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

Factors beyond our control can affect the performance and value of our properties. Our core business is the ownership of commercial properties that generate lease revenue from either a single tenant in a stand-alone property or multiple tenants occupying a single structure or multiple structures.structures or a single tenant in a stand-alone property. Accordingly, our performance is subject to risks incident to the ownership of commercial real estate, including:

Each of our income properties is occupied by a single tenant or multiple tenants. Therefore, theThe success of our investments in theseour income properties is materially dependent upon the performance of our tenants. The financial performance of any one of our tenants is dependent on the tenant’s individual business, its industry and, in many instances, the performance of a larger business network that the tenant may be affiliated with or operate under. The financial performance of any one of our tenants could be adversely affected by poor management, inflation, higher interest rates, supply chain issues (including those potentially caused by global trade uncertainty or tariffs), unfavorable economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant’s products or services or other factors, including the impact of a global pandemic which affects the United States, over which neither they nor we have control. To the extent we own multiple properties operated by one tenant, the general failure of that single tenant or a loss or significant decline in its business could materially and adversely affect us.

Retail properties, particularly those with multiple tenants, often depend on the presence of and successful operation of an anchor tenant or tenantstenants, and the failure of such tenant’s business or the loss of the anchor tenant(s) could adversely affect the overall success of our property and thereby could adversely impact our financial condition, results of operations and cash flows.

Retail properties, like other properties, are subject to the risk that tenants may be unable to make their lease payments or may decline to extend a lease upon its expiration. A multi-tenantshopping propertycenter is particularly sensitive to the risk that a tenant that occupies a large area of a commercial retailthe property (commonly referred to as an anchor tenant) is unable to make their lease payments, does not extend their lease upon its expiration, or otherwise vacates their rented space. A lease termination by an anchor tenant or tenants could impact leases of other tenants. Other tenants may be entitled to modify the terms of their existing leases in the event of a lease termination by an anchor tenant, or the closure of the business of an anchor tenant that leaves its space vacant even if the anchor tenant continues to pay rent. Any such modifications or conditions could be unfavorable to us as the property owner and could decrease rents or expense recoveries. Additionally, should an anchor tenant vacate their leased spacespace, customer traffic to the property may be decreased, which could lead to decreased sales at other stores thus adversely impacting the tenant’s operations and impacting their ability to pay rent.rent to us. In the event of default by a tenant or anchor store,tenant, we may experience delays and costs in enforcing our rights as landlord to recover amounts due to us under the terms of our agreements with thosethat parties.tenant.

We are subject to risks that affect the general retail environment in the United States, such as weakness in the economy, the level of consumer spending, the adverse financial condition of large consumer retail companies and competition from discount and internet retailers, any of which could adversely affect market rents for retail space and the willingness or ability of retail tenants to lease space in our multi-tenant properties.

A significant portion of the properties in our income property portfolio are commercial properties that were developed to be occupied by retail tenants and thus we are subject to the risks that affect the retail sector generally, as well as the market for retail space. The business environment for retail operators and the market for retail space have previously been, and could again be, adversely affected by weakness in the national, regional and local economies, the level of consumer spending and consumer confidence, the adverse financial condition of some large retail companies, the consolidation of operators that occurs from time to time in the retail sector, any excess amount of retail space in a number of markets and increasing competition from discount retail operators, outlet malls, internet or e-commerce retail businesses and other online businesses. Increases in consumer spending through e-commerce channels may significantly affect our retail tenants’ ability to generate sales in their stores and could affect the way future tenants lease space. In addition, some of our retail tenants face competition from the expanding market for digital content and hardware. Newnew and enhanced technologies, including new digital technologies, new web services technologies and artificial intelligence, may increase competition for certain of our retail tenants. We cannot predict with certainty what future tenants will require to operate their businesses, what demands will be made for the build out of future retail spaces and how much revenue will be generated at traditional “brick and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market, our occupancy levels and rental income may decline.

A number of entities and other investors compete with us to purchase income properties. We compete with REITs, public and private real estate focused companies, high wealth individual investors, private equity investors, institutional investment funds, and others. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Several of our public company competitors have greater access to capital, typically by raising equity or debt financing, have significant amounts of capital available and investment objectives that overlap with ours, which often creates competition for acquisition opportunities. Some competitors may have a lower cost of capital and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different assessments of investment risk, which could allow them to consider a wider variety of income property acquisitions and establish more relationships than us. We cannot be assured that the competitive pressures we face will not have a material adverse effect on our business, financial condition, results of operations and therefore our cash flows. Also, because of this competition, we may not be able to take advantage of attractive acquisition opportunities from time to time, and we can offer no assurance that we will be able to identify and purchase assets that are consistent with our objectives.

