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

As of March 14,27, 2025,2026, we have $467.0$1.3 millionbillion of loan maturities and required principal paydowns during the next 12 months and $672.7 million of loan maturities and required principal paydowns from March 14, 2026 through December 31, 2026.months. Our loan agreements require us to sell two properties in 2025,2025 two(which we completed), three properties in 2026 and up to four properties in 2027. Selling real estate assets in the current market may result in a lower sale price than we would otherwise obtain. We may continue to evaluate raising capital through the issuance of new equity or debt to the extent we see improvement in the capital markets. We may also defer noncontractual expenditures to manage our liquidity needs.

We will be adversely affected if we are unable to satisfy the terms and conditions contained in our loan agreements. There is no assurance that we will be able to satisfy the terms and conditions of our existing loan agreements or the terms and conditions of any future extension or refinancing agreements that are entered into. If we are unable to make required principal paydowns under certain loans, sell assets or satisfy certain covenants and conditions in our loan agreements, the lenders may seek to foreclose on the underlying collateral. Our loan agreements contain cross default provisions whereby the occurrence of (or a demand following) an “event of default” under one or more of our debt facilities may trigger a default under certain other debt facilities and the guaranty obligations in respect thereof. The cross default provisions vary across the loan agreements and some require that lenders affirmatively elect that an event of default is triggered and/or that payment demands are made in excess of a threshold amount before an event of default is triggered; however, depending upon which facilities default and the guaranty obligations thereunder, there is a risk that an event of default under one loan agreement could cause an event of default under other debt facilities thereby giving lenders a right to accelerate the relevant debt obligations and exercise their enforcement rights with respect thereto. In addition, we have pledged the equity of certain of our subsidiaries (and all proceeds therefrom) in connection with the restructuring of certain of our subsidiaries’ debt facilities and, therefore, if an event of default occurs under certain debt facilities and the lenders party thereto elect to exercise their enforcement rights thereunder, one of the remedies available to them is to take possession of the relevant pledged equity. We have directly and/or indirectly pledged the equity of subsidiaries owning the following properties: Gateway Tech Center, 201 17th Street, 515 Congress, Carillon, Park Place VillageCarillon and Accenture Tower. Additionally,In we are requiredorder to pledgefacilitate approximatelycertain halfalternative collateral arrangements and in full and final satisfaction of our obligations set forth in the letter agreement entered into July 10, 2025 with respect to the SREIT units, REIT Properties III agreed with the Portfolio Loan Lenders to (i) establish a deposit account (the “Prime Proceeds Account”) for the benefit of the unitsPortfolio Loan Lenders pursuant to which the proceeds of thecertain SREIT thatunits we(“Prime own.Proceeds”) Ifshall webe aredeposited unableand (ii) grant to satisfythe Portfolio Loan Lenders a first priority perfected security interest in the Prime Proceeds Account and the other collateral, all as described in and upon the terms and subject to the conditions containedset forth in oura loanCash agreements,Collateral weAccount anticipateSecurity, wePledge willand makeAssignment effortsAgreement (the “Cash Collateral Agreement”). Pursuant to furtherthe refinance or restructure certainterms of ourthe debtCash instrumentsCollateral orAgreement, makeREIT Properties III agreed that all Prime Proceeds deposited into the Prime Proceeds Account shall be held as additional assetcollateral sales to pay offfor the debt,benefit thoughof therethe canPortfolio beLoan noLenders certainty that we will be able to completeuntil such refinancing,time restructuringas orthe assetPrime sales.Proceeds Inare suchapplied event,in ouraccordance stockholderswith wouldthe likelyterms sufferof athe lossAmended toand theirRestated investment.Portfolio Loan Facility. For information regarding the Amended and Restated Portfolio Loan Facility, see Note 8, “Notes Payable – Recent Financing Transactions – Amended and Restated Portfolio Loan Facility” in this Annual Report.

We have interest rate swaps outstanding with several bank counterparties. An event of default under our debt facilities that triggers an acceleration of our debt could result in an event of default under our swap agreements with bank counterparties. If such an event of default is continuing, the swap counterparty would have the right to designate an early termination date in respect of all outstanding interest rate swaps and determine a net amount payable by one of the parties using standard ISDA close-out methodology. Prior to any such early termination, subject to applicable insolvency law, the swap counterparty would have the right to suspend payments to us under all outstanding interest rate swaps for as long as such event of default is continuing. Currently, the majority of our swaps are an asset to us; however, there is no certainty that will remain the case as this will depend on future changes in interest rates.

In addition, as of March 14,27, 2025,2026, fivesix of our debt facilities (representing $1.3 billion of our outstanding debt that are secured by 12 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. However, such cash management accounts place limits on our access to cash flows from these properties and restrict our operating flexibility.

Despite the substantial amount of refinancing activity since February 2024 (over $1.3$1.4 billion of debt refinanced or extended), there can be no assurances as to the certainty or timing of management’s future plans in regards to the matters above, as certain elements of management’s plans are outside our control, including our ability to repay our outstanding debt obligations at maturity, make required principal paydowns during the terms of the loans, satisfy other terms and conditions contained in our loan agreements, refinance, restructure or extend certain debt obligations,obligations and sell assets in the current real estate and financial marketsmarkets. If we are unable to satisfy the terms and raiseconditions capitalcontained throughin our loan agreements, we anticipate we will make efforts to further refinance or restructure certain of our debt instruments or make additional asset sales to pay off the issuancedebt, though there can be no certainty that we will be able to complete such refinancing, restructuring or asset sales. We may relinquish ownership of new equityone or debt.more secured properties to the mortgage lender. We may also seek the protection of the bankruptcy court to implement a restructuring plan, which would constitute an event of default under our indebtedness.

Continued disruptions in the financial markets and economic uncertainty impacting the U.S. commercial real estate industry could further impact our ability to implement our business strategy and continue as a going concern. Overall, there remains significant uncertainty regarding the timing and duration of the economic recovery, which precludes any prediction as to the ultimate adverse impact the current disruptions in the markets may have on our business. Potential long-term changes in customer behaviorbehavior, such as continued work-from-home arrangements, could materially and negatively impact the future demand for office space, further adversely impacting our operations.

In addition, as of March 14,27, 2025,2026, fivesix of our debt facilities (representing $1.3 billion of our outstanding debt that are secured by 12 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. Generally excess cash flow means an amount equal to (a) gross revenues from the properties securing the facility less (b) an amount equal to principal and interest paid with respect to the associated debt facility, operating expenses of the properties securing the facility and in certain cases a limited amount of REIT-level expenses. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. However, such cash management accounts place limits on our access to cash flows from these properties and restrict our operating flexibility.

In addition, the loan documents for indebtedness may include various coverage ratios, the continued compliance with which may not be completely within our control. If such coverage ratios are not met, the lenders under such indebtedness may declare any unfunded commitments to be terminated and declare any amounts outstanding to be due and payable. Moreover, our loan agreements contain cross default provisions, including that the failure of one or more of our subsidiaries to pay debt as itdescribed matures under one debt facility may trigger the acceleration of our indebtedness under other debt facilities.above.

Elevated interest rates and higher interest rate spreadsspreads, and any future increases in interest rates and interest rate spreadsspreads, could increase the amount of our interest and/or hedge payments and/or mitigate the effectiveness of our interest rate hedges.

As of December 31, 2024,2025, our debt obligations consisted of $118.4$116.9 million of fixed rate notes payable and $1.3$1.2 billion of variable rate notes payable. As of December 31, 2024,2025, the interest rates on $1.1$1.0 billion of our variable rate notes payable were effectively fixed through interest rate swap agreements. Given the challenges affecting the U.S. commercial real estate industry and the challenging interest rate environment, in order to refinance or extend loans, our lenders have required higher interest rate spreads in connection with the loans refinanced or extended in the last 12 months compared to the terms in the loans beingthat have been refinanced or extended. We utilize interest rate swaps to manage interest rate risk, and in particular fluctuations in the variable rate, namely SOFR, but these interest rate swaps will not mitigate any risk related to higher interest rate spreads. Additionally, we have entered into various interest rate swap agreements that are currently below market and as those swaps expire, our interest expense will increase and further impact our liquidity position and ongoing cash flows. As a result, we expect interest expense and our weighted-average effective interest rate to increase in the future as a result of recent extensions and as we continue to refinance our maturing debt.future.

When we place mortgage debt on a property, we run the risk of being unable to refinance part or all of the debt when it becomes due or of being unable to refinance on as favorable terms as existing debt, as has been the case with loans refinanced or extended over the last 12two months.years. If interest rates are higher when we refinance properties subject to mortgage debt or interest rate spreads are higher, our income could be reduced. We may be unable to finance or refinance or may only be able to partly finance or refinance properties if underwriting standards, including loan to value ratios and yield requirements, among other requirements, are stricter. If any of these events occurs, our cash flow could be reduced and/or we might have to pay down existing mortgages. This, in turn, would reduce our cash flows, could cause us to require additional capital and may hinder our ability to raise capital by issuing more stock or by borrowing more money.

•interest rate hedging can be expensive, particularly during periods of elevated, rising and volatile interest rates;

Stockholders may have to hold their shares an indefinite period of time. We can provide no assurance that we will be able to provide additional liquidity to stockholders. Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to redeem any shares of common stock until certain loans are repaid or refinanced. One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement. Since 2019, due to the limitations under our share redemption program, our pursuit of strategic alternatives and/or disruptions in the financial markets, we have either exhausted the funds available for Ordinary Redemptions (defined below) under our share redemption program or implemented suspensions of Ordinary Redemptions for all or a portion of the calendar year. Ordinary Redemptions are all redemptions other than those that qualify for the special provisions for redemptions sought in connection with a stockholder’s death, “Qualifying Disability” or “Determination of Incompetence” (each as defined in the share redemption program and, together, “Special Redemptions”). We terminated our share redemption program on March 15, 2024.

