What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-03-05 compared with 2025-03-05 · 92 added, 105 removed, 371 unchanged (35% of the section changed)

4 unchanged sentences

If global market and economic conditions deteriorate, our business, financial condition and results of operations could be materially adversely affected.

Weak economic conditions generally, sustained uncertainty about global economic conditions, a tightening of credit markets, business layoffs, downsizing, industry slowdowns and other similar factors that affect our tenants have negatively impacted commercial real estate fundamentals and may continue to do so, which has resulted and may continue to result in lower occupancy, lower rental rates and declining values in our real estate portfolio.

Weak economic conditions generally, sustained uncertainty about global economic conditions, a tightening of credit markets, business layoffs, downsizing, industry slowdowns and other similar factors that affect our tenants could negatively impact commercial real estate fundamentals and may result in lower occupancy, lower rental rates and declining values in our real estate portfolio.

Additionally, these factors and conditions have had and may continue to have an impact on our lenders or tenants, which could cause them to reduce their business with us or fail to meet their obligations to us.

We are subject to the risk of rising interest rates, including that our borrowing costs may increase and we may be unable to extend or refinance our debt obligations on favorable terms or at all.

We are subject to the risk of increases in interest rates, including that our borrowing costs may increase and we may be unable to extend or refinance our debt obligations on favorable terms or at all.

We are also subject to the risk of inflation, including that our operating costs, such as insurance premiums, utilities, real estate taxes and capital expenditures and repair and maintenance costs, may rise.

1 unchanged sentence

No assurances can be given regarding such macroeconomic factors or conditions, and our ability to lease our properties and increase or maintain rental rates or the profitability of our properties may be negatively impacted, which may have a material adverse effect on our business, financial condition and results of operations.

Our strategic review process will be costly and time-consuming and may not result in our identification or completion of a strategic transaction, which could have an adverse effect on our stock price and our business.

In January 2026, in connection with our entry into a cooperation agreement with a stockholder, we announced a formal strategic review process.

The strategic review process may be costly and time-consuming, and we may incur significant legal, accounting and advisory fees and other expenses, some of which may be incurred regardless of whether we successfully enter into a transaction.

Any such expenses could affect the value to our stockholders in connection with any transaction or, in the absence of such a transaction, will decrease the remaining cash available for use in our business.

The attention of management and our Board of Directors could also be diverted from our core business operations as a result of this strategic review process.

No decision has been made at this time by our Board of Directors as to whether to engage in any particular transaction.

Any decision by our Board of Directors will depend on numerous factors, which may include our projected financial performance, the interest of potential partners or acquirers in a potential strategic transaction, the value potential partners or acquirers attribute to our business, the likelihood that any such transaction could be successfully completed, potential synergies that could be achieved from any strategic transaction, available alternative options, market conditions and industry trends.

There can be no assurance that our Board of Directors will identify an acceptable strategic partner or acquirer or authorize the pursuit of any strategic alternative.

Moreover, there can be no assurance as to the terms or the timing of any potential transaction, or whether any transaction may ultimately occur.

Any potential transaction would depend on a number of factors, many of which may be beyond our control.

Even if we enter into a definitive agreement, we may not be successful in completing a transaction or, if we complete such a transaction, it may not enhance stockholder value or deliver expected benefits.

Our inability to identify and complete an acceptable strategic transaction or any decision by our Board of Directors to cease the strategic review process could result in increased volatility of our stock and have an adverse effect on our business.

Changes in workplace practices and office space utilization, including remote and hybrid work arrangements, have reduced the demand for office space at our properties and may continue to do so.

Changes in workplace practices and office space utilization, including remote and hybrid work arrangements, have negatively impacted our company and these factors may continue and worsen.

For example, the increased adoption of and

familiarity with remote and hybrid work practices has resulted in decreased demand for and utilization of office space.

For example, the increased acceptance of and familiarity with remote and hybrid work practices has resulted in decreased demand for and utilization of office space.

These trends have impacted our leasing efforts as certain of our tenants have elected to not renew their leases, or to renew them for less space than they were occupying, resulting in increases in vacancy rates at our properties and decreases in rental income.

Remote and hybrid work practices may continue to persist, which may cause the trends impacting our leasing efforts to continue or even accelerate.

Tenants’ evolving preferences regarding office space configuration either in response to the COVID-19 pandemic or for other reasons, may impact their space requirements and also has required and may continue to require us to spend increased amounts for tenant improvements.

If substantial office space reconfiguration is required, a tenant may explore other office space and find it more advantageous to relocate than to renew its lease and renovate the existing space.

Tenants’ evolving preferences regarding office space configuration may impact their space requirements and also has required and may continue to require us to spend increased amounts for tenant improvements.

If a tenant wants to reduce its leasing footprint or substantial office space reconfiguration is required, such tenant may explore other

office space and find it more advantageous to relocate than to renew its lease and downsize or renovate the existing space.

Less successful leasing efforts, lower rents and increased leasing costs have caused our business, operating results, financial condition and prospects to be materially adversely impacted, and may continue to do so.

3 unchanged sentences

If lease defaults occur, we may experience delays in enforcing our rights as landlord.

