What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-29 · 193 added, 217 removed, 122 unchanged (77% of the section changed)

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offer and related conversion and merger transaction.

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 our

Primary Registration Statement, conforming our Primary Offering to our Follow-on Offering.

the year ended December 31, 2023, we issued 98,950 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, 2023, we have raised aggregate gross offering cash proceeds of $354.3

September 30, 2021, the U.S.

Securities and Exchange Commission (the “SEC”) declared effective our initial registration statement

on Form S-11, as amended (File No.

333-255424) (the “Primary Registration Statement”), registering a continuous primary offering

of up to $750,000,000 in our Class A units (our “Primary Offering”).

From the period of October 7, 2021, the date of the

first closing held in connection with our Primary Offering, through December 31, 2022, we issued 2,273,339 Class A units in our Primary

Offering, raising net offering proceeds of $226.0 million.

May 9, 2023, the SEC declared effective our follow-on 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 an additional $750,000,000 of our Class A units on a continuous

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” and, together with our Primary Offering, our “Public Offerings”).

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

5 unchanged sentences

unit sold in the Follow-on Offering.

In addition, our Follow-on Registration Statement constitutes a post-effective amendment to our

Primary Registration Statement, conforming our Primary Offering to our Follow-on Offering.

As of December 31, 2023, $1,264,724,350 remained

unsold under our Public Offerings.

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.

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.

Our Manager calculates

our NAV within approximately 60 days of the last day of each quarter, and any adjustments take effect as of the first business day following

its public announcement.

As of December 31, 2023, our NAV per Class A units was $100.88.

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.

Business Outlook

Despite expectations of the U.S.

falling into recession in 2023, market

conditions for multifamily and mixed-use rental properties 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,

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.

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 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

4 unchanged sentences

of Operations

following table sets forth information regarding our consolidated results of operations during the years ended December 31, 2023 and

2022 (amounts in thousands):

Year Ended December 31,

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):

Years Ended December 31,

Commercial Segment

Mixed-use Segment

Commercial Segment

Mixed-use Segment

Rental revenue

Total revenue

Property expenses

Total Segment NOI

Non-segment items:

Management fees, included in Property expenses

General and administrative

Interest expense

Depreciation and amortization

Impairment of real estate

Total expenses

Interest income

Other expense

Total other income

Loss before income taxes

Provision for income taxes

Net income attributable to Belpointe PREP, LLC

Net loss attributable to noncontrolling interests

Net loss attributable to Belpointe PREP, LLC

Comparison of the Year Ended December 31,

2024 to the Year Ended December 31, 2023

Commercial Segment

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 2022, rental revenue increased by $0.9 million.

This increase is primarily related to the amortization of below-market lease intangibles.

During the year ended December 31, 2023 one of our tenants vacated our 901-909 Central Avenue investment, therefore, we accelerated

the unamortized below-market lease liability in connection with termination of the lease.

Additionally, the increase is related to acquisition

of our 1400 Davidson investment in December 2022, whereby the year ended December 31, 2023 reflects a full year of amortization of

below-market lease intangibles.

expenses primarily consists of management fees, property operational expenses, real estate taxes, and utilities and insurance expenses

incurred in relation to our operating properties.

the year ended December 31, 2023, as compared to the same period in 2022, property expenses increased by $0.4 million.

This increase

is primarily due an increase in real estate tax expenses at certain investments and an increase in third-party property management

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.

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

the year ended December 31, 2023 as compared to the same period in 2022, general and administrative expenses increased by $0.5 million.

This increase is primarily due to higher allocation of costs incurred by our Manager and its affiliates to us, as well as dead deal costs incurred

during the current year period.

These increases were partially offset by a lower marketing expenses.

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 Amortization

the year ended December 31, 2024, as compared to the same period in 2023, depreciation and amortization increased by $2.1 million.

increase is primarily due to the acquisition of properties during the year ended December 31, 2022, and due to the acceleration of unamortized

in-place lease intangible assets at our 901-909 Central Avenue investment as a result of three tenants vacating during the year ended December

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.

of Real Estate

the year ended December 31, 2023, we recorded impairment charges of $4.1 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.

September 30, 2021, we lent approximately $3.5 million to CMC (the “CMC Loan”) pursuant to the terms of a secured promissory

note bearing interest at an annual rate of 12.0% and due and payable on June 27, 2022.

On June 28, 2022, the CMC Loan was repaid in full,

including accrued interest of $0.3 million.