Our business has been and may continue to be adversely affected by market and economic volatility experienced by the U.S. and global economies, the U.S. office market as a whole and/or the local economies in the markets in which our properties are located. Such adverse economic and geopolitical conditions may be due to, among other issues, persistent inflation and elevated interest rates; volatility in the public equity and debt markets; uncertainties regarding actual and potential shifts in U.S. and foreign policies on trade and other fiscal, monetary and regulatory policies, including with respect to treaties, tariffs and sanctions; trade disputes between the U.S. and foreign trading partners; ongoing hostilitiesconflicts between Russia and Ukraine and in the Middle East (including between Israel and HamasHamas, which as of the filing of this Annual Report has expanded to include the U.S., Lebanon (and/or Hezbollah), Iran and other Middle Eastern countries) and the international community’s response thereto; other geopolitical events affecting the markets generally, including pandemics (such as the COVID-19 pandemic); the actual or perceived instability in the U.S. banking system; and labor market challenges. These current conditions, or similar conditions existing in the future, have and may continue to adversely affect our results of operations and financial condition, as a result of one or more of the following, among other potential consequences:

The ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings, continues to be one of the most significant risks and uncertainties we face. The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue), as well as a low level of lending activity in the debt markets, have contributed to continued weakness in the commercial real estate markets. The usage and leasing activity of our assets in several markets remains lower than pre-pandemic levels. Upcoming and recent tenant lease expirations and leasing challenges in certain markets amidst the aforementioned headwinds coupled with slower than expected return-to-office, most notably in the greater San Francisco Bay Area where we own several assets, have had direct and material impacts to property appraisal values used by our lenders and have impacted our ability to access certain credit facilities and on our ongoing cash flow.

As of March 14,27, 2025,2026, we have $467.0$1.3 millionbillion of loan maturities and required principal paydowns during the next 12 months. Considering the current commercial real estate lending environment and the ongoing required loan paydowns and loan maturity schedule, this raises substantial doubt as to our ability to continue as a going concern for at least a year from the date of the issuance of our financial statements. See the discussion under “—Risks Associated with Debt Financing and Going Concern Considerations.” Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to pay any dividends or distributions or redeem any shares of common stock until certain loans are repaid or refinanced. One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement. Additionally, we have terminated our share redemption program and we are unable to predict when or if we will be in a position to pay distributions to or provide liquidity to our stockholders.

Continued disruptions in the financial markets and economic uncertainty impacting the U.S. commercial real estate industry could further impact our ability to implement our business strategy and continue as a going concern. Overall, there remains significant uncertainty regarding the timing and duration of the economic recovery, which precludes any prediction as to the ultimate adverse impact the current disruptions in the markets may have on our business. Potential long-term changes in customer behavior, such as continued work-from-home arrangements, could materially and negatively impact the future demand for office space, further adversely impacting our operations.operations

The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue) have contributed to continued weakness in the commercial real estate markets especially as it pertains to commercial office properties. Elevated interest rates and persistent inflation have had and could continue to have an adverse impact on our variable rate debt; our ability to refinance and extend debt at favorable terms relative to the debt that was or is to be refinanced; our ability to sell assets at the price, on the terms or within the time frame that we desire; and on our general and administrative expenses. In addition, due to elevated interest rates and higher interest rate spreads that lenders have required in loans we have refinanced or extended in the last 12two months,years, we may experience further restrictions in our liquidity due to higher debt service costs and reduced yields relative to the cost of debt. Further, increases in the costs of owning and operating our properties due to inflation could reduce our net operating income and the value of an investment in us to the extent such increases are not reimbursed or paid by our tenants. If we are materially impacted by persistent inflation because, for example, inflationary increases in costs are not sufficiently offset by the contractual rent increases and operating expense reimbursement provisions or escalations in the leases with our tenants, we may implement additional measures to conserve cash or preserve liquidity.

The ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings, continues to be one of the most significant risks and uncertainties we face. The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue), as well as a low level of lending activity in the debt markets, have contributed to continued weakness in the commercial real estate markets. The usage and leasing activity of our assets in several markets remains lower than pre-pandemic levels in those markets.levels. Upcoming and recent tenant lease expirations and leasing challenges in certain markets amidst the aforementioned headwinds coupled with slower than expected return-to-office, most notably in the greater San Francisco Bay Area where we own several assets, have had direct and material impacts to property appraisal values used by our lenders and have impacted our ability to access certain credit facilities and on our ongoing cash flow.

Our success depends to a significant degree upon the contributions of Messrs. DeLuca, Schreiber and Waldvogel and the team of real estate and debt finance professionsprofessionals at our advisor. Neither we nor our advisor or its affiliates have employment agreements with these individuals and they may not remain associated with us, our advisor or its affiliates. If any of these persons were to cease their association with us, our advisor or its affiliates, we may be unable to find suitable replacements and our operating results could suffer as a result. We do not maintain key person life insurance on any person. We believe that our future success depends, in large part, upon our advisor’s and its affiliates’ ability to attract and retain highly skilled managerial, operational and marketing professionals. Competition for such professionals is intense, and our advisor and its affiliates may be unsuccessful in attracting and retaining such skilled professionals. Further, we have established strategic relationships with firms that have special expertise in certain services or detailed knowledge regarding real properties in certain geographic regions. Maintaining such relationships will be important for us to effectively compete in such regions. We may be unsuccessful in maintaining such relationships. If we lose or are unable to obtain the services of highly skilled professionals or do not establish or maintain appropriate strategic relationships, our ability to implement our management and disposition strategies could be delayed or hindered, which could cause our financial condition and results of operations to suffer.

We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. The rapid evolution and increased adoption of artificial intelligence technologies by us, our advisor or third parties, may also heighten our cybersecurity risks by making cyberattacks more difficult to detect, contain and mitigate. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.

We and other KBS-sponsored programs and KBS-advised investors rely on thesethe KBS real estate professionals at our advisor and its affiliates to supervise the property management and leasing of properties. If the KBS team of real estate professionals directs creditworthy prospective tenants to properties owned by another KBS-sponsored program or KBS-advised investor when it could direct such tenants to our properties, our tenant base may have more inherent risk and our properties’ occupancy may be lower than might otherwise be the case.

All of our executive officers, our affiliated directors and the key real estate and debt finance professionals assembled by our advisor are also executive officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor and/or other KBS-affiliated entities. Through KBS-affiliated entities, some of these persons also serve as the investment advisors to KBS-advised investors and, through KBS Realty Advisors, these persons serve as the advisor to other KBS-sponsored programs. In addition, KBS Realty Advisors serves as the U.S. asset manager for the SREIT. As a result, they owe fiduciary duties to each of these entities, their stockholders, members and limited partners and these investors, which fiduciary duties may from time to time conflict with the fiduciary duties that they owe to us and our stakeholders. Their loyalties to these other entities and investors could result in action or inaction that is detrimental to our business, which could harm the implementation of our business strategy and our investmentdisposition and leasing opportunities. Further, Mr. Schreiber and existing and future KBS-sponsored programs and KBS-advised investors generally are not and will not be prohibited from engaging, directly or indirectly, in any business or from possessing interests in any other business venture or ventures, including businesses and ventures involved in the acquisition, development, ownership, leasing or sale of real estate investments. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to maintain or increase the value of our assets and our financial condition and results of operations may suffer.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. To help us comply with the REIT ownership requirements of the Internal Revenue Code,Code of 1986, as amended (the “Internal Revenue Code”), our charter prohibits a person from directly or constructively owning more than 9.8% of our outstanding shares, unless exempted by our board of directors. In addition, our board of directors may classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of preferred stock with priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. These charter provisions may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.

Stockholders may have to hold their shares an indefinite period of time. We can provide no assurance that we will be able to provide additional liquidity to stockholders. Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to redeem any shares of common stock until certain loans are repaid or refinanced. One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement. Further, since 2019, due to the limitations under our share redemption program, our pursuit of strategic alternatives and/or disruptions in the financial markets, we have either exhausted the funds available for Ordinary Redemptions (defined below) under our share redemption program or implemented suspensions of Ordinary Redemptions for all or a portion of the calendar year. Ordinary Redemptions are all redemptions other than those that qualify for the special provisions for redemptions sought in connection with a stockholder’s death, “Qualifying Disability” or “Determination of Incompetence” (each as defined in the share redemption program and, together, “Special Redemptions”). We terminated our share redemption program on March 15, 2024.

During their operating stages, other KBS-sponsored REITs have amended their share redemption programs to limit redemptions to Special Redemptions or place restrictive limitations on the amount of funds available for redemptions. As a result, these programs were not able to honor all redemption requests and stockholders in these programs were unable to have their shares redeemed when requested. In some instances, Ordinary Redemptions were suspended for several years. When implementing these amendments, stockholders did not always have a final opportunity to submit redemptions prior to the effectiveness of the amendment to the program.

The estimated value per share of our common stock (i) may not reflect the value that stockholders will receive for their investmentinvestment, and(ii) does not take into account how developments subsequent to the valuation date related to individual assets, the financial or real estate markets or other events may have decreased the value of our portfolio.portfolio and (iii) does not include the impact of future costs related to the disposition of assets and our liquidation.

On December 12,18, 2024,2025, our board of directors approved an estimated value per share of our common stock of $3.89$2.70 (unaudited) based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2024,2025, with the exception of adjustmentsan adjustment to our net asset value to give effect to (i) the change in the estimated value of our investment in units of the SREIT (SGX-ST Ticker: OXMU) as of November 14, 2024, (ii) the contractual sales price, net of closing credits and disposition costs, of one property that was sold on November 15, 2024 and (iii) estimated contractual loan financing fees and costs incurred for the period from October 1, 2024 through December 20, 2024.2025. We did not make any other adjustments to the December 12,18, 20242025 estimated value per share from the date of the valuations above, including any adjustments relating to, among others, net operating income earned. We provided this estimated value per share to assist broker-dealers that participated in our now-terminated initial public offering in meeting their customer account statement reporting obligations under Financial Industry Regulatory Authority (“FINRA”) Rule 2231. This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013–01, Valuations of Publicly Registered, Non-Listed REITs, issued by the Institute for Portfolio Alternatives (“IPA”) in April 2013 (the “IPA Valuation Guidelines”).