Leases representing approximately 13.5% of our annualized base rent are scheduled to expire in 2025, and as of December 31, 2024, our portfolio, including our proportionate share of properties owned by the Arch Street Joint Venture, had a weighted average lease term of 5.2 years, and had 11 vacant operating properties, with an aggregate 1.7 million square feet, including six properties, with an aggregate of 0.6 million square feet, that have remained vacant for over one year.

Leases representing approximately 10.2% of our annualized base rent are scheduled to expire in 2026, and as of December 31, 2025, our portfolio, including our proportionate share of properties owned by the Arch Street Joint Venture, had a weighted average lease term of 5.7 years, and had five vacant operating properties, with an aggregate 0.5 million square feet, including four operating properties, with an aggregate of 0.4 million square feet, that have remained vacant for over one year.

If our tenants decide not to renew their leases, terminate their leases early or default on their leases, we will experience a loss in the associated rental revenue and will incur property operating costs that will no longer be reimbursed by the vacating tenant.

5 unchanged sentences

therefore, our financial condition, including our ability to make distributions to stockholders, may be adversely affected by the bankruptcy or insolvency, a downturn in the business, or a lease termination of such a single tenant.

During the year ended December 31, 2024, most of our rental revenue was from our properties leased to single tenants.

Most of our rental revenue is from our properties leased to single tenants.

The value of our single tenant properties is materially dependent on the performance of those tenants under their respective leases.

These tenants face competition within their industries and other factors that could reduce their ability to pay us rent.

Our tenants face competition within their industries and other factors that could reduce their ability to pay us rent.

Lease payment defaults by such tenants could cause us to reduce the amount of distributions that we pay to our stockholders.

11 unchanged sentences

Persistent remote and hybrid work practices have also reduced space utilization at many of our government properties.

These factors have reduced the demand for government leased space, and may continue to do so.

The Trump Administration’s initiative to dramatically cut government spending introduces additional uncertainty for our portfolio of properties leased to the United States Government.

The Department of Government Efficiency (“DOGE”) has begun to look at ways to increase government office utilization and shrink the federal government’s real estate portfolio.

This could lead to the General Services Administration (“GSA”) exercising termination options under or otherwise seeking to terminate our leases with the United States Government or make it more likely the United States Government terminates the applicable lease at lease expiration.

As of December 31, 2024, approximately 94,000 of our occupied square feet leased to the GSA were within periods during which the tenant has the right to terminate their space without a termination fee, or “non-firm terms.” The GSA recently announced a suspension of the execution of substantially all GSA funded obligations, including new leases and lease amendments.

This action by the GSA has resulted in delays of the GSA authorizing us to proceed with landlord work at our property in Lincoln, Nebraska and that is a condition to lease commencement of our lease with the United States Government at this property, as well as delays in lease negotiations at certain other properties leased to the United States Government.

We do not know how long the suspension will continue and cannot provide any assurance as to how ongoing developments with respect to DOGE and the Trump Administration’s efforts to reduce government spending may impact our portfolio of properties leased to the United States Government.

Efforts to manage space utilization rates and reduce government spending may result in the government tenants exercising early termination rights under our leases, vacating our properties upon expiration of our leases in order to relocate, or renewing their leases for less space than they currently occupy.

These factors have reduced the demand for government leased space, may continue to do so and may make it more likely the United States Government terminates the applicable lease at expiration.

As of December 31, 2025, approximately 72,000 of our occupied square feet leased to the GSA were within periods during which the tenant has the right to terminate their space without a termination fee, or “non-firm terms.” Efforts to manage space utilization rates and reduce government spending may result in the government tenants exercising early termination rights under our leases, vacating our properties upon expiration of our leases in order to relocate, or renewing their leases for less space than they currently occupy.

Also, our government tenants’ desire to reconfigure leased office space to manage utilization per employee may require us to spend significant amounts for tenant improvements, and tenant relocations are often more prevalent in those circumstances.

Compared to our historical experience with government tenants, the government tenants’ leasing decisions and strategies may be less predictable.

Additionally, the COVID-19 pandemic and its aftermath have had negative impacts on government budgets and resources, and it is unclear what the effect of these impacts will be on government demand for leasing office space.

Our partner in the Arch Street Joint Venture has not had access to sufficient liquidity to contribute its share of the capital requirements that have recently arisen, thereby exposing us to liabilities in excess of our share of the joint venture and other risks.

Compared to our historical experience with government tenants, the current government tenants’ leasing decisions and strategies may be less predictable.

We have made equity and member loan investments in the Arch Street Joint Venture which may not be recoverable.

We are invested in the Arch Street Joint Venture where we own a 20% minority, non-controlling interest and our partner owns the remaining 80% interest.

Our partner in the Arch Street Joint Venture did not have access to sufficient liquidity to contribute its share of capital call obligations that have recently arisen, and this issue may continue to the extent additional partner capital is required in the future.

During November 2024, our joint venture partner was unable to contribute its proportionate share of the capital required to pay down $3.4 million of principal on the Arch Street Joint Venture non-recourse mortgage notes to satisfy the 60% loan-to-value condition to extend the maturity date of such debt.

As a result, we made a member loan to the Arch Street Joint Venture in the amount of $1.4 million.

As of December 31, 2024, the outstanding principal associated with the Arch Street Joint Venture mortgage notes was $131.6 million, and our proportionate share was $26.3 million.

During February 2025, we made an additional member loan of $8.3 million when our partner was unable to contribute its share of leasing costs related to a lease extension that was completed for one of the properties in the Arch Street Joint Venture portfolio.

As part of the terms of the recent extension of the Arch Street Joint Venture mortgage notes, the mortgage lender is expected to re-appraise the property where the lease was extended in February 2025, and we are also committed to make an additional member loan as and if needed to repay principal on the mortgage notes to continue to satisfy the 60% loan-to-value extension condition.

Our member loan to the Arch Street Joint Venture, which had $9.2 million receivable as of March 5, 2025, earns interest at 15% per annum and is non-recourse and unsecured, and structurally subordinate to the Arch Street Joint Venture mortgage notes.

Interest and principal are payable monthly solely out of the excess

cash from the joint venture after payment of property operating expenses, interest and principal on the Arch Street mortgage notes and other joint venture expenses and excess proceeds from the sale of any of the joint venture properties.

Our partner’s failure to meet capital call obligations exposes us to certain risks, including:

• we may have insufficient liquidity or decide it is no longer in our best interest to continue to make member loan or other investments to fund the joint venture’s capital requirements, which could expose us to loss of all or substantially all of our investment in the joint venture;

• we may be unable to recover our member loan or other investments in the joint venture in a timely manner or at all;

• the investments we have recently made or may make in the future in the joint venture reduce our available liquidity and therefore may limit our ability to grow or make other investments in our portfolio.

As of December 31, 2025, the carrying value of our equity investment in the Arch Street Joint Venture before the impairment loss described below was $10.8 million and we had member loans outstanding to the Arch Street Joint Venture in the principal amount of $6.6 million.

These member loans were made to fund certain capital requirements of the joint venture when our partner in the Arch Street Joint Venture did not have access to sufficient liquidity to contribute its share of capital call obligations, including with respect to a principal paydown the Arch Street Joint Venture was required to make during November 2024 to extend the maturity date of the non-recourse mortgage notes and leasing costs the Arch Street Joint Venture was required to fund in February 2025 to extend the lease at one of the joint venture properties.

Our partner in the Arch Street Joint Venture may continue to be unable to contribute its share of capital requirements of the Arch Street Joint Venture.

Our member loan to the Arch Street Joint Venture is non-recourse and unsecured, structurally subordinate to the Arch Street Joint Venture Mortgage Debt, and interest and principal are payable monthly solely out of the excess cash from the joint venture after payment of property operating expenses, interest and principal on the Arch Street Joint Venture Mortgage Debt and other joint venture expenses and excess proceeds from the sale of any of the joint venture properties.

Due to the capital constraints of our joint venture partner, the Arch Street Joint Venture has been unable to make an approximately $16.0 million principal prepayment on the Arch Street Joint Venture Mortgage Debt to satisfy the 60% loan-to-value condition to extend the maturity date until November 27, 2026.

The Arch Street Joint Venture Mortgage Debt was temporarily extended until February 26, 2026 and the joint venture remains in discussions with the lenders about next steps which may include an additional short-term extension and restructuring of the debt.

We cannot provide any assurance that the Arch Street Joint Venture will be able to satisfy the loan-to-value condition or otherwise extend or refinance this debt obligation or that the lenders will not seek to enforce their remedies due to the existing payment default.

Because of the subordinate position of our investment in the Arch Street Joint Venture, our investment, including our member loan, may not be recoverable.

Due to the uncertainties with regard to recovery of our Arch Street Joint Venture investments, we recorded an other-than-temporary impairment loss on our investment in the Arch Street Joint Venture, thereby reducing the carrying value of our investment to zero, and recorded a loan loss reserve of $5.9 million against our $6.6 million member loan to the Arch Street Joint Venture during the year ended December 31, 2025.

Beginning in 2026, we will record management fees from the Arch Street Joint Venture and interest income on the member loan on a cash basis rather than accrual basis.

The Arch Street Joint Venture and any other joint venture investments we make could be adversely affected by the lack of sole decision-making authority, reliance on joint venture partners’ financial condition and any disputes that may arise between us and our joint venture partners.

We are invested in the Arch Street Joint Venture and have co-invested and may in the future co-invest with third parties through partnerships, joint ventures or other structures in which we acquire non-controlling interests in, or share responsibility for, managing the affairs of a property, partnership, co-tenancy or other entity.

Our ability to determine the strategy with respect to properties we own through the Arch Street Joint Venture is materially limited compared to acquisitions we make directly, including with respect to leasing, disposition and joint venture opportunities (including if such actions are necessary to maintain compliance with our debt commitments).

Our ability to determine the strategy with respect to properties we own through the Arch Street Joint Venture is materially limited compared to acquisitions we make directly, including with respect to leasing, disposition, financing and liquidation decisions (including if such actions are necessary to maintain compliance with our debt commitments).

We also may enter into future joint ventures pursuant to which we will not be able to exercise sole decision-making authority regarding the properties owned through such joint ventures or similar ownership structure.

13 unchanged sentences

As of December 31, 2025, our portfolio was comprised of 70.1% and 64.2% traditional office properties, calculated based on rentable square feet and annualized base rent, respectively.

In order to increase the percentage of dedicated use assets in our portfolio, we will need to acquire additional dedicated use assets and/or dispose of traditional office properties.

In order to increase the percentage of dedicated use assets in our portfolio, we intend to acquire additional dedicated use assets and dispose of traditional office properties.

Our ability to acquire new properties and dispose of existing properties in our portfolio is dependent upon competitive and market conditions, which may not be favorable to us at any given time, as well as other factors outside of our control.

We may not be

successful in executing our strategy of shifting our portfolio concentration over time towards more dedicated use assets, and whether or not we are successful in executing such strategy, we may not achieve our objective of increasing the value of our portfolio.

We may not be successful in executing our strategy of shifting our portfolio concentration over time towards more dedicated use assets, and whether or not we are successful in executing such strategy, we may not achieve our objective of increasing the value of our portfolio.

Competition for acquisitions may reduce the number of acquisition opportunities available to us and increase the costs of those acquisitions.

We may acquire properties if market conditions permit and we are presented with an attractive opportunity to do so.

We intend to pursue acquisitions of additional commercial real estate properties as part of our business strategy.

We may face competition for such acquisition opportunities from other investors, and such competition may adversely affect us by subjecting us to the following risks:

18 unchanged sentences

These risks include:

• changes in supply of or demand for office properties in our market or sub-markets;

• changes in supply of or demand for properties in our market or sub-markets;

• competition for tenants in our market or sub-markets;

5 unchanged sentences

• competition from the development of new space in our market or sub-markets and the quality of competition, such as the attractiveness of our properties as compared to our competitors’ properties based on considerations such as convenience of location, rental rates, amenities and safety record;

• civil unrest, acts of war, terrorism, adverse political conditions, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses) and other factors beyond our control.

• civil unrest, rumors or threats of war, terrorism, adverse political conditions, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses) and other factors beyond our control.

Should any of the foregoing occur, it may have a material adverse effect on our business, financial condition and results of operations.

We face considerable competition in the leasing market and may be unable to renew existing leases or re-let space on terms similar to our existing leases, or we may expend significant capital in our efforts to re-lease space, which may adversely affect our business, financial condition and results of operations.

We compete with a number of other owners and operators of office properties to renew leases with our existing tenants and to attract new tenants.

We compete with a number of other owners and operators of competitive properties to renew leases with our existing tenants and to attract new tenants.

If our properties are not as attractive to existing or new tenants as properties owned by our competitors due to the age of the buildings, physical condition, lack of amenities or other similar factors, we could lose tenants, it could take longer to re-lease our properties and we could suffer lower rental rates.

To the extent that we are able to renew leases that are scheduled to expire in the short-term or re-let such space to new tenants, heightened competition may require us to give rent concessions or provide tenant improvements to a greater extent than we otherwise would have.

If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge, or may not be able to increase rates to market rates, in order to retain tenants upon expiration of their existing leases.

may not be able to increase rates to market rates, in order to retain tenants upon expiration of their existing leases.

Even if our tenants renew their leases or we can re-let the space, the terms and other costs of renewal or re-letting, including the cost of required renovations, increased tenant improvement allowances, leasing commissions, declining rental rates, and rent or other potential concessions, may be less favorable than the terms of our current leases and could require significant capital expenditures.

11 unchanged sentences

As of December 31, 2025, 12.3% of our occupied square footage was subject to early termination provisions.

During the year ended December 31, 2024, one tenant exercised an early termination option which will result in the partial termination of approximately 30,000 square feet under an approximately 127,000 square foot lease in the year ending December 31, 2025.

During the year ended December 31, 2023, one tenant exercised an early termination option, which resulted in the partial termination of approximately 30,000 square feet under an approximately 200,000 square foot lease in the year ended December 31, 2023.

There were no tenant-exercised early lease termination options during the year ended December 31, 2025.

During the year ended December 31, 2024, one tenant exercised an early termination option which resulted in the partial termination of approximately 30,000 square feet under an approximately 127,000 square foot lease effective in May 2025.

We and the tenant agreed on an early termination of the remaining 97,000 square feet leased to this tenant as part of a simultaneous sale of the property in October 2025.

To the extent that our tenants exercise early termination rights, our cash flow and earnings will be adversely affected, and we can provide no assurances that we will be able to generate an equivalent amount of net effective rent by leasing the vacated space to new third-party tenants.

9 unchanged sentences

• placing us at a competitive disadvantage compared to less leveraged competitors.

Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.

Our ability to arrange additional financing will depend on, among other factors, the lender’s view of the quality of our portfolio, including tenant credit quality and weighted average lease term, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.

If we are able to obtain additional financing, such financing could further raise our borrowing costs and adversely impact our ability to satisfy our obligations under our indebtedness, which may have a material adverse effect on our business, financial condition and results of operations.

2 unchanged sentences

We might become more highly leveraged as a result, and our financial condition, results of operations and funds available for distribution to stockholders might be negatively affected, and the risk of default on our indebtedness could increase, which may have a material adverse effect on our business, financial condition and results of operations.

We have both fixed and variable rate indebtedness and may incur additional indebtedness in the future, including borrowings under our Revolving Facility.

Our Revolving Facility under which we had $119.0 million borrowed as of December 31, 2024 is scheduled to mature in May 2026, and our $355.0 million CMBS Loan is scheduled to mature in February 2027.

We are dependent upon the Revolving Facility, which is a fully recourse borrowing facility guaranteed in full by us, for liquidity to execute our business strategies, and our CMBS Loan provides cross-collateralized financing for a total of 19 properties in our portfolio, and therefore the lender will have recourse to any and all of the assets that secure the debt in the event we default.

We have existing debt and refinancing risks that could have a material adverse effect on our business, financial condition and results of operations, including the risk that we will be unable to extend or refinance some or all of our debt, or that the lenders will not seek to enforce their remedies due to the existing payment default under the Arch Street Joint Venture mortgage notes.

We have both fixed and variable rate indebtedness and may incur additional indebtedness in the future, including borrowings under our New Revolving Facility.

As described in more detail in the section in this report entitled “Management’s Discussion and Analysis of Results of Operations and Financial Condition - Liquidity and Capital Resources - Credit Agreements”, in February 2026, we entered into a credit agreement for the New Revolving Facility and the Original Revolving Facility was terminated and the indebtedness thereunder discharged and paid in full with borrowings under the New Revolving Facility.

Our New Revolving Facility is scheduled to mature in February 2028 and we have options to extend such maturity date until February 2029 if we satisfy certain conditions.

Additionally, as described in more detail in the section of this report entitled Management’s Discussion and Analysis of Results of Operations and Financial Condition - Liquidity and Capital Resources - CMBS Loan”, our CMBS loan is now scheduled to mature in February 2029 and we have options to further extend such maturity date an additional 18 months until August 2030 if we satisfy certain conditions.

We are dependent upon the New Revolving Facility, which is a fully recourse borrowing facility secured by our ownership interest in 28 of our properties and related collateral and guaranteed in full by us, for liquidity to execute our business strategies, and our CMBS Loan provides cross-collateralized financing for a total of 19 properties in our portfolio, and therefore the lender will have recourse to any and all of the assets that secure the debt in the event we default.

We cannot provide assurance we will be able to extend, refinance or repay these debt obligations at maturity.

1 unchanged sentence

We may be required to make significant principal repayments to extend or refinance our debt obligations.

Following the Arch Street Joint Venture’s exercise of the first extension option and satisfaction of the related conditions in November 2024, the non-recourse mortgage notes associated with the Arch Street Joint Venture of $131.6 million as of December 31, 2024 are scheduled to mature on November 27, 2025, and the Arch Street Joint Venture has one remaining one-year option to extend the maturity until November 27, 2026.

Our proportionate share of the mortgage notes was $26.3 million as of December 31, 2024.

The extension option is subject to satisfaction of certain conditions, including satisfaction of certain financial and operating covenants.

The Arch Street Joint Venture may be unable to satisfy the extension conditions, and we cannot provide any assurance the Arch Street Joint Venture will be able to satisfy the extension conditions or otherwise extend or refinance the mortgage notes.

If the Arch Street Joint Venture is unable to extend or refinance the mortgage notes, our investment in the Arch Street Joint Venture could be materially adversely affected.

The non-recourse mortgage notes associated with the Arch Street Joint Venture were scheduled to mature on November 27, 2025, subject to one remaining one-year borrower option to extend the maturity until November 27, 2026.

The Arch Street Joint Venture exercised the extension option during September 2025.

However, in order to extend the debt, the Arch Street Joint Venture is required to make an approximately $16.0 million prepayment of loan principal outstanding to satisfy the 60% loan-to-value extension condition.

Due to capital constraints of our joint venture partner, the joint venture has been unable to make this prepayment.

The loan was temporarily extended until February 26, 2026 and the joint venture remains in discussions with the lenders about next steps which may include an additional short-term extension and restructuring of the debt with a lender excess cash flow sweep and the requirement to sell one or more properties and utilize the net proceeds to prepay principal outstanding under the debt.

Due to the uncertainties with regard to recovery of our Arch Street Joint Venture investments, we recorded an other-than-temporary impairment loss on our investment in the Arch Street Joint Venture thereby reducing the carrying value of our investment to zero, and recorded a loan loss reserve of $5.9 million against our $6.6 million member loan to the Arch Street Joint Venture during the year ended December 31, 2025.

Beginning in 2026, we will record management fees from the Arch Street Joint Venture and interest income on the member loan on a cash basis rather than accrual basis.

As a result of the indebtedness we incur, we are, and expect to be, subject to the risks normally associated with debt financing including:

4 unchanged sentences

• that debt service obligations will reduce funds available for distribution to our stockholders;

• that any default on our debt, due to noncompliance with financial covenants or otherwise, could result in acceleration of those obligations;

• that any default on our debt, due to non-compliance with financial covenants or otherwise, could result in acceleration of those obligations;

• that we may be unable to extend, refinance or repay the debt as it becomes due;

2 unchanged sentences

Financial covenants could materially adversely affect our ability to conduct our business.

We have incurred debt pursuant to the Revolving Facility and the CMBS Loan.

The credit agreement governing the Revolving Facility and the CMBS Loan each contain various financial and other covenants, including, with respect to the Revolving Facility, various financial covenants and other covenants restricting, subject to certain exceptions, liens, investments, mergers, asset sales, and the payment of certain dividends and share repurchases.

The financial covenants under the Revolving Facility are discussed in the section in this report entitled “Management’s Discussion and Analysis of Results of Operations and Financial Condition – Liquidity and Capital Resources – Credit Agreements – Revolving Facility Covenants”.

The CMBS Loan includes a minimum debt yield test of 8.0%.

Failure to satisfy this test, although not an event of default under the indebtedness, could cause cash flows from the 19 properties financed, after debt service, and certain property operating expenses and loan reserves, to be diverted to the lender, as additional collateral until the minimum debt yield test has been satisfied.

Under the CMBS Loan agreement, we are permitted to prepay outstanding principal under the indebtedness to satisfy the debt yield test.

As of September 30, 2024 (most recent reporting period available and confirmed with lender) the minimum debt yield was satisfied.

Our ability to continue to meet the debt yield test will be dependent upon whether leases that are scheduled to expire in the collateral pool are extended and if they do not the pace at which we re-lease the properties following lease expiration.

We cannot provide any assurance that we will continue to satisfy the minimum debt yield test under the CMBS Loan through maturity of the indebtedness in February 2027, and our failure to do so could have a material adverse effect on our liquidity.

We have incurred debt pursuant to the New Revolving Facility and the CMBS Loan.

The credit agreement governing the New Revolving Facility and the CMBS Loan each contain various financial and other covenants, including, with respect to the Revolving Facility, various financial covenants and other covenants restricting, subject to certain exceptions, liens, investments, mergers, asset sales, and the payment of certain dividends and share repurchases.

The financial covenants under the New Revolving Facility are discussed in the section in this report entitled “Management’s Discussion and Analysis of Results of Operations and Financial Condition – Liquidity and Capital Resources – Credit Agreements – Revolving Facility Covenants”.

In addition, pursuant to the February 2026 Loan Modification Agreement described herein, the CMBS Loan contains a cash sweep arrangement, whereby each month until maturity, the lender will sweep all monthly excess cash flows from the 19 properties, after payment of interest and property operating expenses.

During the initial extension period, the lender will apply one-half of such excess funds to prepay the outstanding principal balance of the CMBS Loan, and the other half to fund the all-purpose reserve.

The financial and other covenants under our existing indebtedness, as well as any additional restrictions to which we may become subject in connection with additional financings or refinancings, could restrict our ability to pursue business initiatives, effect certain transactions or make other changes to our business that may otherwise be beneficial to us, which could adversely affect our business, financial condition and results of operations.

In addition, violations of these covenants could cause declarations of default under, and acceleration of, any related indebtedness, which would result in material adverse consequences to our financial condition.

The Revolving Facility contains cross-default provisions that give the lenders the right to declare a default if we are in default resulting in (or permitting the) acceleration of other debt under other loans in excess of certain amounts.

The New Revolving Facility contains cross-default provisions that give the lenders the right to declare a default if we are in default resulting in (or permitting the) acceleration of other debt under other loans in excess of certain amounts.

In the event of a default, we may be required to repay such debt with capital from other sources, which may not be available to us on attractive terms, or at all, which may have a material adverse effect on our business, financial condition and results of operations.

2 unchanged sentences

As market conditions permit, we intend to acquire new properties which will similarly require us to make capital investments.

We do not expect our cash flows from operations alone to be sufficient to fund our future capital investments and, therefore, we will be dependent upon our ability to access third-party sources of capital, including the Revolving Facility and other sources of debt and equity capital.

We do not expect our cash flows from operations alone to be sufficient to fund our future capital investments and, therefore, we will be dependent upon our ability to access third-party sources of capital, including the New Revolving Facility and other sources of debt and equity capital.

Our access to third-party sources of capital depends on a number of factors, including general market conditions, the market’s view of the quality of our assets, the market’s perception of our growth potential, our current debt levels and our current and expected future earnings.

There can be no assurance that we will be able to obtain the capital necessary to fund the investments we will be required to make in our existing portfolio or to acquire new properties on terms

favorable to us or at all.

There can be no assurance that we will be able to obtain the capital necessary to fund the investments we will be required to make in our existing portfolio or to acquire new properties on terms favorable to us or at all.

If we are unable to obtain a sufficient level of third-party financing to fund our capital needs, our ability to achieve our business strategies will be materially adversely affected.

2 unchanged sentences

As a result, if revenues drop, we may not be able to reduce our expenses accordingly, which may have a material adverse effect on our business, financial condition and results of operations.

Property taxes may increase without notice.

The real property taxes on our properties may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities.

While the majority of our leases are under a net lease structure, some or all of such property taxes may not be collectible from our tenants, and for our vacant properties, we are unable to recover property taxes from any tenants.

Real estate taxes may increase without notice.

The real estate taxes on our properties may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities.

While the majority of our leases are under a net lease structure, some or all of such real estate taxes may not be collectible from our tenants, and for our vacant properties, we are unable to recover real estate taxes from any former tenants.

In such event, our financial condition, results of operations, cash flows, trading price of our common stock and our ability to satisfy our principal and interest obligations and to pay dividends to our stockholders could be adversely affected, which may have a material adverse effect on our business, financial condition and results of operations.

5 unchanged sentences

Our ability to successfully execute on our asset disposition and capital recycling sale program is dependent on market conditions, and such conditions have been and may continue to be unfavorable for commercial real estate generally and office assets in particular, as well as for buyer financing of these assets.

We may incur costs on unsuccessful dispositions that we will not be able to recover.

In general, when we sell properties that are vacant or soon to be vacant, the valuation will be discounted if the new owner is required to make capital improvements and to reflect that the new owner will bear carrying costs until the property has been leased up and take the risk that the property may not be leased up on a timely basis, favorable terms or at all.

As part of our asset disposition activities, we have sought and may continue to seek to sell properties to buyers who intend to re-develop the subject property.

While these sale transactions can result in higher sale valuations, they also normally require us as seller to bear a portion of the buyer’s redevelopment risk through longer due diligence periods during which we remain responsible for carrying costs of the property and the buyer may terminate the transaction.

While these sale transactions can result in higher sale valuations, they also may require us as seller to bear a portion of the buyer’s redevelopment risk through longer due diligence periods during which we remain responsible for carrying costs of the property and the buyer may terminate the transaction.

Our inability to respond rapidly to changes in the performance of our investments could adversely affect our business, financial condition and results of operations.

We could be exposed to losses on loans we have made to buyers of the properties we have sold.

As part of our asset disposition activity, we have provided seller financing to certain buyers and may continue to do so.

To date, these loans have been structured as first mortgage loans with an unsecured recourse guaranty from the buyer principal(s).

The properties sold and that are collateral for the loans are currently vacant and not income producing, and therefore, payment of debt service is dependent upon the existence of independent assets or income of the buyer and the buyer principal(s), until the properties have been leased up and are generating income, or until the loan can be refinanced.

These loans are subject to risk of default and delinquencies by buyers in paying debt service and foreclosure, and the risks of loss are greater than similar risks associated with mortgage loans made on income producing properties.

Foreclosure of a mortgage loan and/or enforcing the recourse guaranty can be an expensive and lengthy process, and there can be no assurance we would be able to recover our investment and expected returns on the loans.

The loans are subject to risks of a buyer’s inability to lease up the property or obtain permanent financing to repay the loan.

In the event of any default under our loans, we bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the amounts we recover from the mortgaged collateral and the recourse guaranty, and the principal amount and unpaid interest of the loan.

To the extent we suffer such losses with respect to these loans, it could adversely affect our business, financial condition and results of operations.

We, our tenants and our properties are subject to various federal, state and local regulatory requirements, such as environmental laws, state and local fire and safety requirements, building codes and land use regulations.

1 unchanged sentence

Failure to comply with these requirements could subject us, or our tenants, to governmental fines or private litigant damage awards.

compliance with these requirements, including new requirements or stricter interpretation of existing requirements, may require us, or our tenants, to incur significant expenditures.

In addition, compliance with these requirements, including new requirements or stricter interpretation of existing requirements, may require us, or our tenants, to incur significant expenditures.

We do not know whether existing requirements will change or whether future requirements, including any requirements that may emerge from pending or future climate change regulations or legislation, will develop.

9 unchanged sentences

, from airborne contaminants such as mold), which may subject us to costs, damages and other liabilities including abatement cleanup, personal injury, and property damage liabilities.

The foregoing could adversely affect occupancy and our ability to develop, sell or borrow against any affected property and could require us to make significant unanticipated expenditures that may have a material adverse effect on our business, financial condition and results of operations.

The foregoing could adversely affect occupancy and our ability to lease, sell or borrow against any affected property and could require us to make significant unanticipated expenditures that may have a material adverse effect on our business, financial condition and results of operations.

We are subject to risks associated with climate change.

4 unchanged sentences

The operating costs and capital expenditures associated with meeting new and evolving regulatory and legal requirements and tenant preferences, including those related to reporting and managing greenhouse gas emissions, could negatively impact our financial results.

Increased scrutiny and changing expectations from investors, tenants, employees, and others regarding our sustainability, social, and governance practices (“sustainability”) and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks.

Companies across all industries are facing increasing scrutiny related to their sustainability practices and reporting.

Investors, tenants, employees, and other stakeholders have begun to focus increasingly on sustainability practices and to place increasing importance on the implications and social costs of their investments, business decisions and consumer choices.

Many investors, particularly institutional investors, may use sustainability practices and scores to benchmark companies against their peers and as a basis for making investment or voting decisions.

Given this increased focus and demand as well as the potential for future legal or regulatory requirements, public reporting regarding sustainability practices is becoming more broadly expected.

If our sustainability practices and reporting do not meet investor, tenant, or employee expectations, which continue to evolve, our reputation and investor interest and tenant and employee retention may be negatively impacted.

Any disclosure we make may include our policies and practices on a variety of sustainability matters, including corporate governance, environmental compliance, employee health and safety practices, human capital management and workforce inclusion and diversity.