January 3, 2022, we lent $30.0 million (the “Norpointe Loan”) to Norpointe, LLC (“Norpointe”), an affiliate of

our Chief Executive Officer, pursuant to the terms of a promissory note secured by a first mortgage lien on certain real property located

at 41 Wolfpit Avenue, Norwalk, Connecticut 06851 (the “Norpointe Property”).

On June 28, 2022, for purposes of complying

with the qualified opportunity fund requirements under the Internal Revenue Code of 1986, as amended, and related Treasury Regulations, we restructured the Norpointe Loan

(the “Restructured Norpointe Loan”).

The Restructured Norpointe Loan was evidenced by a promissory note and was secured by

a first mortgage lien on the Norpointe Property.

On December 13, 2022, the Restructured Norpointe Loan was repaid in full.

See “ Certain Relationships and Related Transactions, and Director Independence—Our Affiliate Transactions—Our Transaction with Norpointe, LLC ” for additional details regarding our transactions with Norpointe.

February 23, 2022, we lent approximately $5.0 million to Visco Propco, LLC (the “Visco Loan”), pursuant to the terms of a

promissory note secured by a first lien deed of trust on certain real property located at 801 Visco Drive, Nashville, Tennessee 37210.

On December 2, 2022, the Visco Loan was repaid in full, including accrued interest of $0.2 million.

For the year ended December 31, 2022, interest income was $1.9

million and is primarily related to interest of $0.7 million earned on the Norpointe Loan, $0.7 million earned on the Restructured Norpointe

Loan, $0.2 million earned on the CMC Loan, and $0.2 million on the Visco Loan.

information regarding our commercial real estate loan transactions is provided in “ Note 7 – Loans Receivable ” in the

Notes to Consolidated Financial Statements included elsewhere in this Form 10-K.

July 10, 2023, our indirect majority-owned subsidiary (the “Mortgage Borrower”) entered into an interest rate cap agreement

(the “1991 Main Interest Rate Cap”) as required under the terms of the variable rate construction loan agreement (the “1991

Main Construction Loan Agreement”) for up to $130.0 million in principal amount that the Mortgage Borrower previously entered into,

on May 12, 2023, with Bank OZK, and which is secured by 1991 Main.

During the year ended December 31, 2023, we recognized a net

unrealized loss of $0.1 million on the 1991 Main Interest Rate Cap.

See “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (also known as “Aster & Links”)—1991 Main Interest Rate Cap ” for additional information

regarding our 1991 Main Construction Loan Agreement and 1991 Main Interest Rate Cap.

June 28, 2022, through an indirect majority-owned subsidiary of our Operating Company, we acquired a 70.2% controlling interest in CMC

(the “CMC Interest”), for an initial capital contribution of $3.8 million.

As part of the transaction two unaffiliated joint

venture partners (the “CMC JV Partners”) were deemed to have made a combined initial capital contribution of $3.1 million.

Following our acquisition of the CMC Interest, we discovered that one of the CMC JV Partners had misappropriated cash from the other

CMC JV Partner’s cash account.

As a result, the CMC JV Partner agreed to forfeit its interest in CMC as of March 24, 2023.

expense for the year ended December 31, 2022, primarily relates to a loss of $0.4 million recorded in connection with the misappropriated

for Income Taxes

For the year ended December 31, 2022, provision for income taxes relates

to taxes incurred (including interest) in connection with our acquisition of Belpointe REIT.

As a result of the conversion of Belpointe

REIT from a corporation into a limited liability company, Belpointe REIT was deemed to have been liquidated and its tax year ended on

October 1, 2021.

Belpointe REIT’s deemed liquidation resulted in a taxable gain for the year ended October 1, 2021.

In connection

with the conversion, we filed an extension for the time to file Belpointe REIT’s 2021 tax returns, however, we did not make an estimated

payment at that time as we had not yet calculated Belpointe REIT’s 2021 tax liability.

As of the date of this Form 10-K, we have

paid the outstanding income tax liability, including interest.

Loss Attributable to Noncontrolling Interests

loss attributable to noncontrolling interests represents the share of earnings generated in entities we consolidate in which we do not

own 100% of the equity.

For the year ended December 31, 2023 as compared to the same period in 2022, net losses attributable to

noncontrolling interests decreased by $0.5 million.

This decrease primarily relates to losses allocated to noncontrolling interest holders

on our CMC and 900 8th Avenue South investments in the prior year period which was based upon an allocation of each investment’s

net assets at book value as if the investments were hypothetically liquidated at the end of each reporting period.

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.

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.

and Capital Resources

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

offering and operating fees and expenses, pay any distributions that we make to the holders of our units and pay interest on any outstanding

indebtedness that we incur.

