What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-20 compared with 2025-03-31 · 238 added, 204 removed, 111 unchanged (80% of the section changed)

29 unchanged sentences

offer and related conversion and merger transaction.

May 9, 2023, the SEC declared effective our follow-on registration statement on Form S-11, as amended (File No.

May 9, 2023, the SEC declared effective our registration statement on Form S-11, as amended (File No.

333-271262) (the “Follow-on

Registration Statement”), registering the offer and sale of up to $750,000,000 of our Class A units on a continuous

“best efforts” basis by any method deemed to be an “at the market” offering pursuant to Rule 415(a)(4) under

the Securities Act of 1933, as amended (the “Securities Act”), including by offers and sales made directly to investors or

through one or more agents.

connection with the Follow-on Registration Statement, we entered into a non-exclusive dealer manager agreement with Emerson Equity LLC

(the “Dealer Manager”), a registered broker-dealer, for the sale of our Class A units through the Dealer Manager.

Manager will enter into participating dealer agreements and wholesale agreements with other broker-dealers, referred to as “selling

group members,” to authorize those broker-dealers to solicit offers to purchase our Class A units.

We will pay our Dealer Manager

commissions of up to 0.25%, and the selling group members commissions ranging from 0.25% to 4.50%, of the principal amount of Class A

unit sold in the Follow-on Offering.

In addition, our Follow-on Registration

Statement constitutes a post-effective amendment to the registration statement on Form S-11, as amended (File No.

333-255424), registering

the offer and sale of our ongoing initial public offering of up to $750,000,000 of our Class A units, declared effective by the SEC on

September 30, 2021 (our “Primary Offering” and, together with our Follow-on Offering, our “Public Offerings”)

conforming our Primary Offering to our Follow-on Offering.

For the year ended December 31, 2024, we issued 41,774 Class A units in connection with our Public Offerings.

Together with the gross proceeds raised by Belpointe REIT in its prior offerings, as of December 31, 2024, we have raised aggregate

gross offering cash proceeds of $357.3 million.

Registration Statement”), registering the offer and sale of up to $750,000,000 of our Class A units on a continuous “best

efforts” basis by any method deemed to be an “at the market” offering pursuant to Rule 415(a)(4) under the Securities

Act of 1933, as amended (the “Securities Act”), including by offers and sales made directly to investors or through one or

more agents (our “Follow-on Offering”).

In connection with the Follow-on Registration Statement, we entered into

a non-exclusive dealer manager agreement with Emerson Equity LLC (the “Dealer Manager”), a registered broker-dealer, for the

sale of our Class A units through the Dealer Manager.

The Dealer Manager has and will continue to enter into participating dealer agreements

and wholesale agreements with other broker-dealers, referred to as “selling group members,” to authorize those broker-dealers

to solicit offers to purchase our Class A units.

We will pay our Dealer Manager commissions of up to 0.25%, and the selling group members

commissions ranging from 0.25% to 4.50%, of the principal amount of Class A unit sold in the Follow-on Offering.

For the year ended December 31, 2025, we issued 172,523 Class A units

in connection with our Follow-on Offering.

Together with the gross proceeds raised in our primary offering, which expired in 2024 (our

“Primary Offering” and, together with the Follow-on Offering, our “Public Offerings”) and the gross proceeds raised

in Belpointe REIT’s prior offerings, as of December 31, 2025, we have raised aggregate gross offering cash proceeds of $368.6

purchase price for Class A units in our Public Offerings is the lesser of (i) the NAV of our Class A units, and (ii) the average of the

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the investment date on which the NYSE American was open for trading and trading in our Class A units occurred.

Each quarter, our Manager calculates our NAV and NAV per Class A unit as of the last

day of the quarter (the “Determination Date”).

Our NAV per Class A unit is equal to our NAV as of the Determination Date, divided by the number of Class A units outstanding on the Determination Date.

We disclose our determination of

NAV and NAV per Class A unit within approximately 60 days of the Determination Date.

Any adjustments to our NAV and the per Class A unit

purchase price take effect as of the first business day following its public announcement.

As of December 31, 2024, our NAV per Class

A units was $119.94.

quarter, our Manager calculates our NAV and NAV per Class A unit as of the last day of the quarter (the “Determination Date”).

