What changed in this filing

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Item 1A. Risk Factors

2026-03-30 compared with 2025-03-28 · 80 added, 72 removed, 1175 unchanged (11% of the section changed)

59 unchanged sentences

We expect that our Board will make that determination in the future based, in part, upon advice from our manager.

If our stockholders are able to find a buyer for their shares, our stockholders will likely have to sell them at a substantial discount to the most recent estimated per share NAV of our common stock.

If our stockholders are able to find a buyer for their shares, our stockholders will likely

have to sell them at a substantial discount to the most recent estimated per share NAV of our common stock.

It also is likely that our common stock will not be accepted as the primary collateral for a loan.

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Our share redemption program allows our stockholders to sell shares of our common stock to us in limited circumstances, subject to numerous restrictions.

Subject to funds being available, we generally limit the number of shares redeemed pursuant to our share redemption program to no more than 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemption is being paid.

In addition, we intend to limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter, and funding for redemptions for each quarter generally is limited to the net proceeds we receive from the sale of shares in the respective quarter under the DRIP.

Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period.

During the past 32 quarters, excluding those when the suspension of the share redemption program was in effect, quarterly redemptions were honored on a pro rata basis, as requests for redemption exceeded the quarterly redemption limits described above.

Our ability to provide liquidity through our share redemption program is limited and is primarily funded with net DRIP proceeds.

Our redemption program is capped at 5% of the weighted average number of shares outstanding annually (intended to approximate 1.25% of the weighted average number of shares outstanding per quarter).

As a result, redemption requests are often pro-rated and unsatisfied requests do not carry over, and in 2025 requests to redeem approximately 173.1 million shares went unfulfilled.

If we reduce or suspend DRIP sales or if redemption requests exceed the caps or available DRIP proceeds, we may further limit or reject requests for redemption.

There is no public market for our shares, and we cannot guarantee a future liquidity event.

The Board may amend the terms of, suspend, or terminate our share redemption program without stockholder approval at any time if it believes that such action is in the best interest of our stockholders, and our management may reject any request for redemption.

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There also is a risk that we may not have sufficient cash flows from operations to fund distributions required to maintain our REIT status.

We have paid, and may continue to pay, some of our distributions from sources other than cash flows from operations, including borrowings and proceeds from asset sales, which may reduce the amount of capital we ultimately deploy in our operations and may negatively impact the value of our common stock.

operations and may negatively impact the value of our common stock.

Additionally, distributions at any point in time may not reflect the current performance of our assets or our current operating cash flows.

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Any resulting disparity may be to the detriment of an acquiror of our common stock or a stockholder requesting share redemptions pursuant to our share redemption program.

The Board last established an updated estimated per share NAV of the Company’s shares as of January 31, 2024 on February 29, 2024.

The Board established an updated estimated per share NAV of the Company’s shares effective on March 27, 2026, using a valuation date as of December 31, 2025.

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If we seek to internalize our management functions in connection with a listing of our shares of common stock on an exchange, an other liquidity event, or otherwise, our stockholders’ interest in us could be diluted, and we could incur other significant costs associated with being self-managed.

In the future, we may undertake a listing of our common stock on an exchange, an other liquidity event or other action that may involve internalizing our management functions.

In the future, we may undertake a listing of our common stock on an exchange, another liquidity event or other action that may involve internalizing our management functions.

If our Board determines that it is in our best interest to internalize our management functions, we may negotiate to acquire our manager’s assets and personnel.

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During times of war and other major conflicts, we and the third-party service providers upon which we rely may be vulnerable to heightened risk of these attacks, including retaliatory cyberattacks.

The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our tenant and stockholder relationships.

The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information,

increased cybersecurity protection and insurance costs, litigation and damage to our tenant and stockholder relationships.

As we and the parties that provide essential services to us increase our and their reliance on technology, the risks posed to the information systems of such persons have also increased.

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Those employees working remotely could expose our manager and other third-party service providers to additional cybersecurity risks and vulnerabilities as their systems could be negatively affected by vulnerabilities present in external systems and technologies outside of their control.

Our approach to artificial intelligence (“AI”) may not be successful and could adversely affect our business.

We have incorporated and may continue to incorporate the use of AI within our business, and these solutions and features may become more important to our operations over time.

Our research and development of AI remains ongoing.

There can be no assurance that we will realize the desired or anticipated benefits or cost-efficiency objectives of, and we may fail to properly implement, such technology.