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 American filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution

Public 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

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

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

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

resource needs 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 organization or Public Offering costs incurred

by our Manager and its affiliates during the years ended December 31, 2023 and 2022.

During the years ended December 31, 2023

and 2022, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $2.9 million and $2.9 million, respectively,

on our behalf.

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

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 our 1991 Main investment, see “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (also known as “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.

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.

For additional

details regarding Viv, see “ Part I, Item 1—Our Investments—1000 First Avenue North and 900 First Avenue North – St.

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,

2023, we had an unfunded capital commitment of $61.8 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 1991 Main will

be a minimum of $84.8 million (inclusive of the aforementioned unfunded capital commitment).

During the year

ended December 31, 2023, our indirect majority-owned subsidiary (the “Mortgage Borrower”) entered into a variable-rate

construction loan agreement for up to $130.0 million in principal amount (the “1991 Main Construction Loan”) to fund the

development of 1991 Main.

Advances under the construction loan bear interest at a per annum rate equal to the one-month term Secured

Overnight Financing Rate (SOFR) plus 3.45%, subject to a minimum all-in per annum rate of 8.51%.

The 1991 Main Construction Loan has

an initial maturity date of May 12, 2027 and contains a one-year extension option, subject to certain restrictions.

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

2023, we have drawn down $23.1 million on the 1991 Main Construction Loan.

discussed in “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (also known as “Aster & Links”)—1991 Main Mezzanine Loan ”, on January 31, 2024, our indirect majority-owned subsidiary (the “Mezzanine

Borrower”) entered into a mezzanine loan agreement for up to $56.4 million in principal amount (the “1991 Main Mezzanine

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

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

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

Cash proceeds from the 1991 Mezzanine Loan totaled $39.8 million, after Reserves of $15.0 million were held

back at closing, and incurring closing costs of $1.6 million.

under the 1991 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, 1991 Main.

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

extension option, subject to certain restrictions.

S ee “ Part I, Item 1—Our Investments—1991 Main Street – Sarasota, Florida (also known as “Aster & Links”) ,” for additional information regarding the

1991 Main Construction Loan and the 1991 Mezzanine Loan.

the year ended December 31, 2023, our indirect majority-owned subsidiary entered into a construction

management agreement in connection with the development of 1000 First.

For additional details regarding our acquisition of 1000 First,

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

Petersburg, Florida (also known as “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, 2023, we had an unfunded capital

commitment of $40.3 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 $119.2 million (inclusive of the aforementioned

unfunded capital commitment).

expect to obtain the liquidity and capital resources that we need over the short and long-term 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 secured or unsecured financings from banks and other lenders and from any undistributed funds from operations.

For additional details regarding our Public Offering, see “ Part II, Item 5.

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 .”

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 .”

currently anticipate that our available capital resources, including the proceeds from our Public Offerings and the proceeds from any

construction or other loans that we may incur, when combined with cash flow generated from our operations, will be sufficient to meet

our anticipated working capital and capital expenditure requirements over the next 12 months and beyond.

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

19 unchanged sentences

Cash flows provided by financing activities

Net decrease in cash and cash equivalents and restricted cash

of December 31, 2023 and 2022, cash and cash equivalents and restricted cash totaled approximately $23.6 million and $145.0 million,

respectively.

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.

Cash flows used in operating activities

for the year ended December 31, 2022 primarily relates to the payment of management fees and employee cost sharing expenses as well

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

These outflows were partially offset by interest received on our Norpointe

Loan, Restructured Norpointe Loan and CMC Loan during the period.

Cash flows used in

investing activities for the year ended December 31, 2023 primarily relates to the funding of development properties.

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

of December 31, 2024 and 2023, cash and cash equivalents and restricted cash totaled approximately $28.8 million and $23.6 million, respectively.

cash flows used in operating activities for the year ended December 31, 2024 primarily relates to interest expense incurred on our indebtedness,

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.

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

For additional details regarding our development properties, see “ Part I, Item 1—Our Investments.

” Net cash flows used

in investing activities for the year ended December 31, 2023 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 development properties, see “ Part I, Item 1—Our Investments .” Cash flows used in investing activities

for the year ended December 31, 2022 primarily relates to the funding of loans receivable in addition to funding costs for our development

properties and investments in real estate.

These outflows were partially offset by inflows from the repayment of the CMC and Restructured

Norpointe Loans during the period as well as cash acquired as part of the acquisition of CMC ( Note 7 ).

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 Primary Offering, and proceeds from our short-term loan from an affiliate.

provided by financing activities for the year ended December 31, 2022 primarily relates to net proceeds received from the

Primary Offering partially offset by the repayment of the Acquisition Loan.

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

23 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis