What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-28 · 144 added, 203 removed, 379 unchanged (48% of the section changed)

14 unchanged sentences

As of December 31, 2025 , CLR holds a diversified portfolio of approximately $1.6 billion, which includes first mortgage loans with a net book value of $1.4 billion, CMBS with an estimated fair value of $64.2 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 $138.7 million.

As of December 31, 2024, we owned 187 commercial real estate properties, which consisted of 176 retail properties, seven office properties, and four industrial properties, representing 16 industry sectors and comprising approximately 5.8 million rentable square feet of commercial space located in 36 states, with a net book value of $983.3 million.

As of December 31, 2025, we owned 202 commercial real estate properties, which consisted of 187 retail properties, eight office properties, and seven industrial properties, representing 22 industry sectors and comprising approximately 6.7 million rentable square feet of commercial space located in 37 states, with a net book value of $1.1 billion.

As of December 31, 2025, we owned condominium developments with a net book value of $12.0 million.

During the year ended December 31, 2024, we disposed of seven properties encompassing 430,000 gross rentable square feet, and 11 condominium units for total consideration of $128.0 million, as further discussed in Note 4 — Real Estate Assets to the consolidated financial statements in this Annual Report on Form 10-K.

During the year ended December 31, 2025, we disposed of five properties encompassing 402,000 gross rentable square feet, and 16 condominium units for total consideration of $181.1 million, as further discussed in Note 4 — Real Estate Assets to the consolidated financial statements in this Annual Report on Form 10-K.

Our operating results and cash flows are primarily influenced by interest income from our credit investments, rental and other property income from our commercial properties, interest expense on our indebtedness and credit investments and other operating expenses.

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The year 2025 was characterized by a mix of positive and challenging developments leading to continued volatility in global markets.

Investor concerns over inflation, higher interest rates, slowing economic growth, political and regulatory uncertainty and geopolitical conditions have persisted.

Investor concerns over inflation, continued high interest rates, slowing economic growth, uncertainty around the impacts of imposed tariffs , political and regulatory uncertainty and geopolitical conditions have persisted.

Heightened inflation caused the Federal Reserve to raise interest rates in 2022 and 2023.

Although the majority of our business model is such that elevated interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect the ability of our existing borrowers to pay debt service, tenants and property values of our own portfolio and the assets that serve as collateral for our loans.

The Federal Reserve began to decrease interest rates in the second half of 2024 and has indicated that it may continue to decrease interest rates in 2025.

The Federal Reserve began to decrease interest rates in the second half of 2024 and in September, November, and December 2025, however the timing, direction and extent of any future interest rate changes remains uncertain.

In a period of declining interest rates, our interest income on floating-rate investments may generally decrease, subject to the impact of interest rate floors in our investment portfolio.

7 unchanged sentences

Operating Results:

• Net loss attributable to the Company of $292.3 million, or $0.67 per share.

• Net income attributable to the Company of $52.4 million, or $0.12 per share.

• Redeemed 6.8 million shares under the share redemption program for $37.1 million at an average price of $5.47 per share.

1 unchanged sentence

Credit Portfolio Investment Activity:

• Originated $77.1 million of first mortgage loans.

• Originated $609.9 million of first mortgage loans, $55.0 million of which was a result of a loan modification that was accounted for as a new loan for GAAP purposes.

• Funded $91.7 million in existing first mortgage loans.

• Invested $65.4 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $452.9 million, including $265.4 million as part of the Master Participation Agreement (as defined in Note 13 — Related-Party Transactions and Arrangements to the consolidated financial statements in this Annual Report on Form 10-K).

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

• Invested $1.3 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $5.1 million.

• Invested $125.6 million in corporate senior loans.

1 unchanged sentence

• Invested $26.7 million in CMBS, received principal repayments on CMBS of $128.8 million and sold CMBS for an aggregate gross sales price of $75.6 million.

• Received proceeds from the repayment of portfolio investments on the CLO subordinated note of $6.1 million (see Note 2 — Summary of Significant Accounting Policies to the consolidated financial statements in this Annual Report on Form 10-K for additional details).

• Funded an additional $26.5 million in NP JV Holdings (as defined in Note 2 — Summary of Significant Accounting Policies to the consolidated financial statements in this Annual Report on Form 10-K).

Real Estate Portfolio Investment Activity:

• Acquired two properties for an aggregate purchase price of $44.1 million.

• Disposed of seven properties for an aggregate sales price of $90.6 million.

• Acquired 18 properties for an aggregate purchase price of $58.1 million.

• Took control of assets securing two risk-rated 5 first mortgage loans, comprised of two office buildings, through deeds-in-lieu of foreclosure with an aggregate fair value of $151.0 million.

During the year ended December 31, 2025, the Company disposed of one of the properties acquired via deed-in-lieu of foreclosure for an aggregate sales price of $91.3 million.