It is possible that investors and other stakeholders may not be satisfied with our sustainability reporting, our sustainability practices or the speed or comprehensiveness with which we adopt and implement them.

In addition, the criteria by which we are benchmarked against our peers and scored may change.

We could also incur additional costs and devote additional resources to monitoring, reporting and implementing various sustainability practices.

Our failure, or perceived failure, to meet any goals and objectives we may set in any sustainability disclosure or the expectations of our various

stakeholders could negatively impact our reputation, investor interest and tenant and employee retention, as well as our cost of or access to capital.

Compliance or failure to comply with the Americans with Disabilities Act could result in substantial costs.

21 unchanged sentences

We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions, malware, computer viruses, business email compromise, compromised vendor software, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization and other significant disruptions of our information technology networks and related systems, which are essential to the operation of our business.

These risks include potential operational interruptions, fraudulent transfer of assets or unauthorized access to and exposure of valuable and confidential data, ransom costs, increased cybersecurity protection and insurance costs, litigation and remediation costs and damage to our relationships with our tenants, among other things.

among other things.

There can be no assurance that our efforts to maintain the security and integrity of our information technology networks and related systems will be effective.

32 unchanged sentences

These changes could adversely affect our ability to pay dividends to our stockholders and may have a material adverse effect on our business, financial condition and results of operations.

The Revolving Facility may limit our ability to pay dividends on our common stock, including repurchasing shares of our common stock.

Under the credit agreement governing the Revolving Facility, our dividends may not exceed the greater of (1) 100% of our adjusted funds available for distribution (as defined in the credit agreement), and (2) the amount required for us to maintain our qualification as a REIT.

The New Revolving Facility may limit our ability to pay dividends on our common stock, including repurchasing shares of our common stock.

Under the credit agreement governing the New Revolving Facility, our dividends may not exceed the greater of (1) 100% of our adjusted funds available for distribution (as defined in the credit agreement), and (2) the amount required for us to maintain our qualification as a REIT.

Any inability to pay dividends may negatively impact our REIT status or could cause stockholders to sell shares of our common stock, which may have a material adverse effect on our business, financial condition and results of operations.

21 unchanged sentences

Therefore, we cannot guarantee that we have qualified as a REIT or that we will remain qualified as such in the future.

If we fail to maintain our qualification as a REIT or lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution to our stockholders for each of the years involved because:

If we fail to maintain our qualification as

a REIT or lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution to our stockholders for each of the years involved because:

• we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to regular U.S.

24 unchanged sentences

A corporation of which a taxable REIT subsidiary directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a taxable REIT subsidiary.

Overall, no more than 20% of the gross value of a REIT’s assets may consist of stock or securities of one or more taxable REIT subsidiaries.

Overall, no more than 25% (20% for tax years beginning before January 1, 2026) of the gross value of a REIT’s assets may consist of stock or securities of one or more taxable REIT subsidiaries.

In addition, the taxable REIT subsidiary rules limit the deductibility of amounts paid or accrued by a taxable REIT subsidiary to its parent REIT to assure that the taxable REIT subsidiary is subject to an appropriate level of corporate taxation.

The rules also impose a 100% excise tax on certain transactions between a taxable REIT subsidiary and its parent REIT that are not conducted on an arm’s length basis.

Taxable REIT subsidiaries that we own or may form will pay federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us but will not be required to be distributed to us, unless

necessary to maintain our REIT qualification.

In certain circumstances, the ability of our taxable REIT subsidiaries to deduct interest expenses for U.S.

20 unchanged sentences

In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held in inventory primarily for sale to customers in the ordinary course of business.

Although we do not intend to hold any properties that would be characterized as inventory held for sale to customers in the ordinary course of our business, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.

be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.

Legislative or other actions affecting REITs could have a negative effect on us or our investors.

21 unchanged sentences

The ownership limits contained in our charter are based upon direct or indirect ownership at any time by any “person,” which term includes entities.

These ownership limitations in our charter are common in REIT governing documents and are intended to provide added assurance of compliance with the tax law requirements, and to minimize administrative burdens.

These ownership limitations in our charter are common in REIT governing documents and are intended to provide added assurance of compliance with the tax law requirements, and to

minimize administrative burdens.

However, the ownership limits on our common stock also might delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

22 unchanged sentences

We cannot predict whether future issuances or sales of shares of our common stock, or the availability of shares for resale in the open market, will decrease the per share trading price of our common stock.

The issuance of a substantial number of shares of our common stock in the open market or the issuance of a substantial number of shares of our common stock upon the exercise of the warrants granted to affiliates of Arch Street Capital Partners in connection with the Distribution or the exchange of OP units or other securities exchangeable or convertible into shares of our common stock, or the perception that such issuances might occur, could adversely affect the per share trading price of our common stock.

The issuance of a substantial number of shares of

our common stock in the open market or the issuance of a substantial number of shares of our common stock upon the exercise of the warrants granted to affiliates of Arch Street Capital Partners in connection with the Distribution or the exchange of OP units or other securities exchangeable or convertible into shares of our common stock, or the perception that such issuances might occur, could adversely affect the per share trading price of our common stock.

In addition, any such issuance could dilute our existing stockholders’ interests in our company.

20 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors