 67,737

Comprehensive income (loss) attributable to the Company $ 8,956 $ ( 11,986 ) $ ( 281,903 ) $ 55,751

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

32 unchanged sentences

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

Issuance of common stock 1,743,296 17 10,581 — — 10,598 — 10,598

Equity-based compensation — — 838 — — 838 — 838

Distributions declared on common stock — $ 0.11 per common share

— — — ( 49,264 ) — ( 49,264 ) — ( 49,264 )

Redemptions of common stock ( 1,790,518 ) ( 18 ) ( 10,866 ) — — ( 10,884 ) — ( 10,884 )

Changes in redeemable common stock — — 286 — — 286 — 286

Contributions from non-controlling interests

— — — — — — 100 100

Comprehensive income (loss)

— — — 7,312 1,644 8,956 3 8,959

Balance as of September 30, 2024

437,070,647 $ 4,374 $ 3,532,361 $ ( 1,611,969 ) $ ( 86,015 ) $ 1,838,751 $ 153 $ 1,838,904

CIM REAL ESTATE FINANCE TRUST, INC.

29 unchanged sentences

437,381,972 $ 4,374 $ 3,529,765 $ ( 1,035,084 ) $ ( 66,848 ) $ 2,432,207 $ — $ 2,432,207

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

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

Distributions declared on common stock — $ 0.11 per common share

— — — ( 45,916 ) — ( 45,916 ) — ( 45,916 )

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

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

Comprehensive loss — — — ( 11,042 ) ( 944 ) ( 11,986 ) — ( 11,986 )

Balance as of September 30, 2023

437,267,415 $ 4,373 $ 3,529,885 $ ( 1,092,042 ) $ ( 67,792 ) $ 2,374,424 $ — $ 2,374,424

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

2 unchanged sentences

(in thousands) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

4 unchanged sentences

Amortization and accretion on deferred loan fees ( 3,857 ) ( 7,128 )

Amortization of premiums and discounts on credit investments ( 3,772 ) ( 18,717 )

Amortization and accretion of premiums and discounts on credit investments ( 4,612 ) ( 20,187 )

Capitalized interest income on real estate-related securities and loans held-for-investment ( 5,874 ) ( 863 )

22 unchanged sentences

Return of investment in unconsolidated entities 397 4,801

Investment in real estate-related securities — ( 143,157 )

Investment in real estate-related securities and other ( 27,646 ) ( 143,157 )

Investment in liquid corporate senior loans ( 65,086 ) ( 105,068 )

7 unchanged sentences

Net proceeds from sale of liquid corporate senior loans 446,974 74,522

Payment of property escrow deposits ( 1,000 ) —

Refund of property escrow deposits 1,000 —

Net cash provided by investing activities 620,487 678,750

2 unchanged sentences

(in thousands) (Unaudited) — Continued

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

6 unchanged sentences

Net cash used in financing activities ( 814,078 ) ( 516,082 )

Net increase in cash and cash equivalents and restricted cash 168,644 292,069

Net (decrease) increase in cash and cash equivalents and restricted cash ( 62,869 ) 333,131

Cash and cash equivalents and restricted cash, beginning of period 260,582 176,594

8 unchanged sentences

Construction reserve allocation $ — $ ( 190 )

Accrued deferred financing costs $ — $ 167

Common stock issued through distribution reinvestment plan $ 32,214 $ 32,117

Change in fair value of real estate-related securities $ ( 6,516 ) $ ( 18,322 )

Conversion of loan held-for-investment to equity securities $ ( 5,060 ) $ —

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited)

September 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 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.

As of September 30, 2024, the Company’s loan portfolio consisted of 71 loans with a net book value of $ 3.5 billion, and investments in real estate-related securities and other of $ 389.6 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 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.

As of September 30, 2024, CLR holds a diversified portfolio of approximately $ 1.4 billion of the Company’s senior secured mortgage loans and commercial mortgage-backed securities.

As of September 30, 2024, the Company owned 191 properties, comprising approximately 6.0 million rentable square feet of commercial space located in 36 states.

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

As of September 30, 2024, the Company owned condominium developments with a net book value of $ 61.4 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 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.

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 (“CMFT Securities”), with respect to investments in securities and certain other investments held by CMFT Securities 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”.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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 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.

As of September 30, 2024, the most recent 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.

15 unchanged sentences

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

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.

As of September 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 CLR’s 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.

As of September 30, 2024, CLR’s loan portfolio consisted of senior secured mortgage loans with a net book value of $ 1.0 billion and investments in real estate-related securities of $ 255.0 million.

In addition, as of September 30, 2024, the carrying value of CLR’s investment in CIM NP JV Holdings, LLC (“NP JV Holdings”) was $ 145.2 million.

CLR had $ 879.3 million of debt outstanding, including net deferred financing costs, as of September 30, 2024.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

During the nine months ended September 30, 2024, the Company sold a portion of the Company’s portfolio of liquid corporate senior loans with an aggregate principal balance of $ 265.4 million to OFSI BSL XIV CLO, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands, resulting in net proceeds of $ 259.7 million after closing costs and a loss of $ 2.9 million.

The collateral manager for OFSI BSL XIV CLO, Ltd.

is OFS CLO Management II, LLC, an affiliate of the Sub-Advisor (as defined in Note 12 — Related-Party Transactions and Arrangements).

The Company does not maintain effective control over the liquid corporate senior loans and the Company does not have the ability, nor the requirement, to repurchase the liquid corporate senior loans.

The liquid corporate senior loans served as the initial positions for the formation of a collateralized loan obligation (“CLO”), in which the Company subsequently invested $ 27.6 million in a subordinated note (the “CLO subordinated note”).

The CLO is a VIE, given the insufficient equity at risk, evidenced by the tranched capital structure and multiple series of debt instruments issued.

However, the Company, through its investment in the CLO subordinated note, lacks the ability to direct the activities that most significantly affect the entity’s economic performance.

Additionally, the collateral manager, which does direct the activities that most significantly affect the entity’s economic performance, was deemed to not be under common control with the Company.

As such, the Company was determined to not be the primary beneficiary and the CLO is not consolidated on the Company’s financial statements.

As of September 30, 2024, the fair value of the CLO subordinated note is $ 28.1 million and is included in real estate-related securities and other on the Company’s condensed consolidated balance sheets.

Use of Estimates

22 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 June 30, 2024 was based on the most current information available to the Company, including expected holdings periods.

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

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

1 unchanged sentence

See also Note 4 — Real Estate Assets for further discussion regarding real estate investment activity.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Assets Held for Sale

4 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 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)

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

Allocation of Purchase Price of Real Estate Assets

10 unchanged sentences

Investment in Unconsolidated Entities

The Company is engaged in an unconsolidated joint venture arrangement through CIM NP JV Holdings, LLC (“NP JV Holdings”) (the “Unconsolidated Joint Venture”), of which it owns, indirectly through CMFT MT JV Holdings, LLC and CLR NP Holdings, LLC, a subsidiary of CLR, approximately 50 % of the outstanding equity.

The Company is engaged in an unconsolidated joint venture arrangement through NP JV Holdings (the “Unconsolidated Joint Venture”), of which it owns, indirectly through CMFT MT JV Holdings, LLC and CLR NP Holdings, LLC, a subsidiary of CLR, approximately 50 % of the outstanding equity.

Through the Unconsolidated Joint Venture, which holds approximately 92 % of the membership interest in NewPoint JV, LLC (the “NewPoint JV”) pursuant to the terms of the Operating Agreement entered into between the Unconsolidated Joint Venture and NewPoint Bridge Lending, LLC, the Company indirectly owns approximately 46 % of the outstanding equity of the NewPoint JV on a fully diluted basis.

3 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Restricted Cash

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.

The Company had $ 3.9 million and $ 13.1 million in restricted cash as of September 30, 2024 and December 31, 2023, respectively.

Included in restricted cash was $ 1.9 million and $ 1.9 million held by lenders in lockbox accounts, as of September 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 June 30, 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 six months ended June 30, 2024.

Real Estate-Related Securities and Other

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

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

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

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;

As of September 30, 2024, the Company classified its investments in CMBS and CLO as available-for-sale as the Company is not actively trading the securities;

however, the Company may sell them prior to their maturity.

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

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

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

The amortized cost of the Company’s CLO subordinated note reflects accretion of interest income based on the effective yield method less any cash distributions received or entitled to be received.

CLO subordinated note positions are entitled to recurring distributions, which are generally equal to the residual cash flows of payments received on underlying securities less contractual payments to debt holders and fund expenses.

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 $ 1.2 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.

Dividend income is included in other (expense) income, net on the condensed consolidated statements of operations, of which the Company recorded $ 1.2 million and $ 3.9 million, respectively, during the three and nine months ended September 30, 2024.

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

The Company monitors its CMBS and CLO for changes in fair value.

A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost has resulted from a credit loss or other factors, such as market conditions.

Such losses that are credit related are recorded as a current expected credit loss in increase in provision for credit losses on the Company’s condensed consolidated statements of operations.

Subsequent cumulative adverse changes in expected cash flows on the Company’s CMBS are recognized as an increase to current expected credit losses.

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

Subsequent cumulative adverse changes in expected cash flows on the Company’s CMBS and CLO are recognized as an increase to current expected credit losses.

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

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

6 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

3 unchanged sentences

Current Expected Credit Losses

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.

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, CMBS and CLO 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.

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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 FASB Staff Q&A Topic 326, No.

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.

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

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

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

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

The trends and outlook for the credit’s

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

operations, balance sheet, and industry are generally positive or neutral.

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

17 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.

13 unchanged sentences

Upon successful lease execution, leasing commissions are capitalized.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Development Activities

10 unchanged sentences

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

June 30, 2024 (Unaudited) – (Continued)

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

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.

6 unchanged sentences

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

The Company recognizes interest income on its CLO subordinated note using the effective yield method utilizing expected cash flows from the underlying positions.

The accretable yield is initially measured as the excess of all cash flows expected to be collected attributable to the beneficial interest, estimated at the transaction date over the initial investment, and will be re-evaluated upon the receipt of each quarterly distribution.

Expected cash flows inherent in the estimate of accretable yields are based on expectations of default, as well as other loan-performance assumptions that impact the loans underlying the CLO portfolio.

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

Accrual of interest income is suspended on nonaccrual loans.

4 unchanged sentences

The Company has two reportable segments:

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

11 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 six months ended June 30, 2024.

ASU 2022-03 did not have a material impact on the Company’s condensed consolidated financial statements and disclosures during the nine months ended September 30, 2024.

In August 2023, the FASB issued ASU No.

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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.

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ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, for interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

The Company does not expect the adoption of ASU 2023-07 to have a material impact on its condensed consolidated financial statements and disclosures.

The Company is still assessing whether the adoption of ASU 2023-07 will have a material impact on its condensed consolidated financial statements and disclosures.

NOTE 3 — FAIR VALUE MEASUREMENTS

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An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

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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 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 CLO subordinated note is valued using Level 3 inputs.

The Company determines the fair value of its CLO subordinated note through consideration of the underlying investment portfolio metrics, including prepayment rates, default and recovery rates, and estimated market yields, supplemented by actual trades executed in the market and indicative prices provided by broker-dealers.

Operating metrics related to the specific CLO subordinated note are also considered in determining the fair value of the investment.

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

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

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

A breakout of the Company’s CMBS, CLO subordinated note, and equity securities levels of the fair value hierarchy as of September 30, 2024 and December 31, 2023 can be found in the tables under Items Measured at Fair Value on a Recurring Basis below.

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

Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.

These financial instruments are valued using Level 2 inputs.

As of 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.

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

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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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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.

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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 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.

In accordance with the fair value hierarchy described above, the following table details the net book value and fair value of of the financial instruments described above as of September 30, 2024 and December 31, 2023 (in thousands):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

September 30, 2024 December 31, 2023

Net Book Value

Net Book Value Fair Value Level

Financial assets:

First mortgage loans

$ 3,187,490 $ 3,367,239 $ 3,539,111 $ 3,596,662 3

Liquid corporate senior loans

51,083 39,565 518,252 515,839 (1)

Corporate senior loans

229,788 233,967 207,102 211,167 3

Total financial assets

$ 3,468,361 $ 3,640,771 $ 4,264,465 $ 4,323,668

Financial liabilities:

Repurchase facilities, notes payable and credit facilities

$ 3,274,363 $ 3,213,771 $ 3,939,125 $ 3,827,782 2

Total financial liabilities

$ 3,274,363 $ 3,213,771 $ 3,939,125 $ 3,827,782

____________________________________

(1) As of September 30, 2024, $ 29.8 million and $ 9.8 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 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.

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

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

Balance as of

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

September 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:

CMBS $ 324,664 $ — $ 255,004 $ 69,660

CLO subordinated note

28,061 — — 28,061

Equity securities

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

September 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 nine months ended September 30, 2024 (in thousands):

Beginning Balance, January 1, 2024

Total gains and losses:

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

Unrealized loss included in other comprehensive income (loss)

Current expected credit losses

1 unchanged sentence

Conversion to equity security (1)

Investment in CLO subordinated note

Accreted interest income

Discounts, net ( 2,670 )

Capitalized interest income 903

Ending Balance, June 30, 2024

Ending Balance, September 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.

(1) During the nine months ended September 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)

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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 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.

As of September 30, 2024, the Company had an aggregate $ 318.1 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.

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.

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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 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.

As discussed in Note 4 — Real Estate Assets, during the nine months ended September 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 $ 115.4 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.

Additionally, during the nine months ended September 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 $ 8.9 million.

During the nine months ended September 30, 2023, real estate assets related to five properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 38.6 million, resulting in impairment charges of $ 11.6 million.

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

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

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

The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the 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)

Six Months Ended June 30,

September 30, 2024 (Unaudited) – (Continued)

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

Nine Months Ended September 30,

Discount Rate Terminal Capitalization Rate

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7.5 % - 11.9 %

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,

7.0 % - 11.4 %

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

Nine Months Ended September 30,

Asset class impaired:

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Property Acquisitions

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

During the nine months ended September 30, 2024, the Company acquired two commercial properties for an aggregate purchase price of $ 44.1 million (the “2024 Property Acquisitions”), which includes $ 148,000 of external acquisition-related expenses that were capitalized.

The Company funded the 2024 Property Acquisitions with proceeds from the sale of loans held-for-investment.

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

The following table summarizes the purchase price allocation for the 2024 Property Acquisitions (in thousands):

2024 Property Acquisitions

Buildings, fixtures and improvements 28,709

Acquired in-place leases and other intangibles (1)

Total purchase price $ 44,148

____________________________________

(1) The amortization period for acquired in-place leases and other intangibles is 20.0 years.

Condominium Development Project

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.

During the nine months ended September 30, 2024 and 2023, the Company capitalized $ 14.5 million and $ 9.1 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 $ 1.0 million of capitalized interest expense during the nine months ended September 30, 2023.

No capitalized interest was included in the capitalized expenditures during the nine months ended September 30, 2024.

Condominium Dispositions

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.

During the nine months ended September 30, 2024, the Company disposed of condominium units for an aggregate sales price of $ 37.4 million, resulting in proceeds of $ 34.1 million after closing costs and a gain of $ 4.5 million.

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

The Company has no continuing

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

involvement that would preclude sale treatment with these condominium units.

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

Property Dispositions and Real Estate Assets Held for Sale

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.

During the nine months ended September 30, 2024, the Company disposed of three properties, including one retail property, one industrial property and one office property, for an aggregate gross sales price of $ 60.8 million, resulting in proceeds of $ 58.7 million after closing costs.

No gain or loss was recorded.

3 unchanged sentences

The consideration was paid in cash.

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

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.

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

The sale of 178 of these properties closed pursuant to the Realty Income Purchase and Sale Agreement for total consideration of $ 861.0 million, resulting in proceeds of $ 852.6 million after closing costs and a gain of $ 32.3 million.

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.

As of September 30, 2024, the Company identified two properties with an aggregate carrying value of $ 13.3 million as held for sale.

The Company disposed of these properties subsequent to September 30, 2024 for $ 16.0 million, as further discussed in Note 17 — Subsequent Events.

As of September 30, 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 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.

During the nine months ended September 30, 2024, seven properties totaling approximately 824,000 square feet with a carrying value of $ 166.9 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $ 115.4 million, resulting in impairment charges of $ 51.5 million, which were recorded in the condensed consolidated statements of operations.

Additionally, during the nine months ended September 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 $ 8.9 million, which were recorded in the condensed consolidated statements of operations.

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

See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges during the nine months ended September 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.

As of September 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 September 30, 2024, the Company had properties located in Ohio, which accounted for 16 % 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 14 %, 12 %, and 11 %, respectively, of the Company’s 2024 annualized rental income.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES

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

September 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.

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,

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

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

2024 2023 2024 2023

2 unchanged sentences

Below-market lease amortization $ 280 $ 309 $ 846 $ 1,055

As of June 30, 2024, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

As of September 30, 2024, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):

In-Place Leases and

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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 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.

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

1 unchanged sentence

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

As of 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.

As of September 30, 2024 and December 31, 2023, the

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

carrying value of the Company’s investment in NP JV Holdings was $ 154.6 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 $ 4.6 million and $ 9.9 million, which represented its share of NP JV Holdings’ gain, during the three and nine months ended September 30, 2024, respectively, in the condensed consolidated statements of operations.

The Company recorded a gain totaling $ 3.1 million and $ 8.2 million, which represented its share of NP JV Holdings’ gain, during the three and nine months ended September 30, 2023, respectively, in the condensed consolidated statements of operations.

During the nine months ended September 30, 2024, the Company contributed an additional $ 28.2 million in NP JV Holdings.

The Company also received $ 10.3 million in distributions during the nine months ended September 30, 2024, $ 9.9 million of which was recognized as a return on investment and $ 397,000 of which was recognized as a return of investment and reduced the invested capital and the carrying amount.

As of September 30, 2024, the Company had $ 60.5 million of unfunded commitments related to NewPoint JV.

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

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NOTE 7 — REAL ESTATE-RELATED SECURITIES AND OTHER

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

June 30, 2024 (Unaudited) – (Continued)

As of September 30, 2024, the Company’s real estate-related securities and other had an aggregate estimated fair value of $ 389.6 million, which included 17 CMBS investments, one CLO subordinated note and four equity securities.

The CMBS investments have initial maturity dates ranging from October 2024 through June 2058 and have interest rates ranging from 0.2 % to 12.4 % as of September 30, 2024, with one CMBS earning a zero coupon rate.

As of September 30, 2024, the CLO subordinated note has an initial maturity date of July 2037 and an estimated effective yield of 16.6 %.

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

Real Estate-Related Securities and Other

3 unchanged sentences

CMBS $ 497,892 $ 364 $ ( 86,360 ) $ ( 87,232 ) $ 324,664

CLO subordinated note

28,061 — — — 28,061

Equity securities

2 unchanged sentences

$ 584,400 $ 364 $ ( 107,905 ) $ ( 87,232 ) $ 389,627

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

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

Amortized Cost Basis Unrealized Loss CECL Fair Value

1 unchanged sentence

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

Investment in CLO subordinated note

31,825 — — 31,825

Converted equity securities

5,060 — — 5,060

Discounts on purchase of CLO subordinated note

( 4,179 ) — — ( 4,179 )

Amortization of discount on real estate-related securities 1,993 — — 1,993

Accretion of interest income on CLO subordinated note

Capitalized interest income on real estate-related securities 903 — — 903

5 unchanged sentences

— — ( 51,424 ) ( 51,424 )

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

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

$ 584,400 $ ( 107,541 ) $ ( 87,232 ) $ 389,627

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.

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

June 30, 2024 (Unaudited) – (Continued)

The scheduled maturities of the Company’s CMBS as of June 30, 2024 are as follows (in thousands):

September 30, 2024 (Unaudited) – (Continued)

During the nine months ended September 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 nine months ended September 30, 2024, the Company invested $ 27.6 million in a CLO subordinated note as further described in Note 2 — Summary of Significant Accounting Policies.

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

During the nine months ended September 30, 2024, the Company recorded $ 16.0 million of net unrealized loss on its real estate-related securities and equity securities, comprised of a $ 4.8 million unrealized loss on CMBS, which is included in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss) and a $ 11.2 million unrealized loss on the Company’s equity securities, which is included in unrealized gain (loss) on equity securities in the accompanying condensed consolidated statements of operations.

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

The scheduled maturities of the Company’s CMBS and CLO subordinated note as of September 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 six months ended June 30, 2024 and 2023 (in thousands):

The following table presents the activity in the Company’s current expected credit losses related to its positions in two different tranches of a CMBS instrument for the nine months ended September 30, 2024 and 2023 (in thousands):

Current expected credit losses as of January 1, 2024

3 unchanged sentences

Current expected credit losses as of June 30, 2024

Provision for credit losses

Current expected credit losses as of September 30, 2024

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Current expected credit losses as of January 1, 2023

3 unchanged sentences

Current expected credit losses as of June 30, 2023

Provision for credit losses

Current expected credit losses as of September 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.

In March 2023, the underlying collateral of the loan was appraised by the special servicer, resulting in an appraisal reduction representing approximately 44 % of one of the CMBS position’s tranches in which the Company is invested.

Though the appraisal reduction was partially reversed during the year ended December 31, 2023, the initial appraisal reduction resulted in reduced cash flows received from the respective CMBS investment during the year ended December 31, 2023.

In addition, during the three months ended September 30, 2024, the Company received notice of preliminary sales transaction activity in relation to the underlying collateral of this CMBS position, as well as an additional position in a separate tranche of this instrument, indicative of a bid below the carrying value of the investment.

The Company considered various factors, including the factors noted above, in determining whether a credit loss existed.

The present value of cash flows expected to be collected from the CMBS position did not exceed its amortized cost basis, and as such the Company determined one of the two tranches of the security the Company is invested in had incurred a credit loss.

In addition, as of March 31, 2024, the CMBS position was in maturity default as it did not mature as anticipated on the initial maturity date during December 2023.

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

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 present value of cash flows expected to be collected from the CMBS positions did not exceed their amortized cost basis, and as such the Company determined both tranches of the security the Company is invested in had incurred a credit loss.

In addition, as of March 31, 2024, the CMBS positions were in maturity default as they did not mature as anticipated on the initial maturity date during December 2023.

As of September 30, 2024, the CMBS positions were 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 more likely than not that the Company will be forced to sell the security prior to recovering the amortized cost.

As a result of the credit loss incurred, the Company reclassified $ 13.6 million of unrealized loss from other comprehensive income (loss) on the condensed consolidated statements of comprehensive income (loss) 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 nine months ended September 30, 2024, the Company recorded a $ 51.4 million increase to the provision for credit losses on the condensed consolidated statements of operations.

As of September 30, 2024, the amortized cost basis of the CMBS positions identified as having incurred a credit loss was $ 192.8 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 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.

As of September 30, 2024, there were 13 CMBS positions with an aggregate fair value of $ 295.5 million with unrealized losses reflected in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss).

Upon evaluating these securities at the individual security level, the Company concluded that the unrealized losses included in other comprehensive income (loss) as of September 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

NOTE 8 — LOANS HELD-FOR-INVESTMENT

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,

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

As of September 30, As of December 31,

First mortgage loans (1)

7 unchanged sentences

____________________________________

(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):

(1) As of September 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.

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

CRE Loans (1) (2)

Liquid Corporate Senior Loans Corporate Senior Loans

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

September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

Number of loans 33 33 18 237 20 21

8 unchanged sentences

____________________________________

(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”).

(1) As of September 30, 2024, 94.4 % 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;

6 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

CRE Loans (1)

5 unchanged sentences

Sale of loans (2)

— ( 446,974 ) — ( 446,974 )

Principal repayments received

10 unchanged sentences

( 264,745 ) 18,721 ( 509 ) ( 246,533 )

Balance, June 30, 2024

Balance, September 30, 2024

$ 3,187,490 $ 51,083 $ 229,788 $ 3,468,361

____________________________________

(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)

(1) Loan originations, acquisitions and funding include $ 11.2 million in protective advances while principal repayments received include $ 12.3 million of cost-recovery proceeds received on the Company’s nonaccrual first mortgage loans during the nine months ended September 30, 2024.

(2) Includes $ 265.4 million in sales of liquid corporate senior loans to OFSI BSL XIV CLO, Ltd., as further discussed in Note 2 — Summary of Significant Accounting Policies.

(3) During the nine months ended September 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.

(4) 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.

2 unchanged sentences

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

As of June 30, 2024, the Company’s CRE loans had the following characteristics based on carrying value (dollar amounts in thousands):

As of September 30, 2024, the Company’s CRE loans had the following characteristics based on carrying value (dollar amounts in thousands):

Collateral Property Type

As of June 30, 2024

As of September 30, 2024

$ 1,754,468 49.3 %

9 unchanged sentences

Total first mortgage loans, net

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Geographic Location

As of June 30, 2024

As of September 30, 2024

$ 1,398,089 39.3 %

11 unchanged sentences

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):

September 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 nine months ended September 30, 2024 and 2023 (in thousands):

First Mortgage Loans Unfunded First Mortgage Loans (1)

15 unchanged sentences

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

(Reversal of) provision for credit losses

( 24,304 ) 5,029 ( 4,050 ) ( 1 ) 595 117 ( 22,614 )

Charge-offs of CECL

— — ( 2,860 ) — — — ( 2,860 )

Current expected credit losses as of September 30, 2024

$ 373,985 $ 15,635 $ 1,017 $ — $ 4,129 $ 521 $ 395,287

Current expected credit losses as of January 1, 2023

7 unchanged sentences

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

Provision for (reversal of) credit losses

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

Current expected credit losses as of September 30, 2023

$ 90,420 $ 9,198 $ 17,991 $ — $ 2,299 $ 330 $ 120,238

____________________________________

(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 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.

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

During the three months ended September 30, 2024, the Company recorded a net decrease of $ 25.5 million in the current expected credit loss reserve against the loans held-for-investment portfolio, bringing the total current expected credit loss reserve on funded and unfunded commitments to $ 395.3 million.

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2024 (Unaudited) – (Continued)

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

(i) a $ 133.4 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 nine months ended September 30, 2024;

(ii) a $ 125.7 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 nine months ended September 30, 2024;

and (iii) a $ 113.1 million commercial first mortgage loan on an office building in California primarily due to being past due on its interest payments during the nine months ended September 30, 2024.

During the nine months ended September 30, 2024, the Company recognized $ 960,000 , $ 982,000 and $ 7.6 million, respectively, of interest income on each of the first mortgage loans prior to payment default.

As of September 30, 2024, two of the risk-rated 5 first mortgage loans noted above were more than 90 days past due on their interest payments and one of the risk-rated 5 mortgage loans was less than 90 days past due on its 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 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.

In addition, during the three months ended September 30, 2024, one of the Company’s first mortgage loans previously on nonaccrual status resumed anticipated interest payments and repaid outstanding overdue interest in accordance with the loan modification discussed below.

As of September 30, 2024, the Company’s asset-specific credit loss reserve totaled $ 318.1 million on funded and unfunded commitments, which related to the Company’s risk-rated 5 first mortgage loans.

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

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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 June 30, 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 September 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 June 30, 2024

As of September 30, 2024

Number of Loans 2024 2023 2022 2021 2020 Prior

28 unchanged sentences

Origination dates are subsequently updated to reflect material loan modifications.

(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.

(2) As of September 30, 2024, one of the Company’s liquid corporate senior loan investments was on nonaccrual status with an aggregate carrying value of $ 378,000 , 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 six months ended June 30, 2024.

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

Loan Modifications

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

Disclosures (“ASU 2022-02”) .

1 unchanged sentence

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.

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

As of September 30, 2024, the loan had a carrying value of $ 267.5 million, representing approximately 7.5 % of the Company’s first mortgage loans and was risk-rated 5.

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

The borrower elected to PIK $ 1.9 million of interest during the nine months ended September 30, 2024.

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

As of September 30, 2024 the loan had a carrying value of $ 51.8 million, representing approximately 1.5 % of the Company’s first mortgage loans and was risk-rated 5.

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.

The Company modified a first mortgage loan collateralized by an office property during the nine months ended September 30, 2024.

As of September 30, 2024, the loan had a carrying value of $ 152.4 million, representing approximately 4.3 % of the Company’s first mortgage loans and was risk-rated 5.

The loan modification extended the maturity date from July 7, 2026 to July 7, 2029, with no extension options, exempted $ 20.0 million of the principal balance from accruing interest, modified the variable interest rate from 3.55 % to a fixed interest rate of 6.25 %, and allowed for the accrual of PIK interest for 2.25 % of the fixed interest rate.

The borrower elected to PIK $ 2.0 million of interest during the nine months ended September 30, 2024.

The Company modified a first mortgage loan collateralized by a multifamily property during the nine months ended September 30, 2024.

As of September 30, 2024, the loan had a carrying value of $ 97.7 million, representing approximately 2.7 % of the Company’s first mortgage loans and was risk-rated 3.

The loan modification extended the maturity date from October 7, 2025 to October 7, 2028, with two extension options.

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

As of September 30, 2024, three of these loans are 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 these risk-rated 5 modified first mortgage loans as of September 30, 2024.

NOTE 9 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

1 unchanged sentence

During the year ended December 31, 2023, the Company’s remaining two interest rate cap agreements matured.

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

As of September 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.

2 unchanged sentences

The Company had interest rate caps which were used to manage exposure to interest rate movements, but did not meet the requirements to be designated as a hedging instrument.

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

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

Interest rate swaps are designated as cash flow hedges in order to hedge the variability of the anticipated cash flows on the Company’s variable rate debt.

The change in fair value of the derivative instruments designated as hedges is recorded in other comprehensive (loss) 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.

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 and nine months ended September 30, 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 September 30, 2024 and 2023.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

cash flows from hedging instruments in the same category in its condensed consolidated statements of cash flows as the category for cash flows from the hedged items.

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

4 unchanged sentences

NOTE 10 — REPURCHASE FACILITIES, NOTES PAYABLE AND CREDIT FACILITIES

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

June 30, 2024 (Unaudited) – (Continued)

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

As of September 30, 2024, the Company had $ 3.3 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 2.4 years and a weighted average interest rate of 6.0 %.

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

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

The following table summarizes the debt balances as of 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

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

During the Nine Months Ended September 30, 2024

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

1 unchanged sentence

Amortization Balance as of

June 30, 2024

September 30, 2024

Notes payable – variable rate debt $ 622,841 $ 2,045 $ ( 14,792 ) $ — $ 610,094

11 unchanged sentences

Notes Payable

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.

As of September 30, 2024, the Company had $ 610.1 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 June 30, 2024 (dollar amounts in thousands):

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Note on Note Financing Arrangement

18 unchanged sentences

On July 28, 2021, the Company issued $ 774.0 million aggregate principal amount of asset backed securities (“ABS”) mortgage notes, Series 2021-1 (the “Class A Notes”) in six classes, as shown below:

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

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

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

10 unchanged sentences

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 June 30, 2024, amounts outstanding on the Class A Notes totaled $ 758.5 million with a weighted average interest rate of 2.8 %.

As of September 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.

6 unchanged sentences

The revolving period began on February 10, 2023 and concludes on the day preceding the earlier to occur of (i) the scheduled revolving period end date of February 10, 2026, (ii) the date of the declaration of the revolving period end date upon the occurrence and continuation of an event of default, and (iii) the termination date.

The termination date is the earlier to occur of (i) February 10, 2028 (two years after the revolving period end date) and (ii) the date of the declaration of the termination date or the date of the automatic occurrence of the termination date upon the occurrence and continuation of an event of default.

As of 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.

The Third Amended Credit and Security Agreement provides for available borrowings under the revolving credit facility up to an aggregate principal amount of $ 550.0 million (the “Credit Securities Revolver”).

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

As of 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.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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).

The reinvestment period began on December 31, 2019 and concludes on the earlier of (i) the date that is three years after June 23, 2022, the date the third amendment became effective, (ii) the final maturity date and (iii) the date on which the total assets under management of the Company and its wholly-owned subsidiaries is less than $ 1.25 billion (the “Reinvestment Period”).

September 30, 2024 (Unaudited) – (Continued)

and continuation of an event of default.

As of September 30, 2024, the amounts borrowed and outstanding under the Loan Facility totaled $ 77.0 million at a weighted average interest rate of 7.5 %.

CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Company, has a revolving credit and security agreement (the “Fourth Amended Credit and Security Agreement”) with the lenders from time to time parties thereto, Citibank, as administrative agent, CMFT Securities, as equityholder and as collateral manager, Citibank (acting through its Agency & Trust division), as both a collateral agent and as a collateral custodian, and Virtus Group, LP, as collateral administrator.

The Fourth Amended Credit and Security Agreement provides for available borrowings under the revolving credit facility up to an aggregate principal amount of $ 18.0 million (the “Credit Securities Revolver”).

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

As of September 30, 2024, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $ 18.0 million at a weighted average interest rate of 7.6 %.

Borrowings under the Fourth Amended Credit and Security Agreement will bear interest equal to the one-month Term SOFR (as defined in the Fourth Amended Credit and Security Agreement) for the relevant interest period, plus an applicable rate.

The applicable rate is dependent on the type of loan being financed, which includes broadly syndicated, private and middle market loans meeting certain criteria as set forth in the Fourth Amended Credit and Security Agreement and ranges from 1.90 % to 2.75 % per annum during the first two years of the reinvestment period and 2.00 % to 2.85 % during the last year of the reinvestment period and 2.10 % to 2.95 % per annum during the amortization period (and, in each case, an additional 2.00 % per annum following an event of default under the Fourth Amended Credit and Security Agreement).

The reinvestment period began on December 31, 2019 and concludes on the earlier of (i) August 29, 2024, (ii) the final maturity date and (iii) the date on which the total assets under management of the Company and its wholly-owned subsidiaries is less than $ 1.25 billion (the “Reinvestment Period”).

The final maturity date is the earliest to occur of:

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

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

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

Borrowings under the Fourth 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 Fourth Amended Credit and Security Agreement.

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

Repurchase Facilities

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.

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

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

Repurchase Facility Date of Agreement Maturity Date

26 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

(2) CRE mortgage loan balances financed under the Repurchase Facilities with Citibank, Barclays, Wells Fargo and Deutsche Bank reflect the aggregate outstanding principal balance while the CMBS balance financed under the J.P.

7 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 June 30, 2024, ranges from 1.05 % to 1.45 %.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Morgan, which as of September 30, 2024, ranges from 1.10 % to 1.45 %.

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 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):

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

Principal Repayments

6 unchanged sentences

The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Unfunded Commitments

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.

As of September 30, 2024, the Company had $ 265.9 million of unfunded loan commitments related to its existing CRE loans held-for-investment and corporate senior loans, and $ 60.5 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 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.

As of September 30, 2024, the Company had $ 8.6 million of unsettled liquid corporate senior loan sales as of September 30, 2024, $ 7.1 million of which settled subsequent to September 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.

10 unchanged sentences

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

9 unchanged sentences

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

On a quarterly basis, the Investment Advisor designates

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

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

During the three and six months ended June 30, 2024 and 2023, no incentive compensation fees were incurred.

During the three and nine months ended September 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.

4 unchanged sentences

Thereafter, CMFT Management is entitled to receive 10 % of CLR’s Core Earnings.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

CLR Securities Investments, LLC (“CLR Securities”), a wholly owned subsidiary of CLR, has an investment advisory and management agreement dated February 29, 2024 (the “CLR Investment Advisory and Management Agreement”) with the Investment Advisor pursuant to which the Investment Advisor manages the day-to-day business affairs of CLR Securities and its investments in real estate-related securities (collectively, the “CLR Managed Assets”), subject to the supervision of the CLR board of trustees.

3 unchanged sentences

If either CLR Advisory Agreement is terminated without cause, CMFT Management and/or the Investment Advisor, as applicable, shall receive a termination fee pursuant to the terminated CLR Advisory Agreement equal to three times the sum of (a) the average annual management fee and (b) the average annual incentive compensation incurred under the terminated CLR Advisory Agreement during the 24-month period prior to the termination.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

The Company and CMFT Management have entered into an agreement (the “Offset Agreement”) whereby, (i) for so long as CMFT Management is the external manager of the Company and an affiliate of CIM Group, the Company’s management fee payable to CMFT Management will be reduced by the Company’s proportional share, based on its ownership of CLR, of the base management fee and performance fee payable to CMFT Management by CLR, and (ii) if the Management Agreement and either or both of the CLR Advisory Agreements are simultaneously terminated without cause, the termination fee payable by the Company to CMFT Management or the Investment Advisor, as applicable, under the applicable CLR Advisory Agreement shall be reduced by the Company’s proportional share, based on its ownership of CLR, of the termination fee payable to CMFT Management or the Investment Advisor by CLR under the applicable CLR Advisory Agreement, such that, in each case, the Company will not pay more fees than would otherwise be payable under its Management Agreement or Investment Advisory and Management Agreement, as applicable.

The Offset Agreement also provides that CMFT Management will reimburse to the Company 50 % of the organization and offering expenses paid by the Company for CLR, which reimbursement may be paid as a reduction in the management fee payable to the CMFT Manager under the Management Agreement.

Organization and offering expenses is defined in the CLR Management Agreement as any and all costs and expenses incurred by or on behalf of CLR in connection with the formation of CLR and the marketing and distribution of its common shares of beneficial interest.

The Investment Advisor has engaged the Sub-Advisor to act as an investment sub-advisor with respect to the assets held by CLR Securities.

2 unchanged sentences

The Sub-Advisory Agreement may be terminated by either party with 30 days’ advance written notice to the other party.

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.

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

Expense reimbursements to related parties

1 unchanged sentence

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

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

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

2024 2023 2024 2023

3 unchanged sentences

$ 3,864 $ 3,349 $ 10,583 $ 10,598

__________________________________

(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, $ 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.

Of the amounts shown above, $ 14.1 million and $ 14.8 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 nine months ended September 30, 2024 and 2023, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

Development Management Agreements

2 unchanged sentences

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

During the six months ended June 30, 2024 and 2023, the Company recorded $ 413,000 and $ 107,000 , 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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Development Services.

During the nine months ended September 30, 2024 and 2023, the Company recorded $ 563,000 and $ 311,000 , respectively, in development management fees.

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.

2 unchanged sentences

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 June 30, 2024, $ 199.9 million of the first mortgage loan was outstanding.

As of September 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 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 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.

As of September 30, 2024, $ 98.0 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, for the purposes of investing in the NewPoint JV.

As of September 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 $ 152.0 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 June 30, 2024, $ 154.0 million of the first mortgage loan was outstanding.

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

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

As of September 30, 2024, $ 143.9 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 June 30, 2024, $ 146.5 million of the corporate senior loans was outstanding.

As of September 30, 2024, $ 145.8 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.

As further described in Note 2 — Summary of Significant Accounting Policies, in August 2024, CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Company, entered into a master participation agreement (the “Master Participation Agreement”) with OFSI BSL XIV CLO, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands to sell a portion of the Company’s portfolio of liquid corporate senior loans.

The collateral manager for OFSI BSL XIV CLO, Ltd.

is OFS CLO Management II, LLC, an affiliate of the Sub-Advisor.

During the nine months ended September 30, 2024, the sale of 185 liquid corporate senior loans closed pursuant to the Master Participation Agreement, with an aggregate principal balance of $ 265.4 million, resulting in net proceeds of $ 259.7 million after closing costs and a loss of $ 2.9 million.

The liquid corporate senior loans served as the initial positions for the formation of a CLO, in which the Company subsequently invested $ 27.6 million in a CLO subordinated note.

NOTE 13 — ECONOMIC DEPENDENCY

8 unchanged sentences

The 2022 Plan superseded and replaced the 2018 Plan.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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 June 30, 2024.

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.

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.

4 unchanged sentences

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 maximum number of shares of common stock of the Company that may be subject to awards granted under the Manager

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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 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.

As of September 30, 2024, the Company has granted awards of approximately 3.3 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 June 30, 2024, there were approximately 9.6 million shares remaining that may be subject to awards granted under the Manager Plan.

The restricted stock units vest in three equal annual installments beginning on December 15, 2024 with respect to approximately 2.2 million of the restricted stock units and on June 30, 2025 with respect to approximately 1.1 million of the restricted stock units.

As of September 30, 2024, there were approximately 8.7 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.

The Company recorded compensation expense related to restricted stock units of $ 1.7 million and $ 4.0 million, respectively, for the three and nine months ended September 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 nine months ended September 30, 2023.

As of September 30, 2024, there was $ 16.4 million of total unrecognized compensation expense related to these restricted stock units, which will be recognized ratably over the remaining vesting periods.

As of September 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 September 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 September 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 June 30, 2024.

The remaining 36,000 restricted shares issued vested on October 1, 2024 based on one year of continuous service.

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 $ 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)

The Company recorded compensation expense of $ 60,000 and $ 360,000 for the three and nine months ended September 30, 2024, respectively, and $ 120,000 and $ 360,000 for the three and nine months ended September 30, 2023, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

All compensation expense related to these restricted shares was recognized ratably over the period of service as of September 30, 2024.

On October 1, 2024, as part of the annual retainers paid to the independent members of the Board and pursuant to the 2022 Plan, the three independent members of the Board were each granted approximately 13,136 restricted shares, which will vest on October 1, 2025.

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 June 30, 2024, the Company’s leases had a weighted-average remaining term of 10.5 years.

As of September 30, 2024, the Company’s leases had a weighted-average remaining term of 10.7 years.

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

1 unchanged sentence

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

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):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

As of September 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 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,

For the three and nine months ended September 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 nine months ended September 30, 2024 and 2023 consisted of the following (in thousands):

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

2024 2023 2024 2023

9 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

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.

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

The Company recognized $ 63,000 and $ 188,000 of ground lease expense during the three and nine months ended September 30, 2024, respectively, of which $ 61,000 and $ 182,000 , respectively, was paid in cash during the period it was recognized.

As of September 30, 2024, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $ 63,000 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):

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Rental and other property income $ 22,829 $ — $ 99 $ 22,928

17 unchanged sentences

Gain on investment in unconsolidated entities — 4,608 — 4,608

Unrealized loss on equity securities

Unrealized gain on equity securities

— 4,486 — 4,486

Other income, net

Other income (expense), net

120 ( 3,730 ) 1,465 ( 2,145 )

Loss on extinguishment of debt — ( 950 ) — ( 950 )

Total other income

120 4,414 2,675 7,209

Segment net loss

Segment net income (loss)

$ 5,999 $ 12,674 $ ( 11,358 ) $ 7,315

Total assets as of June 30, 2024

Net income allocated to noncontrolling interest — 3 — 3

Segment net income (loss) attributable to the Company $ 5,999 $ 12,671 $ ( 11,358 ) $ 7,312

Total assets as of September 30, 2024

$ 1,054,259 $ 4,091,734 $ 219,854 $ 5,365,847

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Rental and other property income $ 70,778 $ — $ 286 $ 71,064

21 unchanged sentences

268 651 3,948 4,867

Loss on extinguishment of debt

— ( 950 ) — ( 950 )

Total other income (expense)

2 unchanged sentences

$ ( 34,051 ) $ ( 210,215 ) $ ( 32,762 ) $ ( 277,028 )

Total assets as of June 30, 2024

Net income allocated to noncontrolling interest

Segment net loss attributable to the Company

$ ( 34,051 ) $ ( 210,218 ) $ ( 32,762 ) $ ( 277,031 )

Total assets as of September 30, 2024

$ 1,054,259 $ 4,091,734 $ 219,854 $ 5,365,847

__________________________________

(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

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Rental and other property income

16 unchanged sentences

9,193 — — 9,193

Real estate impairment 6,754 — 156 6,910

Increase in provision for credit losses — 50,219 — 50,219

5 unchanged sentences

— 3,136 — 3,136

Unrealized gain on equity security

Unrealized loss on equity security

— ( 2,073 ) — ( 2,073 )

7 unchanged sentences

$ 3,110 $ ( 4,521 ) $ ( 9,631 ) $ ( 11,042 )

Total assets as of June 30, 2023

Total assets as of September 30, 2023

$ 1,189,447 $ 5,007,190 $ 491,405 $ 6,688,042

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

Real Estate Credit Corporate/Other (1)

Company Total

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

28 unchanged sentences

$ 54,769 $ 49,737 $ ( 29,489 ) $ 75,017

Total assets as of June 30, 2023

Total assets as of September 30, 2023

$ 1,189,447 $ 5,007,190 $ 491,405 $ 6,688,042

3 unchanged sentences

Redemption of Shares of Common Stock

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.

Subsequent to September 30, 2024, the Company redeemed approximately 1.8 million shares for $ 10.7 million (at an average redemption price of $ 6.09 per share).

The remaining redemption requests received during the three months ended September 30, 2024 totaling approximately 39.1 million shares went unfulfilled.

Investment and Disposition Activity

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.

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

• Disposed of two properties for an aggregate gross sales price of $ 16.0 million, resulting in net proceeds of $ 15.2 million after closing costs and a gain of approximately $ 1.9 million.

• Settled $ 24.1 million on the sale of two CMBS.

• Settled $ 8.2 million of liquid corporate senior loan sales, $ 7.1 million of which were traded as of September 30, 2024.

CIM REAL ESTATE FINANCE TRUST, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2024 (Unaudited) – (Continued)

• Originated one first mortgage loan with a principal balance of $ 32.5 million, funded an aggregate amount of $ 10.9 million to eight of the Company’s first mortgage loans, and received $ 6.0 million of principal repayments on four of the Company’s first mortgage loans.

Financing Activity

• 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.

• Financed a first mortgage loan for $ 23.3 million under the repurchase facility with Citibank.

• Repaid $ 26.4 million of borrowings under the repurchase facilities with Citibank, Barclays, Deutsche Bank, and J.P.

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