AI presents risks, challenges and unintended consequences that could affect our adoption and use of this technology.

Our competitors or other third parties may incorporate AI in their business operations more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations.

Additionally, the complex and rapidly evolving landscape around AI may expose us to claims, demands and proceedings by private parties and regulatory authorities and subject us to legal liability as well as reputational harm.

Future regulations could impose restrictions on the use of these technologies or require us to implement costly compliance measures.

Finally, public perception of new technologies (including AI), such as concerns about data privacy and algorithmic bias, could affect customer acceptance of technology-driven services, which could harm our reputation and business.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results.

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Under the doctrine, if Congress had not spoken directly to the precise issue in question, the courts were to defer to the agency’s interpretation so long as the interpretation was reasonable.

Under the Loper Bright

decision, courts are now required to exercise their independent judgment in deciding whether an agency has acted within its statutory authority and may not defer to an agency interpretation of the law simply because a statute is ambiguous.

Under the Loper Bright decision, courts are now required to exercise their independent judgment in deciding whether an agency has acted within its statutory authority and may not defer to an agency interpretation of the law simply because a statute is ambiguous.

The overturning of the Chevron doctrine is likely to result in challenges to numerous agency interpretations in various areas of law including energy, environment, taxation, and labor, among others.

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In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan.

If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied

only after the senior debt.

If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt.

As a result, we may not recover some or all of our investment.

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We have also made, and may continue to make, preferred equity investments, which involve a higher degree of risk than conventional debt financing due to a variety of factors, including their non-collateralized nature and subordinated ranking to other loans and liabilities of the entity in which such preferred equity is held.

Accordingly, if the issuer defaults on our investment, we would only be able to proceed against such entity in accordance with the terms of the preferred security and not against any property owned by such entity.

Accordingly, if the issuer defaults on our investment, we would only be able to proceed against such entity in accordance with the terms of the preferred security and not

against any property owned by such entity.

Furthermore, in the event of bankruptcy or foreclosure, we would only be able to recoup our investment after all lenders to, and other creditors of, such entity are paid in full.

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We may find it necessary or desirable to foreclose on certain of the loans or CMBS that we acquire, and the foreclosure process may be lengthy and expensive.

The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of the property rather than upon the existence of independent

income or assets of the borrower.

If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired.

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This measurement takes place at the time the financial asset is first added to the balance sheet and updated quarterly thereafter.

This differs significantly from the “incurred loss” model previously required under

GAAP, which delayed recognition until it was probable a loss had been incurred.

This differs significantly from the “incurred loss” model previously required under GAAP, which delayed recognition until it was probable a loss had been incurred.

Accordingly, the current expected credit losses (“CECL”) model creates more volatility in the level of our credit loss provisions.

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Difficulty in redeploying the proceeds from repayments or redemptions of our existing loans and other investments could materially and adversely affect us.

As our loans and other investments are repaid or redeemed, we may attempt to redeploy the proceeds we receive into new loans and investments and repay borrowings under our secured revolving repurchase agreements and other financing arrangements.

arrangements.

It is possible that we will fail to identify reinvestment options that would provide a yield and/or a risk profile that is comparable to the asset that was repaid or redeemed.

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federal, state or local governmental laws.

Real estate lenders and borrowers may be responsible for compliance with a wide range of laws intended to protect the public interest, including, without limitation, the Truth in Lending, Equal Credit Opportunity, Fair Housing and Americans with Disabilities Acts and local zoning laws (including, but not limited to, zoning laws that allow permitted non-conforming uses).

Real estate lenders and borrowers may be responsible for compliance with a wide range of laws intended to

protect the public interest, including, without limitation, the Truth in Lending, Equal Credit Opportunity, Fair Housing and Americans with Disabilities Acts and local zoning laws (including, but not limited to, zoning laws that allow permitted non-conforming uses).

If we or any other person fails to comply with such laws in relation to a loan that we have originated or acquired, legal penalties may be imposed, which could materially and adversely affect us.

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Even if a lease is assumed and brought current, we still run the risk that a tenant could condition lease assumption on a restructuring of certain terms, including rent, that would have an adverse impact on us.

Any shortfall resulting from the bankruptcy of one or more of our tenants could adversely affect our business, financial condition, results of operations, cash flows or our ability to satisfy our debt service obligations or to maintain our level of distributions on our common stock.

Any shortfall resulting from the bankruptcy of one or more of our tenants could

adversely affect our business, financial condition, results of operations, cash flows or our ability to satisfy our debt service obligations or to maintain our level of distributions on our common stock.