We have recently and may in the future develop new income properties. In addition, we have in recent years and may in the future redevelop, significantly renovate or otherwise invest additional capital in certain of our existing income properties to improve the assets and enhance the opportunity for increased returns on our overall investment. These various development activities, particularly the development of new income properties, is subject to a number of risks, including risks associated with construction work and risks of cost overruns due to construction delaysdelays, inflation, higher interest rates, supply chain issues (including those potentially caused by global trade uncertainty or tariffs), or other factors that may increase the expected costs of a project. Furthermore, the commencement of development projects is subject to other risks including the receipt of zoning or entitlements and other required governmental permits and authorizations. In addition, we may incur development costs in connection with projects that are ultimately not pursued to completion. Any of the development activities noted may be financed under our Credit Facility or through other forms of financing. If such financing is not available on acceptable terms, our development activities may not be pursued or may be curtailed. In addition, such development activities would likely reduce the available borrowing capacity on our Credit Facility which we use for the acquisition of income propertiesproperties, origination or acquisition of commercial loans and investments, and other operating needs. The risks associated with development activities, including but not necessarily limited to those noted, could adversely impact our financial condition, results of operations, and liquidity.

In the future, PINE’s board of directors may consider internalizing the functions performed for PINE by us. We may be unable to replace the revenue that we would have received in the future in the absence of an internalization transaction. In the event that we and PINE agree to an internalization transaction, the payment of the internalization price to us would be in lieu of the payment of any termination fee. The internalization price would be payable in cash, shares of PINE’s common stock or OP Units, or a combination thereof, as determined by a majority of PINE’s independent directors in their sole discretion. Even if the internalization price paid to us in connection with an internalization is substantial, we cannot assure you that any cash, shares of PINE’s common stock or OP Unitsconsideration received by us in connection with an internalization transaction will ultimately lead to returns equal to or greater than the revenues lost as a result of the internalization transaction.

We are paid a management fee to manage PINE’s business and we may be paid an incentive fee which will depend on numerous factors, including our ability to make investments on behalf of PINE that generate attractive, risk-adjusted returns, and thereby result in PINE’s stockholders achieving a necessary level of return. A key element of PINE’s success includes its ability to raise additional equity capital to fund its goals for growth. Our successful performance as the manager of PINE therefore depends, in part, on our ability to assist PINE in raising equity capital in amounts sufficient to support PINE’s goals and on acceptable terms. Our successful performance as the manager of PINE also depends on our ability to access debt financing for PINE, on acceptable terms. There can be no assurance that we will be successful in this business, that PINE will achieve its objectives, will invest successfully in income properties or commercial loans and investments, and will generally operate successfully, or that we will earn fees from PINE sufficient to recover the costs we have incurred or to provide a suitable return on our investment in PINE.

As part of our business strategy, we have invested in commercial loans secured by commercial real estate and may in the future invest in other commercial loans or similar financings secured by real estate. Investments in commercial loans or similar financings of real estate involve credit risk with regard to the borrower, the borrower’s operations and the real estate that secures the financing. The credit risks include, but are not limited to, the ability of the borrower to execute their business plan and strategy, the ability of the borrower to sustain and/or improve the operating results generated by the collateral property, the ability of the borrower to continue as a going concern, and the risk associated with the market or industry in which the collateral property is utilized. Our evaluation of the investment opportunity in a mortgage loan or similar financing includes these elements of credit risk as well as other underwriting criteria and factors. Further, we may rely on third party resources to assist us in our investment evaluation process and otherwise in conducting customary due diligence. Our underwriting of the investment or our estimates of credit risk may not prove to be accurate, as actual results may vary from our estimates. In the event we underestimate the performance of the borrower and/or the underlying real estate which secures our commercial loan or financing, we may experience losses or unanticipated costs regarding our investment and our financial condition, results of operations, and cash flows may be adversely impacted.

We have originated and may in the future originate or acquire additional construction loans, the interest from which will be qualifying income for purposes of the REIT75% and 95% gross income tests,tests applicable to REITs, provided that the loan value of the real property securing the construction loan is equal to or greater than the highest outstanding principal amount of the construction loan during any taxable year. For purposes of construction loans, the loan value of the real property is the fair value of the land plus the reasonably estimated cost of the improvements or developments (other than personal property) that will secure the loan and that are to be constructed from the proceeds of the loan. There can be no assurance that the IRS would not challenge our estimate of the loan value of the real property.

When we seek to invest in commercial loans or similar financings secured by underlying real estate, we may not be able to originate or acquire such loan investments at favorable spreads over our borrowing costs. We compete with many other investment groups including other REITs, public and private investment funds, life insurance companies, commercial and investment banks and commercial finance companies, including some of the third parties with which we have, or expect to havehave, relationships. In mostmany instances, the competition has greater financial capacity, are larger organizations and has a greater operating presence in the market. As a result, we may not be able to originate or acquire commercial loans or similar financings in the future at all or at favorable spreads over our borrowing costs, which could adversely impact our results of operations and cash flows.

We have in the past, currently and will own in the future, investments in first mortgages, mezzanine loans, junior participations and preferred equity interests. Such investments may or may not be recourse obligations of the borrower and are not insured or guaranteed by governmental agencies or otherwise. In the event of a default under these obligations, we may have to take possession of the collateral securing these interests including through foreclosure proceedings. Borrowers may contest enforcement of foreclosure or our other remedies and may seek bankruptcy protection to potentially block our actions to enforce their obligations to us. Relatively high loan-to-value ratios and declines in the value of the underlying collateral property may prevent us from realizing an amount equal to our investment upon foreclosure or realization even if we make substantial improvements or repairs to the underlying real estate to maximize such property’s investment potential. Although we have maintained and regularly evaluatedevaluate financial reserves to properly accrue for potential future losses, our reserves would reflect management’s judgment of the probability and severity of losses and the value of the underlying collateral. We cannot be certain that our judgment will prove to be correct and that our reserves, if any, will be adequate over time to protect against future losses due to unanticipated adverse changes in the economy or events adversely affecting specific properties, assets, tenants, borrowers, industries in which our tenants and borrowers operate or markets in which our tenants and borrowers, or their properties are located. If we are unable to enforce our contractual rights, including but not limited to, taking possession of the collateral property in a foreclosure circumstance, or our reserves for credit losses prove inadequate, we could suffer losses which would have a material adverse effect on our financial condition, results of operations, and cash flows.

We may invest in fixed-rate loan investments, and an increase in interest rates may adversely affect the value of these investments, which could adversely impact our financial condition, results of operations and cash flows.

Increases in interest rates may negatively affect the market value of our investments, particularly anythe fixed-rate commercial loans orand other financings we have invested in. Generally, any fixed-rate commercial loans or other financings will be more negatively affected by rising interest rates than adjustable-rate assets. We are required to reduce the book value of our investments by the amount of any decrease in their fair value. Reductions in the fair value of our investments could decrease the amounts we may borrow to purchase additional commercial loans or similar financing investments, which could impact our ability to increase our operating results and cash flows. Furthermore, if our borrowing costs are rising while our interest income is fixed for the fixed-rate investments, the spread between our borrowing costs and the fixed-rate we earn on the commercial loans or similar financing investments will contract or could become negative which would adversely impact our financial condition, results of operations, and cash flows.

The commercial loans or similar financingsinvestments we have acquired and may acquire in the future that are secured by commercial real estate typically depend on the ability of the property owner to generate income from operating the property. Failure to do so may result in delinquency and/or foreclosure.

Commercial loans are secured by commercial property and are subject to risks of delinquency and foreclosure and therefore risk of loss. The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired. In the event of any default under a commercial loan held directly by us, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the commercial loan, which could have a material adverse effect on our financial condition, operating results and cash flows. In the event of the bankruptcy of a commercial loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a loan can be an expensive and lengthy process, which could have a substantial negative effect on our anticipated return on the foreclosed commercial loan. If the borrower is unable to repay a mortgage loan or similar financing, our inability to foreclose on the asset in a timely manner, and/or our inability to obtain value from reselling or otherwise disposing of the asset for an amount equal to our investment basis, would adversely impact our financial condition, results of operations, and cash flows.

While we have no short-term maturities in our long-term debt, should we seek to incur additional debt to help finance our acquisitions, increasedIncreased interest rates would reduce the difference, or spread, that we may earn between the yield on the investments we make and the cost of the leverage we employ to finance such investments. It is possible that the spread on investments could be reduced to a point at which the profitability from investments would be significantly reduced or eliminated entirely. This would adversely affect our returns on our assets, and therefore adversely impact our financial condition, our results of operations, and cash flows, and could require us to liquidate certain or all of these assets.

Our ability to make scheduled payments of the principal of, to pay interest on, to pay any cash due upon conversion of, or to refinance our indebtedness, including the Company’s $51.0 million aggregate principal amount of 3.875% Convertible Senior Notes due 2025 (the “2025 Notes”), depends on our future operating and financial performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

Despite our current consolidated debt levels, we and our subsidiaries may incur substantial additional debt in the future (subject to the restrictions contained in our debt instruments), some of which may be secured debt. The indenture governing our 2025 Notes does not restrict our ability to incur additional indebtedness, whether secured or unsecured, or require us to maintain financial ratios or specified levels of net worth or liquidity.debt.. If we incur substantial additional indebtedness in the future, these higher levels of indebtedness may affect our ability to pay the principal of, and interest on, our outstanding debt and our creditworthiness generally.

Our use of derivative instruments also involves the risk that a counterparty to a hedging arrangement could default on its obligation and the risk that we may have to pay certain costs, such as transaction fees or breakage costs, if a hedging arrangement is terminated by us. To limit the risk of counterparty default, we generally seek to enter into hedging arrangements with counterparties that are large, creditworthy financial institutions typically rated at least "A/A2" by S&P and Moody's, respectively.

Our operating results depend in part on the difference between the income achieved from our income-producing assets and management fee income streams and the interest expense incurred in connection with our interest-bearing liabilities. Changes in the general level of interest rates prevailing in the financial markets have in the past affected and may in the future affect the spread between our income-producing assets and management fee income streams and our interest-bearing liabilities subject to the impact of interest rate floors and caps, as well as the amounts of floating rate assets and liabilities. Any significant compression of the spreads between income-producing assets and management fee income streams and interest-bearing liabilities could have a material adverse effect on us. While interest rates remain low relative to certain historical rates, rates have recently risenrisen. Despite multiple federal fund rate decreases over the course of 2024 and are2025, generallyinterest expectedrates have remained elevated as compared to riseinterest inrates over the comingfive years,year althoughperiod therepreceding isMarch no certainty as to the amount by which they may rise.2022. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, inflation, labor markets, and other factors beyond our control. In the event of a rising interest rate environment, rates could create a mismatch between the income we generate from our income-producing assets and management fee income streams and the interest expense incurred on our floating rate debt that could have a significant adverse effect on our financial condition, our operating results and our cash flows. An increase in interest rates could also, among other things, reduce the value of certain of our income-producing assets and our ability to realize gains from the sale of such assets.

The Credit Facility contains certain financial and operating covenants, including, among other things, certain coverage ratios and limitations on our ability to incur debt and limits on the repurchase of the Company’s stock and similar restrictions. In addition, the Credit Facility contains certain covenants pertaining to maximum levels of investment in certain types of assets, the number and make-up of the propertiesassets in the borrowing base, and similar covenants typical for this type of indebtedness. The Company’s secured indebtedness generally contains covenants regarding debt service coverage ratios. The Company’s ability to meet or maintain compliance with these and other debt covenants may be dependent on the performance of the Company’s tenants under their leases.leases or the performance of borrowers under the Company’s commercial loans and investments. The Company’s failure to comply with certain of our debt covenants could result in a default that may, if not cured, accelerate our payment obligations under such debt and limit the Company’s available cash flow for acquisitions, dividends, or operating costs, which would likely have a material adverse impact on the Company’s financial condition, results of operations, and cash flows. In addition, these defaults could impair the Company’s access to the debt and equity markets.

Risks Associated with Certain Events, Environmental IssuesIssues, and,and Climate Change

Terrorist attacks or other acts of violence may negatively affect the Company’s operations. There can be no assurance that there will not be terrorist attacks against businesses within the United States. These attacks may directly impact the Company’s physical assets or business operations or the financial condition of its tenants, borrowers, lenders or other institutions with which the Company has a relationship. The United States may be engaged in armed conflict, which could have an impact on these parties. The consequences of armed conflict are unpredictable, and the Company may not be able to foresee events that could have an adverse effect on its business. More generally, the occurrence of any of these events or the threat of these events, could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economies. They also could result in or cause an economic recession in the United States or abroad. Any of these occurrences could have an adverse impact on the Company’s financial condition, results of operations or cash flows.

Certain “business combination” and “control share acquisition” provisions of the Maryland General Corporation Law, or the MGCL, may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stocksecurities with the opportunity to realize a premium over the then-prevailing market price of our common stock.securities. Pursuant to the MGCL, the Board has by resolution exempted business combinations between us and any other person. Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. However, there can be no assurance that these exemptions will not be amended or eliminated at any time in the future. Our charter and bylaws and Maryland law also contain other provisions that may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stocksecurities or that our stockholders otherwise believe to be in their best interest.

In order to maintain our qualification as a REIT, no more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals during the last half of any calendar year, and at least 100 persons must beneficially own our stock during at least 335 days for each taxable year other than our initial REIT taxable year (i.e., our taxable year ended December 31, 2020). “Individuals” for this purpose include natural persons, private foundations, some employee benefit plans and trusts and some charitable trusts. To assist us in complying with these limitations, among other purposes, our charter generally prohibits any person from directly or indirectly owning more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our capital stock. These ownership limitations could have the effect of discouraging a takeover or other transaction in which holders of our common stocksecurities might receive a premium for their shares over the then prevailing market price or which holders might believe to be otherwise in their best interests.

In addition, if we fail to remain qualified as a REIT, we will no longer be required to make distributions. As a result of all these factors, our failure to remain qualified as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect our business, financial condition, results of operations or ability to make distributions to our stockholders and the trading price of our common stock.securities.

Even if we remain qualified for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure and state or local income, property and transfer taxes. In addition, any partnership in which we have an interest may be liable at the entity level for tax imposed under those procedures. Further, our taxable REIT subsidiaries (“TRSs”) will be subject to regular corporate U.S. federal, state and local taxes. The TRS rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Any of these taxes would decrease cash available for distributions to stockholders, which, in turn, could materially adversely affect our business, financial condition, results of operations or ability to make distributions to our stockholders and the trading price of our common stock.securities.

The REIT provisions of the Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests applicable to REITs. In addition, certain income from hedging transactions entered into to hedge existing hedging positions after any portion of the hedged indebtedness or property is extinguished or disposed of will not be included in income for purposes of the 75% and 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSsTRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a TRS generally will not provide any tax benefit, except for being carried forward against future taxable income of such TRS.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited transaction tax equal to 100% of net gain upon a disposition of real property. Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. Consequently, we may choose not to engage in certain sales of our properties, may structure dispositions as Section 1031 like-kind exchanges, or may conduct such sales through a TRS, whichwhose sale of properties would be subject to U.S. federal corporate income tax.

Overall, no more than 20%25% of the value of a REIT’s assets may consist of stock or securities of one or more TRS. A TRS will be subject to applicable U.S. federal, state and local corporate income tax on its taxable income, and its after tax net income will be available for distribution to us but is not required to be distributed to us. In addition, the Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation and, in certain circumstances, other limitations on deductibility may apply. The Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of our respective investments in our TRSsTRS for the purpose of ensuring compliance with TRS ownership limitations and will structure our transactions with such TRSsTRS on terms that we believe are arm’s length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20%25% limitation or to avoid application of the 100% excise tax.

The maximum U.S. federal income tax rate applicable to “qualified dividend income” payable to U.S. stockholders that are taxed at individual rates is 20% (plus the 3.8% surtax on net investment income, if applicable). Dividends payable by REITs, however, generally are not eligible for the reduced rates on qualified dividend income. However, for taxable years beginning before January 1, 2026, ordinary REIT dividends constitute “qualified business income” and thus a 20% deduction is available to individual taxpayers with respect to such dividends, resulting in a 29.6% maximum U.S. federal income tax rate (plus the 3.8% surtax on net investment income, if applicable) for individual U.S. stockholders. However, to qualify for this deduction, the stockholder receiving such dividends must hold the dividend-paying REIT stock for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days before the stock becomes ex-dividend, and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property. The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common and preferred stock.

We may be subject to adverse legislative or regulatory tax changes, in each instance with potentially retroactive effect, that could reduce the market price of our common stock.securities.

At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations which, in turn, could materially adversely affect our ability to make distributions to our stockholders and the trading price of our common stock.securities.

As with other publicly-traded securities, the market price of the Company’s common stock,stock and preferred stock and convertible notes depends on various factors, which may change from time to time and/or may be unrelated to the Company’s financial condition, results of operations, or cash flows and such factors may cause significant fluctuations or volatility in the market price of the Company’s common stock and preferred stock. These factors include, but are likely not limited to, the following:

Commercial Loans and Investments: A portfolio of fivefour commercial loan investments and two preferred equity investments which are classified as commercial loan investments.

Real Estate Operations: There were no significant transactions within the Company’s real estate operations during the year ended December 31, 2025. During the year ended December 31, 2024, the Company sold its remaining mitigation credits. These credits were produced by the Company’s formerly owned mitigation bank. During the year ended December 31, 2024, the Company sold its portfolio of subsurface mineral interests associated with approximately 352,000 surface acres in 19 counties in the State of Florida (“Subsurface Interests”), as further described in Note 6, “Real Estate Operations”. As part of the Subsurface Interests sale, the Company entered into a management agreement with the buyer to provide ongoing management services (the “Subsurface Management Agreement”).

Our business also includes our investment in PINE. As of December 31, 2024,2025, the fair value of our investment totaled $39.7$41.3 million, or 14.8%15.4% of PINE’s outstanding common equity, including the units of limited partnership interest (“OP Units”) we hold in Alpine Income Property OP, LP (the “PINE Operating Partnership”), which are redeemable for cash, based upon the value of an equivalent number of shares of PINE common stock at the time of the redemption, or shares of PINE common stock on a one-for-one basis, at PINE’s election. Our investment in PINE generates investment income through the dividends distributed by PINE. In addition to the dividends we receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that such appreciation will occur, the amount by which our investment will increase in value, or the timing thereof. Any dividends received from PINE are included in investment and other income (loss) on the accompanying consolidated statements of operations.

NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by U.S. GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses (“CECL”) on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, subsurface sales, investment securities, and land sales, in addition to the mark-to-market of the Company’s investment securities and interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to U.S. GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items, as well as adding back the interest related to the 2025 Convertible Senior Notes, if the effect is dilutive. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to U.S. GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.

Total revenue for the year ended December 31, 2024 increased to $124.5 million, compared to $109.1 million during the year ended December 31, 2023. The increase in total revenue is primarily attributable to increased revenue produced by the Company’s income property portfolio from the significant volume of acquisitions during the year ended December 31, 2024 versus that of properties disposed. Revenues further benefited from a $3.3 million increase in income from the Company’s commercial loans and investments. These increases were partially offset by a $2.0 million decrease in real estate operations which is primarily due to the completion of the sales of all remaining Subsurface Interests and mitigation credits during the year ended December 31, 2024.

During the year ended December 31, 2024, operating income from real estate operations was $0.5 million on revenues totaling $2.0 million. During the year ended December 31, 2023, operating income from real estate operations was $2.3 million on revenues totaling $4.0 million. The operating income during the years ended December 31, 2024 and 2023 was the result of mitigation credit sales and sales of Subsurface Interests. The remaining Subsurface Interests were sold during the first half of 2024 and all remaining mitigation credits were sold as of December 31, 2024; therefore, the Company expects no further revenue andor operating income from real estate operations.

The increase in total general and administrative expenses was generated primarily from overall higher employee count as a result of the significant growth in our portfolio of multi-tenantshopping retailcenter assets and an increase in executive incentive compensation related to growth in earnings.

Gain on Disposition of Assets – 2024 Dispositions. During the year ended December 31, 2024, the Company sold two income properties for an aggregate sales price of $38.0 million and aggregate gains on sales of $3.8 million. The sales consisted of (i) one mixed use income property in downtown Santa Fe, New Mexico for $20.0 million, resulting in a gain of $4.6 million, and (ii) one multi-tenantshopping income propertycenter located in West Jordan, Utah for $18.0 million resulting in a loss on sale of $0.8 million. In addition, during the year ended December 31, 2024, the Company sold its remaining acres of Subsurface Interests for $5.0 million, or a gain on sale of $4.5 million. The sales of these two properties and the remaining acres of Subsurface Interests resulted in aggregate gains on sales of $8.3 million, which consisted of aggregate gains on disposition of $9.1 million and aggregate losses on disposition of $0.8 million.

Gain on Disposition of Assets – 2023 Dispositions. During the year ended December 31, 2023, the Company sold nine income properties, including (i) an outparcel of the multi-tenantshopping propertycenter known as Eastern Commons, located in Henderson, Nevada, for $2.1 million, (ii) four outparcels of the multi-tenantshopping propertycenter known as Crossroads Towne Center, located in Chandler, Arizona, for an aggregate sale price of $11.5 million, (iii) a single tenant office property located in Reston, Virginia leased to General Dynamics for $18.5 million, (iv) a multi-tenantshopping propertycenter known as Westcliff, located in Fort Worth, Texas, for $14.8 million, (v) a multi-tenantshopping propertycenter known as Eastern Commons, located in Henderson, Nevada, for $18.2 million, (vi) a single tenant office property known as Sabal Pavilion located in Tampa, Florida for $22.0 million. The sales of these nine properties reflect a total disposition volume of $87.1 million and resulted in aggregate gains on sales of $6.6 million, which consisted of aggregate gains on disposition of $8.2 million, aggregate losses on disposition of $0.7 million, and an impairment charge prior to sale of $0.9 million.

Depreciation and amortization totaled $65.1 million and $44.2 million during the years ended December 31, 2024 and 2023, respectively. Depreciation and amortization expense has generally increased commensurate with overall growth of the Company’s income property portfolio. Additionally, duringDuring the year ended December 31, 2024, the Company recorded an out-of-period adjustment totaling $10.1 million consisting of (i) $4.5 million associated with the acceleration of amortization for lease intangibles related to certain lease terminations that occurred prior to January 1, 2024 and (ii) $5.6 million associated with calculating amortization based on the remaining useful life of each lease on an individual basis as opposed to a property-level weighted average remaining useful lease life. Based on our quantitative and qualitative analyses, we do not consider the impact of the out-of-period adjustment to be material to our financial position or results of operations for the year ended December 31, 2024, or for any prior periods.

Interest expense totaled $22.5 million and $22.4 million for the years ended December 31, 2024 and 2023, respectively. While interest expense was relatively flat, there was an increase of $2.2 million in interest expense on our term loans, primarily due to the 2029 Term Loan entered into on SepteemberSeptember 30, 2024, with a corresponding $2.2 million decrease in interest expense on our Credit Facility.

Net Income (Loss)

Our total cash balance at December 31, 2024,2025 reflected cash flows provided by our operating activities totaling $69.3$64.6 million during the year ended December 31, 2024,2025, compared to the prior year’s cash flows provided by operating activities totaling $46.4$59.9 million for the year ended December 31, 2023,2024, an increase of $22.9$4.7 million. The increase ofin $22.9operating millioncash flows is primarily dueattributable to the increase inhigher operating income from ourthe Company’s income property portfolioportfolio, as a result of overall growth and lease-up activities, and increased income from ourits commercial loans and investments.investments, partially offset by increases in interest expense and general and administrative expenses.

Our cash flows used in investing activities totaled $242.2$71.5 million and $52.6$232.7 million for the years ended December 31, 20242025 and 2023,2024, respectively, anrepresenting increasea decrease of $189.6$161.2 million. The increase in cash used in investing activities of $189.6 milliondecrease is primarily relatedattributable to (i) a net increasedecrease in cash outflows of $191.3 million during the year ended December 31, 2024 related to the net income property acquisitions versus dispositions as well as an increase in cash outflows of $11.7$126.5 million related to theproperty transactions, reflecting lower acquisition activity offset by increased proceeds from dispositions, and (ii) $44.5 million of lower net funding of certain investments in the Company’s commercial loans and investmentinvestments portfolio, offsetreflecting byincreased principal paymentsrepayments received on such investments. The overall increases in cash outflows are partially offset by a $5.2 million decrease in capital expenditures on our income property portfolio and additional cash proceeds of $5.0 million received on the sale of our remaining Subsurface Interests.

Acquisitions and Investments. During the year ended December 31, 2024,2025, the Company acquired fivetwo multi-tenantshopping income properties, one vacant land parcel within an existing multi-tenant property owned by the Company, and one building within an existing multi-tenant income property owned by the Companycenters for an aggregate purchase price of $226.8$144.9 million, or a total acquisition cost of $224.4$145.1 million, as further described in Note 3, “Income Properties” in the notes to the consolidated financial statements in Item 8.

For a discussion of the Company’s potential risks and uncertainties, see the information set forth under the heading Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”). The risks described in the Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company. As of MarchJune 31,30, 2026, there have been no material changes in our risk factors from those set forth within the Form 10-K.

As of MarchJune 31,30, 2026, we own and manage, sometimes utilizing third-party property management companies, 2221 commercial real estate properties in seven states in the United States, comprising 5.95.8 million square feet of gross leasable space:

Commercial Loans and Investments: A portfolio of four commercial loan investments and onethree preferred equity investmentinvestments which isare classified as a commercial loan investment.investments.

Investment in PINE: Our business also includes our investment in PINE. As of MarchJune 31,30, 2026, the fair value of our investment totaled $44.5$51.3 million, or 14.0%13.1% of PINE’s outstanding equity, including the units of limited partnership interest (“OP Units”) we hold in Alpine Income Property OP, LP (the “PINE Operating Partnership”), which are redeemable for cash, based upon the value of an equivalent number of shares of PINE common stock at the time of the redemption, or shares of PINE common stock on a one-for-one basis, at PINE’s election. Our investment in PINE generates investment income through the dividends distributed by PINE. In addition to the dividends we receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that such appreciation will occur, the amount by which our investment will increase in value, or the timing thereof. Any dividends received from PINE are included in investment and other income (loss) on the accompanying consolidated statements of operations.

Our current portfolio of 1817 shopping centers generates $110.2$108.5 million of revenue from annualized straight-line base lease payments and had a weighted average remaining lease term of 5.05.1 years as of MarchJune 31,30, 2026. Our current portfolio of 4 other income properties generates $3.7 million of revenues from annualized straight-line base lease payments and had a weighted average remaining lease term of 3.63.8 years as of MarchJune 31,30, 2026.

COMPARISON OF THE THREE MONTHS ENDED MARCHJUNE 31,30, 2026 AND 2025

Total revenue for the three months ended MarchJune 31,30, 2026 is presented in the following summary and indicates the changes as compared to the three months ended MarchJune 31,30, 2025 (in thousands):

Total revenue for the three months ended MarchJune 31,30, 2026 increased to $41.2$43.8 million, compared to $35.8$37.6 million during the three months ended MarchJune 31,30, 2025. The $5.4$6.2 million increase in total revenue is primarily attributable to increased income produced by the Company’s recent income property acquisitions versus that of properties disposed of by the Company during the comparative period, as well as more same store revenue from our properties owned during each period. Additionally, revenues from our management services and our commercial loans and investments increased.have increased due to the recent preferred equity investments which are accounted for within our commercial loan and investment portfolio.

Revenue and operating income from our income property operations totaled $36.6$37.1 million and $26.4$26.0 million, respectively, during the three months ended MarchJune 31,30, 2026, compared to total revenue and operating income of $31.7$33.4 million and $22.8$23.2 million, respectively, for the three months ended MarchJune 31,30, 2025. The direct costs of revenues for our income property operations totaled $10.2$11.1 million and $8.9$10.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase in revenues of $4.9$3.8 million, or 15.5%,11.3%, during the three months ended MarchJune 31,30, 2026 is primarily related to the overall growth and lease up of the Company’s income property portfolio, as well as the timing of acquisitions versus dispositions. The increase in operating income of $3.6$2.8 million from our income property operations reflects increased rent revenues related to our net investments as well as leasing activity.

Revenue from our management services from PINE totaled $1.3$1.4 million and $1.1 million during the three months ended MarchJune 31,30, 2026 and 2025, respectively. Management services during each of the three months ended MarchJune 31,30, 2026 and 2025 also included $0.1 million and less than $0.1 million, respectively, from the asset management agreement with a third party to manage a portfolio of multi-tenant and single-tenant assets (the “Portfolio Management Agreement”), and less than $0.1 million from a subsurface management agreement.

Interest income from our commercial loans and investments totaled $3.2$5.2 million and $2.9$3.0 million during the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase of $0.3$2.2 million is primarily due to the timing of the investments made related to new loan originations and structured investments and repayments of previous investments.investments, most notably the two preferred equity agreements for aggregate investments of $96.4 million completed during the three months ended June 30, 2026.

Total general and administrative expenses for the three months ended MarchJune 31,30, 2026 is presented in the following summary and indicates the changes as compared to the three months ended MarchJune 31,202530, 2025 (in thousands):

Depreciation and amortization totaled $16.0$15.8 million and $14.4$15.3 million during the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase of $1.6$0.5 million is due to the overall growth in the Company’s income property portfolio.

2026 and 2025 Dispositions. During the three months ended June 30, 2026, the Company sold two shopping center properties for $90.7 million, generating gains of $2.1 million. There were no income property dispositions during the three months ended MarchJune 31, 2026 and30, 2025.

Provision for Impairment and Adjustments to CECL Reserve. There were no impairment charges on the Company’s income property portfolio during the three months ended MarchJune 31,30, 2026 and 2025. The Company recorded adjustmentsa charge to CECL reserves related to its commercial loans and investments for an increase in net income of $0.3$1.1 million for the three months ended MarchJune 31,30, 2026, with no such adjustmentcharge being recorded during the three months ended MarchJune 31,30, 2025.

During the three months ended MarchJune 31,30, 2026, the closing stock price of PINE increased by $1.28$2.76 per share, with a closing price of $18.00$20.76 on MarchJune 31,30, 2026. During the three months ended MarchJune 31,30, 2025, the closing stock price of PINE decreased by $0.07$2.01 per share, with a closing price of $16.72$14.71 on MarchJune 31,30, 2025. The change in stock price resulted in unrealized non-cash gain (loss) on the Company’s investment in PINE in the amount of $3.2$6.8 million and $(0.24.7) million which is included in investment and other income (loss) in the consolidated statements of operations for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

The Company earned dividend income of $0.7 million from its investment in PINE during each of the three monthsmonth periods ended MarchJune 31,30, 2026 and 2025.

Interest expense totaled $7.2$7.8 million and $6.1$6.9 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase of $1.1$0.9 million is primarily attributable to an aggregate increase in the Company’s term loan balances.

Net income (loss) attributable to the Company totaled $6.2$15.1 million and $2.3$(23.4) million during the three months ended MarchJune 31,30, 2026 and 2025, respectively. The $3.9$38.5 million increase in net income is attributable to the factors described above.above, most notably the $20.4 million loss on extinguishment of debt incurred during the three months ended June 30, 2025 with no such loss during the three months ended June 30, 2026.

Cash and cash equivalents totaled $8.3$8.1 million at MarchJune 31,30, 2026, while restricted cash totaled $10.6$35.4 million, see Note 2, “Summary of Significant Accounting Policies” in the Notes to Financial Statements under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance at MarchJune 31,30, 2026.

Our cash flows provided by operating activities totaled $14.6$34.6 million during the threesix months ended MarchJune 31,30, 2026, as compared to $10.3$27.5 million during the threesix months ended MarchJune 31,30, 2025, an increase of $4.3$7.1 million. The primary reason for the increase,increase is the increased cash flows provided by income properties, which is the result of the overall growth and lease up of the Company’s income property portfolio, as well as increased cash flows from our commercial loans and investments.

Our cash flows providedused byin financinginvesting activities totaled $31.8$140.6 million during the threesix months ended MarchJune 31,30, 2026, as compared to $68.4$83.7 million forduring the threesix months ended MarchJune 31,30, 2025, afor decreasean increase in cash inflowsoutflows of $36.6$56.9 million. TheThis decreaseincrease iswas primarily duedriven toby a $50.0$78.5 million reductionincrease in proceedsnet fromfunding long-termof debtnew issuancesand whichexisting werecommercial loans and investments, including related reserve funding, partially offset by $14.2$21.1 million inof highernet cash inflowsproceeds from commonincome stockproperty issuancesdispositions underin theexcess commonof ATMacquisition program.and capital investment activity.

Long-Term Debt. At MarchJune 31,30, 2026, the current commitment level under the Revolving Credit Facility was $300.0 million. The undrawn commitment under the Revolving Credit Facility totaled $116.0$107.0 million. As of MarchJune 31,30, 2026, the Revolving Credit Facility had a $184.0$193.0 million balance outstanding. See Note 14, “Long-Term Debt” in the Notes to Financial Statements for the Company’s disclosure related to its long-term debt balance at MarchJune 31,30, 2026.

Acquisitions and Investments. During the threesix months ended MarchJune 31,30, 2026, the Company acquired Palms Crossing, an open-airtwo shopping center locatedproperties inand McAllen,one TX,land parcel for aan aggregate purchase price of $81.6$137.8 million, or a total acquisition cost of $81.8$138.1 million, including capitalized acquisition costs.million. During the threesix months ended MarchJune 31,30, 2025, the Company acquired one shopping center for a purchase price of $79.8 million, or a total acquisition cost of $80.0 million, including capitalized acquisition costs.

The Company’s guidance for 2026 investments in income-producing properties, including structured investments, ranges from $175.0$300.0 million to $250.0$400.0 million. We expect to fund future acquisitions utilizing cash on hand, cash from operations, proceeds from the dispositions of income properties through 1031 like-kind exchanges, borrowings on our Revolving Credit Facility, if available, and additional financing sources. We expect dispositions of income properties will qualify under the like-kind exchange deferred-tax structure.

ATM Program. During the threesix months ended MarchJune 31,30, 2026, the Company sold 733,8834,917,499 shares under the 2024 ATM Program for gross proceeds of $14.4$99.2 million at a weighted average price of $19.59$20.18 per share, generating net proceeds of $14.2$97.8 million after deducting transaction fees of $0.2$1.4 million. As of MarchJune 31,30, 2026, $202.1$117.2 million of availability remained under the 2024 ATM Program.

Contractual Commitments – Expenditures. The Company has committed to fund the following capital improvements. The improvements, which are related to several properties, are estimated to be generally completed within twelve months. These commitments, as of MarchJune 31,30, 2026, are as follows (in thousands):

The Company has unfunded loan commitments under two construction loans, as described in Note 4, “Commercial Loans and Investments.” The unfunded portion of these construction loans totaled $46.2$33.5 million as of MarchJune 31,30, 2026.

Other Matters. We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, $202.1$117.2 million of availability remaining under our $250.0 million “at-the-market” equity offering program, and $116.0$107.0 million undrawn commitment under the existing $300.0 million Revolving Credit Facility as of MarchJune 31,30, 2026.

NAREIT defines FFO as U.S. GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by U.S. GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the current expected credit losses (“CECL”) on commercial loans and investments at the time of origination and repayment, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of investment securities (which are presented net of income tax expense or benefit, if applicable) in addition to the mark-to-market of the Company’s investment securities. To derive Core FFO, we modify the NAREIT computation of FFO to include other adjustments to U.S. GAAP net income related to gains and losses recognized on the extinguishment of debt, amortization of above- and below-market lease related intangibles, and other unforecastable market- or transaction-driven non-cash items. To derive AFFO, we further modify the NAREIT computation of FFO and Core FFO to include other adjustments to U.S. GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, non-cash compensation, and other non-cash amortization. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by U.S. GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have an impact on the Company’s financial condition as well as results of operations due to resulting changes in depreciation and amortization as a result of the fair value allocation. The acquisitions of real estate subject to this estimate totaled onetwo shopping centercenters and one land parcel for a purchase price of $81.6$137.8 million, or a total acquisition cost of $81.8$138.1 million, for the threesix months ended MarchJune 31,30, 2026, and one shopping center for an aggregate purchase price of $79.8 million, or a total acquisition cost of $80.0 million, for the threesix months ended MarchJune 31,30, 2025.