Our NAV per Class A unit is equal to our NAV as of the Determination Date, divided by the number of Class A units outstanding on the

Determination Date.

We disclose our determination of NAV and NAV per Class A unit within approximately 60 days of the Determination Date.

Any adjustments to our NAV and the per Class A unit purchase price take effect as of the first business day following its public announcement.

As of December 31, 2025, our NAV per Class A units was $116.17.

Business Outlook

expectations of the U.S.

falling into recession, market conditions for multifamily and mixed-use rental properties in the geographic

regions in which we operate have remained strong over the past several quarters.

Future economic conditions and the demand for

multifamily and mixed-use rental properties are, and the real estate industry in general is, subject to uncertainty as a result of a

number of factors, including, among others, the rate of rent growth, rate of new construction, rate of absorption, the rate of

unemployment, increasing interest rates, higher rates of inflation, instability in the banking system, the availability of credit,

financial market volatility, general economic uncertainty, increasing energy costs, supply chain disruptions and labor shortages.

The potential effect of these and other factors and the projected impact of these and other events on our business, results of

operations and financial performance, presents material uncertainty and risk with respect to our future performance and financial

results, including the potential to negatively impact our costs of operations, our financing arrangements, the value of our

investments, and the laws, regulations and governmental and regulatory policies applicable to us.

As a result, our past performance

may not be indicative of future results.

Despite expectations of the U.S.

falling into recession, market conditions

for multifamily and mixed-use rental properties in the geographic regions in which we operate have remained strong over the past several

Future economic conditions and the demand for multifamily and mixed-use rental properties are, and the real estate industry

in general is, subject to uncertainty as a result of a number of factors, including, among others, the rate of rent growth, rate of new

construction, rate of absorption, the rate of unemployment, the impact on regional labor markets as a result of changes in immigration

policies, increasing energy costs, increasing interest rates, higher rates of inflation, changes in the availability and price of insurance

coverage, the availability of credit and changes with respect to borrowing costs, financial market volatility, general economic uncertainty,

and other market conditions beyond our control, including impacts and uncertainties from political unrest, changes to trade policies,

trade disputes and tariffs, recent military actions in Iran and the Middle East, changes in federal income tax laws resulting from the

recent enactment of the One Big Beautiful Bill Act of 2025, and the forthcoming related administrative guidance and regulations, as well

as other recent and prospective legislation and regulation, including landlord-tenant laws in the markets in which we operate.

The potential

effect of these and other factors and the projected impact of these and other events on our business, results of operations and financial

performance, presents material uncertainty and risk with respect to our future performance and financial results, including the potential

to negatively impact our costs of operations, our financing arrangements, the value of our investments, and the laws, regulations and

governmental and regulatory policies applicable to us.

As a result, our past performance may not be indicative of future results.

the evolving nature of certain of these factors, the extent to which they may impact our future performance and financial results will

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of Operations

a result of the placement of Aster & Links in service and the commencement of operations during the year ended December 31, 2024

(see Part I, Item 1—Our Investments ), we have revised our reportable segments to include two distinct segments:

Commercial and

Mixed-use properties.

We believe that segment net operating income (loss) (“Segment NOI”) provides a useful measure of our

performance of our business, as it reflects the core rental operations of our operating real estate.

Segment NOI is calculated as total

revenues, less property expenses, excluding corporate level items, such as management fees incurred to our Manager, depreciation and

amortization, general and administrative expenses, interest expense, and other non-operating items.

The following table details the results of Segment NOI, a supplemental

financial measure, reconciled to our consolidated statement of operations for the years ended December 31, 2024, and 2023 (amounts

in thousands):

results of operations below presents the operating results of our two reportable segments, Commercial and Mixed-use, along with our consolidated

results for the years ended December 31, 2025, and 2024.

We believe that analyzing net operating income (loss) (“NOI”) at

the segment level (“Segment NOI”) provides a useful financial performance measure, because it reflects the core rental operations

of our real estate assets.

We calculate Segment NOI as rental revenue, less property expenses, excluding non-segment NOI (“Non-Segment

Non-Segment NOI includes corporate level items, such as management fees incurred to our Manager, general and administrative

expenses, interest expense, depreciation and amortization, interest income and other non-operating items.

is not a financial measure included in accounting principles generally accepted in the United States of America (“U.S.

however it is widely used in the real estate industry as a measure of the operating performance of real estate assets.

