What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2025-11-14 · 126 added, 193 removed, 332 unchanged (49% of the section changed)

16 unchanged sentences

• We are subject to risks associated with bankruptcies or insolvencies of our borrowers and tenants and from borrower or tenant defaults generally.

• Our credit and real estate investments subject us to domestic and international political, economic, capital markets and other conditions and events.

• Our credit and real estate investments subject us to domestic and international political, economic, capital markets and other conditions and events, including ongoing geopolitical tensions in the Middle East.

• We are subject to fluctuations in interest rates which could reduce our ability to generate income on our credit investments.

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• We may be unable to list our shares on a national securities exchange in a particular timeframe or at all.

• If we, our operating partnership and any other subsidiaries do not maintain exemptions from registration under the Investment Company Act of 1940, as amended, we will be subject to significant regulation and restrictions on our business and investments, which could materially and adversely impact us.

• If we, our operating partnership and any other subsidiaries do not maintain exemptions from registration under the Investment Company Act of 1940, as amended, we will be subject to significant regulations and restrictions on our business and investments, which could materially and adversely impact us.

We use certain defined terms throughout this Quarterly Report on Form 10-Q that have the following meanings:

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We are externally managed by CMFT Management and, with respect to investments in securities and certain other investments of ours, our Investment Advisor, each of which is an affiliate of CIM Group, a vertically-integrated community-focused real estate and infrastructure owner, operator, lender and developer.

As of September 30, 2025, our loan portfolio consisted of 76 loans with a net book value of $3.2 billion, and 18 investments in real estate-related securities and other of $246.1 million.

As of March 31, 2026, our loan portfolio consisted of 77 loans with a net book value of $3.1 billion, and 14 investments in real estate-related securities and other of $167.6 million.

The Company conducts and expects to continue to conduct its commercial real estate lending business through CLR, a Maryland statutory trust and subsidiary of the Company which we expect to be taxed as a REIT for U.S.

federal income tax purposes.

As of September 30, 2025, CLR holds a diversified portfolio of approximately $1.4 billion which includes first mortgage loans with a net book value of $1.1 billion,

CMBS with an estimated fair value of $142.7 million, and an investment in the Unconsolidated Joint Venture with a carrying value of $152.7 million.

As of September 30, 2025, we owned 198 properties, which consisted of 186 retail properties, eight office properties, and four industrial properties, representing 22 industry sectors and comprising approximately 6.4 million rentable square feet of commercial space located in 37 states, with a net book value of $1.0 billion.

As of September 30, 2025, we owned condominium developments with a net book value of $17.7 million.

During the nine months ended September 30, 2025, we disposed of five properties encompassing approximately 401,000 gross rentable square feet and 15 condominium units for a total consideration of $175.2 million, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

As of March 31, 2026, CLR holds a diversified portfolio of

approximately $1.5 billion which includes first mortgage loans with a net book value of $1.3 billion, CMBS with an estimated fair value of $63.5 million, and an investment in the Unconsolidated Joint Venture with a carrying value of $115.5 million.

As of March 31, 2026, we owned 199 commercial real estate properties, which consisted of 184 retail properties, eight office properties, and seven industrial properties, representing 22 industry sectors and comprising approximately 6.6 million rentable square feet of commercial space located in 36 states, with a net book value of $1.0 billion.

As of March 31, 2026, we owned condominium developments with a net book value of $12.0 million.

During the three months ended March 31, 2026, we disposed of three properties encompassing approximately 87,000 gross rentable square feet, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

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.

In general, our business model is such that rising interest rates will correlate to increases in our net income, while declining interest rates will correlate to decreases in our net income.

As of September 30, 2025, 90.7% of our CMBS and loans held-for-investment by carrying value earned a floating rate of interest, indexed to SOFR, and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.

As of March 31, 2026, 89.8% of our CMBS and loans held-for-investment by carrying value earned a floating rate of interest, indexed to SOFR, and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.

CMFT Management reviews our investment portfolio and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.

In addition, as 96.9% of our rentable square feet was under lease, including any month-to-month agreements, as of September 30, 2025, with a weighted average remaining lease term of 9.6 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors.

In addition, as 95.8% of our rentable square feet was under lease, including any month-to-month agreements, as of March 31, 2026, with a weighted average remaining lease term of 10.2 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors.

Our manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends.

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Macroeconomic Environment

The nine months ended September 30, 2025 have been 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, uncertainty around the impacts of imposed tariffs, political and regulatory uncertainty and geopolitical conditions have persisted.

The three months ended March 31, 2026 have been characterized by a mix of positive and challenging developments leading to continued volatility in global markets.

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 in September 2025, however the timing, direction and extent of any future interest rate changes remains uncertain.

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.

