What changed in this filing

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Item 1. Business

2025-03-28 compared with 2024-03-28 · 34 added, 27 removed, 259 unchanged (19% of the section changed)

6 unchanged sentences

• Real estate — engages primarily in acquiring and managing geographically diversified income-producing retail, industrial and office properties that are primarily single-tenant properties, which are leased to creditworthy tenants under long-term net leases.

As of December 31, 2023, our credit portfolio consisted of 291 loans with a net book value of $4.3 billion, and investments in real estate-related securities of $519.7 million as of December 31, 2023.

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

As of December 31, 2024, our credit portfolio consisted of 68 loans with a net book value of $3.4 billion, and investments in real estate-related securities and other of $345.8 million.

W e conduct and expect to continue to conduct our commercial real estate lending business through our subsidiary CIM Commercial Lending REIT (“CLR”), a Maryland statutory trust, which we expect to be taxed as a REIT for U.S.

federal income tax purposes.

As of February 29, 2024, CLR holds a diversified portfolio of approximately $1.6 billion of the Company’s senior secured mortgage loans and commercial mortgage-backed securities.

In addition, we owned 192 properties, comprising approximately 6.2 million rentable square feet of commercial space located in 37 states.

As of December 31, 2024 , CLR holds a diversified portfolio of approximately $1.5 billion, which includes first mortgage loans with a net book value of $1.05 billion, CMBS with an estimated fair value of $241.3 million, and an investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies — Investment in Unconsolidated Entities to the consolidated financial statements in this Annual Report on Form 10-K) with a carrying value of $171.8 million .

In addition, as of December 31, 2024 we owned 187 commercial real estate properties, comprising approximately 5.8 million rentable square feet of commercial space located in 36 states.

As of December 31, 2024, the rentable space at these properties was 100.0% leased, including month-to-month agreements, if any.

As of December 31, 2024, we also owned condominium developments with a net book value of $64.9 million.

We have elected to be taxed and conduct our operations to qualify as a REIT for federal income tax purposes.

4 unchanged sentences

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

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

CIM Group also maintains additional offices across the United States and in South Korea to support its platform.

We have no paid employees and rely upon our manager pursuant to our Second Amended and Restated Management Agreement dated March 24, 2023 (the “Management Agreement”), and certain of its affiliates, including our investment advisor, CIM Capital IC Management, LLC (the “Investment Advisor”), with respect to investments in securities and certain other investments, to provide substantially all of our day-to-day management.

CIM Group is headquartered in Los Angeles, California and has offices in Atlanta, Georgia, Chicago, Illinois, Dallas, Texas, New York, New York, Orlando, Florida, Phoenix, Arizona, London, UK and Tokyo, Japan.

CIM Group also maintains additional offices with distribution staff and JV partnerships.

We rely upon our manager pursuant to our Second Amended and Restated Management Agreement dated March 24, 2023 (the “Management Agreement”), and certain of its affiliates to provide substantially all of our day-to-day management, including relying on our investment advisor, CIM Capital IC Management, LLC (the “Investment Advisor”), an affiliate of our manager, which provides substantially all of the day-to-day management of our wholly-owned 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, our manager and the Investment Advisor, together with certain other affiliates of CIM Group, serve as our sponsor, which we refer to as our “sponsor” or “CIM”.

Our Management Agreement had an initial three-year term and renews automatically each year thereafter for an additional one-year period unless terminated by our board of directors (our “Board”).

On December 6, 2019, CMFT Securities Investments, LLC (“CMFT Securities”), which is a wholly-owned subsidiary of the Company, entered into an investment advisory and management agreement (the “Investment Advisory and Management Agreement”) with our Investment Advisor.

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

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

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

The Investment Advisor, a wholly-owned

subsidiary of CIM Group, is registered as an investment advisor with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).

Pursuant to the Investment Advisory and Management Agreement, the Investment Advisor will manage the day-to-day business affairs of CMFT Securities and its investments in corporate credit and real estate-related securities, subject to the supervision of the Board.

29 unchanged sentences

These loans may be tranched into senior and junior mezzanine loans, with junior mezzanine loans secured by a pledge of the equity interests in the more junior mezzanine borrower.

Mezzanine lenders typically have different, and at times more limited, rights compared to more senior lenders, including, following a default on the senior

loan, the right, for a period of time, to cure defaults under the senior loan and any senior mezzanine loan and purchase the senior loan and any senior mezzanine loan.

Mezzanine lenders typically have different, and at times more limited, rights compared to more senior lenders, including, following a default on the senior loan, the right, for a period of time, to cure defaults under the senior loan and any senior mezzanine loan and purchase the senior loan and any senior mezzanine loan.

Subject to the terms negotiated with, and the rights of, the senior lenders, mezzanine lenders typically have the right to foreclose on their equity interest and become the direct or indirect owner of the property.

26 unchanged sentences

In addition, certain states have enacted legislation requiring the licensing of mortgage bankers or other lenders and these requirements may affect our ability to effectuate our proposed investments in loans.

Commencement of operations in these or other jurisdictions may be dependent upon a finding of our financial responsibility, character and fitness.

Commencement of operations in these or

other jurisdictions may be dependent upon a finding of our financial responsibility, character and fitness.

We may determine not to make loans in any jurisdiction in which the regulatory authority determines that we have not complied in all material respects with applicable requirements.

30 unchanged sentences

In evaluating potential property acquisitions consistent with our investment objectives, CMFT Management applies a well-established underwriting process to determine the creditworthiness of potential tenants.

We consider a tenant to be creditworthy if we believe that the tenant has sufficient assets, cash flow generation and stability of operations to meet its obligations under the lease.

We consider a tenant to be creditworthy if we believe that the tenant has sufficient assets, cash flow generation and stability of operations to meet its obligations under

Similarly, CMFT Management applies credit underwriting criteria to possible new tenants when we are leasing properties in our portfolio.

Many of the tenants of our properties are, and we expect will continue to be, international, national or regional companies that are creditworthy entities having high net worth and operating income.

CMFT Management’s underwriting process includes analyzing the financial data and other available information about the tenant, such as income

statements, balance sheets, net worth, cash flows, business plans, data provided by industry credit rating services, and/or other information CMFT Management may deem relevant.

CMFT Management’s underwriting process includes analyzing the financial data and other available information about the tenant, such as income statements, balance sheets, net worth, cash flows, business plans, data provided by industry credit rating services, and/or other information CMFT Management may deem relevant.

Generally, these tenants must have a proven track record in order to meet the credit tests applied by CMFT Management.

33 unchanged sentences

Circumstances might arise that could cause us to determine to sell an asset before the end of the expected holding period if we believe the sale of the asset would be in the best interests of our stockholders.

The determination of whether a particular asset should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, current tenant rolls and tenant creditworthiness, whether we could apply the proceeds from the sale of the asset to acquire other assets, whether disposition of the asset would increase cash flows, and whether the sale of the asset would be a prohibited transaction under the Code or otherwise impact our status as a REIT for federal income tax purposes.

During the year ended December 31, 2023, we sold 188

properties for an aggregate gross sales price of $925.9 million, resulting in net proceeds of $914.4 million after closing costs and a net gain of $44.4 million.

The determination of whether a particular asset should be sold or otherwise disposed of will be made after

consideration of relevant factors, including prevailing and projected economic conditions, current tenant rolls and tenant creditworthiness, whether we could apply the proceeds from the sale of the asset to acquire other assets, whether disposition of the asset would increase cash flows, and whether the sale of the asset would be a prohibited transaction under the Code or otherwise impact our status as a REIT for federal income tax purposes.

During the year ended December 31, 2024, we sold seven properties for an aggregate gross sales price of $90.6 million, resulting in net proceeds of $87.2 million after closing costs and a net gain of $1.9 million.

Financing Strategy

23 unchanged sentences

Our ability to increase our diversification through borrowing may be adversely impacted if banks and other lending institutions reduce the amount of funds available for borrowing.

When interest rates are high or financing is otherwise unavailable on a timely basis, our ability to make additional investments will be restricted and we may not be able to adequately diversify our portfolio.

When interest rates are high or financing is otherwise unavailable on a timely basis, our ability to make additional investments will be restricted and we may not be able to adequately

diversify our portfolio.

See Part I, Item 1A.

22 unchanged sentences

March 1, 2024 $ 6.09

March 28, 2025 $ 5.22

For participants in the DRIP, distributions are reinvested in shares of our common stock under the DRIP at the most recent estimated per share NAV as determined by our Board.

As of December 31, 2023, the estimated per share NAV of our common stock was $6.31, which was established by the Board on November 9, 2023 using a valuation date of September 30, 2023.

Effective on March 1, 2024, the Board established an updated estimated per share NAV of our common stock, using a valuation date of January 31, 2024, of $6.09 per share.

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

Effective on March 28, 2025, the Board established an updated estimated per share NAV of our common stock, using a valuation date of December 31, 2024, of $5.22 per share.

Commencing on March 28, 2025, distributions are reinvested in shares of our common stock under the DRIP at a price of $5.22 per share and $5.22 per share serves as the most recent estimated per share NAV for purposes of the share redemption program.

We have not made any adjustments to the valuation of our estimated per share NAV for the impact of other transactions occurring subsequent to February 29, 2024.

We have not made any adjustments to the valuation of our estimated per share NAV for the impact of other transactions occurring subsequent to March 20, 2025.

See Part II, Item 5.

28 unchanged sentences

In addition, our manager generally shall continue to be entitled to reimbursement for costs and expenses to the extent incurred on behalf of the Company in accordance with the Management Agreement.

The Management Agreement had an initial three-year term and shall be deemed renewed automatically each year thereafter for an additional one-year period unless the Company provides 180 days’ written notice of termination to the manager after the affirmative vote of 2/3 of the Company’s independent directors.

affirmative vote of 2/3 of the Company’s independent directors.

If the Management Agreement is terminated without cause, the manager shall receive a termination fee equal to three times the sum of (a) the average annual management fee and (b) the average annual Incentive Compensation during the 24-month period prior to the termination.

1 unchanged sentence

Pursuant to the Investment Advisory and Management Agreement, our Investment Advisor shall receive an investment advisory fee (the “Investment Advisory Fee”), payable quarterly in arrears, equal to 1.50% per annum (0.375% per quarter) of CMFT Securities’ Equity (as defined in the Investment Advisory and Management Agreement).

In addition, the Investment Advisor is eligible to receive incentive compensation, as described

In addition, the Investment Advisor is eligible to receive incentive compensation, as described below.

In the event that an Incentive Fee is earned and payable with respect to any quarter under the Management Agreement, our manager will calculate the portion of the Incentive Fee that was attributable to the assets managed by our Investment Advisor and payable to the Investment Advisor.

7 unchanged sentences

Either party may terminate the Sub-Advisory Agreement with 30 days’ prior written notice to the other party.

For a discussion of the fees and expenses payable by CLR for the management of its assets, see Note 13 — Related-Party Transactions and Arrangements to the consolidated financial statements in this Annual Report on Form 10-K.

For additional information related to conflicts of interest, see Part I, Item 1 A .

R isk Fac t o rs — Risks Related to Conflicts of Interest and Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — C o nflicts of Interest of this Annual Report on Form 10-K.

Human Capital Resources

We are operated by affiliates of CIM and have no direct employees.

We are operated by affiliates of CIM.

We have entered into the Management Agreement with CMFT Management, and the Investment Advisory and Management Agreement with our Investment Advisor, pursuant to which CMFT Management has agreed to provide, or arrange for other service providers to provide, management and administrative services to us and our subsidiaries, and our Investment Advisor has agreed to provide investment advisory services to CMFT Securities for the assets it manages.

14 unchanged sentences

We also file registration statements, amendments to our registration statements, and/or supplements to our prospectus in connection with any of our offerings with the SEC.

Copies of our filings

with the SEC are available on our sponsor’s website, http://www.cimgroup.com , free of charge.

Copies of our filings with the SEC are available on our sponsor’s website, http://www.cimgroup.com , free of charge.

The information on our sponsor’s website is not incorporated by reference into this Annual Report on Form 10-K.

2 unchanged sentences

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-K

Item 1. Business