Notwithstanding

its common usage, NOI should not be considered as an alternative to net income (loss), operating income (loss), or cash flow from operating

activities as determined in accordance with U.S.

Our computation of NOI may differ from methods used by other companies, and therefore

may not be comparable.

A reconciliation of Segment NOI to the most directly comparable U.S.

GAAP measure has been included below.

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

following table sets forth information regarding our results of Segment NOI, reconciled to our consolidated statement of operations,

for the years ended December 31, 2025, and 2024 (amounts in thousands):

Years Ended December 31,

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Other expense

Loss on extinguishment of debt

Loss before income taxes

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Net loss attributable to Belpointe PREP, LLC

Comparison of the Year Ended December 31,

2024 to the Year Ended December 31, 2023

Commercial Segment

the year ended December 31, 2025, as compared to the same period in 2024, Segment NOI decreased by $1.1 million.

This decrease is primarily

due to higher real estate tax expenses.

For the year ended

December 31, 2024, as compared to the same period in 2023, Segment NOI decreased by $1.1 million.

This decrease is primarily due

to lower below-market rent intangible amortization impacting rental revenue, as certain intangible liabilities were fully amortized in

2023, as well as higher real estate taxes and

insurance expenses.

For the year ended December 31, 2024, as compared to the same period

in 2023, Segment NOI decreased by $1.1 million.

This decrease is primarily due to the recent placement of Aster & Links in service

during the current year.

As the property is still in its initial lease-up phase, rental revenue has not yet fully stabilized to offset

property expenses.

December 31, 2025, as compared to the same period in 2024, Segment NOI increased by $0.1 million.

The increase in both rental revenues

and property expenses relates to the continued stabilization of Aster & Links, which commenced lease-up June 30, 2024, as well as

VIV, which commenced leasing activities in the fourth quarter of 2025.

As a result, Mixed-use Segment NOI is not directly comparable

from year to year.

See “ Part I, Item 1—Our Investments ” for a more detailed discussion of Aster

& Links and the recent substantial completion of VIV.

to the terms of a Management Agreement by and among us, our Operating Companies and our Manager (the “Management Agreement”),

we pay our Manager a quarterly management fee in arrears of one-fourth of 0.75%.

The management fee is based on our NAV at the end of

each quarter.

For the year ended December 31, 2025, as compared to the same period in 2024 management fees increased by $0.6 million

due to an increase in our NAV.

and Administrative

and administrative expenses primarily consists of employee cost sharing expenses (pursuant to our Management Agreement and Employee and

Cost Sharing Agreement), marketing expenses, legal, audit, tax and accounting fees.

See “Certain Relationships and Related Transactions, and Director Independence—Our Management Agreement” for additional details regarding our Management Agreement and “Certain Relationships and Related Transactions, and Director Independence—Our Employee and Cost Sharing Agreement” for additional

details regarding our employee and cost sharing agreement.

the year ended December 31, 2024, as compared to the same period in 2023, general and administrative expenses decreased by $1.2

This decrease is primarily due to lower marketing expenses, a decrease in dead deal costs, and a decrease in allocation of

costs incurred by our Manager and its affiliates.

the years ended December 31, 2024 and 2023, interest expense totaled $10.0 million and zero, respectively, due to gross interest expense

of $12.1 million and $0.5 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of

$2.3 million and $0.6 million, respectively, partially offset by capitalized interest and fees of $4.4 million and $1.1 million, respectively.

and administrative expenses primarily consists of employee cost sharing expenses (pursuant to our Management Agreement and the

Amended and Restated Services and Cost Sharing Agreement (the “Services and Cost Sharing Agreement”) by and among us,

our Operating Companies, our Manager, our Sponsor and certain of our Sponsor’s subsidiaries, associates and affiliates (collectively, the “Sponsor Group”)), marketing expenses,

legal, audit, tax and accounting fees.

See “ Certain Relationships and Related Transactions, and Director

Independence—Our Management Agreement ” for additional details regarding our Management Agreement, and “ Certain

Relationships and Related Transactions, and Director Independence—Our Services and Cost Sharing Agreement ” for

additional details regarding our Services and Cost Sharing Agreement.

the year ended December 31, 2025, as compared to the same period in 2024, general and administrative expenses increased by $1.1 million.

This increase is primarily due to the capitalization of certain employee cost sharing and reimbursements to our Manager in the prior year period, which are no longer being capitalized in the current year period, as well as an increase in legal

expenses incurred.

the years ended December 31, 2025 and 2024, interest expense totaled $17.4 million and $10.0 million, respectively, consisting of

gross interest expense of $19.7 million and $12.1 million, respectively, and the impact of non-cash amortization of debt discount

and debt issuance costs of $2.7 million and $2.3 million, respectively, partially offset by capitalized interest and fees of $5.0

million and $4.4 million, respectively.

The increase in interest expense is primarily due to a higher weighted average outstanding

debt balance and lower capitalized interest and fees.

and Amortization

the year ended December 31, 2025, as compared to the same period in 2024, depreciation and amortization increased by $4.5 million.

increase is primarily due to the placement of fixed assets in service at Aster & Links during 2024, partially offset by lower in-place

lease intangible amortization as certain intangible assets were fully amortized in 2023.

increase is primarily due to the placement of fixed assets in service at Aster & Links and VIV which primarily occurred during the

second quarter of 2024 and the fourth quarter of 2025, respectively.

of Real Estate

the years ended December 31, 2024, and 2023, we recorded impairment charges of $0.8 million and $4.1 million, respectively, in relation

to one of our real estate assets located in Nashville, Tennessee, based on our conclusion that the estimated fair market value of the

real estate asset was lower than the carrying value, and as a result, we reduced the carrying value to the fair market value.

the year ended December 31, 2024, we recorded impairment charges of $0.8 million, in relation to one of our real estate assets located

in Nashville, Tennessee, based on our conclusion that the estimated fair market value of the real estate asset was lower than the carrying

value, and as a result, we reduced the carrying value to the fair market value.

income for the periods presented were comprised of interest earned from cash balances held in interest bearing bank accounts.

in the current year periods as compared to the prior year periods were attributable to higher cash balances in interest bearing accounts.

expense for the periods presented were primarily comprised of gains and losses in connection with our interest rate caps.

see “ Note 9 – Derivative Instruments ” in our consolidated financial statements in this Form 10-K

for additional information.

expense for the periods presented were primarily comprised of losses in connection with our interest rate caps.

Please see “ Note 9 – Derivative Instruments ” in our consolidated financial statements in this Form 10-K for additional details regarding our interest rate caps.

on extinguishment of debt

the year ended December 31, 2025, in connection with the Aster & Links Refinance Transactions, we recorded a loss on

extinguishment of debt of $3.0 million, which includes a non-cash write off of unamortized deferred financing costs of $2.6 million.

See “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (“Aster

& Links”)—Aster & Links Mortgage and Mezzanine Loans ” above, and “ Note

7– Debt, Net ” in our consolidated financial statements for a more detailed discussion of the Aster & Links

Refinance Transactions.

and Capital Resources

primary needs for liquidity and capital resources are to fund our investments, including construction and development costs, pay our

Public Offering and operating fees and expenses, pay any distributions that we may make to the holders of our units and pay interest

Follow-on Offering and operating fees and expenses, pay any distributions that we may make to the holders of our units and pay interest

on our outstanding indebtedness.

Public Offering and operating fees and expenses include, among other things, legal, audit and valuation fees and expenses, federal and

state filing fees, SEC, FINRA and NYSE filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution

Follow-on Offering and operating fees and expenses include, among other things, legal, audit and valuation fees and expenses, federal

and state filing fees, SEC, FINRA and NYSE filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution

fees, the management fee that we pay to our Manager, and fees and expenses related to acquiring, financing, appraising, and managing

our commercial real estate properties.

We do not have office or personnel expenses as we do not have any employees.

our commercial and mixed-use properties.

We are externally managed and do not have office or personnel expenses as we do not have any

future needs for liquidity will depend on a variety of factors, including, without limitation, our ability to generate cash flows from

operations, the timing and availability of net proceeds from our Public Offerings and any future offerings that we may conduct, the timing

and extent of our real estate acquisition and disposition activities, and the timing and extent of our construction and development costs.

Economic uncertainty, uncertainty surrounding legislation, regulation and

government policy at the U.S.

federal level, fluctuating interest rates, unemployment rates, energy prices, tariffs, immigration, taxes,

inflation, volatility in the real estate markets, slowdowns in transaction volume, delays in financings from banks and other lenders and

other negative trends may, in the future, adversely impact our ability to timely access potential sources of liquidity.

If we are unable

to raise additional capital when desired, or on terms that are acceptable to us, our business, financial condition and results of operations

could be adversely affected.

believe that our cash on-hand, the anticipated net proceeds from our Public Offerings, the projected cash flows from our real estate

assets and our current and anticipated financing activities will be sufficient to meet our liquidity and capital resource requirements

for the next 12 months from the date of issuance of this Form 10-K.

Requirements and Resources

our Manager and its affiliates, including our Sponsor, have funded, and in the future if they continue to fund, our capital requirements

by advancing us offering and operating fees and expenses, we reimburse our Manager and its affiliates, including our Sponsor, pursuant

to the terms of our management agreement and employee and cost sharing agreement.

Fees payable and expenses reimbursable to our Manager

and its affiliates, including our Sponsor, may be paid, at the election of the recipient, in cash, by issuance of our Class A Units at

the then-current NAV, or through some combination of the foregoing.

There were no Public Offering costs incurred by our Manager and its

affiliates during the years ended December 31, 2024 and 2023.

During the years ended December 31, 2024 and 2023, our Manager and its

affiliates, including our Sponsor, incurred operating expenses of $2.6 million and $2.9 million, respectively, on our behalf.

the year ended December 31, 2022, our indirect majority-owned subsidiary entered into a construction management agreement for the development

of 1991 Main.

For additional details regarding 1991 Main, see “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (“Aster & Links”) .” The construction management agreement contains terms and conditions that

are customary for a project of this type and will be subject to guaranteed maximum price.

As of December 31, 2024, we had an unfunded

capital commitment totaling $9.7 million under the terms of this agreement.

As of the date of this Form 10-K, we currently anticipate

that the remaining funding for construction and soft costs associated with the development of Aster & Links will be a minimum of

$25.5 million (inclusive of the aforementioned unfunded capital commitment).

the year ended December 31, 2023, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for

up to $130.0 million in principal amount to fund the development of Aster & Links.

Advances under the 1991 Main Construction Loan

bear interest at a per annum rate equal to the one-month term SOFR plus 3.45%, subject to a minimum all-in per annum rate of 8.51%.

1991 Main Construction Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain

restrictions.

As of December 31, 2024, we have drawn down $97.5 million on the 1991 Main Construction Loan.

January 31, 2024, our indirect majority-owned subsidiary entered into a mezzanine loan agreement for up to $56.4 million in principal

The 1991 Main Mezzanine Loan bears interest at a rate of 13.0% per annum, and is secured by Aster & Links.

In connection

with the 1991 Main Mezzanine Loan, we are required to maintain an interest reserve and carry reserve for purposes of paying accrued but

unpaid interest on the 1991 Main Mezzanine Loan and interest, principal and other obligations under the 1991 Main Construction Loan.

As of December 31, 2024, the 1991 Main Mezzanine Loan balance was $46.2 million.

Proceeds under the 1991 Main Mezzanine Loan may be used

to reimburse the Company for certain costs and expenses incurred in relation to, and to fund the continued development of, Aster &

The 1991 Main Mezzanine Loan has an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to

certain restrictions.

For additional details regarding the 1991 Main Mezzanine Loan, see “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (also known as “Aster & Links”) .”

April 2023, our indirect majority-owned subsidiary entered into a construction management agreement for the development of Viv.

operations, the timing and availability of net proceeds from our Follow-on Offering and any future offerings that we may conduct, the

timing and extent of our real estate acquisition and disposition activities, and the timing and extent of our construction and development

Economic uncertainty, fluctuating interest rates, unemployment rates, energy

prices, trade disputes, tariffs, recent military actions in Iran and the Middle East, immigration, taxes, inflation, volatility in the

real estate markets, slowdowns in transaction volume, delays in financings from banks and other lenders and other negative trends may,

in the future, adversely impact our ability to timely access potential sources of liquidity.

If we are unable to raise additional capital

when desired, or on terms that are acceptable to us, our business, financial condition and results of operations could be adversely affected.

believe that our cash on-hand, the anticipated net proceeds from our Follow-on Offering, and any future offerings that we may conduct,

the proceeds from our current debt obligations, the projected cash flows from our real estate assets and our current and anticipated

financing activities will be sufficient to meet our liquidity and capital resource requirements for the next 12 months from the date

of issuance of this Form 10-K.

Where our Manager and its affiliates, including our Sponsor, have funded,

and in the future if they continue to fund, our capital requirements by advancing us offering and operating fees and expenses, we reimburse

our Manager and its affiliates, including members of the Sponsor, Group pursuant to the terms of our M anagement

Agreement and Services and Cost Sharing Agreement.

Fees payable and expenses reimbursable to our Manager and its affiliates, including

members of the Sponsor Group, may be paid, at the election of the recipient, in cash, by issuance of our Class A Units at the then-current

NAV, or through some combination of the foregoing.

There were no Public Offering costs incurred by our Manager

and its affiliates during the years ended December 31, 2025 and 2024 .

During the years

ended December 31, 2025 and 2024 , our Manager and its affiliates, including members of the Sponsor Group,

incurred operating expenses of $2.1 million and $2.6 million ,

respectively, on our behalf.

Our M anager and its affiliates, including members of the Sponsor Group, have

deferred the collection of management fees and the reimbursement of operating fees and expenses, without interest, and may continue

to do so in the future, to support our operations and ensure that we maintain sufficient liquidity under the terms of our guaranty agreements.

All or any part of deferred fees and expenses may be taken in any period as determined by the Manager.

September 2025, we completed approximately $204.1 million in post-construction Aster & Links Refinance Transactions, the

proceeds of which were used to retire existing construction debt and will provide additional liquidity to support lease-up and

stabilization.

In connection with the Aster & Links Refinance Transactions we also entered into a series of guaranty agreements

whereby we have guaranteed payment and performance of certain of the Aster & Links Borrowers’ obligations under the Aster

& Links Loan Agreements.

The guaranty agreements require, among other things, that we maintain certain net worth and liquid

asset standards during the term of the Aster & Links Loans.

As of December 31, 2025, we were in compliance with all of the

net worth and liquid asset standards.

See “ Part I, Item 1—Our Investments—1991 Main Street

– Sarasota, Florida (“Aster & Links”)—Aster & Links Mortgage and Mezzanine Loans ” above,

and “ Note 7– Debt, Net ” in our consolidated financial statements for a more detailed

discussion of the Aster & Links Refinance Transactions.

of December 31, 2025, we had an unfunded capital commitment totaling $3.7 million under the 1991 Main CMA as well as other construction

related commitments for the development of Aster & Links.

See “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota Florida (“Aster & Links”)—Aster & Links Construction Management Agreement ” above for

additional details regarding the 1991 Main CMA.

of the date of this Form 10-K, we currently anticipate that the remaining funding for construction and soft costs associated with the

development of Aster & Links will be a minimum of $12.4 million (inclusive of the aforementioned unfunded capital commitment).

additional details regarding Aster & Links, see “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota Florida (“Aster & Links”) .”

of December 31, 2025, we have drawn down $81.3 million on the 1000 First Construction Loan and had an unfunded capital commitment of

$10.6 million under the 1000 First CMA.

See “ Part I, Item 1—Our Investments—1000 First Avenue North and 900 First Avenue North – St.

Petersburg, Florida (“VIV”) ” above for a more detailed discussion of the 1000 First Construction

Loan and 1000 First CMA.

of the date of this Form 10-K, we currently anticipate the remaining funding for construction and soft costs associated with the development

of VIV will be a minimum of approximately $13.3 million (inclusive of the aforementioned unfunded capital commitment).

For additional

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Petersburg, Florida (“VIV”) ”

” The construction management agreement contains terms

and conditions that are customary for a project of this type and will be subject to guaranteed maximum price.

As of December 31, 2024,

we had an unfunded capital commitment totaling $50.3 million under the terms of this agreement.

We currently anticipate that the remaining

funding for construction and soft costs associated with the development of 1000 First will be a minimum of approximately $62.5 million

(inclusive of the aforementioned unfunded capital commitment).

June 28, 2024, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for up to $104.0 million

in principal amount.

The 1000 First Construction Loan bears interest at a per annum rate equal to the one-month term SOFR plus 3.80%,

subject to a minimum all-in per annum rate of 7.55%, and is secured by Viv.

Advances under the 1000 First Construction Loan may be used

to fund the development of Viv.

The 1000 First Construction Loan has an initial maturity date of June 28, 2027 and contains two one-year

extension options, subject to certain restrictions.

For additional details regarding the 1000 First Construction Loan, see “ —Our Investments—1000 First Avenue North and 900 First Avenue North – St.

Petersburg, Florida (“Viv”) ”.

As of December

31, 2024, we have drawn down $29.5 million on the 1000 First Construction Loan.

June 26, 2024, our indirect majority-owned subsidiary entered into a fixed-rate loan for $10.0 million in principal amount with KHRE

SMA Funding, LLC, which is secured by 900 8th Avenue South.

The 900 8th Land Loan bears interest at a rate of 9.50% per annum, and is

due to mature on June 26, 2025, with two six-month extension options, subject to certain restrictions.

For additional details regarding

the 900 8th Land Loan, see “ —Our Investments—900 8th Avenue South – Nashville, Tennessee .”

8th Avenue South

of December 31, 2025, we have drawn down $10.0 million on the 900 8th Land Loan, which is due to mature in July 2026.

For additional

details regarding 900 8th Avenue South and 900 8th Land Loan, see “ Part I, Item 1—Our Investments—900 8th Avenue South – Nashville, Tennessee.

and Long-Term Capital Resources

expect to continue to obtain the capital resources that we need over the short and long-term from cash on-hand, from the proceeds of

our Public Offerings and any future offerings that we may conduct, from the advancement of reimbursable fees and expenses by our Manager

and its affiliates, including our Sponsor, from the proceeds of secured or unsecured financing from banks and other lenders, from projected

operating funds from our real estate assets and from any other undistributed cash flow generated from operations.

For additional details

regarding our Public Offerings, see “ Part II, Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Use of Proceeds from Registered Sales of Securities .”

our Follow-on Offering and any future offerings that we may conduct, from the advancement of reimbursable fees and expenses by our

Manager and its affiliates, including member of the Sponsor Group, from the proceeds of our current debt obligations and future secured

or unsecured financing from banks and other lenders, from projected operating funds from our real estate assets and from any other

undistributed cash flow generated from operations.

For additional details regarding our Public Offerings, see “ Part

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities—Use of Proceeds from Registered Sales of Securities.

employ leverage in order to provide more funds available for investment.

2 unchanged sentences

targeted aggregate property-level leverage, excluding any debt at the Company level or on assets under development or redevelopment,

after we have acquired a substantial portfolio of stabilized commercial real estate, is between 50-70% of the greater of the cost (before

deducting depreciation or other non-cash reserves) or fair market value of our assets.

During the period when we are acquiring, developing

and redeveloping our investments, we may employ greater leverage on individual assets.

An example of property-level leverage is a mortgage

loan secured by an individual property or portfolio of properties incurred or assumed in connection with our acquisition of such property

or portfolio of properties.

An example of debt at the Company level is a line of credit obtained by us or our Operating Companies.

after we have acquired a substantial portfolio of stabilized commercial and mixed-use real estate, is between 50-70% of the greater of

the cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets.

During the period when we are

acquiring, developing and redeveloping our investments, we may employ greater leverage on individual assets.

An example of property-level

leverage is a mortgage loan secured by an individual property or portfolio of properties incurred or assumed in connection with our acquisition

of such property or portfolio of properties.

An example of debt at the Company level is a line of credit obtained by us or our Operating

Manager may from time to time modify our leverage policy in its discretion in light of then-current economic conditions, relative costs

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Cash flows provided by financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Net (decrease) increase in cash and cash equivalents, and restricted cash

of December 31, 2025 and 2024, cash and cash equivalents and restricted cash totaled approximately $28.7 million and $28.8 million, respectively.

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the payment of employee cost sharing expenses as well as payments for property management, legal, and accounting fees.

Net cash flows used

in operating activities for the year ended December 31, 2023 primarily relates to the payment of management fees and employee cost sharing

expenses as well as payments for marketing, legal, tax and accounting fees.

Operating revenues

from recently placed into service properties were substantially offset by the related operating expenses.

Net cash flows used in operating

activities for the year ended December 31, 2024 primarily relates to the payment interest incurred on our indebtedness, the payment of

employee cost sharing expenses as well as payments for property management, legal, and accounting fees.

cash flows used in investing activities for the year ended December 31, 2025 primarily relates to the funding of development properties.

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in investing activities for the year ended December 31, 2024 primarily relates to the funding of development properties.

cash flows provided by financing activities for the year ended December 31, 2024 primarily relates to net proceeds from financings, including

the 1991 Main Mezzanine Loan, the 1991 Main Construction Loan, the 1000 First Construction Loan, and the 900 8th Land Loan.

For additional

details regarding our outstanding indebtedness, see “ —Liquidity and Capital Resources .” Net cash flows provided by financing

activities for the year ended December 31, 2023 primarily relates to the net proceeds from 1991 Main Construction Loan, proceeds from

our Public Offerings, and proceeds from our loan from an affiliate.

Accounting Policies

cash flows provided by financing activities for the year ended December 31, 2025 primarily relates to the net proceeds from debt financing

activities, including additional draws on the 1000 First Construction Loan and net cash proceeds generated from the Aster & Links

Refinancing Transactions further described in “ Part I, Item 1—Our Investments—1000 First Avenue North and 900 First Avenue North – St.

Petersburg, Florida (“VIV”) ” and “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota Florida (“Aster & Links”)—Aster & Links Mortgage and Mezzanine Loans.

cash flows provided by financing activities for the year ended December 31, 2024 primarily relates to the net proceeds from financings,

including the variable-rate construction loan with Bank OZK and mezzanine loan with Southern Realty Trust Holdings, LLC that were subsequently

retired by the Aster & Links Refinancing Transactions, the 1000 First Construction Loan, and the 900 8th Land Loan.

Accounting Estimates

audited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States

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Our actual results could differ from these estimates.

significant accounting policies are described in “Note 2 — Summary of Significant Accounting Policies.” Many of these

accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our

consolidated financial statements.

On a quarterly basis, we evaluate these estimates and judgments based on historical experience as

well as other factors that we believe to be reasonable under the circumstances.

These estimates are subject to change in the future if

underlying assumptions or factors change.

significant accounting policies are described in “ Note 2 — Summary of Significant Accounting Policies.

Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation

of our consolidated financial statements.

On a quarterly basis, we evaluate these estimates and judgments based on historical experience

as well as other factors that we believe to be reasonable under the circumstances.

These estimates are subject to change in the future

if underlying assumptions or factors change.

Certain accounting policies, while significant, may not require the use of estimates.

accounting changes that may potentially impact our business are described under “Recent Accounting Pronouncements” in “Note 2 — Summary of Significant Accounting Policies.”

recent accounting changes that may potentially impact our business are described under “Recent Accounting Pronouncements”

in “ Note 2 — Summary of Significant Accounting Policies.

Sheet Arrangements

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condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Growth and Smaller Reporting Company Status

are an “emerging growth company,” as defined in the Jump Start Our Business Startups Act of 2012 (“JOBS Act”).

Under Section 107 of the JOBS Act, emerging growth companies are permitted to use an extended transition period provided in Section 7(a)(2)(B)

of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private

have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised

accounting standards that have different effective dates for public and private companies until the earlier of (i) the last day of the

fiscal year (a) following the fifth anniversary of the effective date of our Primary Offering (which will fall on September 26, 2026),

(b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a “large accelerated

filer” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (ii) the

date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period, or (iii) the date

that we affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B).

By electing to extend

the transition period for complying with new or revised accounting standards, our consolidated financial statements may not be comparable

to the consolidated financial statements of companies that comply with public company effective dates.

are also a “smaller reporting company” (as defined in Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K).

Even after we no longer qualify as an emerging growth company, we may remain a smaller reporting company and may continue to take advantage

of the scaled disclosure obligations available to smaller reporting companies.

We will be a smaller reporting company until the last

day of the fiscal year in which (i) the market value of our Class A units held by non-affiliates exceeds $250 million, measured as of

the last business day of the immediately preceding second fiscal quarter, and (ii) our annual revenue exceed $100 million as of the most

recently completed fiscal year and the market value of our Class A units held by non-affiliates exceeds $700 million.

Quantitative and Qualitative Disclosures about Market Risk.

are a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K, as as a result are not required to provide the information

are a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K, as a result are not required to provide the information

required by this Item.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis