What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-31 compared with 2024-03-29 · 447 added, 428 removed, 666 unchanged (57% of the section changed)

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on the Financial Statements

We have audited the accompanying consolidated balance sheets of Belpointe

PREP, LLC (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes

in members’ capital and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively

referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and

its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally

accepted in the United States of America.

have audited the accompanying consolidated balance sheets of Belpointe PREP, LLC (the “Company”) as of December 31, 2024

and 2023, and the related consolidated statements of operations, changes in members’ capital and cash flows for each of the years

in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America .

consolidated financial statements are the responsibility of the Company’s management.

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York, New York

Belpointe PREP, LLC

Balance Sheets

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Building and improvements

Furniture, fixtures and equipment

Intangible assets

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Cash and cash equivalents

Short-term loan from affiliate

Loan from affiliate

Due to affiliates

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Members’ Capital

Class A units, unlimited

units authorized, 3,622,399 and 3,523,449 units issued and outstanding at December 31, 2023 and 2022, respectively

Class B units, 100,000 units authorized, 100,000 units issued and outstanding at December 31, 2023 and 2022, respectively

Class M unit, one unit authorized, one unit issued and outstanding at December 31, 2023 and 2022, respectively

Class A units, unlimited units authorized, 3,664,173 and 3,622,399 units issued and outstanding at

December 31, 2024 and 2023, respectively

Class B units, 100,000 units authorized, 100,000 units issued and outstanding at December 31, 2024

and 2023, respectively

Class M unit, one unit authorized, one unit issued and outstanding at December

31, 2024 and 2023, respectively

Total members’ capital excluding noncontrolling interests

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General and administrative

Interest expense

Depreciation and amortization

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Noncontrolling

Balance at December 31, 2022

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Contribution from noncontrolling interests

Acquisition of ownership in CMC Storrs SPV, LLC ( Note 5 )

Distribution to noncontrolling interests

Acquisition of noncontrolling interests ( Note 5 )

Offering costs

Balance at December 31, 2023

Beginning Balance

Issuance of units

Contribution from noncontrolling interests

Return of capital

Acquisition of noncontrolling interests ( Note 5 )

Distribution to noncontrolling interests

Acquisition of noncontrolling interests

Offering costs

Balance at December 31, 2024

Ending Balance

accompanying notes to consolidated financial statements.

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Amortization of rent-related intangibles and straight-line rent adjustments

Depreciation and amortization

Depreciation and amortization including intangible assets and deferred financing costs

Impairment of real estate

Unrealized loss on interest rate derivative, net

Unrealized loss on interest rate derivatives, net

Changes in operating assets and liabilities:

Increase in due to affiliates

(Increase) decrease in other assets

Increase (decrease) in accounts payable

Decrease in accrued expenses and other liabilities

Increase in other assets

(Decrease) increase in accounts payable

Increase (decrease) in accrued expenses and other liabilities

Net cash used in operating activities

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Development of real estate

Acquisitions of real estate

Purchase of interest rate cap

Other investing activity

Repayment of loans receivable

Funding of loans receivable

Cash acquired from CMC ( Note 5 )

Acquisition of real estate

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issuance of debt

Proceeds from units issued

Short-term loan from affiliate

Proceeds from construction loans

Proceeds from term loans

Repayment of loan from affiliate

Payment of debt issuance costs

Repayment of short-term loan from affiliate

Proceeds from units issued

Proceeds from loan from affiliate

Distribution to noncontrolling interests

Other financing activities, net

Contributions from noncontrolling interests

Payment of offering costs

Payment of financing deposits

Contributions from noncontrolling interests

Other financing activities, net

Return of capital from noncontrolling interests

Proceeds from subscriptions receivable

Repayment of debt

Net cash provided by financing activities

Net decrease in cash cash equivalents and restricted cash

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

Cash and cash equivalents and restricted cash, beginning of year

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Capitalization

are the successor in interest to Belpointe REIT, Inc., a Maryland corporation (“Belpointe REIT”), incorporated on June 19,

During the year ended December 31, 2021, we acquired all of the outstanding shares of common stock of Belpointe REIT in an exchange

offer and related conversion and merger transaction.

May 9, 2023, the U.S.

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(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

Manager may 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.

As of December 31, 2023, we have not sold any Class A units in connection with the Follow-on

addition, the 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, of which $ 514,724,350 remained unsold as of December 31, 2023 (our

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

purchase price for Class A units in the Public Offerings will be the lesser of (i) the current net asset value (the “NAV”)

of our Class A units, and (ii) the average of the high and low sale prices of our Class A units on the NYSE American (the “NYSE”)

We 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 units sold

in the Follow-on Offering.

addition, the Follow-on Registration Statement constituted a post-effective amendment to our initial registration statement on Form S-11,

as amended (File No.

333-255424), registering our continuous primary offering of up to $ 750,000,000 of 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”).

For the year ended December 31, 2024, we have sold aggregate gross proceeds of $ 3.1 million, of Class A units in connection with our

Public Offerings.

Together with the gross proceeds raised in Belpointe REIT, Inc.’s prior offerings, as of December 31, 2024, we

have raised aggregate gross offering proceeds of $ 357.3 million in our Public Offerings.

purchase price for Class A units in our Public Offerings is the lesser of (i) the current net asset value (the “NAV”) of

our Class A units, and (ii) the average of the high and low sale prices of our Class A units on the NYSE American (the “NYSE”)

during regular trading hours on the last trading day immediately preceding the investment date on which the NYSE was open for trading

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and any adjustments take effect as of the first business day following its public announcement.

On February 29, 2024, we announced that

On March 10, 2025, we announced that

our NAV as of December 31, 2024 was equal to $ 119.94 per Class A unit.

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Building and improvements

Furniture, fixtures and equipment

Intangible assets

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

will remain an emerging growth company until the earlier of (i) December 31, 2026 (the last day of the fiscal year following the fifth

anniversary of our Primary Offering), (ii) the last day of the first fiscal year in which we have total annual gross revenue of at least

$1.07 billion, (iii) the last day of the first fiscal year in which we are deemed to be a “large accelerated filer,” as defined

in the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iv) the date on which we have

issued more than $1.0 billion in non-convertible debt during the prior three-year period.

the extent that we continue to qualify as a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act,

after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may

continue to be available to us as a smaller reporting company, including:

(i) not being required to comply with the auditor attestation

requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002;

and (ii) the requirement to provide only two years of audited financial

statements, instead of three years.

preparation of consolidated financial statements in conformity with U.S.

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Actual results could materially differ from those estimates.

operate in a single reportable segment which includes the development, redevelopment and managing of commercial real estate properties

located within qualified opportunity zones.

Therefore, we aggregate all of our real estate assets into one reportable segment.

primary need for liquidity is 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 on our outstanding indebtedness.

of December 31, 2024, we held cash, cash equivalents and other short-term investments of $ 24.7 million.

We believe that our cash

on-hand as of December 31, 2024, together with 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 fund our operations for at least

12 months from the date of issuance of these consolidated financial statements.

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.

are focused on identifying, acquiring, developing or redeveloping and managing real estate assets located within qualified

opportunity zones.

Our operating segments are based on the way we organize and evaluate our business internally.

operate in two

reportable segments, commercial and mixed-use, which are further described in Note 12 - Segment Reporting .

of Purchase Price of Acquired Assets and Liabilities

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the carrying value of the asset to fair value, calculated as the discounted net cash flows of the property.

In circumstances where the highest and best use of a property is the fee simple value of vacant land, we compare

book value of the property to the appraised value of the land.

If the carrying value of the asset exceeds the appraised value of the land,

an impairment loss is recorded to reduce the carrying value to the appraised value.

In circumstances where the

highest and best use of a property is the fee simple value of vacant land, we compare book value of the property to the appraised value

If the carrying value of the asset exceeds the appraised value of the land, an impairment loss is recorded to reduce the

carrying value to the appraised value.

Pursuit Costs

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charged to earnings when debt is retired before the maturity date.

Deposits for pending financings are presented within Other assets

in our consolidated balance sheets.

derivative instruments are measured at fair value and are recorded as either assets or liabilities in our consolidated balance sheets

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Cash and cash equivalents

Restricted cash (1)

Total cash and cash equivalents and restricted cash

(1) Restricted

cash is included within Other assets in our consolidated balance sheets.

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Organization,

Primary Offering and Other Operating Costs

Public Offerings and Other Operating Costs

costs are expensed as incurred.

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equity against the gross proceeds of an offering.

Our Primary Offering costs for the years ended December 31, 2023, and 2022, were

$ 0.4 million, and $ 0.6 million, respectively.

We became liable to reimburse our Manager and its affiliates, including our Sponsor, when

the first closing was held in connection with our Primary Offering, which occurred in October 2021.

Our Public Offering costs for the years ended December 31, 2024, and 2023, were less

than $ 0.1 million, and $ 0.4 million, respectively.

We became liable to reimburse our Manager and its affiliates, including our Sponsor,

when the first closing was held in connection with our Primary Offering, which occurred in October 2021.

to a management agreement by and among the Company, our Operating Companies and our Manager (the “Management Agreement”),

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and Uncertainties

for multifamily and mixed-use rental properties is subject to uncertainty as a result of a number of factors, including, among

for commercial and mixed-use rental properties is subject to uncertainty as a result of a number of factors, including, among

others, increasing interest rates, the availability of credit, higher rates of inflation, the rate of unemployment, and ongoing

supply chain disruptions.

The potential effect of these and other factors 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 government and

regulatory policies applicable to us.

We are closely monitoring the potential impact of these and other factors on all aspects of

our investments and operations.

The potential effect of these and other factors 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 government and regulatory policies applicable to us.

are closely monitoring the potential impact of these and other factors on all aspects of our investments and operations.

Assets and Liabilities

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accounts receivable.

We include accrued expenses, straight-line lease liabilities, prepaid rent, leasing commission payables and security

We include accrued expenses, straight-line lease liabilities, accrued interest, prepaid rent, leasing commission payables and security

deposits payable in Accrued expenses and other liabilities in our consolidated balance sheets.

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Accounting Pronouncements

March 2024, the SEC adopted final rules under Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures

for Investors (the “Climate Rules”).

The Climate Rules require quantitative and qualitative disclosure of certain climate-related

information in registration statements and annual reports filed.

These disclosures include financial statement footnote disclosure related

to the effects of certain severe weather events and other natural conditions.

In April 2024, the SEC issued an order staying the Climate

Rules pending completion of a judicial review of certain petitions challenging their validity.

If the stay is lifted, the effective dates

remain unchanged and we remain a smaller reporting company, emerging growth company or non-accelerated filer, the Climate Rules will

be effective for our fiscal year ending December 31, 2027.

We are currently evaluating the impact of the Climate Rules on our consolidated

financial statements.

Adopted Accounting Pronouncements

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

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Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after

December 15, 2024, and requires single reporting entities to comply with the expanded reportable segment disclosures outlined in the

The expanded reportable segment disclosures are intended to enhance certain disclosures surrounding significant segment expenses.

We are currently evaluating the impact of the new standard on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial

Instruments ( “ASU 2016-13”).

ASU 2016-13 introduces a new model for estimating credit losses based on current expected

credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments

in direct financing leases, amongst other financial instruments.

ASU 2016-13 also modifies the impairment model for available-for-sale

debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the

allowance for losses.

ASU 2016-13 does not apply to receivables arising from operating leases, which are within the scope of ASU 2016-02 ,

Leases (Topic 842).

adopted ASU 2016-13 on January 1, 2023 using the modified retrospective method.

The adoption of this standard did not have a material

impact on our consolidated financial statements, and no cumulative-effect adjustment was recorded to retained earnings.

own rental properties which are leased to tenants under operating leases with current expirations ranging from 2024 to 2040, with options

to extend or terminate the leases.

Revenues from such leases are reported as Rental revenue in our consolidated statements of operations,

and are comprised of (i) lease components, which includes fixed and variable lease payments and (ii) non-lease components which includes

reimbursements of property level operating expenses.

We do not separate non-lease components from the related lease components as the

timing and pattern of transfer are the same and account for the combined component.

ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years

beginning after December 15, 2024.

The objective of ASU 2023-07 is to improve reportable segment disclosure requirements, primarily

through enhanced disclosures about significant segment expenses.

The Company adopted ASU 2023-07 during the fourth quarter of 2024

and these consolidated financial statements incorporate the required disclosures.

See Note 12 - Segment Reporting .

own rental properties which are leased to tenants under operating leases that typically have terms of between 12 and 24 months with

current expirations ranging from 2025 to 2040, and with options to extend or terminate the leases.

Revenues from such leases are

reported as Rental revenue in our consolidated statements of operations, and are comprised of (i) lease components, which includes

fixed and variable lease payments and (ii) non-lease components which includes reimbursements of property level operating expenses.

We do not separate non-lease components from the related lease components as the timing and pattern of transfer are the same and

account for the combined component.

lease revenues represent the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported

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reimbursements for property taxes, insurance, and common area maintenance services.

lease intangible amortization of $ 0.8 million, and $ 0.3 million, for the years ended December 31, 2023, and 2022, respectively.

straight-line rent of less than $ 0.1 million for the years ended December 31, 2023, and 2022, respectively.

lease intangible amortization of less than $ 0.1 million, and $ 0.8 million, for the years

ended December 31, 2024, and 2023, respectively.

straight-line rent of less than $ 0.1 million for the years ended December 31, 2024, and 2023,

respectively.

certain of our leases, the tenant is obligated to pay the real estate taxes, insurance, and certain other expenses directly to the vendor.

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for such obligations would be recorded.

assess the collectability of substantially all lease payments due by reviewing a tenant’s payment history or financial condition.

Changes to collectability are recognized as a current period adjustment to rental revenue.

We have assessed the collectability of all

recorded lease revenues as probable as of December 31, 2023.

assess the collectability of substantially all lease payments due, including unbilled rent receivable balances, by reviewing a tenant’s

payment history and financial condition, and the age of the receivables.

Changes to collectability are recognized as a current period

adjustment to rental revenue.

We have assessed the collectability of all recorded lease revenues as probable as of December 31, 2024.

Future Lease Payments

following table summarizes the minimum future contractual rents to be received (exclusive of expenses paid by tenants, and percentage

of sales rents) on non-cancellable operating leases as of December 31, 2023 (amounts in thousands):

of Minimum Future Contractual Rents

of sales rents) on non-cancellable tenant operating leases as of December 31, 2024 (amounts in thousands):

of Minimum Future Lease Payments

For the year ended December 31, (1)

(1) A majority of our operating leases have terms of between 12 and 24 months, however expiration dates range from 2025

$ 0.1 million of straight-line rent and $ 1.2 million of lease intangible amortization.

assess the collectability of unbilled rent receivable balances by reviewing a tenant’s payment history and financial condition.

We have assessed the collectability of all unbilled rent receivable balances as probable as of December 31, 2023.

further described in Note 5 – Real Estate, Net, on August 24, 2023, through an indirect majority-owned subsidiary of our Operating

Company, we purchased land located in Sarasota, Florida, which we previously leased.

Therefore, there is no longer a right of use (“ROU”)

asset or lease liabilities in our consolidated balance sheets as of December 31, 2023.

As of December 31, 2022, we were a lessee

under the aforementioned ground lease which was classified as a financing lease.

Accordingly, a finance lease liability of $ 5.0 million

is included in Lease liabilities in our consolidated balance sheets as of December 31, 2022, which represented our obligation to

make payments under this ground lease, and a ROU asset of $ 5.0 million is included in Other assets in our consolidated balance sheets

as of December 31, 2022, which represented our right to use the underlying asset during the lease term.

During the years ended December 31,

2023, and 2022 we capitalized $ 0.3 million and $ 0.3 million, respectively, of ground rent expense related to this ground lease on one

of our development investments, which is included in Real estate under construction in our consolidated balance sheets.

are no operating leases for which we are the lessee;

therefore, there are no related ROU assets or lease liabilities in our consolidated

balance sheets as of December 31, 2023 and 2022.

4 – Related Party Arrangements

Transactions with Belpointe Investment Holding, LLC

furtherance of the Merger, Belpointe REIT sold its interest (the “1991 Main Interest”) in the holding company for 1991 Main

Street (“1991 Main”) to Belpointe Investment Holding, LLC (“BI Holding”), an affiliate of our Chief Executive

As part of the transaction, BI Holding assumed a $ 10.8

million secured loan (the “Acquisition

Loan”), and Belpointe REIT provided BI Holding with a $ 24.8

million loan, which was evidenced by a secured

promissory note bearing interest at an annual rate of 5.0 %

and due and payable at maturity on September 14, 2022 (the “BI Secured Note”).

Upon consummation of the Merger, we acquired

the BI Secured Note as successor in interest to Belpointe REIT.

Effective November 30, 2021, we acquired the 1991 Main Interest

from BI Holding in consideration of its payment to us of $ 0.3

million in interest that had accrued under the

terms of the BI Secured Note through November 30, 2021, and in satisfaction of its remaining obligations under the BI Secured Note.

On April 22, 2022, we repaid the Acquisition Loan in full.

Transaction with Norpointe, LLC

January 3, 2022, through an indirect wholly-owned subsidiary, we provided a commercial mortgage loan in the principal amount of

$ 30.0 million (the “Norpointe Loan”) to Norpointe, LLC (“Norpointe”), an affiliate of our Chief Executive Officer.

Norpointe is the owner of certain real property located at 41 Wolfpit Avenue, Norwalk, Connecticut 06851 (the “Norpointe Property”).

The Norpointe Loan was evidenced by a promissory note bearing interest at an annual rate of 5.0 %, due and payable on December 31,

2022, and was secured by a first mortgage lien on the Norpointe Property.

June 28, 2022, for purposes of complying with the qualified opportunity fund requirements under the Code and related Treasury Regulations,

we restructured the Norpointe Loan through an indirect majority owned subsidiary (the “Restructured Norpointe Loan”).

Restructured Norpointe Loan was evidenced by a promissory note bearing interest at an annual rate of 5.0 %, due and payable on June 28,

2023, and was secured by a first mortgage lien on the Norpointe Property.

On December 13, 2022, the Restructured Norpointe Loan

including accrued interest of less than $ 0.1 million was repaid in full.

Transaction with Belpointe Development Holding, LLC

Transactions with Belpointe Development Holding, LLC

May 16, 2024, we entered into an agreement, which has since been amended, to borrow up to $ 3.0 million in principal amount from Belpointe

Development Holding, LLC, an affiliate of our Chief Executive Officer, pursuant to the terms of a revolving credit facility agreement

(the “BDH Facility”).

Interest accrues on the BDH Facility at an annual rate of 5.0 %, due and payable at maturity.

Facility is due to mature on August 31, 2026 .

Proceeds under the BDH Facility are to be used for general corporate purposes.

As of December

31, 2024, the BDH Facility had an outstanding principal balance of $ 2.6 million and accrued interest of less than $ 0.1 million.

October 30, 2023, we borrowed $ 1.5 million from Belpointe Development Holding, LLC, an entity in which certain immediate family members

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December 29, 2023, we borrowed $ 4.0 million from Lacoff Holding II LLC, an affiliate of our Chief Executive Officer, pursuant to the

terms of a promissory note (the “LH II

The LH II Loan is due and payable on April 1, 2024 and interest accrues on the LH II Note at an annual rate of 5.26 %.

proceeds of the loan were used for general corporate purposes.

the years ended December 31, 2023 and 2022, less than $ 0.1 million, and $ 0.3

million, respectively, of noncontrolling interest contributions were made by affiliates of our Sponsor representing their 0.1 %

ownership in various investments.

These noncontrolling interests will be allocated profit and loss in accordance with the respective

operating agreements.

terms of a promissory note (the “LH II Loan”).

The LH II Loan was due and payable on April 1, 2024 and interest accrued on

the LH II Note at an annual rate of 5.26 %.

The proceeds of the loan were used for general corporate purposes.

On February 8, 2024, the

LH II Loan, including accrued interest of less than $ 0.1 million, was repaid in full.

the years ended December 31, 2024 and 2023, less than $ 0.1 million, and less than $ 0.1 million, respectively, of noncontrolling interest

contributions were made by affiliates of our Sponsor representing their 0.1 % ownership in various investments.

These noncontrolling interests

will be allocated profit and loss in accordance with the respective operating agreements.

Relationship with Our Manager and Sponsor

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Our Manager and its affiliates, including our Sponsor, receive fees or reimbursements

in connection with our Primary Offering and the management of our investments.

in connection with our Public Offerings and the management of our investments.

following table summarizes the fees incurred on our behalf by, and expenses reimbursable to, our Manager and its affiliates, including

our Sponsor, in accordance with the terms of our relevant agreements with such parties (amounts in thousands):

Schedule of Non Cash Activity to

Related Party

Schedule of Non Cash Activity to Related Party

Years Ended December 31,

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Director compensation

Costs incurred

by the manager and its affiliates

Costs and expenses related parties

Capitalized costs included in the Consolidated Balance Sheets

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Insurance (3)

Total capitalized costs

wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor, which are included in General and

administrative in our consolidated statements of operations.

Capitalized costs

wage, overhead and other reimbursements to our Manager and its affiliates, including our

Sponsor, which are included in General and administrative in our consolidated statements

of operations.

in Property expenses in our consolidated statements of operations.

insurance premiums are prepaid and are included in Other assets in our consolidated balance sheets and are amortized monthly to

either Property expenses in our consolidated statements of operations or Real estate under construction in our consolidated balance

insurance premiums are prepaid and are included in Other assets in our consolidated balance

sheets and are amortized monthly to either Property expenses in our consolidated statements

of operations or Real estate under construction in our consolidated balance sheets.

following table summarizes amounts included in Due to affiliates in our consolidated balance sheets (amounts in thousands):

of Due to Related Party

Schedule of Due to Related Party

Amounts Due to affiliates

Management fees

Development fees

Employee cost sharing and reimbursements (1)

Management fees

Accrued interest

Director compensation

wage, overhead and other reimbursements to our Manager and its affiliates, including our Sponsor.

Due to affiliates

wage, overhead and other reimbursements to our Manager and its affiliates, including our

Offering Expenses

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held in connection with our Primary Offering, which occurred in October 2021.

were no organizational or Primary Offering expenses incurred by our Manager and its affiliates during the years ended December 31,

2023 and 2022.

were no organizational or Public Offering expenses incurred by our Manager and its affiliates during the years ended December 31, 2024

Operating Expenses

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services to us.

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 expenses are payable, 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.

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 expenses are payable, 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.

As of December 31, 2024,

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accordance with the terms of the development management agreement.

the years ended December 31, 2023, and 2022, we incurred development fees earned during the construction phase of $ 5.9 million,

and $ 4.3 million, respectively.

As of December 31, 2023 and 2022, $ 6.1 million and $ 4.3 million, respectively, remained due and

payable to our affiliates for development fees.

the years ended December 31, 2024, and 2023, we incurred development fees earned during the construction phase of $ 4.2 million, and $ 5.9

million, respectively.

As of December 31, 2024 and 2023, $ 2.5 million and $ 6.1 million, respectively, remained due and payable to our

affiliates for development fees.

the years ended December 31, 2024, and 2023, we incurred employee reimbursement expenditures to our affiliates acting as development

17 unchanged sentences

We did not incur any acquisition fees during the

years ended December 31, 2023 and 2022, since all investments acquired during these periods were, or will be, subject to payment

of development fees.

years ended December 31, 2024 and 2023, since all investments acquired during these periods were, or will be, subject to payment of development

immediate family members of our Chief Executive Officer have a passive indirect minority beneficial ownership interest in Belpointe Specialty

7 unchanged sentences

related to owner-controlled insurance programs, for which we pay an administration fee.

the years ended December 31, 2023, and 2022, we obtained insurance coverage and paid premiums in the aggregate amount of $ 2.6

million, and $ 4.8

million, respectively, from which Belpointe Specialty Insurance earned commissions and administrative fees of $ 0.2

million, and $ 0.5

million, respectively.

Insurance premiums are prepaid and are included in Other assets in our consolidated balance

various agreements we have engaged our Manager and its affiliates, including in certain cases our Sponsor, to provide certain services

that are essential to us, including asset management services, asset acquisition and disposition services, supervision of our Primary

Offering and any other offerings that we may conduct, as well as other administrative responsibilities for the Company, including, without

limitation, accounting services and investor relations services.

As a result of these relationships, we are dependent upon our Manager

and its affiliates, including our Sponsor.

In the event that our Manager and its affiliates are unable to provide us with the services

that we have engaged them to provide, we would be required to find alternative service providers.

the years ended December 31, 2024, and 2023, we obtained insurance coverage and paid premiums in the aggregate amount of $ 2.9 million,

and $ 2.6 million, respectively, from which Belpointe Specialty Insurance earned commissions and administrative fees of $ 0.2 million,

and $ 0.2 million, respectively.

Insurance premiums are prepaid and are included in Other assets in our consolidated balance sheets.

various agreements we have engaged our Manager and its affiliates, including in certain cases our Sponsor, to provide certain

services that are essential to us, including asset management services, asset acquisition and disposition services, supervision of

our Public Offerings and any other offerings that we may conduct, as well as other administrative responsibilities for the Company,

including, without limitation, accounting services and investor relations services.

As a result of these relationships, we are

dependent upon our Manager and its affiliates, including our Sponsor.

In the event that our Manager and its affiliates are unable to

provide us with the services that we have engaged them to provide, we would be required to find alternative service

5 – Real Estate, Net

11 unchanged sentences

August 24, 2023, through an indirect majority-owned subsidiary of our Operating Company, we acquired land located in Sarasota, Florida,

that was previously subject to a ground lease (See Note 3 – Leases for additional information) for a purchase price of $ 4.9 million,

inclusive of transaction costs of $ 0.1 million.

We accounted for the transaction as an asset acquisition.

As the acquired land is being

held for development, the total purchase price was allocated to Real estate under construction on the consolidated balance sheets as of

December 31, 2023.

of Real Estate During 2022

January 7, 2022, through an indirect majority-owned subsidiary of our Operating Company, we completed the acquisition of a 1.1 -acre

site, located in Mansfield, Connecticut, for a purchase price of $ 0.3 million, inclusive of transaction costs of less than $ 0.1 million.

Upon closing, the building was leased back to the seller for a term of 12 months.

This acquisition was deemed to be an asset acquisition

and all direct transaction costs were capitalized.

The purchase price was allocated to land and building of $ 0.1 million and $ 0.2 million,

respectively.

All related assets and liabilities, including identifiable intangibles, were recorded at their relative fair values based

on the purchase price and acquisition costs incurred.

May 9, 2022, through an indirect majority-owned subsidiary of our Operating Company, we completed the acquisition of a 0.265 -acre

site, located in Sarasota, Florida, for a purchase price of $ 1.5 million, inclusive of transaction costs of $ 0.1 million.

This acquisition

was deemed to be an asset acquisition and all direct transaction costs were capitalized.

The purchase price was allocated to land, building,

and an in-place lease intangible asset of $ 1.3 million, $ 0.1 million and less than $ 0.1 million, respectively.

All related assets and

liabilities, including identifiable intangibles, were recorded at their relative fair values based on the purchase price and acquisition

costs incurred.

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

(the “CMC Interest”) in CMC Storrs SPV, LLC (“CMC”), a holding company for an approximately 60 -acre site located

in Mansfield, Connecticut, 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 (a non-cash

financing activity during the year ended December 31, 2022).

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 resulting in the loss of $ 0.4 million

included in Other expense in the accompanying consolidated statement of operations for the year ended December 31, 2022.

The CMC JV Partner agreed to forfeit its interest in CMC as of March 24, 2023.

Our acquisition of the CMC Interest was deemed to be an

asset acquisition and all direct transaction costs were capitalized.

All related assets and liabilities, including identifiable intangibles,

were recorded at their relative fair values based on the purchase price and acquisition costs incurred.

As a result of our controlling

financial interest, we consolidate this development project.

The purchase price was allocated as follows (amounts in thousands):

of Real Estate Properties

As of June 28, 2022

Intangible asset

Real estate under construction

Total real estate

Accumulated depreciation and amortization

Real estate, net

Cash and cash equivalents

Other assets (1)

Accounts payable

Accrued expenses and other liabilities

Total liabilities

Amounts attributable to noncontrolling interests (2)

Total net assets

restricted cash of $ 1.4 million.

a non-cash financing activity during the year ended December 31, 2022.

October 13, 2022, through an indirect majority-owned subsidiary of our Operating Company, we completed the acquisition of an approximately

19 -acre site, located in Mansfield, Connecticut, for a purchase price of $ 5.5 million, inclusive of transaction costs of $ 0.1 million.

This acquisition was deemed to be an asset acquisition and all direct transaction costs were capitalized.

The purchase price was solely

allocated to land, and was recorded at the relative fair value based on the purchase price and acquisition costs incurred.

December 2, 2022, an indirect majority-owned subsidiary of our Operating Company acquired a 99 % controlling interest in a jointly-owned

investment with an unaffiliated third party to acquire an approximately 5.9 -acre site, located in Nashville, Tennessee (“Nashville

4”) for a purchase price of $ 16.4 million, inclusive of transaction costs $ 0.2 million.

This acquisition was deemed to be an

asset acquisition and all direct transaction costs were capitalized.

The purchase price was allocated to land, building, intangible assets

and below-market lease liability of $ 15.2 million, $ 0.8 million, $ 0.6 million and $ 0.4 million, respectively.

All related assets and

liabilities, including identifiable intangibles, were recorded at their relative fair values based on the purchase price and acquisition

costs incurred.

that was previously subject to a ground lease for a purchase price of $ 4.9 million, inclusive of transaction costs of $ 0.1 million.

accounted for the transaction as an asset acquisition.

As the acquired land is being held for development, the total purchase price was

allocated to Real estate under construction on the consolidated balance sheets.

Estate Under Construction

2 unchanged sentences

Beginning balance

Placed in service

Capitalized costs (1) (2)

Land held for development (3)

Impairment charges (4)

Capitalized interest

Impairment charges (3)

Land held for development (4)

Ending balance

development fees and employee reimbursement expenditures.

See “ Note 4 – Related Party Agreements ” for additional

details regarding our transactions with related parties.

direct and indirect project costs to the construction and development of real estate projects, including but not limited to loan

fees, property taxes and insurance, incurred of $ 3.4 million and $ 2.2 million for the years ended December 31, 2023 and 2022,

respectively.

the acquisition of land located in Sarasota, Florida during the year ended December 31, 2023 as discussed above.

Additionally,

includes ground lease payments and straight-line rent adjustments incurred of $ 0.1 million and $ 0.8 million for the years ended December 31,

2023 and 2022, respectively.

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 estimated fair market value.

See “Note 4 – Related Party Agreements” for additional details regarding our transactions with related parties.

direct and indirect project costs to the construction and development of real estate projects,

including but not limited to loan fees, property taxes and insurance, incurred of $ 5.4 million

and $ 3.4 million for the years ended December 31, 2024 and 2023, respectively.

(3) Impairments

for the years ended December 31, 2024 and 2023 are 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 estimated fair market value.

the acquisition of land located in Sarasota, Florida during the year ended December 31, 2023

as discussed above.

the year ended December 31, 2024, our 1991 Main Street, Sarasota, Florida (“Aster & Links”) development project reached

substantial completion, and as a result, we reclassified $ 235.7 million from Real estate under construction to Land ($ 12.3 million),

Building and improvements ($ 220.8 million), and Furniture, fixtures and equipment ($ 2.6 million) on our consolidated balance sheets.

estate under construction includes non-cash investing activity of $ 21.0 million for year ended December 31, 2024 (inclusive of unpaid

development fees of $ 2.2 million and unpaid employee cost sharing and reimbursements of $ 0.9 million) and $ 27.6 million for the year

ended December 31, 2022 (inclusive of land contributed by one of the CMC JV partners, unpaid development fees of $ 4.3 million and

unpaid employee cost sharing and reimbursements of $ 0.3 million).

Depreciation expense was $ 0.8 million, and $ 0.7 million for the years ended December 31, 2023, and 2022, respectively,

and is included in Depreciation and amortization in our consolidated statements of operations.

ended December 31, 2023 (inclusive of unpaid development fees of $ 6.1 million and unpaid employee cost sharing and reimbursements of

$ 1.3 million).

expense was $ 4.0 million, and $ 0.8 million for the years ended December 31, 2024, and 2023, respectively, and is included in Depreciation

and amortization in our consolidated statements of operations.

6 – Intangible Assets and Liabilities

15 unchanged sentences

Total intangible liabilities

lease intangible assets recorded for acquisitions of real estate during 2022, noted above, are included in Intangible assets in our consolidated

balance sheets and are being amortized over a weighted average lease term of approximately 1.1 years.

See “ Note 5 – Real Estate, Net ” for additional details regarding our acquisitions of real estate during 2022.

the years ended December 31, 2024, and 2023, the amortization of in-place lease intangible assets was $ 0.1 million, and $ 1.2 million,

respectively, and is included in Depreciation and amortization in our consolidated statements of operations.

below-market lease liabilities recorded for acquisitions of real estate during 2022, noted above, are included in Lease liabilities in

our consolidated balance sheets and are being amortized over a weighted average lease term of approximately 1.0 years.

See “ Note 5 – Real Estate, Net ” for additional details regarding our acquisitions of real estate during 2022.

the years ended December 31, 2024, and 2023, the amortization of below-market lease liability was $ 0.1 million and $ 0.8 million,

1 unchanged sentence

on the intangible assets and liabilities recorded as of December 31, 2024, scheduled annual net amortization of intangibles for

the next five calendar years and thereafter is as follows (in thousands):

Schedule of Annual Net Amortization of Intangibles

the next five calendar years and thereafter is as follows (amounts in thousands):

Schedule of Annual Net Amortization

of Intangibles

Years Ending December 31,

Increase in Rental Revenue

Increase to Amortization

7 – Loans Receivable

described in greater detail in “ Note 4 - Related Party Arrangements ”, pursuant to the terms of the BI

Secured Note, Belpointe REIT provided BI Holding with a $ 24.8

million loan, bearing interest at an annual rate

and due and payable at maturity on September 14, 2022.

Effective November 30, 2021, we acquired the 1991 Main Interest from BI Holding

in consideration of its payment to us of $ 0.3

million in interest that had accrued under the

terms of the BI Secured Note through November 30, 2021, and in satisfaction of its remaining obligations under the BI Secured Note.

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

promissory note (the “CMC Note”) secured by a Mortgage Deed and Security Agreement on a property owned by CMC located in

Mansfield, Connecticut.

CMC used the proceeds from the CMC Loan to enter into a Redemption Agreement with BPOZ 497 Middle Holding, LLC

(“BPOZ 497”), an indirect majority-owned subsidiary of Belpointe REIT, to redeem BPOZ 497’s preferred equity investment

in CMC in furtherance of our Transaction with Belpointe REIT.

Interest accrued on the CMC Note at an annual rate of 12.0 %, and was due

and payable at maturity on June 27, 2022.

On June 28, 2022, CMC repaid the CMC Note in full, including accrued interest of

$ 0.3 million.

January 3, 2022, we provided a $ 30.0 million commercial mortgage loan to Norpointe, LLC (“Norpointe”) an affiliate

of our Chief Executive Officer, pursuant to the terms of a secured promissory note bearing interest at an annual rate of 5.0 %, was

due and payable on December 31, 2022 (the “Norpointe Loan”).

On June 28, 2022, for purposes of complying with the

qualified opportunity fund requirements under the Internal Revenue Code of 1986, as amended (the “Code”), and related

Treasury Regulations, we restructured the Norpointe Loan through an indirect majority owned subsidiary (the “Restructured

Norpointe Loan”).

The Restructured Norpointe Loan was evidenced by a secured promissory note bearing interest at an annual

rate of 5.0 %, due and payable on June 28, 2023.

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

including accrued interest of less than $ 0.1 million.

See “ Note 4 – Related Party

Arrangements ” for additional details regarding our transactions with Norpointe.

February 23, 2022, we provided an approximately $ 5.0 million commercial mortgage loan to Visco Propco, LLC (“Visco”) pursuant

to the terms of a secured promissory note bearing interest at an annual rate of 6.0 %, due and payable on February 18, 2023 (the

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

income from loans receivable was zero , and $ 1.8 million, for the years ended December 31, 2023, and 2022, respectively, and is

included in Interest income in our consolidated statements of operations.

Rental Revenue

7 – Debt, Net

May 12, 2023, our indirect majority-owned subsidiary (the “Mortgage Borrower”) entered into a variable-rate construction

loan agreement (the “1991 Main Construction Loan Agreement”) for up to $ 130.0

million in principal amount (the “1991 Main Construction Loan”) with Bank OZK (the “Mortgage Lender”), which

is secured by our investment in 1991 Main Street, Sarasota, Florida (“1991 Main”).

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 % ,

and will be used to fund the development of 1991 Main.

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.

As of December 31, 2023, we have drawn down $ 23.1

million on the 1991 Main Construction Loan, and have incurred interest expense of $ 0.1

million which was capitalized to Real estate under construction in our consolidated balance sheets.

We incurred deferred financing

costs of $ 4.0

million (inclusive of debt discount of $ 1.4

million) for the 1991 Main Construction Loan which are reflected as a component of Debt, net in our consolidated balance sheets as of

December 31, 2023.

During the construction period, the deferred financing costs are amortized to Real estate under construction

in our consolidated balance sheets.

As of December 31, 2023, the accumulated amortization for deferred financing costs was

In connection with the 1991 Main Construction Loan, we provided a carveout

guaranty to the Lender (the “Guaranty”) pursuant to which we guaranteed the Borrower’s obligations to the Lender with

respect to certain non-recourse carveout events, such as “bad acts,” environmental conditions, and violations of certain provisions

of the loan documents.

The Guaranty contains financial covenants requiring that we maintain liquid assets of no less than $ 20.0 million

and a net worth of no less than $ 130.0 million.

As of December 31, 2023, the Company was in compliance with all covenants under the

with the Borrower, we also provided a customary environmental indemnity agreement to the Lender pursuant to which we agreed to protect,

defend, indemnify, release and hold harmless the Lender from and against certain environmental liabilities related to 1991 Main.

Debt Transactions

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”) with various lenders.

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

(the “900 8th Land Loan”) with KHRE SMA Funding, LLC.

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

principal amount (the “1991 Main Mezzanine Loan”) with Southern Realty Trust Holdings, LLC.

Debt Transactions

May 12, 2023, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement for up to $ 130.0 million

in principal amount (the “1991 Main Construction Loan”) with Bank OZK.

following table details our Debt, net (dollars in thousands):

Interest Rate

Maturity Date

Maximum Facility

Carrying Value as of

Interest Rate

Maturity Date

Maximum Facility

Fixed rate loans:

1991 Main Mezzanine

900 8th Land Loan (2)

Variable rate loans:

1991 Main Construction Loan

First Construction Loan (5)

Unamortized debt issuance costs

Unamortized debt discount

contains a one-year extension option, subject to certain restrictions.

900 8th Land Loan contains two six-month extension options, subject to certain restrictions.

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.

Undrawn amounts were held back at closing and are

being maintained by an administrative agent appointed by the lender (the “Reserves”).

As interest and other obligations accrue, the Reserves balance will be reduced and be added

to the principal outstanding on the 1991 Main Mezzanine Loan.

As of December 31, 2024,

the Reserves balance was $ 10.1 million.

under the 1991 Main 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 %.

To mitigate our exposure to increases to the one-month SOFR,

we have obtained an interest rate cap (see Note 9 – Derivative Instruments ).

1000 First Construction Loan contains two one-year extension options, subject to certain

restrictions.

Advances under the 1000 First Construction Loan bear 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

To mitigate our exposure to increases to the one-month SOFR, we have obtained an

interest rate cap (see Note 9 – Derivative Instruments ).

following table summarizes the scheduled future principal payments under our debt arrangements as of December 31, 2024 (amounts

in thousands):

Schedule of Future Principal Payments

Year ended December 31,

paid, net of capitalized interest for the years ended December 31, 2024 and 2023, was $ 7.5 million and zero , respectively.

During the year ended December 31, 2024 we capitalized unpaid lender fees of less than $ 0.1 million, which is a non-cash financing activity.

of deferred financing costs for the years ended December 31, 2024 and 2023, was $ 2.3 million and $ 0.6 million, respectively,

of which $ 1.0 million and $ 0.6 million was capitalized, respectively.

and Covenants

of our indebtedness agreements are secured by the individual underlying real estate investments serving as collateral.

In connection

with certain agreements, we provided completion guarantees, which, among other things, guarantee completion of the work at each individual

construction project, as well as carveout guarantees pursuant to which we guarantee the borrowers obligations with respect to certain

non-recourse carveout events, such as “bad acts,” environmental conditions, and violations of certain provisions of the loan

We also provided a customary environmental indemnity agreement to the certain lenders pursuant to which we agreed to protect,

defend, indemnify, release and hold harmless such lenders from and against certain environmental liabilities related to the real estate

investments for which they apply.

are subject to various financial and operational covenants which includes, but is not limited to, maintaining liquid assets of no less

than $20.0 million and a net worth of no less than $130.0 million .

As of December 31, 2024 and 2023, we were in compliance with

all of our loan covenants.

8 – Fair Value of Financial Instruments

21 unchanged sentences

Fair Value Measurements

measured at fair value on a recurring basis is comprised of our interest rate cap (see Note 10 – Derivative Instruments).

The valuation of our interest rate cap is

prepared by an independent third-party and is classified as Level 2 in the fair value hierarchy, as the valuation is approximated

using market values of similar instruments in active markets.

measured at fair value on a recurring basis is comprised of our interest rate caps (see Note 9 – Derivative Instruments ).

The valuation

of our interest rate caps are prepared by an independent third-party and is classified as Level 2 in the fair value hierarchy, as the

valuation is approximated using market values of similar instruments in active markets.

following table sets forth the carrying value and estimated fair value of our debt arrangements as of December 31, 2024 and 2023

(amounts in thousands):

Carrying Value and Estimated Fair Value

Total indebtedness

disclosed are net of unamortized debt issuance costs and debt discounts.

fair value of our indebtedness as of December 31, 2024 was prepared by an independent

third-party using a discounted cash flow analysis, reviewed by management utilizing estimated

credit spreads, and observable market interest rates.

fair value of our debt as of December 31, 2023 approximated its carrying value.

9 – Derivative Instruments

1991 Main Construction Loan Agreement required the Borrower to enter into an interest rate cap agreement with a one-month SOFR rate

based strike price of 5.07 %

(the “1991 Main Interest Rate Cap”).

The notional amount of the 1991 Main Interest Rate Cap increases in accordance with

the schedule set forth in the interest rate cap agreement up to a maximum notional amount of $ 112.5

following table details our derivative financial instrument as of December 31, 2023 (amounts in thousands):

of Table Derivative Financial Instrument

connection with our variable rate loan agreements ( Note 7 – Debt, Net ), we are required to obtain and maintain interest rate protection

in the form of interest rate caps during the term of the loans to effectively limit the impact of increases in the one-month SOFR.

are subject to credit risk by the counterparty of these derivative instruments in the event of non-performance under the derivative contracts,

however we believe the risk to be minimal.

following table details our derivative financial instrument as of December 31, 2024 (dollars in thousands):

Schedule of Table Derivative

Financial Instrument

Interest Rate Derivative

1 unchanged sentence

Maturity Date

Fair Value (1)

1991 Main Interest Rate Cap

in Other assets in our consolidated balance sheets.

following table details the effect of our derivative financial instrument on our consolidated statement of operations for the

year ended December 31, 2023 (amounts in thousands):

of Table Details Effect Derivative Financial Instrument

Interest rate cap

following table details the fair value of our derivative financial instruments (amounts in thousands):

Schedule of Fair Value of Our

Derivative Financial Instruments

Value as of December 31, (1)

Interest Rate Derivative

Interest rate caps

are included in Other assets in our consolidated balance sheets.

following table details the effect of our derivative financial instrument on our consolidated statement of operations for the years ended

December 31, 2024 and 2023 (in thousands):

Schedule of Table Details Effect Derivative Financial Instrument

Years Ended December 31,

Interest Rate Derivative

Location of Gain (Loss)

1991 Main Interest Rate Cap

Interest rate caps

Other expense

10 unchanged sentences

there were 3,664,173 Class A units, 100,000 Class B units and one Class M unit issued and outstanding.

As of December 31,

2022, there were 3,523,449 Class A units, 100,000 Class B units and one Class M unit issued and outstanding.

As of December 31, 2023, there

were 3,622,399 Class A units, 100,000 Class B units and one Class M unit issued and outstanding.

payment in full of any consideration payable with respect to the initial issuance of our Class A units, the holder thereof will not be

42 unchanged sentences

11 – Commitments and Contingencies

of December 31, 2023, the Company is not subject to any material litigation nor is the Company aware of any material litigation

threatened against it.

connection with the development of our commercial real estate assets, we have entered into separate construction management

agreements for each asset which contain terms and conditions that are customary for the related scope of work.

As of December 31,

2023, we have two development projects with an aggregate unfunded commitment of $ 102.1 million.

As of December 31, 2023, $ 19.2

million, inclusive of retainage of $ 12.2 million, is outstanding and payable in connection with these developments.

time to time the Company may become involved in certain non-material litigation or other claims arising in the ordinary course of business.

See Note — 13 Subsequent Events .

of December 31, 2024, the Company is not subject to any material litigation nor is the Company aware of any material litigation threatened

connection with the development of our commercial real estate assets, we have entered into separate construction management agreements

for each asset which contain terms and conditions that are customary for the related scope of work.

As of December 31, 2024, we have

two development projects with an aggregate unfunded commitment of $ 59.9 million.

As of December 31, 2024, $ 19.6 million, inclusive

of retainage of $ 13.0 million, is outstanding and payable in connection with these developments.

12 – Segment Reporting

identify our operating segments based on the way we organize and evaluate our business.

As a result of the placement of Aster &

Links in service and the commencement of operations during the year ended December 31, 2024, we have revised our reportable segments

to include two

distinct segments as follows:

Segment — which includes properties such as office, retail centers, and warehouses

(the “Commercial Segment”).

For reporting purposes, we aggregate these asset

types into the Commercial Segment given their similar characteristics in property management

Segment — which includes properties that blend both residential and retail components

within a single real estate asset (the “Mixed-use Segment”).

For reporting purposes,

we aggregate these business components into the Mixed-use Segment due to their functional

integration and the fact that they are evaluated as a unified asset.

Chief Executive Officer is our Chief Operating Decision Maker (“CODM”).

Our CODM reviews financial information presented on an

operating segment basis for purposes of allocating resources, making decisions and assessing financial performance.

believe 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 ( Note 4 – Related Party Arrangements ), depreciation

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

following table details the results of Segment NOI, reconciled to our consolidated statement of operations for the years ended December 31,

2024, and 2023 (amounts in thousands):

Schedule of Segment NOI Reconciled to

Consolidated Statement of Operations

Commercial Segment

Mixed-use Segment

Commercial Segment

Mixed-use Segment

Year Ended December 31, 2024

Year Ended December 31, 2023

Commercial Segment

Mixed-use Segment

Commercial Segment

Mixed-use Segment

Rental 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

Interest income

Other expense

Loss before income taxes

Provision for income taxes

Net loss attributable to noncontrolling interests

Net loss attributable to Belpointe PREP, LLC

following table details the significant expense categories by segment for the years ended December 31, 2024, and 2023 (amounts in thousands):

Schedule of Significant Expense

Categories by Segment

Commercial Segment

Mixed-use Segment

Commercial Segment

Mixed-use Segment

Years Ended December 31,

Commercial Segment

Mixed-use Segment

Commercial Segment

Mixed-use Segment

Property expenses:

Real estate taxes

Management fees

Repairs & maintenance

Other property expenses

Total property expenses

The following table details our total assets

by segment as of December 31, 2024, and 2023 (amounts in thousands):

Schedule of Total Assets By Segment

Commercial Segment

Mixed-use Segment

Other non-segment assets (1)

(1) Other non-segment assets primarily consist of cash and cash equivalents not attributable to specific reportable segments.

13 – Subsequent Events

has evaluated subsequent events to determine if events or transactions occurring after the balance sheet date through the date the

audited consolidated financial statements were issued require potential adjustment to or disclosure in the audited consolidated

financial statements and has concluded that, except as set forth below and disclosed herein, all such events or transactions that would require

recognition or disclosure have been recognized or disclosed.

Loan Agreement

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 Loan”) with Southern Realty Trust Holdings, LLC (the “Mezzanine

The 1991 Main Mezzanine Loan bears interest at a rate of 13.0 % per

annum and is secured by our investment in 1991 Main.

Advances under the 1991 Main Mezzanine Loan may be used to reimburse us for

certain costs and expenses incurred in relation to, and to fund the continued development of, 1991 Main.

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.

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 (the “Reserves”).

We also provided the Mezzanine Lender with (i) a completion guaranty, which, among other things, guarantees completion of the work on 1991 Main, and (ii) a carveout

guaranty, which, among other things, indemnifies the Mezzanine Lender for losses resulting from certain “bad acts,”

insolvency, environmental conditions, violations of the terms of the 1991 Main Mezzanine Loan and certain provisions of the 1991 Main

Construction Loan Agreement (collectively, the “Mezzanine Guarantees”).

Similar to the Carveout Guaranty, we provided to the Mortgage Lender, the Mezzanine Guarantees

contain financial covenants requiring that we maintain liquid assets of no less than $ 20.0 million and a net worth of no less than $ 130.0

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

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

February 8 2024, the LH II Loan was repaid in full, including accrued interest (see Note 4 – Related Party Arrangements).

the date of this Form 10-K, we drew down $ 17.0 million on the 1991 Main Construction Loan.

Management’s Evaluation

has evaluated subsequent events to determine if events or transactions occurring after the balance sheet date through the date the audited

consolidated financial statements were issued require potential adjustment to or disclosure in the audited consolidated financial statements

and has concluded that, except as set forth below, all such events or transactions that would require recognition

or disclosure have been recognized or disclosed.

The Galinn Fund LLC

On December 5, 2024, the Galinn Fund LLC,

a New York limited liability company (“Galinn”), filed a complaint in Connecticut State Superior Court naming CMC Storrs SPV,

LLC (“CMC”), the holding company for our investment property located at 497-501 Middle Turnpike, Storrs, Connecticut (“497-501

Middle”), as a defendant, alongside Chen Ji, an individual (“Chen”), and two additional entities (the “Guarantors”).

In the complaint Galinn alleges, among other

things, that on May 24, 2024, Chen, on behalf of CMC, executed a mortgage note (the “Note”) in the principal amount of $ 3.0

million (the “Loan”), which was secured in part by a mortgage against 497-501 Middle (the “Mortgage”).

further alleges that CMC is in default under both the Note and Mortgage for failure to make payments when due.

Galinn is seeking to foreclose

on the Mortgage and damages against CMC and the Guarantors.

In March 2020, when we first acquired an

equity interest in CMC, Chen was an affiliate of the entity, however, he thereafter exited the investment and is no longer in any way

affiliated with or authorized to act on behalf of CMC.

We maintain that the Loan was obtained as a result of Chen’s fraud and Galinn’s

negligence, and had Galinn done adequate due diligence, or reviewed the publicly available filings on the State of Connecticut’s

Business Records website, or even a basic Google search, Chen’s lack of authority would have been readily apparent prior to Galinn

having made the Loan.

We dispute any liability in this litigation,

believe we have substantial defenses to Galinn’s claims, and are vigorously defending the matter.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures.

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 8. Financial Statements and Supplementary Data