In addition, the financial failure of, or other default by, one or more of the tenants to whom we have exposure could have an adverse effect on the results of our operations.

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Negative developments in the real estate market may cause management to reevaluate the business and macro-economic assumptions used in its impairment analysis.

Changes in management’s assumptions based on actual results may have a material impact on our financial statements.

Changes in management’s assumptions based on actual results

may have a material impact on our financial statements.

See Note 3 — Fair Value Measurements to our consolidated financial statements in this Annual Report on Form 10-K for a discussion of our real estate impairment charges.

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Beginning in 2022, in an effort to combat inflation and restore price stability, the Federal Reserve significantly raised the federal funds rate, which led to increases in interest rates in the credit market.

Although the Federal Reserve began lowering the federal funds rate in the second half of 2024, and there are expectations that the Federal Reserve will continue lowering the federal funds rate in 2025, these expectations may not materialize and the Federal Reserve may increase rates in the future in an effort to combat inflation.

Although the Federal Reserve began lowering the federal funds rate in the second half of 2024 and in the latter part of 2025, the federal funds rate remains well above pre-2022 levels, and any increase in inflation may cause the Federal Reserve to again raise the federal funds rate.

Should the Federal Reserve raise rates in the future, this will likely result in further increases in market interest rates.

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Many of our properties are or will be subject to significant covenants, conditions and restrictions, known as “CC&Rs,” restricting their operation and any improvements on such properties.

Compliance with CC&Rs may adversely affect the types

of tenants we are able to attract to such properties, our operating costs and reduce the amount of funds that we have available to pay distributions to our stockholders.

Compliance with CC&Rs may adversely affect the types of tenants we are able to attract to such properties, our operating costs and reduce the amount of funds that we have available to pay distributions to our stockholders.

Our operating results may be negatively affected by potential development and construction delays and the resultant increased costs and risks.

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In addition, we will be subject to normal lease-up risks relating to newly constructed projects.

We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property.

We also must rely on rental

income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property.

If our projections are inaccurate, we may pay too much for a property, and our return on our assets could suffer.

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From time to time, we may acquire multiple properties in a single transaction.

Portfolio acquisitions are often more complex and expensive than single-property acquisitions, and the risk that a multiple-property acquisition does not close may

be greater than in a single-property acquisition.

Portfolio acquisitions are often more complex and expensive than single-property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition.

Portfolio acquisitions may also result in us owning assets in geographically dispersed markets, placing additional demands on our ability to manage the properties in the portfolio.

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We may acquire real estate assets located in areas that are susceptible to terrorist attacks or acts of war.

These attacks may directly impact the value of our assets through damage,

destruction, loss or increased security costs.

These attacks may directly impact the value of our assets through damage, destruction, loss or increased security costs.

Although we may obtain terrorism insurance, we may not be able to obtain sufficient coverage to fund any losses we may incur.

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CMFT Securities has engaged our Investment Advisor to select and manage our investment securities.

Our Investment Advisor has engaged its sub-advisor to provide management services with respect to corporate credit-related securities and

certain other investments.

Our Investment Advisor has engaged its sub-advisor to provide management services with respect to corporate credit-related securities and certain other investments.

We rely on the performance of our Investment Advisor and its sub-advisor in implementing the investment securities portion of our investment strategy.

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If our Investment Advisor and its sub-advisor do not succeed in implementing the investment securities portion of our investment strategy, our performance may suffer.

In addition, even though CMFT Securities has the ability to terminate our Investment Advisor at any time and therefore also terminate the sub-advisor, a termination fee may be required to be paid in connection with such termination and it may be difficult and costly to terminate and replace our Investment Advisor and the sub-advisor.

In addition, even though CMFT Securities has the ability to terminate our Investment Advisor at any time and therefore also terminate the sub-

advisor, a termination fee may be required to be paid in connection with such termination and it may be difficult and costly to terminate and replace our Investment Advisor and the sub-advisor.

We do not have a direct contractual relationship with the sub-advisor.

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DeBacker, is an employee of CIM Group, the vice president of our manager and is an officer of certain of its affiliates.

Conflicts with our business and interests are most likely to arise from involvement in activities related to (1) allocation of new acquisition opportunities, management time and operational expertise among us and the other entities, (2) our purchase of assets from, or sale of assets to, affiliated entities, (3) the timing and terms of the acquisition or sale of an asset, (4) development of our properties by affiliates, (5) investments with affiliates of our manager, (6) compensation to our manager and its affiliates, and (7) our relationship with, and compensation to, our dealer manager.

and its affiliates, and (7) our relationship with, and compensation to, our dealer manager.