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Operating Highlights and Key Performance Indicators

Activity from January 1, 2025 through September 30, 2025

Activity from January 1, 2026 through March 31, 2026

Operating Results:

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• Declared aggregate distributions of $0.08 per share.

Credit Portfolio Activity:

• Originated $178.6 million first mortgage loans, $55.0 million of which was a result of a loan modification.

Credit Portfolio Investment Activity:

• Originated $56.0 million of first mortgage loans.

• Funded $10.8 million in existing first mortgage loans.

• Invested $1.3 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $4.8 million.

• Invested $37.4 million in corporate senior loans.

• Received principal repayments on loans held-for-investment of $483.8 million.

• Invested $4.6 million in CMBS, received repayments on CMBS of $42.8 million and sold CMBS for an aggregate gross sales price of $60.9 million.

• Received repayments on CMBS of $513,000.

• Received proceeds from the repayment of portfolio investments on the CLO subordinated note of $1.1 million.

• Funded an additional $24.4 million in NP JV Holdings.

Real Estate Portfolio Activity:

• Acquired 14 commercial properties for an aggregate purchase price of $28.7 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 three months ended September 30, 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 properties for an aggregate sales price of $15.8 million.

• Disposed of 15 condominium units for an aggregate sales price of $68.1 million.

Real Estate Portfolio Investment Activity:

• Disposed of three commercial properties for an aggregate sales price of $20.1 million.

Financing Activity:

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Portfolio Information

The following table shows the net book value of our portfolio by investment type as of September 30, 2025 and 2024 (dollar amounts in thousands):

As of September 30,

The following table shows the net book value of our portfolio by investment type as of March 31, 2026 and 2025 (dollar amounts in thousands):

As of March 31,

Asset Count Net Book Value

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____________________________________

(1) Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $163.0 million as of September 30, 2025, $152.7 million of which is held through CLR as of September 30, 2025.

(2) As of September 30, 2025, first mortgage loans with a net book value of $1.1 billion and CMBS with an estimated fair value of $142.7 million were held through CLR.

(1) Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $125.1 million as of March 31, 2026, $115.5 million of which is held through CLR as of March 31, 2026.

(2) As of March 31, 2026, first mortgage loans with a net book value of $1.3 billion and CMBS with an estimated fair value of $63.5 million were held through CLR.

Credit Portfolio Information

The following table details overall statistics for our credit portfolio as of September 30, 2025 (dollar amounts in thousands):

The following table details overall statistics for our credit portfolio as of March 31, 2026 (dollar amounts in thousands):

CRE Loans (1)(2)

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Unfunded loan commitments (4)

$ 150,816 $ — $ — $ 68,973

Weighted-average interest rate (5)(6)

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(1) As of September 30, 2025, 90.7% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR.

(1) As of March 31, 2026, 89.8% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR.

(2) Maximum maturity date assumes all extension options are exercised by the borrower and assumes all relevant conditions are met for such extensions;

however, our loans and CMBS may be repaid prior to such date.

(3) Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $163.0 million as of September 30, 2025.

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

(3) Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $125.1 million as of March 31, 2026.

(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 September 30, 2025, the CLO subordinated note has an initial maturity date of July 2037 and an estimated effective yield of 15.1%.

As of March 31, 2026, the CLO subordinated note has an initial maturity date of July 2037 and an estimated effective yield of 15.6%.

(7) Does not include positions in maturity default.

Real Estate Portfolio Information

As of September 30, 2025, we owned 198 properties located in 37 states, the gross rentable square feet of which was 96.9% leased, including any month-to-month agreements, with a weighted average lease term remaining of 9.6 years.

As of September 30, 2025, we had certain geographic and industry concentrations in our property holdings.

As of September 30, 2025, we had properties located in Virginia and Ohio which accounted for 16% and 14%, respectively, of our 2025 annualized rental income.

As of March 31, 2026, we owned 199 properties located in 36 states, the gross rentable square feet of which was 95.8% leased, including any month-to-month agreements, with a weighted average lease term remaining of 10.2 years.

As of March 31, 2026, we had certain geographic and industry concentrations in our property holdings.

As of March 31, 2026, we had properties located in Virginia and Ohio which accounted for 17% and 12%, respectively, of our 2026 annualized rental income.

In addition, we had tenants in the health and personal care stores and manufacturing industries, which accounted for 13% and 12%, respectively, of our 2026 annualized rental income.

During the nine months ended September 30, 2025, we disposed of five properties for an aggregate gross sales price of $107.1 million as well as 15 condominium units for a gross sales price of $68.1 million.

The following table shows the property statistics of our real estate assets as of September 30, 2025 and 2024:

As of September 30,

During the three months ended March 31, 2026, we disposed of three properties for an aggregate gross sales price of $20.1 million.

The following table shows the property statistics of our real estate assets as of March 31, 2026 and 2025:

As of March 31,

Number of commercial properties 199 186

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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 three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30,

Nine Months Ended September 30,

2025 2024 2025

The following table summarizes our real estate acquisition activity during the three months ended March 31, 2025.

No commercial properties were acquired during the three months ended March 31, 2026.

Three Months Ended March 31,

Commercial properties acquired 2

Purchase price of acquired properties (in thousands)

$ 28,721 $ 44,148 $ 179,764 $ 44,148

Rentable square feet (in thousands)

153 105 948 105

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 ongoing geopolitical tensions in the Middle East and 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 the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 and this Quarterly Report on Form 10-Q.

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Refer to Note 15 — Segment Reporting to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion of our operating segments.

The following table compares our summarized results of operations for the three and nine months ended September 30, 2025 and 2024 by operating segment (amounts in thousands):

The following table compares our summarized results of operations for the three months ended March 31, 2026 and 2025 by operating segment (amounts in thousands):

For the Three Months Ended

For the Nine Months Ended

September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change

March 31, 2026 March 31, 2025 Change

Credit Segment $ 71,818 $ 77,596 $ (5,778)

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64,120 146,750 (82,630)

Other income (expense):

Other income:

Credit Segment 3,133 4,993 (1,860)

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Net income allocated to non-controlling interest

27 3 24 59 3 56

Net income (loss) attributable to the Company

$ 43,028 $ (32,883) $ 75,911

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

Credit Segment

Our Credit segment revenues decreased $21.4 million for the three months ended September 30, 2025, as compared to the same period in 2024.

The decrease was primarily due to a decrease in the overall size of our investment portfolio during the three months ended September 30, 2025 as compared to the same period in 2024.

As of September 30, 2025, we held credit investments with an outstanding principal balance of $4.0 billion compared to credit investments with an outstanding principal balance of $4.5 billion as of September 30, 2024.

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

The decrease in our Credit segment expenses of $36.4 million for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an $18.1 million decrease in provision for credit losses during the three months ended September 30, 2025, as compared to the same period in 2024, due to a decrease in incremental asset-specific credit loss provisions on funded and unfunded commitments related to the Company’s first mortgage loans.

The decrease was further driven by a $17.4 million decrease in interest expense, primarily due to decreased outstanding borrowings used to fund credit investments during the three months ended September 30, 2025 as compared to the same period in 2024.

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

The increase in our Credit segment other income of $3.0 million during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a $4.9 million increase in other income, net during the three months ended September 30, 2025, as compared to the same period in 2024, primarily related to the recognition of a $7.0 million loss on sale of liquid corporate senior loans during the three months ended September 30, 2024, partially offset by a $1.8 million decrease in interest income generated by short-term liquid investments in cash and cash equivalents on the condensed consolidated balance sheets during the three months ended

September 30, 2025, as compared to the same period in 2024.

The increase was offset by a $2.0 million decrease in unrealized gain on equity securities during the three months ended September 30, 2025, as compared to the same period in 2024.

Real Estate Segment

The increase in our Real Estate segment revenues of $4.6 million for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the addition of 16 properties subsequent to September 30, 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 $3.0 million for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in depreciation and amortization expense of $1.6 million.

The increase was further driven by a $1.5 million increase in property operating, real estate tax and management fees expense.

These increases were driven by the addition of 16 properties subsequent to September 30, 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, net, and other income.

The increase in our Real Estate segment other income of $1.1 million during the three months ended September 30, 2025, as compared to the same period in 2024 was primarily due to the disposition of one property resulting in a net gain of $1.1 million during the three months ended September 30, 2025, as compared to the disposition of one property and no gain or loss during the same period in 2024.

Corporate and Other

During the three months ended September 30, 2025, we did not generate any corporate revenues, which primarily consists of rental income from our condominium and rental units acquired via foreclosure.

There was no revenue generated as the Company has disposed of all rent stabilized condominium units as of September 30, 2025.

The units that remained during the three months ended September 30, 2025 are under development.

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 related to our condominium and rental units acquired via foreclosure.

The decrease in corporate expenses of $3.0 million during the three months ended September 30, 2025 was primarily due to no condominium-related impairment expense recorded for the three months ended September 30, 2025 as compared to $3.5 million during the same period in 2024.

The decrease was partially offset by an increase of $898,000 in general and administrative expenses during the three months ended September 30, 2025 as compared to the same period in 2024, primarily in connection with restricted stock unit related expenses recorded during the three months ended September 30, 2025.

The decrease in corporate other income of $515,000 during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a decrease in interest income generated by short-term liquid investments in cash and cash equivalents on the condensed consolidated balance sheets for the three months ended September 30, 2025.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Credit Segment

Our Credit segment revenues decreased $74.0 million for the nine months ended September 30, 2025, as compared to the same period in 2024.

The decrease was primarily due to a decrease in the overall size of our investment portfolio during the nine months ended September 30, 2025 as compared to the same period in 2024.

As of September 30, 2025, we held credit

investments with an outstanding principal balance of $4.0 billion compared to credit investments with an outstanding principal balance of $4.5 billion as of September 30, 2024.

Our Credit segment revenues decreased $5.8 million for the three months ended March 31, 2026, as compared to the same period in 2025.

The decrease was primarily due to a decrease in the overall size of our investment portfolio during the three months ended March 31, 2026 as compared to the same period in 2025.

As of March 31, 2026, we held credit investments with an outstanding principal balance of $3.8 billion compared to credit investments with an outstanding principal balance of $4.2 billion as of March 31, 2025.

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

The decrease in our Credit segment expenses of $296.0 million for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a $235.1 million decrease in provision for credit losses during the nine months ended September 30, 2025, as compared to the same period in 2024 due to six first mortgage loans that were moved to a risk rating of 5 during the nine months ended September 30, 2024, compared to no downgrades to a risk rating of 5 during the nine months ended September 30, 2025.

The decrease was further driven by a $56.9 million decrease in interest expense, primarily due to decreased outstanding borrowings used to fund credit investments during the nine months ended September 30, 2025 as compared to the same period in 2024.

Other Income (Expense)

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

Our Credit segment had other income of $14.0 million during the nine months ended September 30, 2025, as compared to other expense of $1.6 million during the same period in 2024.

The change was primarily due to a $3.6 million unrealized gain on equity securities during the nine months ended September 30, 2025, as compared to an $11.2 million unrealized loss on equity securities for the same period in 2024.

The increase was further driven by a $2.0 million increase in other income, net primarily related to an $8.0 million decrease in loss on sale of liquid corporate senior loans during the three months ended September 30, 2025, as compared to the same period in 2024, partially offset by a $4.7 million decrease in interest income generated by short-term liquid investments in cash and cash equivalents on the condensed consolidated balance sheets and a $1.1 million decrease in dividend income from our equity securities during the three months ended September 30, 2025, as compared to the same period in 2024.

The increase was offset by a $2.2 million decrease in gain on investment in unconsolidated entities during the nine months ended September 30, 2025, as compared to the same period in 2024.

The decrease in our Credit segment expenses of $78.0 million for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a $68.9 million decrease in provision for credit losses during the three months ended March 31, 2026.

During the three months ended March 31, 2026, there was a decrease in incremental asset-specific credit loss provisions on funded and unfunded commitments related to the Company’s first mortgage loans, as compared to the same period in 2025, where there was a reclassification of $71.0 million of unrealized loss related to one CMBS position previously recorded in other comprehensive income in the accompanying condensed consolidated statements of comprehensive (loss) income to (decrease) increase in provision for credit losses on the condensed consolidated statements of operations during the three months ended March 31, 2025.

The decrease was further driven by a $7.9 million decrease in interest expense, primarily due to decreased outstanding borrowings used to fund credit investments during the three months ended March 31, 2026, as compared to the same period in 2025.

Net Interest Income (amounts in thousands):

For the Three Months Ended March 31,

2026 2025 Change

Interest income from loans held-for-investment

$ 68,828 $ 70,943 $ (2,115)

Interest income from real estate-related securities and other

2,990 6,653 (3,663)

Interest expense

(31,555) (39,429) 7,874

Net interest income

$ 40,263 $ 38,167 $ 2,096

For the three months ended March 31, 2026, net interest income for our Credit segment increased $2.1 million.

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

The decline in interest expense due to lower borrowing due to a reduction in average outstanding borrowings used to fund our credit investments, were able to offset the decline in interest income.

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

The decrease in our Credit segment other income of $1.9 million during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily related to a loss on investment in unconsolidated entities of $971,000 during the three months ended March 31, 2026, as compared to a $1.0 million gain on investment in unconsolidated entities for the same period in 2025.

The decrease was further driven by a loss on extinguishment of debt of $282,000, partially offset by a $387,000 increase in other income, net during the three months ended March 31, 2026, as compared to the same period in 2025.

Real Estate Segment

The increase in our Real Estate segment revenues of $14.6 million for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the addition of 16 properties subsequent to September 30, 2024.

The decrease in our Real Estate segment revenues of $3.0 million for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to occupancy on our same store properties of 97% at March 31, 2026, compared to 100% at March 31, 2025.

The decrease was further driven by the disposition of five properties for an aggregate gross sales price of $114.2 million, partially offset by the acquisition of 18 properties for an aggregate fair value at the time of acquisition of $58.1 million, subsequent to March 31, 2025.

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

The decrease in our Real Estate segment expenses of $35.6 million for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a decrease in impairment charges of $43.8 million for the nine months ended September 30, 2025, as compared to the same period in 2024, as three properties were deemed to be impaired during the nine months ended September 30, 2025, resulting in impairment charges of $7.7 million, as compared to seven properties that were deemed to be impaired during the nine months ended September 30, 2024, resulting in impairment charges of $51.5 million.

The decrease in Real Estate segment expenses was partially offset by an increase in depreciation and amortization expenses of $3.3 million and an increase in property operating expenses of $3.2 million driven by the acquisition of 16 properties subsequent to September 30, 2024.

The decrease in our Real Estate segment expenses of $5.7 million for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to there being no impairments recorded during the three months ended March 31, 2026, as compared to $7.0 million of impairment charges recorded during the three months ended March 31, 2025.

The decrease in our Real Estate segment expenses was partially offset by increases of $766,000, $348,000, and $219,000 in management fees, real estate tax expense, and property operating expenses, respectively.

These increases were driven by the addition of 18 properties subsequent to March 31, 2025.

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, net, and other income.

The increase in our Real Estate segment other income of $1.4 million for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the disposition of five properties resulting in a net gain of $1.5 million during the nine months ended September 30, 2025, compared to the disposition of three properties resulting in no gain or loss during the nine months ended September 30, 2024.

The increase in our Real Estate segment other income of $5.3 million during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to the disposition of three properties resulting in a net gain of $5.7 million during the three months ended March 31, 2026, as compared to the disposition of three properties resulting in a net gain of $418,000 during the same period in 2025.

Corporate and Other

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, decreased $218,000 during the nine months ended September 30, 2025 as compared to the same period in 2024, due to the disposition of all condominium units not under development during the nine months ended September 30, 2025.

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, decreased $68,000 during the three months ended March 31, 2026 as compared to the same period in 2025.

The Company disposed of 16 condominium units during the year ended December 31, 2025 and two units remained as of March 31, 2026.

The decrease in corporate expenses of $9.9 million during the nine months ended September 30, 2025 as compared to the same period in 2024, was primarily due to no condominium-related impairment expense recorded during the nine months ended September 30, 2025, as compared to $8.9 million during the same period in 2024.

The decrease in corporate expenses was further driven by a decrease in property operating expenses of $2.2 million, due to decreased condominium-related legal expenses and miscellaneous condominium repairs and maintenance expense during the nine months ended September 30, 2025, as compared to the same period in 2024.

The decrease was partially offset by an increase of $2.2 million in general and administrative expenses during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily in connection with restricted stock unit related expenses recorded during the nine months ended September 30, 2025.

The increase in corporate other income of $758,000 during the nine months ended September 30, 2025 as compared to the same period in 2024, was primarily due to the disposition of 15 condominium units resulting in a net gain of $6.3 million during the nine months ended September 30, 2025, compared to the disposition of 11 condominium units resulting in a net gain of $4.5 million during the nine months ended September 30, 2024.

The increase was partially offset by a decrease in other income, net of $1.1 million due to a decrease in interest income generated by short-term liquid investments in cash and cash equivalents on the condensed consolidated balance sheets for the nine months ended September 30, 2025.

The increase in corporate expenses of $1.0 million during the three months ended March 31, 2026 was primarily due to an increase of $1.0 million in general and administrative expenses during the three months ended March 31, 2026 as compared to the same period in 2025, primarily in connection with restricted stock unit related expenses recorded during the three months ended March 31, 2026.

The decrease in corporate other income of $1.3 million during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to no gain on disposition of condominium units recorded during the three months ended March 31, 2026, as compared to a gain of $1.1 million during the same period in 2025.

Same Store Analysis

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In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment.

Comparison of the Three Months Ended September 30, 2025 and 2024

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

For the Three Months Ended September 30,

2025 2024 Change

$ 8,682 $ 5,999 $ 2,683

Other expense, net

(77) (120) 43

Gain on disposition of real estate and condominium developments, net

(1,128) — (1,128)

Real estate impairment — 9 (9)

Depreciation and amortization 8,980 7,381 1,599

Management fees 2,403 2,008 395

General and administrative

Interest expense, net 5,748 5,814 (66)

Net operating income $ 24,740 $ 21,206 $ 3,534

A total of 181 properties were acquired before July 1, 2024 and represent our “same store” properties during the three months ended September 30, 2025 and 2024.

“Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after July 1, 2024.

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 Three Months Ended September 30,

2025 2024 Change 2025 2024 Change 2025 2024 Change

Rental and other property income $ 27,438 $ 22,829 $ 4,609 $ 21,355 $ 21,395 $ (40) $ 6,083 $ 1,434 $ 4,649

Property operating expenses 1,552 965 587 574 691 (117) 978 274 704

Real estate tax expenses 1,146 658 488 624 532 92 522 126 396

Total property operating expenses 2,698 1,623 1,075 1,198 1,223 (25) 1,500 400 1,100

Net operating income

$ 24,740 $ 21,206 $ 3,534 $ 20,157 $ 20,172 $ (15) $ 4,583 $ 1,034 $ 3,549

Net Operating Income

Same store property net operating income remained relatively consistent during the three months ended September 30, 2025, as compared to the same period in 2024.

Non-same store property net operating income increased $3.5 million during the three months ended September 30, 2025, as compared to the same period in 2024.

The increase was primarily due to the acquisition of 16 properties, including two properties acquired through deeds-in-lieu of foreclosure, for an aggregate fair value at the time of acquisition of $179.8 million subsequent to September 30, 2024, partially offset by the disposition of nine properties for an aggregate gross sales price of $136.9 million subsequent to September 30, 2024.

Comparison of the Nine Months Ended September 30, 2025 and 2024

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

For the Nine Months Ended

Comparison of the Three Months Ended March 31, 2026 and 2025

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

For the Three Months Ended March 31,

2026 2025 Change

Net income (loss)

$ 10,600 $ 2,579 $ 8,021

Other expense, net

(136) (268) 132

Other income, net

Gain on disposition of real estate and condominium developments, net

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General and administrative

259 360 (101)

Interest expense, net 5,814 5,821 (7)

Net operating income $ 22,672 $ 26,211 $ (3,539)

A total of 181 properties were acquired before January 1, 2024 and represent our “same store” properties during the nine months ended September 30, 2025 and 2024.

A total of 180 properties were acquired before January 1, 2025 and represent our “same store” properties during the three months ended March 31, 2026 and 2025.

“Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after January 1, 2025.

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Total Same Store Non-Same Store

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

2026 2025 Change 2026 2025 Change 2026 2025 Change

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Net Operating Income

Same store property net operating income remained relatively consistent during the nine months ended September 30, 2025, as compared to the same period in 2024.

Non-same store property net operating income increased $10.6 million during the nine months ended September 30, 2025, as compared to the same period in 2024.

Same store property net operating income decreased $1.2 million during the three months ended March 31, 2026, as compared to the same period in 2025 as a result of decreased occupancy.

Same store property occupancy decreased from 100% as of March 31, 2025 to 97% as of March 31, 2026.

Non-same store property net operating income decreased $2.4 million during the three months ended March 31, 2026, as compared to the same period in 2025.

The decrease was primarily due to the disposition of five properties for an aggregate gross sales price of $114.2 million, subsequent to March 31, 2025, partially offset by the acquisition of 18 properties for an aggregate gross purchase price of $58.1 million subsequent to March 31, 2025.

Distributions

Our Board authorizes distributions on a quarterly basis, which are paid out on a monthly basis.

Our Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, during the year ended December 31, 2024 and the nine months ended September 30, 2025 for the periods indicated below:

Our Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, during the year ended December 31, 2025 and the three months ended March 31, 2026 for the periods indicated below:

Period Commencing Period Ending Monthly Distribution Amount

January 2024 December 2024 $0.0375

January 2025 March 2026 $0.0283

As of September 30, 2025, we had distributions payable of $12.7 million.

January 2025 June 2026 $0.0283

As of March 31, 2026, we had distributions payable of $14.8 million.

The following table presents distributions and source of distributions for the periods indicated below (dollar amounts in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Amount Percent Amount Percent

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____________________________________

(1) Net cash provided by operating activities for the nine months ended September 30, 2025 and 2024 was $102.7 million and $130.7 million, respectively.

(2) Our distributions covered by cash flows for the nine months ended September 30, 2025 and 2024 include cash flows from operating activities in excess of distributions from prior periods of $12.7 million and $16.5 million, respectively.

(1) Net cash provided by operating activities for the three months ended March 31, 2026 and 2025 was $32.5 million and $31.8 million, respectively.

(2) Our distributions covered by cash flows for the three months ended March 31, 2026 and 2025 include cash flows from operating activities in excess of distributions from prior periods of $4.6 million and $9.4 million, 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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While the shares of deceased stockholders and stockholders determined to have exigent circumstances will be included in calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps;

stockholders’ shares and stockholders determined to have exigent circumstances would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available.

If sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares and shareholders determined to have exigent circumstances would be honored on a pro rata basis.

therefore, if the volume of requests to redeem deceased stockholders’ shares and stockholders determined to have exigent circumstances in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares and stockholders determined to have exigent circumstances would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available.

If sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions

in full, the requests to redeem deceased stockholders’ shares and shareholders determined to have exigent circumstances would be honored on a pro rata basis.

We next will give priority to requests for full redemption of accounts with a balance of 250 shares or less at the time we receive the request, in order to reduce the expense of maintaining small accounts.

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Any material modifications or suspension of the share redemption program will be disclosed to our stockholders as promptly as practicable in our reports filed with the SEC and via our website.

During the nine months ended September 30, 2025, we received valid redemption requests under our share redemption program totaling approximately 133.8 million shares, of which we redeemed approximately 3.4 million shares as of September 30, 2025 for $17.6 million (at an average redemption price of $5.24 per share) and approximately 1.5 million shares subsequent to September 30, 2025 for $7.8 million (at an average redemption price of $5.22 per share).

During the three months ended March 31, 2026, we received valid redemption requests under our share redemption program totaling approximately 45.2 million shares, of which we redeemed approximately 1.5 million shares subsequent to March 31, 2026 for $7.6 million (at an average redemption price of $5.14 per share).

The remaining redemption requests relating to 43.7 million shares went unfulfilled.

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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):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Cash and cash equivalents $ 183,617 $ 184,674

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See Note 9 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for additional details regarding our repurchase facilities, notes payable and credit facilities.

The following table details our outstanding financing arrangements and borrowing capacity as of September 30, 2025 (in thousands):

The following table details our outstanding financing arrangements and borrowing capacity as of March 31, 2026 (in thousands):

Portfolio Financing Outstanding Principal Balance Maximum Capacity (1)

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March 31, 2026 $ 1,511,386 $ 1,689,556 $ (178,170) (2)

June 30, 2025 $ 1,693,710 $ 1,621,436 $ 72,274

September 30, 2025 $ 1,613,093 $ 1,618,193 $ (5,100)

____________________________________

(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 9 — 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 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 9 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q).

(2) Variance driven by late quarter timing of debt repayments, primarily in connection with the Master Repurchase Agreements with Wells Fargo and Citibank (as described in further detail in Note 9 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q).

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 $1.5 billion within the next 12 months, $44.5 million of which has a rolling term that resets monthly, as further discussed in Note 9 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

As of September 30, 2025, we had unfunded commitments of $184.1 million related to 37 loans and unfunded commitments of $49.2 million related to the NewPoint JV.

Loan funding commitments are generally subject to certain conditions and the satisfaction of borrower milestones.

Therefore, the exact timing and amounts of such future loan fundings are uncertain and will depend on the current and future performance of the underlying collateral assets.

We expect to fund our loan commitments over the remaining term of the related loans, which have a weighted-average future funding period of 5.6 years.

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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Contractual Obligations

As of September 30, 2025, we had debt outstanding with a carrying value of $3.0 billion and a weighted average interest rate of 5.2%.

As of March 31, 2026, we had debt outstanding with a carrying value of $2.7 billion and a weighted average interest rate of 4.7%.

See Note 9 — Repurchase Facilities, Notes Payable and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt outstanding, including extension options.

Our contractual obligations as of September 30, 2025 were as follows (in thousands):

Our contractual obligations as of March 31, 2026 were as follows (in thousands):

Payments due by period (1)

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(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.

(2) Comprised of our unfunded loan commitments to provide additional CRE loan, corporate senior loan and liquid corporate senior loan financing as of September 30, 2025.

(2) Comprised of our unfunded loan commitments to provide additional CRE loan, corporate senior loan and liquid corporate senior loan financing as of March 31, 2026.

The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final maturity date;

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This table does not include $81.3 million of unfunded commitments related to the NewPoint JV.

(3) Interest payments on the variable rate debt, credit facilities and repurchase facilities have been calculated based on outstanding balances as of September 30, 2025 through their respective maturity dates.

(3) Interest payments on the variable rate debt, credit facilities and repurchase facilities have been calculated based on outstanding balances as of March 31, 2026 through their respective maturity dates.

This is only an estimate as actual amounts borrowed and interest rates could vary over time.

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There is no limitation on the amount we may borrow against any single improved property.

As of September 30, 2025, our ratio of debt to total gross assets net of gross intangible lease liabilities was 62.5%.

As of March 31, 2026, our ratio of debt to total gross assets net of gross intangible lease liabilities was 60.1%.

Cash Flow Analysis

Operating Activities.

Net cash provided by operating activities decreased by $28.0 million for the nine months ended September 30, 2025, as compared to the same period in 2024.

The change was primarily due to a decrease in interest income of $74.0 million, primarily driven by a net decrease in credit investments of $477.0 million.

The decrease in credit investments was primarily a result of a net decrease of $436.4 million in first mortgage loans subsequent to September 30, 2024, primarily related to the Company taking possession of the underlying assets of two first mortgage loans through deeds-in-lieu of foreclosure, a net decrease of real estate-related securities and other of $120.9 million, and a net decrease of $23.6 million in liquid corporate senior loans subsequent to September 30, 2024.

The decrease was further driven by a decline in interest rates during the period ending September 30, 2025 as compared to the same period in 2024.

The decrease was also due to the disposition of nine properties for an aggregate gross sales price of $136.9 million subsequent to September 30, 2024.

The decrease was offset by the acquisition of 16 properties, including two properties acquired through deeds-in-lieu of foreclosure, for an aggregate fair value at the time of acquisition of $179.8 million subsequent to September 30, 2024.

Net cash provided by operating activities increased by $720,000 for the three months ended March 31, 2026, as compared to the same period in 2025.

The change was primarily due to an increase in net interest income of $2.1 million, primarily driven by decreased interest expense of $7.9 million, as compared to a decrease in interest income of $5.8 million.

The decrease in interest expense was driven by a decrease in outstanding borrowings of $367.5 million during the three months ended March 31, 2026.

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

Investing Activities.

Net cash provided by investing activities decreased $323.8 million during the nine months ended September 30, 2025, as compared to the same period in 2024.

The change was primarily due to a $490.9 million decrease in net proceeds from loans held-for-investment during the nine months ended September 30, 2025, partially offset by an increase in net proceeds from the disposition of real estate assets and condominium units of $85.0 million, as the Company disposed of five properties and 15 condominium units during the nine months ended September 30, 2025, as compared to three properties and 11 condominium units disposed of during the same period in 2024.

The decrease was partially offset by $19.7 million in net proceeds on unconsolidated entities during the nine months ended September 30, 2025, as compared to $27.8 million in net investment in unconsolidated entities during the same period in 2024.

The decrease was further offset by an increase in net proceeds received from the sale of real estate-related securities of $28.1 million.

For the three months ended March 31, 2026 net cash provided by investing activities was $393.3 million, as compared to net cash used in investing activities of $4.6 million during the same period in 2025.

The change was primarily due to $380.9 million net proceeds from loans held-for-investment during the three months ended March 31, 2026, as compared to $67.5 million net investment, during the same period in 2025.

The change was further driven by $23.1 million in net proceeds on unconsolidated entities during the three months ended March 31, 2026, as compared to $10.1 million in net investment during the same period in 2025.

The change was partially offset by a decrease in net proceeds received from the sale of real estate related securities of $45.0 million during the three months ended March 31, 2026.

The change was further offset by a decrease in net proceeds from the disposition of real estate assets and condominium units of $8.6 million, as the Company disposed of three properties during the three months ended March 31, 2026, as compared to three properties and five condominium units disposed of during the same period in 2025.

Financing Activities.

For the nine months ended September 30, 2025, net cash used in financing activities decreased by $488.7 million, as compared to the same period in 2024.

The change was primarily due to a decrease in net repayments on the repurchase facilities, notes payable and credit facilities of $462.3 million.

The decrease was further driven by a decrease in distributions to shareholders of $23.4 million for the nine months ended September 30, 2025 compared to the same period in 2024.

For the three months ended March 31, 2026, net cash used in financing activities increased by $339.0 million, as compared to the same period in 2025.

The change was primarily due to an increase in net repayments on the repurchase facilities, notes payable and credit facilities of $341.6 million.

Election as a REIT

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To maintain our qualification as a REIT, we must continue to meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping.

As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).

As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our

stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).

If we fail to maintain our qualification as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax on our taxable income at regular corporate rates.

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We may also originate loans to third parties that use the proceeds to finance the acquisition of real estate from funds that are advised by an affiliate of CMFT Management.

See Note 11 — Related-Party Transactions and Arrangements to

our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion of the various related-party transactions, agreements and fees.

See Note 11 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion of the various related-party transactions, agreements and fees.

Conflicts of Interest

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DeBacker, our chief financial officer, principal accounting officer and treasurer, is an employee of CIM Group, the vice president of our manager, and is an officer of certain of its affiliates.

As such, there may be conflicts of interest where CMFT Management or its affiliates, while serving in the capacity as sponsor, general partner, officer, director, key personnel and/or advisor for CIM Group or another program sponsored or operated by affiliates of our manager, may be in conflict with us in connection with providing services to other real estate-related programs related to property acquisitions, property dispositions, and property management, among others.

conflict with us in connection with providing services to other real estate-related programs related to property acquisitions, property dispositions, and property management, among others.

The compensation arrangements between affiliates of CMFT Management and these other real estate programs sponsored or operated by affiliates of our manager could influence the advice provided to us.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis