CMCT 10-K & 10-Q changes, risk factors and insider trading

•If a major tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which could have a material adverse effect on our financial condition and ability to pay distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

•Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

•Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

Stockholders should carefully consider the risks described in this section and the other information included in this Annual Report on Form 10-K in evaluating the Company and our business. The information in this section should be read in conjunction with Part II, “Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes in Part II, “Item 8—Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. If any of the risks described in this section actually occur, our business, financial condition and results of operations could be materially and adversely affected, actual results could differ materially from those reflected in forward-looking statements or from our historical results and stockholders may lose all or part of their investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. This discussion of risk factors includes many forward-looking statements. For cautions about relying on forward-looking statements, please refer to the section entitled “Forward-Looking Statements” immediately prior to “Item 1—Business” of this Annual Report on Form 10-K.

Our executive officers also serve as officers or employees of the Administrator and/or the Operator or other applicable affiliates of CIM Group. The Administrator and the Operator have significant discretion as to the implementation of acquisitions and operating policies and strategies on behalf of us and CIM Urban. Accordingly, we believe that our success depends to a significant extent upon the efforts, experience, diligence, skill and network of business contacts of the officers and key personnel of the Administrator, the Operator and the other applicable affiliates of CIM Group. The departure of any of these officers or key personnel could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We also depend on access to, and the diligence, skill and network of, business contacts of the professionals within CIM Group and the information and deal flow generated by its investment professionals in the course of their acquisitions and onsite property management and leasing activities. The departure of any of these individuals, or of a significant number of the investment professionals or principals of CIM Group, could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock. We cannot guarantee that we will continue to have access to CIM Group’s investment professionals or its information and deal flow.

If we experience a loss that is uninsured or that exceeds policy limits, we could incur significant costs and lose the capital deployed in the damaged properties as well as the anticipated future cash flows from those properties. Further, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if the properties were irreparable. In addition, our properties may not be able to be rebuilt to their existing height or size at their existing location under current land-use laws and policies. In the event that we experience a substantial or comprehensive loss of one of our properties, we may not be able to rebuild such property to its existing specifications and otherwise may have to upgrade such property to meet current code requirements. Any of the factors described above could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We face cybersecurity risks and risks associated with security breaches or disruptions, such as cyberattacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, social engineering and phishing schemes or persons inside our organization, the Operator and/or Administrator. The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusions, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. The occurrence of a cybersecurity incident may result in disrupted operations, misstated or unreliable financial data, misappropriation of assets, compromise or corruption of confidential information collected in the course of conducting our business, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation, regulatory enforcement, damage to our tenant and stockholder relationships, material harm to our financial condition, cash flows and the market price of our securities or other adverse effects. Our Operator’s and Administrator’s IT networks and related systems are essential to the operations of our business and our ability to perform day-to-day operations (including managing our building systems). Our Operator and Administrator have implemented processes, procedures and internal controls to help mitigate cybersecurity incidents, but these measures do not guarantee that a cybersecurity incident involving our Operator or Administrator will not occur or that attempted security breaches or disruptions would not be successful or damaging. A cybersecurity incident involving our Operator’s or Administrator’s IT networks and related systems could materially adversely impact our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

An effective system of internal control over financial reporting is necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. As part of our ongoing monitoring of internal controls, we may discover material weaknesses or significant deficiencies in our internal controls that we believe require remediation. If we discover such weaknesses, we will make efforts to improve our internal controls in a timely manner. Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can only provide reasonable, not absolute, assurance that the objectives of the system are met. Any failure to maintain effective internal controls, or implement any necessary improvements in a timely manner, could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock, or cause us to not meet our reporting obligations, which could affect our ability to maintain our listing of Common Stock on Nasdaq and the TASE.Nasdaq. Ineffective internal controls could also cause holders of our securities to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our securities.

We believe closures of businesses and stay in place orders and the resulting remote working arrangements for non-essential personnel in response to the COVID-19 pandemic has resulted in long-term changed work practices that could negatively impact us and our business. For example, the increased adoption of and familiarity with remote work practices, and the recent increase in tenants seeking to sublease their leased space, has resulted in decreased demand for office space. Further, prior to the onset of the COVID-19 pandemic, telecommuting, flexible work schedules, open workspaces and teleconferencing had become increasingly common and there was an increasing trend among some businesses to utilize shared office space and co-working spaces. As a result, there has been a general trend in office real estate for tenants to decrease the space they occupy per employee. Our tenants may elect to not renew their leases, or to renew them for less space than they currently occupy, which could increase vacancy, place downward pressure on occupancy, rental rates and income and property valuation. The need to reconfigure leased office space, either in response to the COVID-19 pandemic, to new tenants’ needs, to modify utilization or for other reasons, may impact space requirements and also may require us to spend increased amounts for tenant improvements. If substantial reconfiguration of the tenant’s space is required, the tenant may find it more advantageous to relocate than to renew its lease and renovate the existing space. All of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flow our or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We and our lending subsidiaries are partiesparty to the Master Services Agreement pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administrative services to us and all of our direct and indirect subsidiaries. We are obligated to pay the Administrator the Revised Incentive Fee (see “Item 1—Business—Master Services Agreement”) and market rate transaction fees for transactional and other services that the Administrator elects to provide to us. Pursuant to the terms of the Master Services Agreement, the Administrator has the right to provide any transactional services to us that we would otherwise engage a third party to provide.

Each of the Administrator, under the Master Services Agreement, and the Operator, under the Investment Management Agreement, has broad discretion and authority over our day-to-day operations and deployment of our capital in assets. While our Board of Directors periodically reviews the performance of our businesses, our Board of Directors does not review all activities conducted by the Administrator and the Operator, and may not review certain proposed acquisitions, dispositions or the implementation of other strategic initiatives before they occur. In addition, in reviewing our business operations, our directors may rely on information provided to them by the Administrator or the Operator, as the case may be. The Administrator or the Operator may cause us to enter into significant transactions or undertake significant activities that may be difficult or impossible to unwind, exit or otherwise remediate. Each of the Administrator and the Operator has great latitude in the implementation of our strategies, including determining the types of assets that are appropriate for us. The decisions of the Administrator and the Operator could therefore result in losses or returns that are substantially below our expectations, which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

While we are principally focused on both premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office real assets in vibrantmarkets with similar business and improvingemployment metropolitancharacteristics communitiesto throughoutour themultifamily United Statesinvestments (including improving and developing such assets), we may also participate more actively in other CIM Group real estate strategies and product types, including, but not limited to, multifamily residential and/or real estate debt, in order to broaden our participation in CIM Group’s platform and capabilities for the benefit of all classes of stockholders. This may include, without limitation, engaging in real estate development activities as well as investing in other product types directly, side-by-side with one or more funds of CIM Group, through direct deployment of capital in a CIM Group real estate or debt fund, or deploying capital in or originating loans that are secured directly or indirectly by properties primarily located in Qualified Communities that meet our strategy. Such loans may include limited and/or non-recourse junior (mezzanine, B-note or 2nd lien) and senior acquisition, bridge or repositioning loans.fund. Stockholders will not have any approval rights with respect to any expansion or change in strategies or future composition of our assets. Our Operator determines our policies regarding deployment of capital into real estate assets, financing, growth and debt capitalization. Our Operator may change these and other policies without a vote of our stockholders. In addition, there can be no assurance that the Operator will follow its acquisition process in relation to the identification and acquisition or origination of prospective assets. As a result, the nature of the composition of our assets could change without the consent of our stockholders. Changes in the Operator’s acquisition process and/or philosophy may result in, among other things, inferior due diligence and transaction standards, which may adversely affect the performance of our assets. If we are unsuccessful in expanding into new real estate activities or our changes in strategies or future deployment of our capital turn out to be unsuccessful, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We also are permitted to purchase and we currently maintain insurance or provide similar protection on behalf of any directors, officers, employees and agents, including our Administrator and its affiliates, against any liability asserted which was incurred in any such capacity with us or arising out of such status. This may result in us having to expend significant funds, which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

During periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or an increased incidence of defaults under existing leases. If we cannot operate our properties so as to meet our financial expectations, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock may be negatively impacted.

Because our properties in California represent a significant portion of our portfolio by aggregate net operating income and square feet, we are exposed to greater economic risks than if we owned a more geographically diverse portfolio. We are susceptible to adverse developments in the California economic and regulatory environments (such as business layoffs or downsizing, industry slowdowns, relocations of businesses, increases in real estate and other taxes, costs of complying with governmental regulations or increased regulation and other factors) as well as natural disasters that occur in these areas (such as earthquakes, floods, fires and other events). In addition, the State of California is regarded as more litigious and more highly regulated and taxed than many states, which may reduce demand for office and hotel space in California. Any adverse developments in the economy or real estate markets in California, any decrease in demand for office and hotel space resulting from the California regulatory or business environments or any reduced need for apartment units resulting from increased relocation out of California could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

In periods when the capital and credit markets experience significant volatility, demand for our properties and the overall availability and cost of credit may be adversely affected. No assurances can be given that the capital and credit market conditions will not have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

FollowingAdverse developments in the banking industry, such as the 2023 bank failures in the United States and acquisitions of distressed financial institutions in the United States and internationallyinternationally, can result in 2023, there has been uncertainty and turmoil in credit markets globally, which may cause financial institutions to reduce their lending, which in turn could adversely affect our ability to access capital markets for our liquidity needs and/or cause our cost of capital to increase.

We will endeavor to limit uninsured deposits that we have with banks. Nevertheless, if a bank in which we hold funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such funds or be subject to a delay in accessing all or a portion of such uninsured funds. In addition, we have undrawn capacities under our 2022 Credit Facility and certain of our mortgages. Any such loss of funds on deposit, lack of access to funds held at banks or inability to borrow from any of our lenders could adversely impact our short-term liquidity and ability to meet our operating expenses or working capital needs.

We are, and expect that we will continue to be, subject to a degree of tenant concentration at certain of our properties and/or across multiple properties. Kaiser, which occupies space in one of our Oakland, California properties, accounted for 22.9%23.4% of our annualized rental income for the year ended December 31, 2024.2025. In the event that a tenant occupying a significant portion of one or more of our properties or whose rental income represents a significant portion of the rental revenue at such property or properties were to experience financial weakness or file bankruptcy, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

If a major tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which could have a material adverse effect on our financial condition and ability to pay distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

The bankruptcy or insolvency of our tenants may adversely affect the income produced by our properties. Under bankruptcy law, a tenant cannot be evicted solely because of its bankruptcy and has the option to assume or reject any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (other than to the extent of any collateral securing the claim) will be treated as a general unsecured claim. Our claim against the bankrupt tenant for unpaid and future rent will be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease, and it is unlikely that a bankrupt tenant that rejects its lease would pay in full amounts it owes us under the lease. Even if a lease is assumed and brought current, we still run the risk that a tenant could condition lease assumption on a restructuring of certain terms, including rent, that would have an adverse impact on us. Any shortfall resulting from the bankruptcy of one or more of our tenants could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

In connection with the acquisition of properties, we may assume existing liabilities, some of which may have been unknown or unquantifiable at the time of the acquisition of assets. Unknown liabilities might include liabilities for cleanup or remediation of undisclosed environmental conditions, claims of tenants or other persons dealing with the sellers prior to our acquisition of the properties, tax liabilities, and accrued but unpaid liabilities whether incurred in the ordinary course of business or otherwise. If the magnitude of such unknown liabilities is high, either singly or in the aggregate, it could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

As of December 31, 2024,2025, 29.0%25.2% of the rentable square footage of our office portfolio was available for lease, and 11.9%11.1% of the occupied square footage of such office properties was scheduled to expire in 2025.2026. The local economic environment may make the renewal of these leases more difficult, or renewal may occur at rental rates equal to or below existing rental rates. As a result, portions of our office properties may remain vacant for extended periods of time. In addition, we may have to offer substantial rent abatements, tenant improvements, concessions, early termination rights or below-market renewal options to attract new tenants or retain existing tenants. The factors described above could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

An adverse change in lodging fundamentals could result in returns that are substantially below our expectations or result in losses, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

Our hotel operations are sensitive to the willingness and ability of our guests to travel. The outbreak of highly infectious, contagious or widespread diseases or global health emergencies will likely cause decreases in both discretionary and business travel and reduce the number of guests that visit our hotel. The degree of any decrease in travel will likely be worsened in the event such a disease causes a disruption in air or other forms of travel used by guests of our hotel. In the event a person having such a disease visits or works at our hotel, the operations at our hotel will likely be disrupted. For example, the spread of COVID-19 in the United States and the resulting restrictions on and cancellations of travel, meetings and social gatherings negatively impacted the operations of our hotel in Sacramento, California in 2020, 2021 and part of 2022.

The lodging industry is seasonal in nature, which may cause quarterly fluctuations in our revenues, occupancy levels, room rates, operating expenses and cash flows. Our quarterly earnings may be adversely affected by factors outside our control, including timing of holidays, weather conditions, poor economic factors and competition in the area of our hotel. We can provide no assurances that our cash flows will be sufficient to offset any shortfalls that occur as a result of these fluctuations. As a result, we may have to enter into short-term borrowings in certain quarters in order to make distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock, and we can provide no assurances that such borrowings will be available on favorable terms, if at all. Consequently, volatility in our financial performance resulting from the seasonality of the lodging industry could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

Some of our hotel rooms are booked through online travel intermediaries, including, but not limited to, Travelocity.com, Expedia.com and Priceline.com. As online bookings increase, these intermediaries may demand higher commissions, reduced room rates or other significant contract concessions. Moreover, some of these online travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. These intermediaries hope that consumers will develop brand loyalties to their reservations systems rather than to particular hotels. Although most of the business for our hotel is expected to be derived from consumer direct and traditional hotel channels, such as travel agencies, corporate accounts, meeting planners and recognized wholesale operators, if the amount of sales made through online intermediaries increases significantly, room revenues may be lower than expected, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

The increased use of teleconference and video-conference technology by businesses could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location. To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

When residents decide to leave our apartments, whether because their leases are not renewed or they leave prior to their lease expiration date, we may not be able to release their apartment units. Even if leases are renewed or we can release the apartment units, the terms of renewal or reletting may be less favorable than current lease terms. Furthermore, because our apartment leases generally have initial terms of 12 months or less, our rental revenues at our multifamily properties are impacted by declines in market rents more quickly than if our leases were for longer terms. If we are unable to promptly renew the leases or release apartment units, or if the rental rates upon renewal or releasingre-leasing are lower than expected rates, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock could be adversely affected.

If we cannot complete real estate transactions on favorable terms, or operate acquired assets to meet our goals or expectations, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock could be materially adversely affected.

The risks described in the immediately preceding risk factor that are applicable to our ability to acquire and successfully integrate and operate properties in the markets in which our properties are located are also applicable to our ability to acquire and successfully integrate and operate properties in new markets. In addition to these risks, we may not possess the same level of familiarity with the dynamics and market conditions of certain new markets that we may enter, which could adversely affect our ability to expand into those markets. We may be unable to build a significant market share or achieve a desired return on our assets in new markets. If we are unsuccessful in expanding into new markets, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We have in the past, and may in the future, take impairment charges with respect to certain of our properties. We routinely evaluate our assets for impairment indicators (we recorded $3.7 million in impairments of long-lived assets for the year ended December 31, 2025 and no impairment of long-lived assets for the yearsyear ended December 31, 2024 and 2023). The judgment regarding the existence and magnitude of impairment indicators is based on factors such as market conditions, tenant performance and lease structure. For example, the early termination of, or default under, a lease by a tenant may lead to an impairment charge. If we determine that an impairment has occurred, we will be required to make a downward adjustment to the net carrying value of the property, which could have a material adverse effect on our results of operations in the period in which the impairment charge is recorded. Negative developments in the real estate market may cause management to reevaluate the business and macro-economic assumptions used in its impairment analysis. Changes in management’s assumptions based on actual results may have a material impact on the Company’s financial statements.

Real estate assets are, in general, relatively illiquid and may become even more illiquid during periods of economic downturn. As a result, we may not be able to sell our properties quickly or on favorable terms in response to changes in the economy or other conditions when it otherwise may be prudent to do so. In addition, certain significant expenditures generally do not change in response to economic or other conditions, including debt service obligations, real estate taxes, and operating and maintenance costs. This combination of variable revenue and relatively fixed expenditures may result, under certain market conditions, in reduced earnings. In addition, historically, during periods of increasing interest rates, real estate valuations have generally decreased as a result of rising capitalization rates, which tend to be positively correlated with interest rates. Consequently, prolonged periods of higher interest rates may negatively impact the valuation of our portfolio as well as lower sales proceeds from future dispositions. Accordingly, we may be unable to adjust our portfolio promptly in response to economic, market or other conditions, which could adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, capital expenditures, refinancing of indebtedness, SBA 7(a) loan originations, paying distributions on our Preferred Stock or any other preferred stock we may issue, any future repurchase and/or redemption of our Preferred Stock (if we choose, or are required, to pay the redemption price in cash instead of in shares of our Common Stock), andand, if we determine to renew distributions on our Common Stock, any renewed distributions on our Common Stock. We are also in the process of converting part of an office property that we own from office to multifamily. We may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of these long-term cash requirements. The nature of our business, and the requirements imposed by REIT rules that we distribute a substantial majority of our REIT taxable income on an annual basis in the form of dividends, may cause us to have substantial liquidity needs over the long-term. We will seek to satisfy our long-term liquidity needs through one or more of the following methods: (i) offerings of shares of Common Stock, Preferred Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) credit facilities and term loans; (iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (v) the sale of existing assets; and/or (vi) cash flows from operations. These sources of funding may not be available on attractive terms or at all. If we cannot obtain additional funding for our long-term liquidity needs, our assets may generate lower cash flow or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so and could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We are exposed to risks related to increases in market lease rates and inflation, as income from long-term leases at our office properties is an important source of our cash flow from operations. Leases of long-term duration or which include renewal options that specify a maximum rate increase may result in below-market lease rates over time if we do not accurately estimate inflation or market lease rates. Provisions of our leases designed to mitigate the risk of inflation and unexpected increases in market lease rates, such as periodic rental increases, may not adequately protect us from the impact of inflation or unexpected increases in market lease rates. If we are subject to below-market lease rates on a significant number of our properties pursuant to long-term leases and our operating and other expenses are increasing faster than anticipated, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock could be materially adversely affected.

Our properties are subject to operating risks common to real estate in general, any or all of which may negatively affect us. If any property is not fully occupied or if rents are payable (or are being paid) in an amount that is insufficient to cover operating expenses that are our responsibility under the lease, we could be required to expend funds in excess of such rents with respect to that property for operating expenses. Our properties are subject to increases in tax rates, utility costs, insurance costs, repairs and maintenance costs, administrative costs and other operating and ownership expenses. Our property leases may not require the tenants to pay all or a portion of these expenses, in which event we may be responsible for these costs. If we are unable to lease properties on terms that require the tenants to pay all or some of the properties’ operating expenses, if our tenants fail to pay these expenses as required or if expenses we are required to pay exceed our expectations, we could have less funds available for future acquisitions or cash available for distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

The market environment may adversely affect our operating results, financial condition and ability to pay distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We are required to pay property taxes for our properties, which can increase as property tax rates increase or as properties are assessed or reassessed by taxing authorities. In California, pursuant to an existing state law commonly referred to as Proposition 13, all or portions of a property are reassessed to market value only at the time of “change in ownership” or completion of “new construction,” and thereafter, annual property tax increases are limited to 2% of previously assessed values. As a result, Proposition 13 generally results in significant below-market assessed values over time. From time to time, lawmakers and political coalitions have initiated efforts to repeal or amend Proposition 13, including by introducing Proposition 15 on the California ballot in November 2020, which measure was not approved by voters. If successful in the future, these proposals could substantially increase the assessed values and property taxes for our properties in California. Although some tenant leases may permit us to pass through such tax increases to the tenants for payment, renewal leases or future leases may not be negotiated on the same basis. Tax increases not passed through to tenants could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We expect to engage in development, redevelopment, repositioning or construction of real estate projects, including, without limitation, deploying capital in unimproved real properties, and will therefore face significant risks relating to such activities. We must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If our projections are inaccurate or we pay too much for a property, our return on our assets could suffer. We may abandon any of these activities after we begin to explore them and as a result we may lose deposits or fail to recover expenses already incurred. We may be unable to proceed with these activities because we cannot obtain financing on favorable terms or at all. We may be unable to obtain, or face delays in obtaining, required zoning, land-use, building, occupancy, and other governmental permits and authorizations, which could result in increased costs and could require us to abandon or substantially alter our plan for a project. We may incur construction costs for a development project that exceed our original estimates due to continuing high interest rates, which is the economic environment that we expect to continue to face in 2024, increased materials, labor, leasing or other costs, material shortages or supply chain delays, all of which are more likely in the current inflationary environment, or unanticipated technical difficulties, which could make completion of the project less profitable because market rents may not increase sufficiently to compensate for the increase in construction costs. We may even suspend development projects after construction has begun due to changes in economic conditions or other factors, and this may result in the write-off of costs, payment of additional costs or increases in overall costs when the development project is restarted. In addition, we will be subject to normal lease-up risks relating to newly constructed projects.

Our office portfolio competes with a number of developers, owners and operators of office real estate, many of which own properties similar to ours in the same markets in which our properties are located. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose existing or potential tenants and may not be able to replace them, and we may be pressured to reduce our rental rates below those we currently charge or to offer more substantial rent abatements, tenant improvements, early termination rights or below-market renewal options in order to retain tenants when our tenants’ leases expire. As a result of any of the foregoing factors, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock may be materially adversely affected.

These laws often impose liability regardless of whether the person knew of, or was responsible for, the presence of the hazardous or toxic substances that caused the contamination. The presence of, or contamination resulting from, any of these substances, or the failure to properly remediate them, may adversely affect our ability to sell or rent our property,property or to borrow using the property as collateral or create lender’s liability for us.collateral. In addition, third parties exposed to hazardous or toxic substances may sue for personal injury damages and/or property damages. For example, some laws impose liability for release of or exposure to asbestos-containing materials. As a result, in connection with our former, current or future ownership, operation, and development of real estate assets, or our role as a lender for loans secured directly or indirectly by real estate properties,assets we may be potentially liable for investigation and cleanup costs, penalties and damages under environmental laws.

Further, these or other environmental studies may not identify all potential environmental liabilities or accurately assess whether we will incur material environmental liabilities in the future. If we do incur material environmental liabilities in the future, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock could be materially adversely affected.

Compliance with the ADA and fire, safety and other regulations may require us to make unanticipated expenditures and/or increase our operating costs that could significantly reduce the cash available for distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

In addition, our properties are subject to various federal, state and local regulatory requirements, such as state and local earthquake, fire and life safety requirements. Local regulations, including municipal or local ordinances, zoning restrictions and restrictive covenants imposed by community developers may restrict our use of our properties and may require us to obtain approval from local officials or community standards organizations at any time with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our existing properties. If we were to fail to comply with these various requirements, we might incur governmental fines or private damage awards. If we incur substantial costs to comply with the ADA or any other regulatory requirements, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock could be materially adversely affected.

Further, existing and future rent control or rent stabilization laws and regulations, along with similar laws and regulations that expand tenants’ rights or impose additional costs on landlords, may reduce rental revenues or increase operating costs on our multifamily portfolio. Such laws and regulations limit our ability to charge market rents, increase rents, evict tenants or recover increases in our operating expenses and could reduce the value of our multifamily portfolio or make it more difficult for us to dispose of properties in certain circumstances. Expenses associated with our investment in our multifamily portfolio, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in rental income from our multifamily portfolio. As a result, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock could be materially adversely affected.

Inflation may remain highelevated in 20252026 relative to historical levels. Inflation has caused and will likely continue to cause our construction costs, maintenances costs, operating and general and administrative expenses and interest expenses to rise, which in turn could materially adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock. See “We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions or high inflation,” “—Income from our long-term leases at our office properties is an important source of our cash flow from operations and is subject to risks related to increases in expenses and inflation,” “—We face risks associated with development, redevelopment, repositioning or construction of real estate projects,” “—High interest rates may make it difficult for us to finance or refinance assets, which could reduce the number of properties we can acquire and the amount of cash distributions we can make” and “—Supply chain disruption and increased costs in labor and materials may adversely affect our real estate operations.”

Payments of principal and interest on our borrowings may leave us with insufficient cash resources to operate our properties and/or pay distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock. The incurrence of substantial outstanding indebtedness, and the limitations imposed by our debt agreements, could have significant other adverse consequences, including the following:

If any one of these events occurs, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock may be materially adversely affected. In addition, any foreclosure on our properties could create taxable income without the accompanying cash proceeds, which could adversely affect our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code of 1986, as amended (the “Code”).

Interest rates may remain highelevated in 20252026 relative to historical levels. If interest rates remain elevated, we run the risk of being unable to finance or refinance our assets on favorable terms or at all. If interest rates are high when we desire to mortgage our assets or when existing loans come due and the assets need to be refinanced, we may not be able to, or may choose not to, finance the assets and we would be required to use cash to purchase or repay outstanding obligations. Our inability to use debt to finance or refinance our assets could reduce the number of assets we can acquire, which could reduce our operating cash flow and the amount of cash distributions we can make on our Common Stock or Preferred Stock. Higher costs of capital also could negatively impact our operating cash flow and returns on our assets.

Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

We have incurred indebtedness, and in the future may incur additional indebtedness, that bears interest at a variable rate. A continued high interest rate environment, which is the economic environment that the Company expects to face in 2025,2026, will result in increases in the variable rate component of our indebtedness. As of December 31, 2024, we have $15.0 million outstanding under the 2022 credit facility and2025, $27.1 million was outstanding under our junior subordinated notes,notes and $36.6 million in aggregate was outstanding on two mortgage loans, all of which bearbears interest at a variable rate. We have not hedged our interest rate with respect to this variable rate indebtedness. As a result, increases in interest rates will increase the amounts payable under such indebtedness, which will reduce our operating cash flows and could materially adversely affect our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock. In addition, if our existing indebtedness matures or otherwise becomes payable during a period of rising interest rates, we could be required to liquidate one or more of our assets at times that may prevent realization of the maximum return on such assets.

As a result, we may not be able to refinance our indebtedness on commercially reasonable terms, or at all. If we do not generate sufficient cash flow from operations, and additional borrowings or refinancing or proceeds of asset sales or other sources of cash are not available to us, we may not have sufficient cash to enable us to meet all of our obligations. Accordingly, if we cannot service our indebtedness, we may have to take actions such as seeking additional equity, or delaying any strategic acquisitions and alliances or capital expenditures, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

As of December 31, 2024,2025, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures. Our Unconsolidated Joint Ventures contain one office property, one multifamily site currently under development, twothree multifamily properties (one of which has been partially converted from office into multifamily units and is now being classified as a multifamily property) and one commercial development site. As of December 31, 2024,2025, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 70.6%74.8% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $135.90$152.70 for the year ended December 31, 20242025 and our fourfive multifamily properties were 81.7%85.3% occupied. Additionally, as of December 31, 2024,2025, we had nineeight development sites (threetwo of which were being used as parking lots).

Fluctuations in submarkets, buildings and terms of leases cause large variations in these numbers and make predicting the changes in rent in any specific period difficult. Our rental and occupancy rates are impacted by general economic conditions, including the pace of regional and economic growth, and access to capital. Therefore, we cannot give any assurance that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates. Additionally, decreased demand and other negative trends or unforeseeable events that impair our ability to timely renew or re lease space could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or renew dividends on our Common Stock.

______________________ (1)Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units. This amount reflects total cash rent before concessions. Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,319$2,127 and $2,074$2,319 as of December 31, 20242025 and 2023,2024, respectively.

The Company had a net loss of $39.6 million for the year ended December 31, 2025, representing an increase of $13.8 million compared to a net loss of $25.8 million for the year ended December 31, 2024, representing a decrease of $25.7 million compared to a net loss of $51.5 million for the year ended December 31, 2023.2024. The decreaseincrease was primarily due to a decrease of $25.1$7.2 million in depreciationsegment andnet amortizationoperating expenseincome (discussed in more detail below in “Summary Segment Results”) and a decrease in transaction costs of $3.0 million, partially offset by, an increase in interest expense not allocated to our operating segments of $2.2$4.1 millionmillion, an increase in impairment of real estate of $3.7 million, and an increase in expense reimbursements to related parties - corporate of $1.2 million. These were partially offset by a decrease in loss on early extinguishment of debt of $1.4$1.3 million.million and a gain on sale of real estate of $679,000 recognized in the current year.

(1)During the years ended December 31, 20242025 and 2023,2024, we recognized $17.7$1.4 million and $1.5$17.7 million, respectively, of redeemable preferred stock redemptions on our consolidated statements of operations and $755,000 and $0 respectively, of redeemable preferred stock deemed dividends on our consolidated statements of operations.redemptions. Such amounts are included in, and have the effect of increasing theincreasing, net loss attributable to common stockholders and decreasing FFO attributable to common stockholders because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT.

FFO attributable to common stockholders, which is a non-GAAP measure, was $(31.5) million for the year ended December 31, 2025, an increase of $14.8 million compared to $(46.3) million for the year ended December 31, 2024, a decrease of $19.8 million compared to $(26.4) million for the year ended December 31, 2023.2024. The decreaseincrease in FFO was primarily attributable to ana increasedecrease in redeemable preferred stock redemptions of $16.2$16.3 million, ana increasedecrease in redeemable preferred stock dividends of $4.0$8.5 million,million and a decrease in loss on early extinguishment of debt of $1.3 million. These were partially offset by a decrease of $7.2 million in segment net operating income (discussed in more detail below in “Summary Segment Results”) and an increase in interest expense not allocated to our operating segments of $2.2 million and a loss on extinguishment of debt of $1.4 million, these were partially offset by a decrease in transaction costs of $3.0$4.1 million.

______________________ (*)Percentage changes in excess of 100% are deemed to be not meaningful (“NM”)

Office Revenue: Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties. Office revenue decreased to $50.1 million for the year ended December 31, 2025 from $54.3 million for the year ended December 31, 2024 from $55.0 million for the year ended December 31, 2023.2024. The decrease iswas primarily due to a decrease in rental revenues at an office propertyproperties in Oakland, California, Los Angeles, California, and San Francisco, California dueas toa result of lower occupancy. This wasoccupancies, partially offset by higheran increase in rental revenues at an office propertyproperties in Beverly Hills, California dueand toAustin, Texas as a result of increased rental ratesoccupancy and higher rental revenues at an office property in Los Angeles, California from increased occupancy.rates.

MultifamilyHotel Revenue: MultifamilyHotel revenue increased to $19.5$41.3 million for the year ended December 31, 2024,2025, compared to $11.2$39.4 million for the year ended December 31, 2023.2024. The increase iswas primarily due to higheran increase in occupancy and increasedaverage rentdaily per occupied unit, net of rent concessions, at our consolidated multifamily propertiesrate during the year ended December 31, 2025 as compared to year ended December 31, 2024.

LendingMultifamily Revenue: Lending revenue represents revenue from our lending subsidiaries, including interest income on loans and other loan related fee income. LendingMultifamily revenue decreased to $10.8$15.8 million for the year ended December 31, 2024,2025, compared to $11.5$19.5 million for the year ended December 31, 2023.2024. The decrease was primarily dueattributed to alower decrease in premium incomeoccupancy and adecreased decreasemonthly inrent interestper incomeoccupied asunit, a resultnet of lowerrent loan originations and loan sale volumeconcessions during the year ended December 31, 2024,2025 as compared to the year ended December 31, 2023.2024.

Income (Loss) Income From Unconsolidated MultifamilyOffice EntityEntities: The incomeIncome from our office Unconsolidated Joint VentureVentures included in multifamilyoffice segment net operating income decreased to a loss of $1.3 million$254,000 for the year ended December 31, 2024,2025, compared to income of $155,000$462,000 for the year ended December 31, 2023.2024. The decrease is due to changes in the valuation of investments in real estate at our unconsolidated multifamilyoffice entities, which recognized a net unrealized loss during the year ended December 31, 2024,2025, compared to a net unrealized gain forduring the year ended December 31, 2023.2024.

Office Expenses: Office expenses increaseddecreased to $25.8 million for the year ended December 31, 2025, compared to $27.3 million for the year ended December 31, 2024,2024. comparedThe decrease was primarily due to $26.1 million for the year ended December 31, 2023. The increase is primarily a result of increases inlower operating expenses at an office property in Oakland, California resulting from higherlower utilitiesoccupancy, andas repairswell andas maintenancelower expenseoperating andexpenses at an office property in Beverly Hills, California fromas result of property tax refunds received during the year ended December 31, 2025, partially offset by increased property taxes at an increaseoffice property in administrativeAustin, expense.Texas and at an office property in San Francisco, California during the year ended December 31, 2025.

Hotel Expenses: Hotel expenses were $28.0$29.6 million for the year ended December 31, 2024,2025, consistentcompared with $28.0 million for the year ended December 31, 2023.2024. The increase is due to increased occupancy during the year ended December 31, 2025 compared to the prior year period.

ProvisionMultifamily for Income TaxesExpenses: ProvisionMultifamily for income taxesexpenses decreased to $798,000 for the year ended December 31, 2024, compared to $1.2$12.8 million for the year ended December 31, 2023.2025, compared to $13.7 million for the year ended December 31, 2024. The decrease iswas primarily due to lowera taxabledecrease incomein real estate tax expense as well as decreases in repairs and maintenance expenses at our taxablemultifamily REIT subsidiariesproperties during the year ended December 31, 2024 as2025 compared to the prior year ended December 31, 2023.period.

Our cash flows from operating activities are primarily dependent upon the real estate assets owned, occupancy level of our real estate assets, the rental rates achieved through our leases, the occupancy and ADR of our hotel, the collectability of rent and recoveries from our tenants, and loan related activity. Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash provided by operating activities increasedwas by $5.0$5.8 million for the year ended December 31, 20242025 as compared to $17.0 million during the same period in 2023.2024. The increasedecrease wasis primarily due to a $4.1 millionan increase resulting from a lower level of net working capital used and a reduction in net loss adjusted for depreciation and amortization expense and other non-cash items of $3.7$11.9 million, partially offset by a $2.8 million decrease in net proceeds from the sale of loans, compared to the same period in 2023.million.

Our cash flows from investing activities are primarily related to property acquisitions and dispositions, expenditures for the development or repositioning of properties, capital expenditures and cash flows associated with loans originated at our lending segment. Net cash used in investing activities decreasedwas by $66.4$12.0 million for the year ended December 31, 2025, compared to $22.3 million for the year ended December 31, 2024, compared to $88.7 million for the year ended December 31, 2023.2024. The decrease in cash used in investing activities was primarily due to a $96.7$2.5 million decrease in acquisitionscapital expenditures, an increase in the receipt of realkey estatemoney of $4.7 million, and a decrease in cash outlaysused to fund loans of $12.0$3.3 million related to our investments in the Unconsolidated Joint Ventures, compared to the same period in 2023. Partially offsetting the decrease in net cash used in investing activities are $32.2 million in proceeds from the sale of a property to the 4750 Wilshire JV during the year ended December 31, 2023 and a $9.9 million increase in capital expenditures during the year ended December 31, 2024.2025.

Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash providedused byin financing activities for the year ended December 31, 20242025 was $13.9$4.6 million, compared to cash provided by financing activities of $63.4$13.9 million for the year ended December 31, 2023.2024. The decrease of $49.5$18.5 million was primarily due to a $62.8decrease in net proceeds from debt of $17.5 million during year ended December 31, 2025 and a $40.6 million decrease in net proceeds from issuance of preferred stock during the year ended December 31, 2024 compared to the prior period, the issuance of unguaranteedredeemable SBApreferred 7(a)stock. loan-backed notes of approximately $54.1 million during the year ended December 31, 2023, and $38.0 million of net proceeds from our 2022 Credit Facility and mortgages for the year ended December 31, 2024, compared to $56.5 million for the year ended December 31, 2023. The aforementioned amounts decreasing net cash provided by financing activitiesThese were partially offset by a decrease of $80.8 million in cash redemptions of redeemable preferred stock of $25.4 million, a decrease in common stock dividends of $5.8 million, a decrease in redeemable preferred stock dividends of $3.6 million, and a decrease in preferredthe dividend cash paymentspayment of $3.9deferred millioncosts duringof the$1.9 year ended December 31, 2024 compared to the prior period.million.

On a short-term basis, our principal demands for funds will be for the acquisition of assets, development or repositioning of properties (as further described below) (including pre-construction costs such as obtaining entitlements and permits and architectural work), or re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, SBA 7(a) loan originations,and paying distributions on our Preferred Stock and Common Stock and making redemption payments on our Preferred Stock. We may finance our future activities through one or more of the following methods: (i) offerings of shares of Common Stock, Preferred Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) credit facilities and term loans; (iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (v) the sale of existing assets; and/or (vi) cash flows from operations. Our 2022 Revolving Credit Facility has an outstanding balance of $15.0 million and matures on March 31, 2025 (pursuant to various modification amendments).

Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, or re-leasing of space in existing properties, capital expenditures, paying interest and principal on debt financings, refinancing of indebtedness, SBA 7(a) loan originations, paying distributions on our Preferred Stock or any other preferred stock we may issue, any future repurchase of Common Stock and/or redemption of our Preferred Stock (if we choose, or are required, to pay the redemption price in cash instead of in shares of our Common Stock) and any renewed distributions on our Common Stock. Additionally, our outstanding commitments to fund loans were $9.5 million as of December 31, 2024, substantially all of which reflect prime-based loans to be originated by our subsidiary engaged in SBA 7(a) Small Business Loan Program lending. A majority of these commitments have government guarantees of 75% and we believe that we will be able to sell the guaranteed portion of these loans in a liquid secondary market upon fully funding these loans. Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. To the extent we decide to proceed with development work on any of our development sites (in addition to those discussed below), we will have increased liquidity needs.

Construction has been substantially completed on the Rooms Renovation Project at our Sheraton Grand Hotel in Sacramento, California, with a total costcosts incurred of approximately $20.9 million, of which approximately $16.6$21.2 million had been paid as of December 31, 2024.2025. We arealso currentlystarted working on designs for theour renovation of Sheraton Grand Hotel’s lobbies and common areas (the “Lobby Renovation Project”). Weduring havethe notthird approvedquarter aof budget2025. The estimated cost for the Lobby Renovation Project butis intendapproximately to$11.6 completemillion, of which $7.4 million had been incurred as of December 31, 2025. Both the projectRooms inRenovation 2025.Project and Lobby Renovation Project are being funded by a combination of draws on the mortgage loan at the property and key money from the Sheraton Grand Hotel’s franchisor.

DuringFrom theand yearafter ended December 31,September 2024, at our option, we redeemed 2,589,606 and 2,150,076 shares of Series A1 Preferred Stock and Series A Preferred Stock, respectively, in shares of Common Stock and, additionally, from September 2024 through December 2024,and we have paid holder-requested redemptions of 181,912718,649, 671,058, and 214,7134,122 shares of Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock respectively, in shares of Common Stock. On or about March 16, 2026, the Company expects to redeem approximately 1,957,023 shares of Series A Preferred Stock, approximately 7,767,609 shares of Series A1 Preferred Stock and Seriesapproximately A Preferred Stock, respectively, in21,760 shares of CommonSeries Stock. We currently plan to continue to satisfy some or all redemption requests submitted by holders of our shares ofD Preferred Stock in shares of Common Stock during(the 2025,“March when2026 legallyRedemption”). permitted.Other Wethan havethe March 2026 Redemption, the company does not currently intend to redeem, at the Company’s election, additional Preferred Stock in shares of Common Stock. However, the pastCompany exercisedwill ourevaluate rightredemption torequests redeemsubmitted by holders of its shares of Preferred Stock at ourthe optiontime (subjectit receives them and may elect to theredeem termsthose ofPreferred Shares in Common Stock or cash, at the PreferredCompany’s Stock set forth in the charter) and pay the redemption price in shares of Common Stock, and we may do so again in the future.discretion.

The measures noted above, taken together, are expected to strengthen our balance sheet,sheet and improve liquidity and accelerate our transition towards premier multifamily properties.liquidity. These actions are also intended to better position the Company to take advantage of opportunities that are expected to arise in a recovering real estate market.

We may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of our long-term cash requirements. The nature of our business, and the requirements imposed by REIT rules that we distribute a substantial majority of our REIT taxable income on an annual basis in the form of dividends, may cause us to have substantial liquidity needs over the long-term. While we will seek to satisfy such needs through one or more of the methods described in this Annual Report on Form 10-K, our ability to take such actions is highly uncertain and cannot be predicted, and could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in “Item 1A—Risk Factors” of this Annual Report on Form 10-K. If we cannot obtain funding for our long-term liquidity needs, our assets may generate lower cash flows or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our CommonPreferred Stock or Preferredany renewed distributions on our Common Stock.

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations, including plans and objectives relating to future growth of our business and availability of funds. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would,” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” “should” or “goal” or the negative thereof or other variations or similar words or phrases. Such forward-looking statements also include, among others, statements about our plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that our management has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the timing, form, and operational effects of our development activities, (ii) our ability to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and continuing higher interest rates on our operations and profitability, (v) general economic, market and other conditions, including the effects of high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth, and (vi) our approach to artificial intelligence (“AI”). and (vii) the ongoing conflict in the Middle East and related disruptions. Additional important factors that could cause our actual results to differ materially from our expectations are discussed in “Item 1A—Risk Factors” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 10, 2026 (the “2025 Form 10-K”). The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements expressed or implied in this Quarterly Report on Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements expressed or implied herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. We do not undertake to update them to reflect changes that occur after the date they are made, except as may be required by applicable securities laws.

The following discussion of our financial condition as of MarchJune 31,30, 2026 and results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 should be read in conjunction with the 2025 Form 10-K. For a more detailed description of the risks affecting our financial condition and results of operations, see “Risk Factors” in Part I, Item 1A of the 2025 Form 10-K. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-Q, including the notes to the consolidated financial statements contained therein. The terms “we,” “us,” “our” and the “Company” refer to Creative Media & Community Trust Corporation and its subsidiaries.

The phrase “ADR” represents average daily rate. It is calculated as trailing three-monthsix-month room revenue divided by the number of rooms occupied. For sold properties, ADR is presented for the Company’s period of ownership only.

The phrase “annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

The phrase “net annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, net of total rent abatements granted in the applicable month, multiplied by 12. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

The phrase “RevPAR” represents revenue per available room. It is calculated as trailing three-monthsix-month room revenue divided by the number of available rooms. For sold properties, RevPAR is presented for the Company’s period of ownership only.

As of MarchJune 31,30, 2026, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in Unconsolidated Joint Ventures. Our Unconsolidated Joint Ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now being classified as a multifamily property) and one commercial development site. As of MarchJune 31,30, 2026, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 73.1%71.9% occupied and our one 505-room hotel with an ancillary parking garage, had RevPAR of $178.71$179.59 for the threesix months ended MarchJune 31,30, 2026 and our five multifamily properties were 89.6%93.6% occupied. Additionally, as of MarchJune 31,30, 2026, we had eight development sites (two of which were being used as parking lots).

Established in 1994, CIM is a vertically integrated, community-focused real estate and infrastructure owner, operator, lender, and developer of real assets. Through CIM’s vertically integrated structure, CIM is able to leverage in-house expertise across the full life cycle of assets to drive value creation across the process. CIM has dedicated teams for sourcing/acquisition, credit analysis, development, financing, commercial leasing, onsite property management and distribution. These functions bring alignment of interests and deep expertise, allowing for disciplined business plan underwriting and effective risk management. CIM also seeks to maximize synergies across its vertically integrated platform. TheCIM threemanages investmentassets platforms,and pursues opportunities across five platforms: real estate, credit, infrastructure, opportunity zones, and creditstrategic leverageopportunities, in-housewith expertisea tofocus createon valuegenerating withinattractive eachrisk-adjusted investment.returns.

We will seek to satisfy our long-term liquidity needs through one or more of the following methods: (i) offerings of shares of Common Stock or other equity and/or debt securities of the Company; (ii) issuances of interests in our operating partnership in exchange for properties; (iii) issuances of Preferred Stock to one or more of our affiliates; (iv) credit facilities and term loans; (ivv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (vvi) the sale of one or more of our existing assets; and/or (vivii) cash flows from operations.

(2)Represents gross monthly base rent under leases commenced as of the specified periods, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail. Total abatements, representing lease incentives in the form of free rent, for the twelve months ended MarchJune 31,30, 2026 and 2025 were approximately $1.8 million and $1.0$1.1 million, respectively. Giving effect to abatements, net annualized rent per occupied square foot was $55.90$56.94 and $58.00$60.05 as of MarchJune 31,30, 2026 and 2025, respectively (See Definitions for more detail).

(2)Represents gross monthly base rent, as of MarchJune 31,30, 2026, under leases expiring during the periods above, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

During the three and six months ended MarchJune 31,30, 2026, we executed leases with terms longer than 12 months totaling 20,56216,176 and 36,738 square feet.feet, respectively. The table below sets forth information on certain of our executed leases during the three and six months ended MarchJune 31,30, 2026, excluding space that was vacant for more than one year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party:

Fluctuations in submarkets, buildings and terms of leases cause large variations in these numbers and make predicting the changes in rent in any specific period difficult. Our rental and occupancy rates are impacted by general economic conditions, including the pace of regional and economic growth, and access to capital. Therefore, we cannot give any assurance that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates. Additionally, decreased demand and other negative trends or unforeseeable events that impair our ability to timely renew or re leasere-lease space could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock or renew dividends on our Common Stock.

______________________ (1)Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units. This amount reflects total cash rent before concessions. Net of rent concessions granted in the specified period, monthly rent per occupied unit was $2,156$2,286 and $2,341$2,284 as of MarchJune 31,30, 2026 and 2025, respectively.

Prior to the divestiture described in this paragraph, we were a national lender that primarily originated loans to small businesses. As previously announced on November 12, 2025, the Company and First Western entered into the Membership Interest Purchase Agreement with the Buyer. The Closing occurred on January 21, 2026. At the Closing, pursuant to the Membership Interest Purchase Agreement, and upon the terms and subject to the conditions therein, Buyer purchased from the Company all of the issued and outstanding equity interests of First Western for a purchase price of $44.9 million (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), resulting in proceeds of $31.2 million after the repayment of the Lending Division Revolving Credit Facility, and a net gain of $1.7 million. Subsequent to March 31, 2026, theThe Company received $1.0 million of incremental proceeds held in escrow proceedswhich was previously contemplated in connection with the Transactions.Transactions during the three months ended June 30, 2026.

Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 24.0%24.3% of our annualized office rental income for the three months ended MarchJune 31,30, 2026.

We are not aware of any material trends or uncertainties, other than geopolitical conflict and national economic conditions affecting real estate in general, such as the ongoing conflict in the Middle East and related disruptions, the effects of high unemployment rates, continued or renewed inflation, heightened interest rates, and any recession or slowdown in economic growth and any proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners, that may reasonably be expected to have a material impact on our results from operations other than those listed in the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

The Company had a net loss of $8.4$10.0 million for the three months ended MarchJune 31,30, 2026, representing an increase of $2.1 million$835,000 compared to a net loss of $6.3$9.2 million for the three months ended MarchJune 31,30, 2025. The increase in net loss was primarily due to a decrease of $1.9 million$510,000 in segment net operating income (discussed in more detail below in “Summary Segment Results”).

We believe that funds from operations (“FFO”), a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferredPreferred stockStock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, casualty losses, net, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”).

(1)During the three months ended MarchJune 31,30, 2026 and 2025, we recognized $22.2 million$82,000 and $300,000,$0, respectively, of redeemable preferredPreferred stockStock redemptions. Such amounts are included in, and have the effect of increasing, net loss attributable to common stockholders and FFO attributable to common stockholders because redeemable preferredPreferred stockStock redemptions are not an adjustment prescribed by NAREIT.

FFO attributable to common stockholders, which is a non-GAAP measure, was $(28.83.5) million for the three months ended MarchJune 31,30, 2026, aan decreaseincrease of $(23.4)$4.4 million compared to $(5.47.9) million for the three months ended MarchJune 31,30, 2025. The decreaseincrease in FFO was primarily attributable to ana increasedecrease in redeemable preferredPreferred stockStock redemptionsdividends of $21.9$4.3 million, and a decrease in transaction-related costs of $786,000, partially offset by a decrease of $1.9 million$510,000 in segment net operating income (discussed in more detail below in “Summary Segment Results”) and an increase of $705,000 in loss on early extinguishment of debt, partially offset by a decrease in redeemable preferred stock dividends of $1.3 million..

During the three months ended MarchJune 31,30, 2026 and 2025, we operated in three segments: office, hotel and multifamily properties. As previously disclosed, the Company completed the sale of its lending business on January 21, 2026, and, as a result, the Company’s lending business ceased to be one of the Company’s reportable segments during(as further discussed in Note 17 to the threeconsolidated monthsfinancial ended March 31, 2026. As the lending segment activity was de minimis during the period it remained under the Company’s ownership for the three months ended March 31, 2026, the related amounts arestatements included within non-segment interest and other income, interest expense, and general and administrative, as applicable, in thethis followingQuarterly tableReport foron theForm three months ended March 31, 2026.10-Q). Set forth and described below are summary segment results for our operating segments (dollar amounts in thousands).

______________________ (*)Percentage changes in excess of 100% are deemed to be not meaningful (“NM”)

Office Revenue: Office revenue includes rental revenue, expense reimbursements and lease termination income from office properties. Office revenue decreasedincreased to $12.6$12.5 million for the three months ended MarchJune 31,30, 2026 from $13.1$11.9 million for the three months ended MarchJune 31,30, 2025. The change iswas primarily due to aan decreaseincrease in rental revenue and tenant reimbursement revenue at an office property in Los Angeles, California, in addition to an increase in tenant reimbursement revenue at an office property in Oakland, California.

MultifamilyHotel Revenue: MultifamilyHotel revenue decreasedincreased to $3.9$12.8 million for the three months ended MarchJune 31,30, 2026, compared to $4.1$11.6 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease iswas primarily due to decreasedan rentincrease perin occupiedroom unit,revenue netand an increase in food and beverage revenues, as a result of rentincreased concessions,occupancy at our multifamily properties duringfor the three months ended MarchJune 31,30, 2026.2026, compared to June 30, 2025.

LossMultifamily From UnconsolidatedRevenue: Multifamily Entities: The loss from our unconsolidated multifamily entitiesrevenue increased to $1.4$4.3 million for the three months ended MarchJune 31,30, 2026, compared to $1.1$3.9 million for the three months ended MarchJune 31,30, 2025. The increase iswas primarily due to an increase in the unrealized loss on investments in real estateoccupancy at one of our unconsolidated multifamily entitiesproperties during the three months ended MarchJune 31,30, 2026, partially offset by an increase in rental revenues at the property.2026.

Interest and Other Income: Interest and other income, which has not been allocated to our operating segments, was $591,000$144,000 for the three months ended MarchJune 31,30, 2026, comparedconsistent towith $91,000$143,000 for the three months ended MarchJune 31,30, 2025. The increase is primarily due the Company recording lending revenue for the period First Western was still under ownership during the three months ended March 31, 2026 to interest and other income.

Office Expenses: Office expenses increaseddecreased to $6.1$6.2 million for the three months ended MarchJune 31,30, 2026, compared to $5.9$6.5 million for the three months ended MarchJune 31,30, 2025. The increasedecrease iswas primarily a result of ana increasedecrease in real estate tax expensetaxes at an office property in BeverlyLos Hills,Angeles, California and lower administrative costs at an office property in Austin, Texas and across five of our office properties in Los Angeles, California for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, driven by a tax refund recorded in the prior-year period.2025.

Hotel Expenses: Hotel expenses increased to $8.4$8.2 million for the three months ended MarchJune 31,30, 2026, compared to $8.0$7.5 million for the three months ended MarchJune 31,30, 2025. The increase iswas due to an increase in operatingfood and beverage expenses and administrativeroom expenses, driven mostlyprimarily by elevatedincreased maintenance and marketing costsoccupancy for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.2025, in addition to an increase in general and administrative expenses compared to the prior year period.

Multifamily Expenses: Multifamily expenses decreased to $3.0$2.6 million for the three months ended MarchJune 31,30, 2026, compared to $3.6$3.1 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to a decrease in real estate tax expensestaxes at our multifamily properties in Oakland, California for the three months ended MarchJune 31,30, 2026, compared to the prior period.

Lending Expenses: Lending expenses included interest expense, general and administrative expenses and fees to related parties from our lending business (First Western), which was sold on January 21, 2026. TheAs such, the Company recorded no lending expenses for the three months ended MarchJune 31,30, 2026, compared to $1.8$2.1 million for the three months ended MarchJune 31,30, 2025. Lending expenses for the period First Western was still under ownership during the three months ended March 31, 2026 were recorded to general and administrative expenses and interest expense not allocated to any of our operating segments.

Asset Management and Other Fees to Related Parties: Asset management fees and other fees to related parties, which have not been allocated to our operating segments increased to $584,000$859,000 for the three months ended MarchJune 31,30, 2026, compared to $360,000$349,000 for the three months ended MarchJune 31,30, 2025. The change was a result of an increase in asset management fees driven by an increase in our net asset value attributable to common stockholders resulting from the issuance of additional shares of Common StockStock, primarily during the threefirst monthsquarter ended March 31,of 2026.

Expense Reimbursements to Related Parties—Corporate: The Administrator receives compensation and/or reimbursement for performing certain services for the Company and its subsidiaries. Expense reimbursements to related parties—corporate were $875,000$852,000 for the three months ended MarchJune 31,30, 2026, comparedrelatively toconsistent $626,000with $891,000 for the three months ended MarchJune 31,30, 2025. The change was primarily due to an increase in expense allocation as well as an increase in legal services.

Interest Expense: Interest expense, which has not been allocated to our operating segments, was $9.1$9.0 million for the three months ended MarchJune 31,30, 2026, consistentcompared withto $9.2$9.6 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to a decrease in the outstanding balance on the Channel House Mortgage subsequent to June 30, 2025 in addition to a decrease in variable interest rates.

General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $1.6$1.1 million for the three months ended MarchJune 31,30, 2026, compared to $1.2 million$712,000 for the three months ended MarchJune 31,30, 2025. The increasechange iswas primarily due theto Companylegal recordingfees lendingnormalizing generalfrom andbelow-average administrativelevels expenseswhen forcompared to the periodprior Firstyear Western was still under ownership during the three months ended March 31, 2026 to general and administrative expenses not allocated to any of our operating segments.period.

Transaction-Related Costs: Transaction-related costs were $7,000$17,000 for the three months ended MarchJune 31,30, 2026, generallycompared consistentto with $26,000$803,000 for the three months ended MarchJune 31,30, 2025. The decrease was due to a lower volume of contemplated transactions and reduced dead deal costs incurred during the three months ended June 30, 2026 compared to the prior year period.

Depreciation and Amortization Expense: Depreciation and amortization expense increased to $7.7$7.1 million for the three months ended MarchJune 31,30, 2026, compared to $6.6$6.3 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to an increase in tenant improvement amortization at an office property located in Beverly Hills, California, as well as an increase at our hotel property due to renovation projects which have increased depreciable assets.

GainLoss on saleEarly Extinguishment of First WesternDebt: GainLoss on saleearly extinguishment of First Westerndebt was $1.7 million$88,000 for the three months ended MarchJune 31,30, 2026,2025 relatedin toconnection with the salepayoff and termination of Firstthe Western2022 incredit Januaryfacility. 2026. There were noNo such amounts were recorded forduring the three months ended MarchJune 31,30, 2025.2026.

Provision for Income Taxes: There was no provision for income taxes for the three months ended MarchJune 31,30, 2026, compared to a provision for income taxes of $121,000$158,000 for the three months ended MarchJune 31,30, 2025. The decrease iswas primarily due to the sale of First Western, one of our taxable REIT subsidiaries, onin January 21, 2026.