• Disposed of four additional net lease properties for an aggregate sales price of $15.8 million.

• Disposed of 16 condominium units for an aggregate sales price of $74.0 million.

4 unchanged sentences

As of December 31,

Asset Count Net Book Value

Net Book Value

Loan Held-For-Investment

5 unchanged sentences

Real Estate-Related Securities and Other

16 396,819 8.3 % 22 512,523 8.6 %

CLO subordinated note

1 26,901 0.6 % — — — %

Equity securities

4 32,170 0.7 % 1 42,999 0.7 %

Current expected credit losses

(110,062) (2.3) % (35,808) (0.6) %

Total real estate-related securities and other, net

21 345,828 7.3 % 23 519,714 8.7 %

Total real estate assets and intangible lease liabilities, net

1 unchanged sentence

____________________________________

(1) Table does not include our investment in the Unconsolidated Joint Venture (as defined in Note 2 — Summary of Significant Accounting Policies to the consolidated financial statements in this Annual Report on Form 10-K), which had a carrying value of $149.2 million, $138.7 million of which is held through CLR as of December 31, 2025.

3 unchanged sentences

CRE Loans (1)(2)

Liquid Corporate Senior Loans Real Estate Related Securities and Other (2)

Liquid Corporate Senior Loans

Real Estate Related Securities and Other (2)

Corporate Senior Loans

4 unchanged sentences

Weighted-average interest rate (5)(6)

7.7 % 9.9 % 7.9 % 10.5 %

Weighted-average maximum years to maturity (6)(7)

____________________________________

(1) As of December 31, 2025, 91.1% of our loans by principal balance earned a floating rate of interest indexed to SOFR.

2 unchanged sentences

(3) Table does not include our 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), which had a carrying value of $149.2 million as of December 31, 2025.

(4) The weighted-average interest rate for variable rate investments is based on the relevant floating benchmark plus a spread.

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

(5) The weighted-average interest rate is based on the relevant fixed rate or floating benchmark plus a spread.

Excludes loans on nonaccrual status.

(6) Does not include the CLO subordinated note.

As of December 31, 2025, the CLO subordinated note had an initial maturity date of July 2037 and an estimated effective yield of 15.4%.

(7) Does not include positions in maturity default.

As of December 31, 2025, our CRE loans had the following characteristics based on carrying values (dollar amounts in thousands):

Collateral Property Type As of December 31, 2024

Office $ 1,779,324 51.2 %

Multifamily 1,023,514 29.5 %

Industrial 331,269 9.6 %

Hospitality 137,541 4.0 %

Mixed Use 69,786 2.0 %

Retail 64,677 1.9 %

Self-Storage 60,818 1.8 %

Collateral Property Type

As of December 31, 2025

Total first mortgage loans

$ 3,466,929 100.0 %

current expected credit losses

Total first mortgage loans, net

Geographic Location As of December 31, 2024

South $ 1,350,617 38.9 %

West 1,009,262 29.1 %

East 795,688 23.0 %

Various 311,362 9.0 %

Geographic Location

As of December 31, 2025

Total first mortgage loans

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As of December 31, 2025, we owned 202 commercial real estate properties located in 37 states, the gross rentable square feet of which was 96.5% leased, including any month-to-month agreements, with a weighted average lease term remaining of 10.1 years.

During the year ended December 31, 2024, we disposed of seven properties for an aggregate gross sales price of $90.6 million.

During the year ended December 31, 2025, we disposed of five properties for an aggregate gross sales price of $107.1 million.

Additionally, during the year ended December 31, 2025, we sold 16 condominium units for an aggregate gross sales price of $74.0 million.

6 unchanged sentences

____________________________________

(1) Includes square feet of buildings on land parcels subject to ground leases.

2 unchanged sentences

The weighted average credit rating is weighted based on annualized rental income and is for only those tenants rated by Standard & Poor’s.

The following table summarizes our real estate acquisition activity during the year ended December 31, 2024.

No properties were acquired during the year ended December 31, 2023.

The following table summarizes our real estate acquisition activity during the years ended December 31, 2025 and 2024:

As of December 31,

2 unchanged sentences

Rentable square feet (in thousands)

(1) Excludes two properties acquired through deeds-in-lieu of foreclosure, with an aggregate fair value at the time of acquisition of $151.0 million and 794,000 of rentable square feet, as further discussed in Note 4 — Real Estate Assets to the consolidated financial statements in this Annual Report on Form 10-K.

The following table shows the tenant diversification of our real estate portfolio, based on annualized rental income, as of December 31, 2025:

Percentage of

Total Leased Annualized Annualized 2024

Number Square Feet Rental Income Rental Income Annualized

Tenant of Leases (1)

Rental Income

of Leases (1)

(in thousands) (2)

(in thousands) per Square Foot (2)

(in thousands)

per Square Foot (2)

Rental Income

CVS 33 421 $ 8,852 $ 21.03 10 %

Cabela’s 1 403 7,198 17.86 8 %

United Oil 2 38 6,508 171.26 8 %

Lowe’s 8 1,073 6,321 5.89 7 %

Walgreens 11 162 3,884 23.98 5 %

BJ’s Wholesale Club, Inc.

2 225 3,270 14.53 4 %

Valvoline Oil Change

Tractor Supply

Bob Evans 2 76 2,826 37.18 3 %

AAA 1 120 2,811 23.43 3 %

Other 61 2,928 38,668 13.21 45 %

____________________________________

(1) Includes leases which are master lease agreements.

2 unchanged sentences

Percentage of

Total Leased Annualized Annualized 2024

Number Square Feet Rental Income Rental Income Annualized

Industry of Leases (1)

Rental Income

of Leases (1)

(in thousands) (2)

(in thousands) per Square Foot (2)

(in thousands)

per Square Foot (2)

Rental Income

Health and Personal Care Stores 44 584 $ 12,736 $ 21.81 15 %

Manufacturing

Sporting Goods, Hobby, and Musical Instrument Retailers 3 504 9,072 18.00 11 %

Retail Trade - Health and Personal Care Stores

Retail Trade - Sporting Goods, Hobby, and Musical Instrument Retailers

Retail Trade - Warehouse Clubs, Supercenters, and Other General Merchandise Retailers

Automotive Repair and Maintenance

Gasoline Stations 5 52 7,272 139.85 8 %

Warehouse Clubs, Supercenters, and Other General Merchandise Retailers 9 695 6,815 9.81 8 %

Building Material and Supplies Dealers 8 1,073 6,321 5.89 7 %

Grocery Stores 9 717 6,317 8.81 7 %

Restaurants and Other Eating Places 11 110 4,492 40.84 5 %

Lawn and Garden Equipment and Supplies Stores 12 278 4,301 15.47 5 %

Other 16 487 11,041 22.67 13 %

133 5,821 $ 86,290 $ 14.82 100 %

Retail Trade - Gasoline Stations

Professional, Scientific, and Technical Services

Retail Trade - Grocery Stores

Retail Trade - Building Material and Supplies Dealers

Retail Trade - Lawn and Garden Equipment and Supplies Stores

____________________________________

3 unchanged sentences

Percentage of

Total Rentable Annualized Annualized 2024

Number of Square Feet Rental Income Rental Income Annualized

Location Properties (in thousands) (1)

(in thousands) per Square Foot (1)

Rental Income

Ohio 18 1,120 $ 13,506 $ 12.06 16 %

Illinois 10 634 7,238 11.42 8 %

California 28 72 7,164 99.50 8 %

Wisconsin 7 677 6,530 9.65 8 %

Florida 9 601 6,167 10.26 7 %

Texas 24 189 4,873 25.78 6 %

Virginia 10 239 3,960 16.57 5 %

Kentucky 3 188 3,632 19.32 4 %

Nebraska 2 193 3,540 18.34 4 %

New Jersey 3 146 3,523 24.13 4 %

Other 73 1,762 26,157 14.85 30 %

187 5,821 $ 86,290 $ 14.82 100 %

Rental Income

(in thousands) (1)

(in thousands)

per Square Foot (1)

Rental Income

____________________________________

2 unchanged sentences

Percentage of

Total Rentable Annualized Annualized 2024

Number of Square Feet Rental Income Rental Income Annualized

Property Type Properties (in thousands) (1)

(in thousands) per Square Foot (1)

Rental Income

Retail 176 4,149 $ 67,911 $ 16.37 78 %

Office 4 888 14,414 16.23 17 %

Industrial 7 784 3,965 5.06 5 %

187 5,821 $ 86,290 $ 14.82 100 %

Rental Income

Property Type

(in thousands) (1)

(in thousands)

per Square Foot (1)

Rental Income

____________________________________

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The following table shows lease expirations of our real estate portfolio, as of December 31, 2025, during each of the next ten years and thereafter, assuming no exercise of renewal options:

Total Leased Annualized 2024 Percentage of

Number Square Feet Rental Income Annualized 2024

of Leases Expiring Expiring Rental Income Annualized

Year of Lease Expiration Expiring (1)

Percentage of

Rental Income

Year of Lease Expiration

(in thousands) (2)

(in thousands) per Square Foot (2)

(in thousands)

per Square Foot (2)

Rental Income

____________________________________

2026 2 296 3,333 11.26 4 %

2027 3 420 5,067 12.06 6 %

2028 — — — — — %

2029 4 226 3,184 — 4 %

2030 5 86 1,491 17.34 2 %

2031 10 815 6,011 7.38 7 %

2032 10 378 7,853 20.78 9 %

2033 10 406 4,120 10.15 4 %

2034 11 123 8,658 70.39 10 %

Thereafter 77 3,011 45,555 15.13 53 %

133 5,821 $ 86,290 $ 14.82 100 %

____________________________________

(1) Includes leases which are master lease agreements.

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Results of Operations

We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate in general, such as inflation and heightened interest rates and the imposition of tariffs and other changes to trade policy in the U.S.

We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate in general, such as inflation and heightened interest rates and uncertainty around the impacts of imposed tariffs and other changes to trade policy in the U.S.

and other jurisdictions, that may reasonably be expected to have a material impact on our results from the acquisition, management and operation of properties and credit investments other than those listed in Part I, Item 1A.

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For the Year Ended December 31,

2024 2023 Change

Credit Segment

Real Estate Segment

Corporate 387 323 64

483,900 568,859 (84,959)

Credit Segment

Real Estate Segment

Corporate 51,802 58,126 (6,324)

778,418 576,341 202,077

Other (expense) income:

Other income (expense):

Credit Segment

Real Estate Segment

Corporate 9,994 9,083 911

2,228 35,568 (33,340)

Net (loss) income

(292,290) 28,086 (320,376)

Net income (loss)

Net income allocated to non-controlling interest

Net (loss) income attributable to the Company

$ (292,301) $ 28,078 $ (320,379)

Net income (loss) attributable to the Company

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Credit Segment

The decrease in our Credit segment revenues of $63.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the suspension of interest income on three of our risk-rated 5 first mortgage loans with a carrying value of $373.8 million that were placed on nonaccrual status and were past due on their interest payments as of December 31, 2024, as well as a decrease in the overall size of our investment portfolio and a decline in interest rates during the year ended December 31, 2024.

The decrease in our Credit segment revenues of $85.7 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a decrease in the overall size of our investment portfolio and a decline in interest rates during the year ended December 31, 2025.

As of December 31, 2025, we held credit investments with an outstanding principal balance of $4.2 billion compared to credit investments with an outstanding principal of $4.4 billion as of December 31, 2024.

Expenses for our Credit segment consist primarily of interest expense, increases (decreases) to our provision for credit losses, management fees, and general and administrative expenses.

The increase in our Credit segment expenses of $191.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to a $208.5 million increase in the provision for credit losses, primarily due to the asset-specific credit loss provision on funded and unfunded commitments recognized on seven of the Company’s first mortgage loan investments and the increase in provision for credit loss related to two CMBS positions that was recognized due to a decline in the underlying collateral value during the year ended December 31, 2024.

Other Expense

Other expense for our Credit segment consists of gain on investment in unconsolidated entities, unrealized (loss) gain on equity securities, and loss on extinguishment of debt, along with dividend income from our equity securities.

The decrease in our Credit segment other expense of $7.6 million during the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a $25.2 million decrease in other (expense) income, net, driven by a $36.4 million decrease in loss

on sale of CMBS during the year ended December 31, 2024, as compared to the same period in 2023, partially offset by a $13.7 million increase in loss on sale of liquid corporate senior loans during the year ended December 31, 2024, as compared to the same period in 2023.

The decrease in other expense was further driven by a $1.9 million increase in gain on investment in unconsolidated entities and a decrease of $1.2 million in loss on extinguishment of debt during the year ended December 31, 2024, as compared to the same period in 2023.

The decrease in other expense was partially offset by a $15.9 million unrealized loss on equity securities during the year ended December 31, 2024, compared to a $4.8 million unrealized gain on equity securities during the year ended December 31, 2023.

The decrease in our Credit segment expenses of $342.1 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a $272.0 million decrease in the provision for credit losses, primarily due to six first mortgage loans that were moved to a risk rating of 5 during the year ended December 31, 2024, compared to no downgrades to a risk rating of 5 during the year ended December 31, 2025.

The decrease was further driven by a $65.2 million decrease in interest expense, primarily due to decreased outstanding borrowings used to fund credit investments during the year ended December 31, 2025.

Net Interest Income (amounts in thousands):

For the Year Ended December 31,

Interest income from loans held-for-investment

Interest income from real estate-related securities and other

Interest expense

Net interest income

For the year ended December 31, 2025, net interest income for our Credit segment decreased $20.5 million.

While decreases in average outstanding balances were the primary drivers of the declines in both interest income and interest expense, net interest income was adversely impacted by a larger decline in weighted average interest rates earned on credit investments relative to the decline in weighted average borrowing rates.

Although interest expense declined due to lower borrowing rates and a meaningful reduction in average outstanding borrowings used to fund our credit investments, these impacts only partially offset the decline in interest income.

Other Income (Expense)

Other income (expense) for our Credit segment consists of gain on investment in unconsolidated entities, unrealized gain (loss) on equity securities, and loss on extinguishment of debt, along with dividend income from equity securities owned.

Our credit segment had other income of $18.5 million during the year ended December 31, 2025, as compared to other expense of $10.0 million during the year ended December 31, 2024.

The increase in our Credit Segment other income (expense) of $28.5 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to an unrealized gain on equity securities of $5.7 million during the year ended December 31, 2025 as compared to an unrealized loss on equity securities of $15.9 million during the year ended December 31, 2024, largely driven by the change in market value of our investment in an equity security of a public company.

The increase was further driven by other income of $3.9 million, consisting of $756,000 in loss on sale of CMBS and liquid corporate senior loans, during the year ended December 31, 2025, as compared to other expense of $6.8 million, consisting of $17.3 million in loss on sale of CMBS and liquid corporate senior loans during the year ended December 31, 2024.

The decrease in the loss on sale of CMBS and liquid corporate senior loans was slightly offset by a decrease in interest income of $4.4 million.

The increase in other income (expense) was partially offset by a $4.5 million decrease in gain on investment in unconsolidated entities and a decrease of $676,000 in loss on extinguishment of debt during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

Real Estate Segment

The decrease in our Real Estate segment revenues of $21.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the disposition of seven properties subsequent to December 31, 2023 and the disposition of 188 properties during the year ended December 31, 2023.

The increase in our Real Estate segment revenues of $18.1 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to the addition of 20 properties subsequent to December 31, 2024.

Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

The increase in our Real Estate segment expenses of $16.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to an increase in impairment charges of $31.8 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, as ten properties were deemed to be impaired during the year ended December 31, 2024, due to sales prices or revised cash flow estimates that were less than their respective carrying values, resulting in impairment charges of $52.2 million, as compared to six properties that were deemed to be impaired during the year ended December 31, 2023, resulting in impairment charges of $20.4 million.

The increase was partially offset by the disposition of seven properties subsequent to December 31, 2023.

The decrease in our Real Estate segment expenses of $30.8 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a decrease in impairment charges of $42.4 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, as four properties were deemed to be impaired during the year ended December 31, 2025, resulting in impairment charges of $9.9 million, as compared to ten properties that were deemed to be impaired during the year ended December 31, 2024, resulting in impairment charges of $52.2 million.

The decrease in Real Estate segment expenses was partially offset by an increase in depreciation and amortization expense of $4.4 million and an increase in property operating expenses of $4.8 million driven by the addition of 20 properties subsequent to December 31, 2024.

Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Other income for our Real Estate segment primarily consists of gain on disposition of real estate, loss on extinguishment of debt and other income.

The decrease in our Real Estate segment other income of $41.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the disposition of seven properties resulting in a net gain of $1.9 million during the year ended December 31, 2024, compared to the disposition of 188 properties resulting in a net gain of $44.4 million during the year ended December 31, 2023.

Other income for our Real Estate segment primarily consists of gain on disposition of real estate and other income.

The decrease in our Real Estate segment other income of $551,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to the disposition of five properties resulting in a net gain of $1.5 million during the year ended December 31, 2025, compared to the disposition of seven properties resulting in a net gain of $1.9 million during the year ended December 31, 2024.

Corporate and Other

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, did not meaningfully change during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, decreased $319,000 during the year ended December 31, 2025 as compared to the year ended December 31, 2024, The Company disposed of 16 condominium units during the year ended December 31, 2025 and two units remained as of December 31, 2025.

Our corporate expenses consist primarily of general and administrative expenses, expense reimbursements to related parties, interest expense, net related to our credit facilities, and property operating expenses and impairment on our condominium and rental units acquired via foreclosure.

The decrease in corporate expenses of $6.3 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023, was partially due to a $5.6 million decrease in impairment charges related to condominium units during the year ended December 31, 2024, as compared to the year ended December 31, 2023, and a decrease in interest expense, net of $4.3 million, driven by the pay down and termination of the credit agreement with JPMorgan Chase Bank, N.A.

and PNC Bank, N.A.

(the “CMFT Credit Facility”) and the paydown and termination of the variable rate debt assumed by the Company upon completing the January 2021 foreclosure of assets which previously secured the Company's mezzanine loans (the “Assumed Variable Rate Debt”) during the year ended December 31, 2023.

The decrease was further driven by a $3.4 million decrease in transaction-related expenses driven by a tax settlement related to the Company’s condominium units during the year ended December 31, 2023.

In addition, we saw a decrease in property operating expenses of $1.9 million, primarily driven by decreased condominium-related legal expenses during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The decrease was partially offset by an increase in general and administrative expenses of $8.9 million, primarily in connection with restricted stock unit related expenses recorded during the year ended December 31, 2024 as well as an increase in escrow and trustee fees and a non-recurring increase in taxes.

The increase in corporate other income of $911,000 during the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily driven by a decrease of $4.4 million in loss on extinguishment of debt during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily in connection with the paydown and termination of the CMFT Credit Facility and the refinanced Assumed Variable Rate Debt.

The increase was further driven by the disposition of 11 condominium units resulting in a net gain of $4.8 million during year ended December 31, 2024, compared to the disposition of 18 condominium units resulting in a net gain of $3.6 million during the year ended December 31, 2023.

The increase was partially offset by a decrease in other (expense) income, net of $4.7 million primarily due to a decrease in interest income generated by decreased short-term liquid investments included in cash and cash equivalents on the consolidated balance sheets during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The decrease in corporate expenses of $10.5 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024, was partially due to no impairment charges related to condominium units during the year ended December 31, 2025, as compared to $9.1 million during the year ended December 31, 2024.

The decrease was further driven by decreases of $2.1 million and $537,000 in property operating expense and real estate tax expense, respectively, related to the disposition of 16 condominium units during the year ended December 31, 2025.

The decrease was partially offset by an increase in general and administrative expenses of $1.5 million, primarily in connection with restricted stock unit related expenses recorded during the year ended December 31, 2025, as well as increases in professional and escrow and trustee fees.

The increase in corporate other income of $1.2 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily driven by the disposition of 16 condominium units resulting in a net gain of $6.6 million during year ended December 31, 2025, compared to the disposition of 11 condominium units resulting in a net gain of $4.8 million during the year ended December 31, 2024.

The increase was partially offset by a decrease in other income of $736,000 primarily due to a decrease in interest income generated by short-term liquid investments included in cash and cash equivalents on the consolidated balance sheets during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

Same Store Analysis

7 unchanged sentences

Comparison of the Years Ended December 31, 2025 and 2024

The following table reconciles our Real Estate segment net (loss) income, calculated in accordance with GAAP, to net operating income (in thousands):

The following table reconciles our Real Estate segment net income (loss), calculated in accordance with GAAP, to net operating income (in thousands):

For the Year Ended December 31,

2024 2023 Change

Net (loss) income

$ (26,986) $ 53,341 $ (80,327)

Loss on extinguishment of debt — 1,192 (1,192)

Other (expense) income, net

(413) 4,380 (4,793)

Net income (loss)

Other expense, net

Gain on disposition of real estate and condominium developments, net

(1,855) (49,731) 47,876

Real estate impairment

52,243 20,404 31,839

Depreciation and amortization

31,981 42,532 (10,551)

Transaction-related expenses

Management fees

8,218 10,702 (2,484)

General and administrative expenses

399 709 (310)

Interest expense, net

23,248 22,884 364

Net operating income

$ 86,835 $ 106,423 $ (19,588)

A total of 181 properties were acquired before January 1, 2024 and represent our “same store” properties during the years ended December 31, 2025 and 2024.

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The following table details the components of our Real Estate segment net operating income broken out between same store and non-same store properties (in thousands):

Total Same Store

Non-Same Store

For the Year Ended December 31,

For the Year Ended December 31, For the Year Ended December 31,

2024 2023 Change

2024 2023 Change 2024 2023 Change

For the Year Ended December 31,

Rental and other property income

Property operating expenses

3,639 5,203 (1,564) 3,054 3,171 (117) 585 2,032 (1,447)

Real estate tax expenses

3,051 3,430 (379) 2,547 2,732 (185) 504 698 (194)

Total property operating expenses

Net operating income

$ 86,835 $ 106,423 $ (19,588) $ 81,769 $ 81,559 $ 210 $ 5,066 $ 24,864 $ (19,798)

Net Operating Income

Same store property net operating income remained relatively consistent during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

Non-same store property net operating income decreased $19.8 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The decrease was primarily due to the disposition of seven properties subsequent to December 31, 2023 in addition to the disposition of 188 properties during the year ended December 31, 2023.

Non-same store property net operating income increased $11.7 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase was primarily due to the acquisition of 20 properties, including two properties acquired through deeds-in-lieu of foreclosure, for an aggregate fair value at the time of acquisition of $209.1 million subsequent to December 31, 2024, partially offset by the disposition of five properties for an aggregate gross sales price of $107.1 million subsequent to December 31, 2024.

Distributions

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Our Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, for the periods indicated below:

Period Commencing Period Ending Monthly Distribution Amount

January 2022 September 2022 $0.0305

October 2022 December 2022 $0.0339

January 2023 September 2023 $0.0350

October 2023 December 2023 $0.0367

January 2024 December 2024 $0.0375

January 2025 June 2025 $0.0283

Period Commencing

Period Ending

Monthly Distribution Amount

September 2023

December 2023

December 2024

As of December 31, 2025, we had distributions payable of $14.5 million.

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Year Ended December 31,

Amount Percent Amount Percent

Distributions paid in cash

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Net cash provided by operating activities (1) (2)

$ 196,675 100 % $ 184,697 100 %

Total sources

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(1) Net cash provided by operating activities for the years ended December 31, 2025 and 2024 was $136.0 million and $161.2 million, respectively.

(2) Our distributions covered by cash flows for the year ended December 31, 2024 include cash flows from operating activities in excess of distributions from prior periods of $35.4 million.

(2) Our distributions covered by cash flows include cash flows from operating activities in excess of distributions from prior periods of $16.5 million and $35.4 million for the years ending December 31, 2025 and 2024, respectively.

We have paid, and may continue to pay, some of our distributions from sources other than cash flows from operations, including proceeds from asset sales, proceeds from loan repayments, and borrowings.

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We expect to utilize proceeds from net cash provided by operations, cash proceeds from the sale of credit investments, principal payments received on credit investments, cash proceeds from real estate asset dispositions, proceeds from the Secondary DRIP Offering, proceeds from the sale of subsidiary equity, distributions from certain investments, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions and loan originations, repayment of certain indebtedness, distributions, redemptions and for general corporate uses.

The sources of our operating cash

flows will primarily be provided by interest income from our portfolio of credit investments and the rental and other property income received from current and future leased properties.

The sources of our operating cash flows will primarily be provided by interest income from our portfolio of credit investments and the rental and other property income received from current and future leased properties.

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents and available borrowings under our debt facilities, which are set forth in the following table (in thousands):

December 31, 2024 December 31, 2023

December 31, 2025

December 31, 2024

Cash and cash equivalents

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____________________________________

$ 273,077 $ 347,638

____________________________________

(1) Reflects the total borrowing capacity approved by the lenders related to the assets pledged as collateral, less the drawn amount.

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The following table details our outstanding financing arrangements and borrowing capacity as of December 31, 2025 (in thousands):

Portfolio Financing Outstanding Principal Balance Maximum Capacity (1)

Portfolio Financing Outstanding Principal Balance

Maximum Capacity (1)

Notes payable – variable rate debt

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The following table compares the average amount outstanding under our Repurchase Facilities (as defined in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K) during each quarter and the amount outstanding as of the end of each quarter, together with an explanation of significant variances (amounts in thousands):

Quarter Ended Quarter-End Balance Weighted-Average Balance During Quarter Variance

Quarter Ended

Quarter-End Balance

Weighted-Average Balance During Quarter

December 31, 2024

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____________________________________

(1) Variance driven by late quarter timing of CMBS sales and debt pay downs primarily in connection with the amended and restated Master Repurchase Agreement with Barclays Bank PLC (as described in further detail in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K).

(2) Variance driven by late quarter timing of CMBS sales and debt pay downs, primarily in connection with the Master Repurchase agreement with Wells Fargo Bank, N.A and the amended and restated Master Repurchase Agreement with Barclays Bank PLC (as described in further detail in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K).

(1) Variance driven by late quarter timing of CMBS sales and debt pay downs, primarily in connection with the Master Repurchase Agreement with Wells Fargo and the amended and restated Master Repurchase Agreement with Barclays Bank (as described in further detail in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K).

(2) Variance driven by late quarter timing of the origination of six first mortgage loans funded, primarily in connection with the Master Repurchase Agreements with Wells Fargo and Citibank (as described in further detail in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K).

Capital Resources

Our principal demands for funds will be for the acquisition or origination of credit investments and real estate, and the payment of tenant improvements, acquisition-related expenses, operating expenses, distributions, redemptions and interest and principal on current and any future debt financings, including principal repayments of $1.7 billion within the next 12 months, $104.0 million of which has a rolling term that resets monthly, as further discussed in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K.

principal on current and any future debt financings, including principal repayments of $1.7 billion within the next 12 months, $44.9 million of which has a rolling term that resets monthly, as further discussed in Note 10 — Repurchase Facilities, Notes Payable and Credit Facilities to our consolidated financial statements in this Annual Report on Form 10-K.

Generally, we expect to meet our liquidity requirements through net cash provided by operations, cash proceeds from the sale of credit investments, principal payments received on credit investments, cash proceeds from real estate asset dispositions, proceeds from the Secondary DRIP Offering, proceeds from the sale of subsidiary equity, distributions, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions and loan originations, repayment of certain indebtedness and for general corporate uses.

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Payments due by period (1)

Total Less Than 1

Year 1-3 Years 3-5 Years More Than

Unfunded loan commitments (2)

$ 261,657 $ 3,735 $ 154,785 $ 92,361 $ 10,776

Principal payments — variable rate debt

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____________________________________

Total $ 3,758,958 $ 1,842,073 $ 843,905 $ 586,017 $ 486,963

____________________________________

(1) The table does not include amounts due to CMFT Management or its affiliates pursuant to our Management Agreement because such amounts are not fixed and determinable.

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This table does not include $60.3 million of unfunded commitments related to the NewPoint JV (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).

In addition, the table does not include $1.2 million of unsettled liquid corporate senior loan acquisitions, which is included in cash and cash equivalents on the accompanying consolidated balance sheet.

(3) Interest payments on the variable rate debt, credit facilities and repurchase facilities have been calculated based on outstanding balances as of December 31, 2025 through their respective maturity dates.

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Net cash provided by operating activities decreased by $25.2 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease was primarily due to a net decrease in credit investments of $717.8 million, and decreased interest income as a result of our three first mortgage loans that were placed on nonaccrual status and were past due on their interest payments as of December 31, 2024, along with a decline in interest rates during the year ended December 31, 2024.

The decease was further driven by the dispositions of seven properties subsequent to December 31, 2023.

The decrease was primarily due to a decrease in interest income of

$85.7 million, driven by a net decrease in credit investments of $194.6 million during the year ended December 31, 2025.

The decrease in credit investments was a result of a net decrease of $182.8 million in real estate-related securities and other, a net decrease of $106.0 million in first mortgage loans, partially related to the Company taking possession of the underlying assets of two first mortgage loans through deeds-in-lieu of foreclosure, and a net decrease of $15.3 million in liquid corporate senior loans.

The decrease in credit investments was partially offset by an increase in corporate senior loans of $109.5 million.

The decrease was further driven by a decline in interest rates during the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The change was partially offset by an increase in rental and other property income, driven by the net acquisition of 15 properties subsequent to December 31, 2024.

See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.

Investing Activities.

For the year ended December 31, 2024, net cash provided by investing activities increased by $161.1 million, as compared to the year ended December 31, 2023.

The change was primarily due to $627.3 million of net proceeds from loans held-for-investment during the year ended December 31, 2024, as compared to the $342.4 million net investment in loans held-for-sale during the year ended December 31, 2023.

The change was further driven by $85.9 million of net proceeds from real estate-related securities and other during the year ended December 31, 2024, as compared to the $26.3 million net investment in real estate-related securities and other during the year ended December 31, 2023.

The change was offset by a decrease in net proceeds from real estate assets and condominium units of $892.3 million, as the Company disposed of seven properties and 11 condominium units during the year ended December 31, 2024, as compared to 188 properties and 18 condominium units disposed of during the same period in 2023.

For the year ended December 31, 2025, net cash provided by investing activities decreased by $609.9 million, as compared to the year ended December 31, 2024.

The decrease was primarily due to a $200.9 million net investment in loans held-for-investment during the year ended December 31, 2025, as compared to $627.3 million in net proceeds from loans held-for-investment during the year ended December 31, 2024.

The decrease was partially offset by an increase in net proceeds received from the disposition of real estate-related securities and other of $97.9 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease was further offset by $33.5 million in net proceeds on the investment in unconsolidated entities during the year ended December 31, 2025, as compared to a $54.6 million net investment in unconsolidated entities during the year ended December 31, 2024.

In addition, the decrease was offset by an increase in net proceeds from real estate assets and condominium units of $30.6 million, during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

Financing Activities.

For the year ended December 31, 2024, net cash used in financing activities increased by $257.9 million.

The change was primarily due to net repayments on the repurchase facilities, notes payable and credit facilities of $756.5 million during the year ended December 31, 2024, as compared to net repayments on the repurchase facilities, notes payable and credit facilities of $505.8 million during the year ended December 31, 2023.

For the year ended December 31, 2025, net cash used in financing activities decreased by $714.6 million, as compared to the year ended December 31, 2024.

The change was primarily due to a decrease in net repayments on the repurchase facilities, notes payable and credit facilities of $676.1 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The change was further driven by a decrease in distributions to shareholders of $32.7 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

Election as a REIT

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This process requires significant judgments about future events that, while based on the information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic condition impacting our portfolios could vary significantly from the estimates we made as of December 31, 2025.

• For collateral-dependent loans where foreclosure of the collateral is deemed probable, expected credit losses are measured as the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.

For collateral-dependent loans where foreclosure is not considered probable, we apply a practical expedient to estimate expected losses based upon the difference between the collateral’s fair value (reduced by certain adjustments such as estimated costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan.

A loan is determined to be collateral-dependent if (i) the borrower or sponsor is experiencing financial difficulty, and (ii) repayment is expected to be provided through the sale of the underlying collateral.

This assessment requires the use of significant judgment and is subject to uncertainty.

In evaluating whether a borrower is experiencing financial difficulty, we consider various factors including, but not limited to, the sufficiency of the borrower’s operating cash flows to meet current and future debt service requirements, the borrower’s ability to refinance the loan, market liquidity conditions, and other circumstances that may affect the borrower’s ability to satisfy its contractual obligations under the loan agreement.

Recoverability of Real Estate Assets

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Allocation of Purchase Price of Real Estate Assets

In connection with our acquisition of real estate assets, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their respective relative fair values.

In connection with our acquisition of real estate assets or after taking control of real assets through deeds-in-lieu of foreclosure, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their respective relative fair values.

Tangible assets consist of land, buildings, fixtures and tenant improvements.

9 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 7. Management’s Discussion and Analysis