Even if these persons do not violate their duties to us and our stockholders, they will have competing demands on their time and resources and may have conflicts of interest in allocating their time and resources among us and these other entities and persons.

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In addition, if we become listed for trading on a national securities exchange, we may develop more divergent goals and objectives from any affiliated co-venturer or co-owner that is not listed for trading.

In the event we enter into a joint venture or other co-ownership arrangement with another

real estate program sponsored by CIM or its affiliates, or another real estate investment program sponsored by CIM that has a term shorter than ours, the joint venture may be required to sell its assets earlier than we may desire to sell the assets.

In the event we enter into a joint venture or other co-ownership arrangement with another real estate program sponsored by CIM or its affiliates, or another real estate investment program sponsored by CIM that has a term shorter than ours, the joint venture may be required to sell its assets earlier than we may desire to sell the assets.

Even if the terms of any joint venture or other co-ownership agreement between us and CIM or its affiliates, or another real estate program sponsored by CIM grants us the right of first refusal to buy such assets, we may not have sufficient funds or borrowing capacity to exercise our right of first refusal under these circumstances.

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While we currently have the ability to control all matters submitted to CLR’s shareholders for approval, CLR’s shareholders have limited voting rights, and CLR’s board of trustees has broad discretion to control the management of CLR.

For example, CLR’s board of trustees determines any major policies of CLR, including CLR’s policies regarding investments.

For example, CLR’s board of trustees determines any major policies of CLR, including CLR’s policies

regarding investments.

The CLR board of trustees may amend or revise CLR’s investment policies or other policies without a vote of CLR’s shareholders.

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Thus, our Board could authorize the issuance of preferred stock with terms and conditions that have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock.

Preferred stock could also have the effect of delaying, deferring or preventing the removal of incumbent management or a change of control of us, including an

extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium to the purchase price of our common stock for our stockholders.

Preferred stock could also have the effect of delaying, deferring or preventing the removal of incumbent management or a change of control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium to the purchase price of our common stock for our stockholders.

Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired and may limit our stockholders’ ability to dispose of their shares.

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If we are unable to maintain our exemptions and it was established that we were operating as an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the SEC, that we would be unable to enforce contracts with third parties, that third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company.

If we were required to register as an investment company, we would be required to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

required to register as an investment company, we would be required to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

• limitations on capital structure;

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Additionally, our charter limits, subject to certain exceptions, the liability of our directors and officers to us and our stockholders for monetary damages.

Although our charter does not allow us to indemnify our directors or our manager and its affiliates for any liability or loss suffered by them or hold

harmless our directors or our manager and its affiliates for any loss or liability suffered by us to a greater extent than permitted under Maryland law, we and our stockholders may have more limited rights against our directors, officers, employees and agents, and our manager and its affiliates, than might otherwise exist under common law, which could reduce our stockholders’ and our recovery against them.

Although our charter does not allow us to indemnify our directors or our manager and its affiliates for any liability or loss suffered by them or hold harmless our directors or our manager and its affiliates for any loss or liability suffered by us to a greater extent than permitted under Maryland law, we and our stockholders may have more limited rights against our directors, officers, employees and agents, and our manager and its affiliates, than might otherwise exist under common law, which could reduce our stockholders’ and our recovery against them.

In addition, our manager is not required to retain cash to pay potential liabilities and it may not have sufficient cash available to pay liabilities if they arise.

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Because of this dividend requirement, we may not be able to fund from cash retained from operations all of our future capital needs, including capital needed to refinance maturing obligations or make new acquisitions.

If interest rates remain at an elevated level because of the Federal Reserve’s attempt to combat inflation, it could hinder our ability to obtain new debt financing or

refinance our maturing debt on favorable terms or at all or to raise debt and equity capital.

If interest rates remain at an elevated level because of the Federal Reserve’s attempt to combat inflation, it could hinder our ability to obtain new debt financing or refinance our maturing debt on favorable terms or at all or to raise debt and equity capital.

Our access to capital will depend upon a number of factors, including:

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The Federal Reserve began lowering the federal funds rate in the second half of 2024, and while there are expectations that the Federal Reserve will continue lowering the federal funds rate in 2025, these expectations may not materialize and the Federal Reserve may increase rates in the future in an effort to combat inflation.

The Federal Reserve began lowering the federal funds rate in the second half of 2024 and in the latter part of 2025;

however, the federal funds rate remains well above pre-2022 levels, and any increase in inflation may cause the Federal Reserve to again raise the federal funds rate .

Should the Federal Reserve raise rates in the future, this will likely result in further increases in market interest rates.

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Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective.

Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the

terms of, or fail to perform its obligations under, the derivative contract.

Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract.

If we are unable to manage these risks effectively, our results of operations, financial condition and ability to pay distributions to our stockholders will be adversely affected.

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This is because qualification as a REIT involves the application of highly technical and complex provisions of the Code as to which there are only limited judicial and administrative interpretations and involves the determination of facts and circumstances not entirely within our control.

Furthermore, new legislation, new regulations, administrative interpretations or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT.

Furthermore, new legislation, new regulations,

administrative interpretations or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT.

If we fail to qualify, or to remain qualified, as a REIT in any taxable year, then:

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federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock that does not represent a return of capital.

In addition, our stockholders may be treated, for U.S.

our stockholders may be treated, for U.S.

federal tax purposes, as having received an additional distribution to the extent the shares are purchased at a discount from fair market value.

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Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the shares of common stock of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock.

However, commencing with taxable years beginning on or after January 1, 2018 and continuing through 2025, individual taxpayers may be entitled to claim a deduction in determining their taxable income of 20% of ordinary REIT dividends (dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us), which temporarily reduces the effective tax rate on such dividends.

However, commencing with taxable years beginning on or after January 1, 2018, individual taxpayers may be entitled to claim a deduction in determining their taxable income of 20% of ordinary REIT dividends (dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us), which reduces the effective tax rate on such dividends.

Stockholders are urged to consult with their tax advisors regarding the effect of this change on effective tax rates with respect to REIT dividends.

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The impact of tax reform and any potential tax changes on an investment in our shares is uncertain.

In addition, the Tax Cuts and Jobs Act made significant changes to the U.S.

federal income tax rules for taxation of individuals and businesses, generally effective for taxable years beginning after December 31, 2017, including a number of provisions of the Code that affect the taxation of REITs and their stockholders.

Among the changes made by the Tax Cuts and Jobs Act are permanently reducing the generally applicable corporate tax rate, generally reducing the tax rate applicable to individuals and other noncorporate taxpayers for tax years beginning after December 31, 2017 and before January 1, 2026, eliminating or modifying certain previously allowed deductions (including substantially limiting interest deductibility and, for individuals, the deduction for non-business state and local taxes), and, for taxable years beginning after December 31, 2017 and before January 1, 2026, providing for preferential rates of taxation through a deduction of up to 20% (subject to certain limitations) on most ordinary REIT dividends and certain trade or business income of non-corporate taxpayers.

and Jobs Act also imposes new limitations on the deduction of net operating losses and requires us to recognize income for tax purposes no later than when we take it into account on our financial statements, which may result in us having to make additional taxable distributions to our stockholders in order to comply with REIT distribution requirements or avoid taxes on retained income and gains.

The Tax Cuts and Jobs Act also made numerous large and small changes to the tax rules that do not affect the REIT qualification rules directly but may otherwise affect us or our stockholders.

While the changes in the Tax Cuts and Jobs Act generally appear to be favorable with respect to REITs, the extensive changes to non-REIT provisions in the Code may have unanticipated effects on us or our stockholders.

In addition, the Coronavirus Aid, Relief, and Economic Security Act made technical corrections, or temporary modifications, to certain provisions of the Tax Cuts and Jobs Act.

Additional changes to tax laws were enacted as part of the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”).

Many of the material provisions of the Inflation Reduction Act exempt REITs.

We urge our stockholders to consult with their own tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on holding our common stock.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

The OBBBA made significant changes to the U.S.

federal income tax laws in various areas.

Among the notable changes, the OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017, most of which were set to expire after December 31, 2025.

As a result of such extensions, individuals and other non-corporate taxpayers will continue to be entitled to a 20% deduction for certain “qualified REIT dividends” for taxable years after 2025, subject to certain requirements, and the maximum U.S.

federal income tax rate on ordinary income for individuals and other non-corporate taxpayers will continue to be 37% after 2025 (before application of the 3.8% Medicare tax on “net investment income”).

In addition, the OBBBA also increased the percentage limit under the REIT asset test applicable to securities of one or more taxable REIT subsidiaries from 20% to 25% for 2026 and subsequent taxable years.

You are urged to consult with your own tax advisor to determine the effects of the OBBBA and the ownership and disposition of shares of our common stock on your individual tax situation, including any state, local, or non-U.S.

tax consequences.

Our Board is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.

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We also may decide to retain net capital gain we earn from the sale or other disposition of our investments and pay income tax directly on such income.

In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly.

In that event, our stockholders could be treated as if they earned that income and paid the tax on it directly.

However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S.

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Debt will generally meet the “straight debt” safe harbor if the debt is a written unconditional promise to pay on demand or on a specified date a certain sum of money, the debt is not convertible, directly or indirectly, into shares of common stock, and the interest rate and the interest payment dates of the debt are not contingent on the profits, the borrower’s discretion, or similar factors.

Additionally, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our assets may be represented by securities of one or more TRSs.

Additionally, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% prior to January 1, 2026) of the value of our assets may be represented by securities of one or more TRSs.

If we fail to comply with these requirements at the end of any calendar quarter, we must dispose of a portion of our assets within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions in order to avoid losing our REIT qualification and suffering adverse tax consequences.

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federal income tax under the Foreign Investment in Real Property Tax Act of 1980, as amended (“FIRPTA”), on the amount received from such disposition.

Such tax does not apply, however, to the disposition of stock in a REIT that is “domestically controlled.” Generally, a REIT is domestically controlled if less than 50% of its stock, by value, has been owned directly or indirectly by non-U.S.

persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT’s existence.

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Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets or to offset certain other positions, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests.

To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for

purposes of one or both of the gross income tests.

To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of one or both of the gross income tests.

As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS.

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Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement.

Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made.

Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the

first year for which a REIT election is made.

To help ensure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of our shares of stock.

15 unchanged sentences

While we intend that all transactions between us and our TRSs would be conducted on an arm’s-length basis, and therefore, any amounts paid by our TRSs to us would not be subject to the excise tax, no assurance can be given that the IRS would not disagree with such conclusion and levy an excise tax on such transactions.

other arrangement that is subject to the Employee Retirement Income Securities Act (“ERISA”) or Section 4975 of the Code (referred to generally as “Benefit Plans and IRAs”) fails to meet the fiduciary and other standards under ERISA or the Code as a result of an investment in shares of our common stock, such stockholder could be subject to civil and criminal, if the failure is willful, penalties.

If a stockholder that is an employee benefit plan, individual retirement account (“IRA”), annuity described in Sections 403(a) or (b) of the Code, Archer Medical Savings Account, health savings account, Coverdell education savings account, or other arrangement that is subject to the Employee Retirement Income Securities Act (“ERISA”) or Section 4975 of the Code (referred to generally as “Benefit Plans and IRAs”) fails to meet the fiduciary and other standards under ERISA or the Code as a result of an investment in shares of our common stock, such stockholder could be subject to civil and criminal, if the failure is willful, penalties.

There are special considerations that apply to Benefit Plans and IRAs investing in shares of our common stock.

22 unchanged sentences

As a general rule, certain employee benefit plans, including foreign pension plans, governmental plans established or maintained in the United States (as defined in Section 3(32) of ERISA), and certain church plans (as defined in Section 3(33) of ERISA), are not subject to ERISA’s requirements and are not “benefit plan investors” for purposes of investing in “plan assets” subject to ERISA’s requirements.

Any such plan that is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code may nonetheless be subject to the prohibited transaction rules set forth in Section 503 of the Code and,

under certain circumstances in the case of church plans, Section 4975 of the Code.

Also, some foreign plans and governmental plans may be subject to foreign, state, or local laws which are, to a material extent, similar to the provisions of ERISA or Section 4975 of the Code.

7 unchanged sentences

We have invested, and may continue to invest in construction loans, the interest from which is qualifying income for purposes of the REIT income tests, provided that the loan value of the real property securing the construction loan is equal to or greater than the highest outstanding principal amount of the construction loan during any taxable year.

For purposes of construction loans, the loan value of the real property is the fair value of the land plus the reasonably estimated cost of the improvements or developments (other than personal property) that secure the loan and that are to be constructed from the proceeds of the loan.

For purposes of

construction loans, the loan value of the real property is the fair value of the land plus the reasonably estimated cost of the improvements or developments (other than personal property) that secure the loan and that are to be constructed from the proceeds of the loan.

There can be no assurance that the IRS would not challenge our estimate of the loan value of the real property.

29 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 1A. Risk Factors