We engaged Kroll, LLC (“Kroll”), an independent third-party real estate valuation firm, to provide (i) appraisals for 1412 of our consolidated real estate properties owned as of September 30, 20242025 (the “Appraised Properties”), (ii) an estimated value for our investment in units of the SREIT and (iii) a calculation of the range in estimated value per share of our common stock as of December 12,18, 2024.2025. Kroll based this range in estimated value per share upon (i) its appraisals of the Appraised Properties, (ii) the contractual sales price, net of closing credits and disposition costs, of one property that was sold on November 15, 2024, (iii) its estimated value for our investment in units of the SREIT, (iv) estimated contractual loan financing fees and costs incurred for the period from October 1, 2024 through December 20, 2024SREIT and (viii) valuations performed by our advisor of our cash, other assets, notes payable and other liabilities, which are disclosed in our Quarterly Report on Form 10-Q for the period ended September 30, 2024.2025, with the exception of the valuation for The Almaden Mortgage Loan as discussed under Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Market Information – Methodology – Notes Payable” of this Annual Report.

As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties using different assumptions and estimates could derive a different estimated value per share of our common stock, and this difference could be significant. The estimated value per share is not audited and does not represent the fair value of our assets less the fair value of our liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of our assets and liabilities or the price at which our shares of common stock would trade on a national securities exchange. The estimated value per share does not reflect a discount for the fact that we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties that were not under contract to sell as of December 12,18, 2024,2025 debtnor prepaymentdoes penaltiesit thatinclude couldany applyfuture uponliquidation the prepayment of certain of our debt obligations, the impact of restrictions on the assumption of debt or swap breakage fees that may be incurred upon the termination of certain of our swaps prior to expiration.costs. We generally have incurred disposition costs and fees related to the sale of each real estate property since inception of 0.8%0.6% to 2.9% of the gross sales price less concessions and credits, with the weighted average being approximately 1.5%. The estimated value per share also does not take into consideration any financing and refinancing costs subsequent to December 20,18, 2024.2025. Accordingly, with respect to the estimated value per share, we can give no assurance that:

As of March 14,27, 2025,2026, we have $467.0$1.3 millionbillion of loan maturities and required principal paydowns during the next 12 months and $672.7 million of loan maturities and required principal paydowns from March 14, 2026 through December 31, 2026.months. Our loan agreements require us to sell two properties in 2025,2025 two(which we completed), three properties in 2026 and up to four properties in 2027. Selling real estate assets in the current market may result in a lower sale price than we would otherwise obtain. We may continue to evaluate raising capital through the issuance of new equity or debt to the extent we see improvement in the capital markets. We may also defer noncontractual expenditures to manage our liquidity needs.

We may be adversely affected if we are unable to satisfy the terms and conditions contained in our loan agreements. There is no assurance that we will be able to satisfy the terms and conditions of our existing loan agreements or the terms and conditions of any future extension or refinancing agreements that are entered into. If we are unable to make required principal paydowns under certain loans, sell assets or satisfy certain covenants and conditions in our loan agreements, the lenders may seek to foreclose on the underlying collateral. Additionally, ourOur loan agreements contain cross default provisions whereby the occurrence of (or a demand following) an “event of default” under one or more of our debt facilities may trigger a default under certain other debt facilities and the guaranty obligations in respect thereof, thereby giving lenders a right to accelerate the relevant debt obligations and exercise their enforcement rights with respect thereto. In addition, we have pledged the equity of certain of our subsidiaries (and all proceeds therefrom) in connection with the restructuring of certain debt facilities. If an event of default occurs under certain debt facilities and the lenders party thereto elect to exercise their enforcement rights thereunder, one of the remedies available to them is to take possession of the relevant pledged equity.

Continued disruptions in the financial markets and economic uncertainty impacting the U.S. commercial real estate industry could further impact our ability to implement our business strategy and continue as a going concern. Overall, there remains significant uncertainty regarding the timing and duration of the economic recovery, which precludes any prediction as to the ultimate adverse impact the current disruptions in the markets may have on our business. Potential long-term changes in customer behaviorbehavior, such as continued work-from-home arrangements, could materially and negatively impact the future demand for office space, further adversely impacting our operations.

Our common stockholders do not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 1,010,000,000 shares of capital stock, of which 1,000,000,000 shares are designated as common stock and 10,000,000 shares are designated as preferred stock. Our board of directors may increase the number of authorized shares of capital stock without stockholder approval. Our board may elect to (i) sell additional shares in oura dividend reinvestment plan or in future primary offerings; (ii) issue equity interests in private offerings; (iii) issue equity interests to our advisor, or its successors or assigns, in payment of fee obligations; or (iv) otherwise issue additional shares of our capital stock, units of our Operating Partnership or equity in our other subsidiaries. To the extent we issue additional equity interests, our stockholders’ percentage ownership interest in our assets would be diluted. In addition, depending upon the terms and pricing of any additional issuance of equity interests, the use of the proceeds and the value of our real estate investments, our stockholders may also experience dilution in the book value and fair value of their shares and in the earnings and distributions per share.

As of March 1, 2025,2026, our real estate portfolio held for investment was composed of 1312 office properties and one mixed-use office/retail property encompassing in the aggregate approximately 6.45.6 million rentable square feet and was collectively 81%77% occupied. We also own an investment in the equity securities of the SREIT, a Singapore real estate investment trust listed on the SGX-ST. We made these investments based on an underwriting analysis with respect to each asset and how the asset fits into our portfolio. If these assets do not perform as expected, we may have less cash flow from operating activities and our financial condition and results of operations would suffer.

A property may incur vacancies either by the expiration and non-renewal of tenant leases or the continued default of tenants under their leases. If vacancies continue for a long period of time, we may suffer reduced revenues. Further, some of our assets may be outfitted to suit the particular needs of the tenants. We may have difficulty replacing the tenants of these properties if the outfitted space limits the types of businesses that could lease that space without major renovation. If a tenant does not renew a lease or, terminates or defaults on a lease, we may be unable to lease the property for the rent previously received or sell the property without incurring a loss. Because the market value of a particular property depends principally upon the value of the cash flow generated by the leases associated with such property, we may incur a loss upon the sale of a property with significant vacant space. These events could diminish the return on properties with significant vacancies, reduce our revenues, impact our ability to access certain credit facilities and meet our outstanding debt obligations and cause our operations to suffer.

All of our real estate properties arewere subject to Phase I environmental assessments prior to the time they arewere acquired; however, such assessments may not provide complete environmental histories due, for example, to limited available information about prior operations at the properties or other gaps in information at the time we acquire the property. A Phase I environmental assessment is an initial environmental investigation to identify potential environmental liabilities associated with the current and past uses of a given property. If any of our properties were found to contain hazardous or toxic substances after our acquisition, the value of our investment could decrease below the amount paid for such investment.

Our stockholders may have current tax liability on distributions they elected to reinvest in our common stock.

If (i) all or a portion of our assets are subject to the rules relating to taxable mortgage pools, (ii) we are a “pension-held REIT,” or (iii) a U.S. tax-exempt stockholder has incurred debt to purchase or hold our common stock, then a portion of the distributions to and, in the case of a stockholder described in clause (iii), gains realized on the sale of common stock by such tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income under the Internal Revenue Code.

To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20%25% of the value of our total assets can be represented by securities of one or more taxable REIT subsidiaries (20% for taxable years between January 1, 2018 and December 31, 2025) and no more than 25% of the value of our total assets can be represented by “non-qualified publicly offered REIT debt instruments.” If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate from our portfolio otherwise attractive investments. These actions could have the effect of reducing our income and adversely impact our financial condition and results of operations.

A REIT may own up to 100% of the stock of one or more taxable REIT subsidiaries. A taxable REIT subsidiary may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a taxable REIT subsidiary. A corporation of which a taxable REIT subsidiary directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a taxable REIT subsidiary. Overall, no more than 20%25% of the value of a REIT’s assets may consist of stock or securities of one or more taxable REIT subsidiaries.subsidiaries (20% for taxable years between January 1, 2018 and December 31, 2025). A domestic taxable REIT subsidiary will pay federal, state and local income tax at regular corporate rates on any income that it earns. In addition, the taxable REIT subsidiary rules limit the deductibility of interest paid or accrued by a taxable REIT subsidiary to its parent REIT to assure that the taxable REIT subsidiary is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a taxable REIT subsidiary and its parent REIT that are not conducted on an arm’s-length basis. We cannot assure our stockholders that we will be able to comply with the 20%25% value limitation on ownership of taxable REIT subsidiary stock and securities on an ongoing basis so as to maintain REIT status or to avoid application of the 100% excise tax imposed on certain non-arm’s length transactions.

Our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. While we believe we have qualified and intend to continue to qualify to be taxed as a REIT, we may terminate our REIT election if we determine that qualifying as a REIT is no longer in our best interests. For example, due to the terms and conditions of our existing loan agreements or any future extension or refinancing agreements entered into,into or if we would seek the protection of the bankruptcy court to implement a restructuring plan, we may determine that qualifying as a REIT is no longer in our best interests. If we cease to be a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our operations and on the value of our common stock.

In general, the maximum tax rate for qualified dividends payable by C corporations to domestic stockholders that are individuals, trusts and estates is 20%. Ordinary dividends payable by REITs, however, are generally not eligible for this reduced rate. While this tax treatment does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts or estates to perceive investments in REITs to be relatively less attractive than investments in stock of non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our common stock. However, under the Tax Cuts and Jobs Act, Pub. L. No. 115-97, commencing with taxable years beginning on or after January 1, 2018 and continuing through 2025, individualIndividual taxpayers may be entitled to claim a deduction in determining their taxable income of 20% of ordinary REIT dividends (dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us), which temporarily reduces the effective tax rate on such dividends.. The deduction, if allowed in full, equates to a maximum effective U.S. federal income tax rate on ordinary REIT dividends of 29.6%. Without further legislation, this deduction would sunset after 2025. Our stockholders are urged to consult with their tax advisor regarding the effect of this change on their effective tax rate with respect to REIT dividends.

Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions and the Treasury Regulations promulgated thereunder for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. In addition, our ability to satisfy the requirements to qualify as a REIT depends in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership or REIT for U.S. federal income tax purposes. Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA (subject to specific FIRPTA exemptions for certain non-U.S. stockholders). Our common stock will not constitute a USRPI so long as we are a “domestically-controlled qualified investment entity.” A domestically-controlled qualified investment entity includes a REIT if at all times during a specified testing period, less than 50% in value of such REIT’s stock is held directly or indirectly by non-U.S. stockholders. Final Treasury regulations effective April 25, 2024 (the “Final Regulations”) modify the existing prior tax guidance relating to the manner in which we determine whether we are a domestically controlled REIT. These regulations provide a look through rule for our stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated investment companies, or domestic “C” corporations owned 50% or more directly or indirectly by foreign persons (“foreign-controlled domestic corporations”) and treat “qualified foreign pension funds” and “international organizations” as foreign persons for this purpose. The look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will not apply to a REIT for a period of up to ten years if the REIT is able to satisfy certain requirements during that time, including not undergoing a significant change in its ownership and not acquiring a significant amount of new U.S. real property interests, in each case since April 24, 2024, the date the Final Regulations were issued. If a REIT fails to satisfy such requirements during the ten-year period, the look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will apply to such REIT beginning on the day immediately following the date of such failure. We cannot predict when we will commence being subject to such look-through rule in the Final Regulations and we may not be able to satisfy the applicable requirements for the duration of the ten-year period. Prospective investors are urged to consult with their tax advisors regarding the application and impact of these rules. Even if we do not qualify as a domestically-controlled qualified investment entity at the time a non-U.S. stockholder sells or exchanges our common stock, gain arising from such a sale or exchange would not be subject to U.S. taxation under FIRPTA as a sale of a USRPI if: (a) our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and (b) such non-U.S. stockholder owned, actually and constructively, 10% or less of our common stock at any time during the five-year period ending on the date of the sale. However, it is not anticipated that our common stock will be “regularly traded” on an established market. We encourage stockholders to consult their tax advisors to determine the tax consequences applicable to them if they are non-U.S. stockholders.

Further changes to the tax laws are possible. In particular, the federal income taxation of REITs may be modified, possibly with retroactive effect, by legislative, administrative or judicial action at any time. We anticipate that legislative and regulatory changes, including tax reform, may be likely in the 119th Congress, which convened in January 2025. There can be no assurance that future tax law changes will not increase income tax rates, impose new limitations on deductions, credits or other tax benefits, or make other changes that may adversely affect our business, cash flows or financial performance or the tax impact to a stockholder of an investment in our common stock.

We have invested in a diverse portfolio of real estate investments. As of December 31, 2024,2025, we owned 1312 office properties, one mixed-use office/retail propertyproperties and an investment in the equity securities of the SREIT.

Section 5.11 of our charter requires that we seek stockholder approval of our liquidation if our shares of common stock are not listed on a national securities exchange by September 30, 2020, unless a majority of the conflicts committee of our board of directors, composed solely of all of our independent directors, determines that liquidation is not then in the best interest of our stockholders. Pursuant to our charter requirement, the conflicts committee considered the ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office properties, the challenging interest rate environment and lack of activity in the debt markets,environment, the limited availability in the debt markets for commercial real estate transactions in the office sector, and the lacklow amount of transaction volume in the U.S. office market for assets similar in size to those of ours, and on August 12,13, 2024,2025, our conflicts committee unanimously determined to postpone approval of our liquidation. Section 5.11 of our charter requires that the conflicts committee revisit the issue of liquidation at least annually.

As of March 14,27, 2025,2026, we have $467.0$1.3 millionbillion of loan maturities and required principal paydowns during the next 12 months and $672.7 million of loan maturities and required principal paydowns from March 14, 2026 through December 31, 2026.months. Our loan agreements require us to sell two properties in 2025,2025 two(which we completed), three properties in 2026 and up to four properties in 2027. Selling real estate assets in the current market may result in a lower sale price than we would otherwise obtain. We may continue to evaluate raising capital through the issuance of new equity or debt to the extent we see improvement in the capital markets. We may also defer noncontractual expenditures to manage our liquidity needs.

We will be adversely affected if we are unable to satisfy the terms and conditions contained in our loan agreements. There is no assurance that we will be able to satisfy the terms and conditions of our existing loan agreements or the terms and conditions of any future extension or refinancing agreements that are entered into. If we are unable to make required principal paydowns under certain loans, sell assets or satisfy certain covenants and conditions in our loan agreements, the lenders may seek to foreclose on the underlying collateral. Our loan agreements contain cross default provisions whereby the occurrence of (or a demand following) an “event of default” under one or more of our debt facilities may trigger a default under certain other debt facilities and the guaranty obligations in respect thereof. The cross default provisions vary across the loan agreements and some require that lenders affirmatively elect that an event of default is triggered and/or that payment demands are made in excess of a threshold amount before an event of default is triggered; however, depending upon which facilities default and the guaranty obligations thereunder, there is a risk that an event of default under one loan agreement could cause an event of default under other debt facilities thereby giving lenders a right to accelerate the relevant debt obligations and exercise their enforcement rights with respect thereto. In addition, we have pledged the equity of certain of our subsidiaries (and all proceeds therefrom) in connection with the restructuring of certain of our subsidiaries’ debt facilities and, therefore, if an event of default occurs under certain debt facilities and the lenders party thereto elect to exercise their enforcement rights thereunder, one of the remedies available to them is to take possession of the relevant pledged equity. We have directly and/or indirectly pledged the equity of subsidiaries owning the following properties: Gateway Tech Center, 201 17th Street, 515 Congress, Carillon, Park Place VillageCarillon and Accenture Tower. Additionally,In we are requiredorder to pledgefacilitate approximatelycertain halfalternative collateral arrangements and in full and final satisfaction of our obligations set forth in the letter agreement entered into July 10, 2025 with respect to the SREIT units, REIT Properties III agreed with the Portfolio Loan Lenders to (i) establish a deposit account (the “Prime Proceeds Account”) for the benefit of the Portfolio Loan Lenders pursuant to which the proceeds of certain SREIT units (“Prime Proceeds”) shall be deposited and (ii) grant to the Portfolio Loan Lenders a first priority perfected security interest in the Prime Proceeds Account and the other collateral, all as described in and upon the terms and subject to the conditions set forth in a Cash Collateral Account Security, Pledge and Assignment Agreement (the “Cash Collateral Agreement”). Pursuant to the terms of the SREITCash Collateral Agreement, REIT Properties III agreed that weall own.Prime Proceeds deposited into the Prime Proceeds Account shall be held as additional collateral for the benefit of the Portfolio Loan Lenders until such time as the Prime Proceeds are applied in accordance with the terms of the Amended and Restated Portfolio Loan Facility. For information regarding the Amended and Restated Portfolio Loan Facility, see Note 8, “Notes Payable – Recent Financing Transactions – Amended and Restated Portfolio Loan Facility” in this Annual Report.

In addition, as of March 14,27, 2025,2026, fivesix of our debt facilities (representing $1.3 billion of our outstanding debt that are secured by 12 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. However, such cash management accounts place limits on our access to cash flows from these properties and restrict our operating flexibility.

Despite the substantial amount of refinancing activity since February 2024 (over $1.3$1.4 billion of debt refinanced or extended), there can be no assurances as to the certainty or timing of management’s future plans in regards to the matters above, as certain elements of management’s plans are outside our control, including our ability to repay our outstanding debt obligations at maturity, make required principal paydowns during the terms of the loans, satisfy other terms and conditions contained in our loan agreements, refinance, restructure or extend certain debt obligations,obligations and sell assets in the current real estate and financial markets and raise capital through the issuance of new equity or debt.markets. If we are unable to satisfy the terms and conditions contained in our loan agreements, we anticipate we will make efforts to further refinance or restructure certain of our debt instruments or make additional asset sales to pay off the debt, though there can be no certainty that we will be able to complete such refinancing, restructuring or asset sales. We may relinquish ownership of one or more secured properties to the mortgage lender. We may also seek the protection of the bankruptcy court to implement a restructuring plan, which would constitute an event of default under our indebtedness.

Volatility in global financial markets and changing political environments can cause fluctuations in the performance of the U.S. commercial real estate markets. Declines in rental rates, slower or potentially negative net absorption of leased space, increased rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from investment properties. Further, revenues from our properties have decreased and could continue to decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases), increased rent deferrals or abatements, tenants being unable to pay their rent and/or lower rental rates. Increases in the cost of financing due to higherelevated interest rates and higher market interest rate spreads has prevented us from refinancing debt obligations at terms as favorable as the terms of the debt we were refinancing. Further, increases in interest rates increase the amount of our debt payments on our variable rate debt to the extent the interest rates on such debt are not fixed through interest rate swap agreements or limited by interest rate caps. Market conditions can change quickly, potentially negatively impacting the value of real estate investments. The current challenging interest rate environment and low level of financing available in the current environment have had a downward impact on real estate values, especially for commercial office buildings, and these factors have significantly impacted the amount of transaction activity in the commercial real estate market and made valuing such assets increasingly difficult. Management continuously reviews our investment and debt financing strategies to optimize our portfolio and the cost of our debt exposure in this challenging environment.

As of DecemberMarch 31,27, 2024,2026, we had mortgage debt obligations in the aggregate principal amount of $1.5$1.3 billion, with a weighted-average remaining term of one0.5 year.years. As of DecemberMarch 31,27, 2024, we had $525.9 million of notes payable maturing during the 12 months ending December 31, 2025 and approximately $31.8 million of required paydowns. As of December 31, 2024,2026, our debt obligations consisted of $118.4$116.5 million of fixed rate notes payable and $1.3$1.2 billion of variable rate notes payable. As of DecemberMarch 31,27, 2024,2026, the interest rates on $1.1$800.0 billionmillion of our variable rate notes payable were effectively fixed through interest rate swap agreements.agreements, of which (i) one interest rate swap in the amount of $100.0 million will mature on May 1, 2026, (ii) four interest rate swaps in the total amount of $400.0 million will mature on July 1, 2026, (iii) one interest rate swap in the amount of $100.0 million will mature on August 1, 2026 and (iv) two interest rate swaps in the total amount of $200.0 million will mature on November 1, 2026.

If we are unable to make required principal paydowns under certain loans, sell assets or satisfy certain covenants and conditions in our loan agreements, the lenders may seek to foreclose on the underlying collateral. Our loan agreements contain cross default provisions whereby the occurrence of (or a demand following) an “event of default” under one or more of our debt facilities may trigger a default under certain other debt facilities and the guaranty obligations in respect thereof. The cross default provisions vary across the loan agreements and some require that lenders affirmatively elect that an event of default is triggered and/or that payment demands are made in excess of a threshold amount before an event of default is triggered; however, depending upon which facilities default and the guaranty obligations thereunder, there is a risk that an event of default under one loan agreement could cause an event of default under other debt facilities thereby giving lenders a right to accelerate the relevant debt obligations and exercise their enforcement rights with respect thereto. In addition, we have pledged the equity of certain of our subsidiaries (and all proceeds therefrom) in connection with the restructuring of certain of our subsidiaries’ debt facilities and, therefore, if an event of default occurs under certain debt facilities and the lenders party thereto elect to exercise their enforcement rights thereunder, one of the remedies available to them is to take possession of the relevant pledged equity. We have directly and/or indirectly pledged the equity of subsidiaries owning the following properties: Gateway Tech Center, 201 17th Street, 515 Congress, Carillon, Park Place VillageCarillon and Accenture Tower. Additionally,In we are requiredorder to pledgefacilitate approximatelycertain halfalternative collateral arrangements and in full and final satisfaction of our obligations set forth in the letter agreement entered into July 10, 2025 with respect to the SREIT units, REIT Properties III agreed with the Portfolio Loan Lenders to (i) establish the Prime Proceeds Account for the benefit of the unitsPortfolio Loan Lenders pursuant to which the Prime Proceeds shall be deposited and (ii) grant to the Portfolio Loan Lenders a first priority perfected security interest in the Prime Proceeds Account and the other collateral, all as described in and upon the terms and subject to the conditions set forth in the Cash Collateral Agreement. Pursuant to the terms of the SREITCash Collateral Agreement, REIT Properties III agreed that weall own.Prime Proceeds deposited into the Prime Proceeds Account shall be held as additional collateral for the benefit of the Portfolio Loan Lenders until such time as the Prime Proceeds are applied in accordance with the terms of the Amended and Restated Portfolio Loan Facility.

Despite the substantial amount of refinancing activity since February 2024 (over $1.3$1.4 billion of debt refinanced or extended), there can be no assurances as to the certainty or timing of management’s future plans in regards to the matters above, as certain elements of management’s plans are outside our control, including our ability to repay our outstanding debt obligations at maturity, make required principal paydowns during the terms of the loans, satisfy other terms and conditions contained in our loan agreements, refinance, restructure or extend certain debt obligations,obligations and sell assets in the current real estate and financial markets and raise capital through the issuance of new equity or debt.markets. If we are unable to satisfy the terms and conditions contained in our loan agreements, we anticipate we will make efforts to further refinance or restructure certain of our debt instruments or make additional asset sales to pay off the debt, though there can be no certainty that we will be able to complete such refinancing, restructuring or asset sales. We may relinquish ownership of one or more secured properties to the mortgage lender. We may also seek the protection of the bankruptcy court to implement a restructuring plan, which would constitute an event of default under our indebtedness.

In addition, as of March 14,27, 2025,2026, fivesix of our debt facilities (representing $1.3 billion of our outstanding debt that are secured by 12 of our properties ) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. Generally, excess cash flow means an amount equal to (a) gross revenues from the properties securing the facility less (b) an amount equal to principal and interest paid with respect to the associated debt facility, operating expenses of the properties securing the facility and in certain cases a limited amount of REIT-level expenses. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. However, such cash management accounts place limits on our access to cash flows from these properties and decrease our operating flexibility.

As a result of the current interest rate environment, the recent extensions and refinancings of certain of our loans have also reduced our available liquidity due to increased interest rate spreads. Additionally, we have entered into various interest rate swap agreements that are currently below market and as those swaps expire, our interest expense will increase and further impact our liquidity position and ongoing cash flows. See the discussion on the interest rate swap maturities above.

Net cash provided by investing activities was $157.9$195.3 million for the year ended December 31, 20242025 due to $192.4$220.1 million of net proceeds from the sales of theSterling McEwen BuildingPlaza and PrestonPark Commons,Place Village, offset by $34.5$24.8 million used in improvements to real estate.

•$173.1During millionthe ofyear ended December 31, 2025, net cash used in debtfinancing financingactivities was $168.6 million as a result of principal payments on notes payable of $198.5$188.7 million and payments of deferred financing costs of $10.5$11.0 million, partially offset by proceeds from notes payable of $35.9$31.1 million; andmillion.

On November 22, 2024, our advisor entered into a Management Fee and Disposition Fee Subordination Agreement (the “Subordination Agreement”) in favor of U.S. Bank National Association (the “Credit Facility Agent”) as agent for the lenders under the credit facility that was entered on July 30, 2021 (as subsequently modified and amended, the “Credit Facility”) among REIT Properties III, the Credit Facility Agent and the lenders party thereto (the “Credit Facility Lenders”). Pursuant to the Subordination Agreement, our advisor agreed that payment of certain asset management fees owed by us to our advisor pursuant to the advisory agreement will be subordinate to the obligations of REIT Properties III to the Credit Facility Lenders under the Credit Agreement (such obligations, the “Senior Debt”). Specifically, payment of asset management fees to our advisor associated with five of our real estate properties (Carillon, 515 Congress, Gateway Tech Center, 201 17th Street and Accenture Tower) is subordinated to the Senior Debt until the Senior Debt is paid in full, provided that we may pay our advisor 90% of the asset management fees associated with these five properties so long as an “Event of Default” under the Credit Facility is not in existence or would not result from such payment. For the avoidance of doubt, the remaining 10% of the asset management fees associated with these properties is subordinated and deferred until the Senior Debt is paid in full. Additionally, pursuant to the Fourth Modification Agreement (as defined in “– Subsequent Events – Fourth Modification of the Modified Portfolio Revolving Loan Facility”), with respect to 515 Congress, Gateway Tech Center and 201 17th Street, we agreed to limit the amount of asset management fees that we may pay to our advisor to 90% of the asset management fees associated with 515 Congress, Gateway Tech Center and 201 17th Street (with the remaining 10% of the asset management fees associated with these properties being deferred until the obligations under the Modified Portfolio Revolving Loan Facility have been paid in full).

In connection with the Accenture Tower Fourth Modification Agreement (defined in Note 8, “Notes Payable – Recent Financing Transactions – Accenture Tower Loan”),Agreement, on December 20, 2024, we and our advisor entered into an amendment to the advisory agreement to defer 10% of the asset management fees associated with Accenture Tower until the Accenture Tower Loan is paid in full; provided, that upon the occurrence and during the continuance of a restricted payment event under the loan agreement, all asset management fees with respect to Accenture Tower will be deferred and during the restricted payment event, such deferred fees may only be paid to our advisor with the consent of the required lenders.

Further, on February 6, 2025, in connection with thean Eighth Modification Agreementamendment to the Amended and Restated Portfolio Loan Facility, on February 6, 2025, we and our advisor entered into an amendment to the advisory agreement to defer 10% of the asset management fees associated with 60 South Sixth, Sterling Plaza, Towers at Emeryville, Ten Almaden and Town Center until the obligations under the Amended and Restated Portfolio Loan Facility are paid in full, or the requirements to pay such deferred fees are met during the extension period of the loan; provided that no asset management fees with respect to 60 South Sixth, Sterling Plaza, Towers at Emeryville, Ten Almaden and Town Center may be paid during the occurrence and continuance of a default or potential default under the Amended and Restated Portfolio Loan Facility for which we have received notice that has not been waived or cured. ForWe informationsold Sterling Plaza on theJuly Eighth11, Modification2025 Agreement,and seeSterling “SubsequentPlaza Eventswas –released Eighthas Modificationsecurity offor the Amended and Restated Portfolio Loan Facility.”

Pursuant to the current advisory agreement, asset management fees accruing from October 1, 2022 are no longer subject to the deferral provision described in the paragraph above. Asset management fees that remained deferred as of September 30, 2022 are “Deferred Asset Management Fees.” As of September 30, 2022, Deferred Asset Management Fees totaled $8.5 million. The advisory agreement also provides that we remain obligated to pay our advisor outstanding Deferred Asset Management Fees in any month to the extent that MFFO for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, a “RMFFO Surplus”); provided however, that any amount of outstanding Deferred Asset Management Fees in excess of the RMFFO Surplus will continue to be deferred. We have not made any payments to our advisor related to the Deferred Asset Management Fees for the period from October 1, 2022 to December 31, 2024.2025.

As of December 31, 2024,2025, we had accrued $18.6$19.7 million of asset management fees, of which $8.5 million were Deferred Asset Management Fees. Also,Also included in accrued asset management fees as of December 31, 20242025 iswere $8.5 million of restricted cash deposited into the Bonus Retention Fund.Fund and $1.4 million of asset management fees that were deferred in connection with agreements related to the refinancing of our debt obligations. We had not made any payments to our advisor from the Bonus Retention Fund as of December 31, 2024.2025. ForAs the year endedof December 31, 2022,2025, we andhad our$1.3 advisormillion agreedof asset management fees payable related to adjustasset MFFOmanagement fees incurred for the purposemonth of theDecember calculation2025, abovewhich towere addsubsequently back the following non-operating expenses: a one-time write-off of prepaid offering costs of $2.7 million and a $0.5 million fee to the conflicts committee’s financial advisorpaid in connectionJanuary with the conflicts committee’s review of alternatives available to us.2026.

(1) Amounts include principal payments only based on maturity dates as of December 31, 2024.2025. The maturity dates of certain loans may be extended beyond their current maturity dates; however, the extension options are subject to certain terms and conditions contained in the loan documents some of which are more stringent than our current loan compliance tests. Subsequent to December 31, 2024, we completed the modification and extension of the Amended and Restated Portfolio Loan Facility. As a result as of March 14, 2025, we had debt obligations in the aggregate principal amount of $1.5 billion, with a weighted-average remaining term of 1.5 years. See also the discussion above under “—Liquidity and Capital Resources” and “—Going Concern Considerations.”

(3) Projected interest payments on interest rate swaps are calculated based on the notional amount, effective term of the swap contract, and fixed rate net of the swapped floating rate in effect as of December 31, 2024.2025. In the case where the swapped floating rate (Fallback SOFR or one-month Term SOFR) at December 31, 20242025 is higher than the fixed rate in the swap agreement, interest payments on interest rate swaps in the above debt obligations table would reflect zero as we would not be obligated to make any interest payments on those swaps and instead expect to receive payments from our swap counter-parties.

(4) We recognized net realized gains related to interest rate swaps of $24.3$10.0 million, excluding unrealized losses on derivative instruments of $6.8 million and gains related to swap terminations of $0.2$10.2 million, during the year ended December 31, 2024.2025.

As of December 31, 2024,2025, we havehad capital expenditure obligations of $27.7$20.2 million, the majority of which is expected to be spent in the next twelve months and of which $12.7$7.7 million has already been accrued and included in accounts payable and accrued liabilities on our consolidated balance sheet as of December 31, 2024.2025. This amount includes unpaid contractual obligations for building improvements and unpaid portions of tenant improvement allowances which were granted pursuant to lease agreements executed as of December 31, 2024,2025, including amounts that may be classified as lease incentives pursuant to GAAP. In certain cases, tenants may have discretion over when to utilize their tenant allowances and may delay the start of projects or tenants control the construction of their projects and may not submit timely requests for reimbursement or there are general construction delays, all of which could extend the timing of payment for a portion of these capital expenditure obligations beyond twelve months. The capital expenditure obligations will be funded from cash on hand, draws on current loan facilities with additional availability and future property cash flows. See “—Going Concern Considerations.”

As of December 31, 2023, we owned 16 office properties (of which one property was held for non-sale disposition as of December 31, 2023), one mixed-use office/retail property and an investment in the equity securities of the SREIT. Subsequent to December 31, 2023, we disposed of one office property in connection with a deed-in-lieu of foreclosure transaction and sold two office properties. As a result, as of December 31, 2024, we owned 13 office properties, one mixed-use office/retail property and an investment in the equity securities of the SREIT. Subsequent to December 31, 2024, we disposed of one office property and one mixed-use office/retail property. As a result, as of December 31, 2025, we owned 12 office properties and an investment in the equity securities of the SREIT. Therefore, the results of operations presented for the years ended December 31, 20242025 and 20232024 are not directly comparable. The following table provides summary information about our results of operations for the years ended December 31, 20242025 and 20232024 (dollar amounts in thousands):

(1) Represents the dollar amount increase (decrease) for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 related to the dispositions of properties after January 1, 2023.2024. Interest expense incurred on portfolio loans is not allocated to the individual properties that serve as collateral for these portfolio loans and therefore, the decrease in interest expense related to the two office properties sold during the year ended December 31, 2024 and one office property sold during the year ended December 31, 2025 which served as collateral for portfolio loans is not reflected in this column.column for changes due to dispositions of properties. During the year ended December 31, 2024, we repaid $186.6 million of outstanding principal debt under portfolio loans with the net sale proceeds from the sale of two office properties during 2024. During the year ended December 31, 2025, we repaid $87.7 million of outstanding principal debt under a portfolio loan with the net sale proceeds from the sale of one office property in July 2025.

Rental income from our real estate properties decreased from $270.2 million for the year ended December 31, 2023 to $258.5 million for the year ended December 31, 2024,2024 to $232.2 million for the year ended December 31, 2025, primarily due to the sales of real properties in February 2024, November 2024, July 2025 and September 2025 and the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024, theand salesa of real propertiesdecrease in Februaryproperty 2024tax andrecoveries Novemberwith 2024respect andto leasetwo expirations at a propertyproperties held throughout both periods,periods as a result of successful property tax appeals, partially offset by leasean terminationincrease incomein receivedpercentage duringrent theas yeara endedresult Decemberof 31,higher 2024demand due to physical occupancy and an increase in operating recoveries with respect to a property held throughout both periods. We expect rental income to decrease in future periods as a result of the disposition of thesethe threetwo properties in 2025 and to the extent we dispose of additional properties, to vary based on occupancy rates and rental rates of our real estate investments and to the extent of continued uncertainty in the real estate and financial markets and to increase due to tenant reimbursements related to operating expenses to the extent physical occupancy increases as employees return to the office. See “—Going Concern Considerations,” “—Market Outlook – Real Estate and Real Estate Finance Markets” and “—Liquidity and Capital Resources.”

Dividend income from our real estate equity securities decreasedincreased slightly from $11.9 million for the year ended December 31, 2023 to $1.0 million for the year ended December 31, 2024 to $1.1 million for the year ended December 31, 2025 due to a decreaseslight increase in the dividend rate per unit declared by the SREIT. We expect dividend income from our real estate equity securities to vary in future periods based on the occupancy and rental rates of the SREIT’s portfolio, movements in interest rates and the underlying liquidity needs of the SREIT.

Other operating income decreased from $18.7$18.2 million during the year ended December 31, 20232024 to $18.2$16.6 million for the year ended December 31, 2024,2025, primarily due to the sales of real properties in February 2024, November 2024, July 2025 and September 2025 and the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sales of real properties in February 2024 and November 2024, partially offset by an increase in parking revenues at properties held throughout both periods as employees returnreturned to the office. We expect other operating income to vary in future periods based on occupancy rates and parking rates at our real estate properties and to the extent of continued uncertainty in the real estate and financial markets and to decrease to the extent we dispose of properties.

Operating, maintenance and management costs decreased from $75.9 million for the year ended December 31, 2023 to $72.9 million for the year ended December 31, 2024,2024 to $68.9 million for the year ended December 31, 2025, primarily due to the sales of real properties in February 2024, November 2024, July 2025 and September 2025 and the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sales of real properties in February 2024 and November 2024, partially offset by an overall increase in repairs and maintenance costs and operating costs, including janitorial,onsite costs, security, utility, security and onsiteparking costs,expenses, as a result of general inflation and an increase in physical occupancy at properties held throughout both periods. We expect operating, maintenance and management costs to increase in future periods as a result of general inflation and to the extent physical occupancy increases as employees return to the office and to decrease to the extent we dispose of properties.

Real estate taxes and insurance decreased from $52.8 million for the year ended December 31, 2023 to $50.0 million for the year ended December 31, 2024,2024 to $42.7 million for the year ended December 31, 2025, primarily due to the sales of real properties in February 2024, November 2024, July 2025 and September 2025 and the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024, the sales of real properties in February 2024 and November 2024 and a decrease in real estate taxes as a result of property tax refunds received and successful property tax appeals related to properties held throughout both periods, partially offset by the increased assessed property value of a real estate property held throughout both periods. We expect real estate taxes and insurance to vary based on future property tax reassessments for properties that we continue to own and to decrease to the extent we dispose of properties.

Asset management fees decreased from $20.8 million for the year ended December 31, 2023 to $19.6 million for the year ended December 31, 2024,2024 to $18.0 million for the year ended December 31, 2025, primarily due to the sales of real properties in February 2024, November 2024, July 2025 and September 2025 and the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sales of real properties in February 2024 and November 2024, partially offset by an increase due to capital improvements at our real estate properties.2024. We expect asset management fees to decrease to the extent we dispose of properties and to increase in future periods as a result of any improvements we make to our properties and to decrease to the extent we dispose of properties. As of December 31, 2024,2025, there were $18.6$19.7 million of accrued asset management fees, of which (i) $8.5 million were Deferred Asset Management FeesFees, and(ii) $8.5 million were related to asset management fees that were restricted for payment and deposited in the Bonus Retention Fund.Fund, and (iii) $1.4 million were related to asset management fees that were deferred in connection with agreements related to the refinancing of our debt obligations. As of December 31, 2025, we had $1.3 million of asset management fees payable related to asset management fees incurred for the month of December 2025, which were subsequently paid in January 2026. For a discussion of Deferredasset Assetmanagement Management Fees and the Bonus Retention Fund,fees, see “— Liquidity and Capital Resources” herein.

General and administrative expenses increaseddecreased from $7.3 million for the year ended December 31, 2023 to $18.5 million for the year ended December 31, 2024,2024 to $7.5 million for the year ended December 31, 2025, primarily due to legal fees and financial and advisory consulting fees related to our development and pursuit of our debt restructuring plan and capital raising efforts.efforts during the year ended December 31, 2024. General and administrative costs consisted primarily of portfolio legal fees, directors’ and officers’ insurance coverage costs, board of directors fees, third party transfer agent fees, financial and advisory consulting fees and audit costs.

Interest expense increaseddecreased from $120.5 million for the year ended December 31, 2023 to $126.6 million for the year ended December 31, 2024.2024 to $114.3 million for the year ended December 31, 2025. Included in interest expense was (i) $116.3$117.1 million and $117.1$101.9 million of interest expense payments for the years ended December 31, 20232024 and 2024,2025, respectively, and (ii) the amortization of deferred financing costs of $4.2$9.5 million and $9.5$12.4 million for the years ended December 31, 20232024 and 2024,2025, respectively. The increasedecrease in interest expense was primarily due to higher one-month BSBY and one-month Term SOFR during the year ended December 31, 2024 and the impact on interest expense related to our variable rate debt, a higher fixed interest rate on the Almaden Mortgage Loan, which became effective in December 2023, additional revolver draws and recent loan modifications which have resulted in additional loan fees being amortized to interest expense in 2024, partially offset by less interest expense incurred as a result of loan paydowns in connection with the sales of real properties in February 2024, November 2024, July 2025 and September 2025 and the disposition of an office property and related forgiveness of debt in connection with a deed-in-lieu of foreclosure transaction in January 20242024, andpartially loanoffset paydownsby inhigher connectioninterest withrate thespreads salesas a result of realrefinancings propertiessubsequent into FebruaryDecember 31, 2024 and Novemberthe 2024.impact on interest expense of additional loan draws. In general, we expect interest expense to decrease due to required loan paydowns, to vary based on fluctuations in interest rates (for our variable rate debt) and the amount of future borrowings,borrowings and to increase due to higher interest rate spreads as a result of recent refinancings and to decrease due to required loan paydowns.refinancings.

We recognized net loss on derivative instruments of $0.1 million for the year ended December 31, 2025. Included in net loss on derivative instruments was (i) unrealized loss on interest rate swaps of $10.2 million, offset by (ii) realized gain on interest rate swaps of $10.0 million, for the year ended December 31, 2025. We recognized net gain on derivative instruments of $17.6 million for the year ended December 31, 2024. Included in net gain on derivative instruments was (i) realized gain on interest rate swaps of $24.3 million, (ii) gains related to swap terminations of $0.2 million, and offset by (iii) unrealized loss on interest rate swaps of $6.8 million for the year ended December 31, 2024. We recognized net gain on derivative instruments of $14.9 million for the year ended December 31, 2023. Included in net gain on derivative instruments was (i) realized gain on interest rate swaps of $31.4 million, offset by (ii) unrealized loss on interest rate swaps of $16.4 million and (iii) fair value loss on interest rate cap of $25,000 for the year ended December 31, 2023. The change in net loss (gain) on derivative instruments was primarily due to changes in fair values with respect to our interest rate swaps that are not accounted for as cash flow hedges during the year ended December 31, 2024.hedges. In general, we expect net gains or losses on derivative instruments to vary based on fair value changes with respect to our interest rate swaps that are not accounted for as cash flow hedges. In addition, as the remaining lives of our interest rate swaps that are not accounted for as cash flow hedges decrease, we expect the fair values of these interest rate swaps to move towards zero, decreasing the net gains or losses on derivative instruments.

During the year ended December 31, 20242025, we recorded an unrealized gain on real estate equity securities of $6.2 million, and 2023,during the year ended December 31, 2024, we recorded unrealized losses on real estate equity securities of $11.2 million and $35.6 million, respectively, as a result of the change in the closing price of the units of the SREIT on the SGX-ST.

We recognized a gain on sale of real estate of $77.4 million during the year ended December 31, 2025 related to the dispositions of Sterling Plaza in July 2025 and Park Place Village in September 2025. We recognized a gain on sale of real estate of $53.1 million during the year ended December 31, 2024 related to the dispositions of the McEwen Building in February 2024 and Preston Commons in November 2024. We did not dispose of any real estate during the year ended December 31, 2023.

•As of MayAugust 14,13, 2026, six of our debt facilities (representing $1.2 billion of our outstanding debt that are secured by 11 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. Cash management accounts place limits on our access to cash flows from these properties and restrict our operating flexibility.

We have invested in a diverse portfolio of real estate investments. As of MarchJune 31,30, 2026, we owned 11 office properties and an investment in the equity securities of the SREIT.

Since February 2024, we have refinanced, restructured or extended $1.4 billion of maturing debt obligations, some of which was subsequently paid down. As of MayAugust 14,13, 2026, we had debt obligations in the aggregate principal amount of $1.2 billion, with a weighted-average remaining term of 0.50.3 years.

As of MayAugust 14,13, 2026, we have $1.2 billion of loan maturities and required principal paydowns during the next 12 months. Our loan agreements require us to sell two properties in 2025 (which we have completed), three properties in 2026 (one of which we have completed) and up to three properties in 2027. However, to qualify for extensionsan extension of twoone of our debt facilities in 2026, we must have entered into a qualifying purchase and sale agreementsagreement for thea propertiesproperty securing thosethe loans,loan, potentially resulting in the sale of threeone additional propertiesproperty in 2026. Selling real estate assets in the current market may result in a lower sale price than we would otherwise obtain.

In addition, asAs of MayAugust 14,13, 2026, six of our debt facilities (representing $1.2 billion of our outstanding debt that are secured by 11 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. However, such cash management accounts place limits on our access to cash flows from these properties and restrict our operating flexibility.

Volatility in global financial markets and changing political environments can cause fluctuations in the performance of the U.S. commercial real estate markets. Declines in rental rates, slower or potentially negative net absorption of leased space,space and increased rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from investment properties. Further, revenues from our properties have decreased and could continue to decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases), increased rent deferrals or abatements, tenants being unable to pay their rent and/or lower rental rates. Increases in the cost of financing due to elevated interest rates and higher market interest rate spreads has prevented us from refinancing debt obligations at terms as favorable as the terms of the debt we were refinancing. Further, increases in interest rates increase the amount of our debt payments on our variable rate debt to the extent the interest rates on such debt are not fixed through interest rate swap agreements or limited by interest rate caps. Market conditions can change quickly, potentially negatively impacting the value of real estate investments. The current challenging interest rate environment and low level of financing available in the current environment have had a downward impact on real estate values, especially for commercial office buildings, and these factors have significantly impacted the amount of transaction activity in the commercial real estate market and made valuing such assets increasingly difficult. Management continuously reviews our investment and debt financing strategies to optimize our portfolio and the cost of our debt exposure in this challenging environment.

As of MayAugust 14,13, 2026, we had mortgage debt obligations in the aggregate principal amount of $1.2 billion, with a weighted-average remaining term of 0.50.3 years. As of MayAugust 14,13, 2026, our debt obligations consisted of $116.2$116.0 million of fixed rate notes payable and $1.1 billion of variable rate notes payable. As of MayAugust 14,13, 2026, the interest rates on $700.0$200.0 million of our variable rate notes payable were effectively fixed through two interest rate swap agreements, of which (i) four interest rate swaps in the total amount of $400.0 million will mature on July 1, 2026, (ii) one interest rate swap in the amount of $100.0 million will mature on August 1, 2026 and (iii) two interest rate swaps in the total amount of $200.0 million will mature on November 1, 2026.

As of MayAugust 14,13, 2026, we have $1.2 billion of loan maturities and required principal paydowns during the next 12 months. As of MarchJune 31,30, 2026, we believe we were in compliance with the financial debt covenants under our notes payable. As of March 31, 2026, we did not meet one of the leasing requirements related to the Amended and Restated Portfolio Loan Facility; however, such leasing requirement does not constitute an event of default unless there are two consecutive quarters of non-compliance.

Our loan agreements require us to sell two properties in 2025 (which we have completed), three properties in 2026 (one of which we have completed) and up to three properties in 2027. However, to qualify for extensionsan extension of twoone of our debt facilities in 2026, we must have entered into a qualifying purchase and sale agreementsagreement for thea propertiesproperty securing thosethe loans,loan, potentially resulting in the sale of threeone additional propertiesproperty in 2026. Selling real estate assets in the current market may result in a lower sale price than we would otherwise obtain.

As of MarchJune 31,30, 2026, the estimated fair value of The Almaden was less than the outstanding mortgage debt that had a maturity date of MayAugust 1, 2026. Subsequent to MarchJune 31,30, 2026, the maturity date of The Almaden Mortgage Loan was further extended to AugustOctober 1, 2026.

We did not redeem any shares of our common stock during the threesix months ended MarchJune 31,30, 2026. Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to redeem any shares of common stock until certain loans are repaid or refinanced. One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement. We terminated our share redemption program on March 15, 2024.

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended MarchJune 31,30, 2026 did not exceed the charter-imposed limitation.

During the threesix months ended MarchJune 31,30, 2026,2026 and 2025, net cash provided by operating activities was $16.7$16.9 million.million Duringand the$0.6 threemillion, months ended March 31, 2025, net cash used in operating activities was $5.7 million.respectively. Net cash provided by operating activities increased during the threesix months ended MarchJune 31,30, 2026 primarily as a result of the timing of payments and cash receipts.

Net cash provided by investing activities was $43.1$35.4 million for the threesix months ended MarchJune 31,30, 2026 due to $48.4 million of net proceeds from the sale of Gateway Tech Center, offset by $5.3$13.0 million used in improvements to real estate.

During the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities was $48.6$48.3 million as a result of principal payments on notes payable of $49.0$50.8 million and payments of deferred financing costs of $0.6$1.3 million, offset by proceeds from notes payable of $1.0$3.8 million.

Pursuant to the current advisory agreement, asset management fees accruing from October 1, 2022 are no longer subject to the deferral provision described in the paragraph above. Asset management fees that remained deferred as of September 30, 2022 are “Deferred Asset Management Fees.” As of September 30, 2022, Deferred Asset Management Fees totaled $8.5 million. The advisory agreement also provides that we remain obligated to pay our advisor outstanding Deferred Asset Management Fees in any month to the extent that MFFO for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, a “RMFFO Surplus”); provided however, that any amount of outstanding Deferred Asset Management Fees in excess of the RMFFO Surplus will continue to be deferred. We have not made any payments to our advisor related to the Deferred Asset Management Fees for the period from October 1, 2022 to MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we had accrued $20.1$20.6 million of asset management fees, of which $8.5 million were Deferred Asset Management Fees. Also included in accrued asset management fees as of MarchJune 31,30, 2026 were $8.5 million of restricted cash deposited into the Bonus Retention Fund and $1.8$2.5 million of asset management fees that were deferred in connection with agreements related to the refinancing of our debt obligations. We had not made any payments to our advisor from the Bonus Retention Fund as of MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had $1.3$1.1 million of asset management fees payable related to asset management fees incurred for the month of MarchJune 2026, which were subsequently paid in AprilJuly 2026.

The following is a summary of our debt obligations as of MarchJune 31,30, 2026 (in thousands):

(1) Amounts include principal payments only based on maturity dates as of MarchJune 31,30, 2026. The maturity dates of certain loans may be extended beyond their current maturity dates; however, the extension options are subject to certain terms and conditions contained in the loan documents some of which are more stringent than our current loan compliance tests. See the above discussion under “—Liquidity and Capital Resources” and “—Going Concern Considerations.”

(2) Projected interest payments are based on the outstanding principal amounts, maturity dates and interest rates in effect as of MarchJune 31,30, 2026 (consisting of the contractual interest rate and using interest rate indices as of MarchJune 31,30, 2026, where applicable). We incurred interest expense related to notes payable of $21.6$42.6 million, excluding amortization of deferred financing costs totaling $3.4$6.8 million, during the threesix months ended MarchJune 31,30, 2026.

(3) Projected interest payments on interest rate swaps are calculated based on the notional amount, effective term of the swap contract, and fixed rate net of the swapped floating rate in effect as of MarchJune 31,30, 2026. In the case where the swapped floating rate (one-month Term SOFR) at MarchJune 31,30, 2026 is higher than the fixed rate in the swap agreement, interest payments on interest rate swaps in the above debt obligations table would reflect zero as we would not be obligated to make any interest payments on those swaps and instead expect to receive payments from our swap counter-parties.

(4) We recognized net realized gains related to interest rate swaps of $0.7$0.9 million, excluding unrealized gainloss on derivative instruments of $42,000,$118,000, during the threesix months ended MarchJune 31,30, 2026.

As of MarchJune 31,30, 2025, we owned 13 office properties, one mixed-use office/retail property and an investment in the equity securities of the SREIT. Subsequent to MarchJune 31,30, 2025, we sold two office properties and one mixed-use office/retail property. As a result, as of MarchJune 31,30, 2026, we owned 11 office properties and an investment in the equity securities of the SREIT. Therefore, the results of operations presented for the three and six months ended MarchJune 31,30, 2026 and 2025 are not directly comparable. The following tabletables providesprovide summary information about our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 (dollar amounts in thousands):

Comparison of the three months ended MarchJune 31,30, 2026 versus the three months ended MarchJune 31,30, 2025

(1) Represents the dollar amount increase (decrease) for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 related to the dispositions of properties after JanuaryApril 1, 2025. Interest expense incurred on portfolio loans is not allocated to the individual properties that serve as collateral for these portfolio loans and therefore, the decrease in interest expense related to the onean office property sold duringin the year ended December 31,July 2025 whichand servedan asoffice collateralproperty forsold ain portfolioMarch loan2026 is not reflected in the column for changes due to dispositions of properties. DuringIn the year ended December 31,July 2025, we repaid $87.7 million of outstanding principal debt under a portfolio loan with the net sale proceeds from the sale of onean office propertyproperty. in July 2025. During the three months endedIn March 31, 2026, we repaid $47.5 million of outstanding principal debt under a portfolio loan with the net sale proceeds from the sale of one office property in March 2026.property.

(2) Represents the dollar amount increase (decrease) for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 related to real estate investments owned by us throughout both periods presented.

Rental income from our real estate properties decreased from $60.3$60.9 million for the three months ended MarchJune 31,30, 2025 to $53.9$52.0 million for the three months ended MarchJune 31,30, 2026, primarily due to the sales of real properties in July 2025, September 2025 and September 2025, partially offset by an increase in rental income due to lease commencements subsequent to March 31, 2025 at a property held throughout both periods and an increase in operating and property tax recoveries with respect to properties held throughout both periods.2026. We expect rental income to decrease in future periods as a result of the disposition of these twothree properties, the disposition of a property in March 2026properties and to the extent we dispose of additional properties, to vary based on occupancy rates and rental rates of our real estate investments and to increase due to tenant reimbursements related to operating expenses to the extent physical occupancy increases as employees return to the office. See “—Going Concern Considerations,” “—Market Outlook – Real Estate and Real Estate Finance Markets” and “—Liquidity and Capital Resources.”

DividendOther operating income from our real estate equity securities increaseddecreased from $0.3$4.5 million for the three months ended MarchJune 31,30, 2025 to $0.6$4.0 million for the three months ended MarchJune 31,30, 20262026, primarily due to the sales of real properties in July 2025, September 2025 and March 2026, partially offset by an increase in theparking dividendrevenues rateat perproperties unitheld declaredthroughout byboth periods as employees returned to the SREIT.office. We expect dividendother operating income fromto ourdecrease realto estatethe equityextent securitieswe dispose of additional properties and to vary in future periods based on the occupancy and rental rates of the SREIT’s portfolio, movements in interest rates and theparking underlyingrates liquidityat needsour ofreal theestate SREIT.properties.

Operating, maintenance and management costs decreased from $17.1$17.3 million for the three months ended MarchJune 31,30, 2025 to $15.3$14.6 million for the three months ended MarchJune 31,30, 2026, primarily due to the sales of real properties in July 2025, September 2025 and SeptemberMarch 2025.2026, and an overall decrease in repairs and maintenance costs which vary based on the needs and timing of budgeted repair projects at properties held throughout both periods. We expect operating, maintenance and management costs to decrease to the extent we dispose of additional properties and to increase in future periods as a result of general inflation and to the extent physical occupancy increases as employees return to the office and to decrease due to the sale of a property in March 2026 and to the extent we dispose of additional properties.office.

Real estate taxes and insurance decreased from $11.9 million for the three months ended MarchJune 31,30, 2025 to $9.9$10.1 million for the three months ended MarchJune 31,30, 2026, primarily due to the sales of real properties in July 2025, September 2025 and SeptemberMarch 2025,2026 and a reduction in real estate taxes as a result of a successful property tax appeal at a property held throughout both periods. We expect real estate taxes and insurance to decrease to the extent we dispose of additional properties and to vary based on future property tax reassessments for properties that we continue to own and to decrease due to the sale of a property in March 2026 and to the extent we dispose of additional properties.own.

Asset management fees with respect to our real estate investments decreased from $4.6 million for the three months ended MarchJune 31,30, 2025 to $4.2$4.1 million for the three months ended MarchJune 31,30, 2026, primarily due to the sales of real properties in July 2025, September 2025 and SeptemberMarch 2025.2026. We expect asset management fees to decrease due to the sale of a property in March 2026 and to the extent we dispose of additional properties and to increase in future periods as a result of any improvements we make to our properties. As of MarchJune 31,30, 2026, there were $20.1$20.6 million of accrued asset management fees, of which (i) $8.5 million were Deferred Asset Management Fees, (ii) $8.5 million were related to asset management fees that were restricted for payment and deposited in the Bonus Retention Fund, and (iii) $1.8$2.5 million were related to asset management fees that were deferred in connection with agreements related to the refinancing of our debt obligations. As of MarchJune 31,30, 2026, we had $1.3$1.1 million of asset management fees payable related to asset management fees incurred for the month of MarchJune 2026, which were subsequently paid in AprilJuly 2026. For a discussion of assetDeferred managementAsset fees,Management Fees and the Bonus Retention Fund, see “—– Liquidity and Capital Resources” herein.

General and administrative expenses decreased from $2.5$2.3 million for the three months ended MarchJune 31,30, 2025 to $1.6$1.7 million for the three months ended MarchJune 31,30, 2026, primarily due to legal fees and financial and advisory consulting fees related to our development and pursuit of our debt restructuring plan and capital raising effortsincurred during the three months ended MarchJune 31,30, 2025.2025 related to the disposition of real estate properties, which fees were subsequently reclassified to selling expenses upon the sale of these properties in July 2025 and September 2025, respectively. General and administrative costs consisted primarily of portfolio legal fees, directors’ and officers’ insurance coverage costs, board of directors fees, third party transfer agent fees, financial and advisory consulting fees and audit costs.

Depreciation and amortization decreased from $26.4$25.2 million for the three months ended MarchJune 31,30, 2025 to $21.2$20.5 million for the three months ended MarchJune 31,30, 2026, primarily due to the sales of real properties in July 2025, September 2025 and March 2026 and a decrease in depreciation and amortization due to the reduced depreciable asset basis for The Almaden, Towers at Emeryville and 60 South Sixth as a result of non-cash impairment charges recorded during the year ended December 31, 2025.2025 and additional non-cash impairment charges recorded during the three months ended March 31, 2026. We expect depreciation and amortization to decrease in future periods to the extent we dispose of properties, decrease for the properties onfor which we recognized non-cash impairment charges during the year ended December 31, 2025 and the six months ended June 30, 2026, respectively, which reduced those properties’ depreciable book valuevalue, and decrease due to fully amortized tenant origination and absorption costs, offset by an increase as a result of additional capital improvements.

Interest expense decreased from $28.3$30.5 million for the three months ended MarchJune 31,30, 2025 to $25.0$24.4 million for the three months ended MarchJune 31,30, 2026. Included in interest expense was (i) $26.0$26.9 million and $21.6$21.0 million of interest expense payments for the three months ended MarchJune 31,30, 2025 and 2026, respectively, and (ii) the amortization of deferred financing costs of $2.3$3.6 million and $3.4 million for the three months ended MarchJune 31,30, 2025 and 2026, respectively. The decrease in interest expense was primarily due to less interest expense incurred as a result of loan paydowns in connection with the sales of real properties in July 2025, September 2025 and SeptemberMarch 2025,2026, and lower one-month Term SOFR during the three months ended MarchJune 31,30, 2026 and the impact on interest expense related to our variable rate debt. In general, we expect interest expense to decrease due to required loan paydowns, to vary based on fluctuations in interest rates (for our variable rate debt) and the amount of future borrowings and to increase due to higher interest rate spreads as a result of recent financings.

We recorded net gain on derivative instruments of $0.7 million$40,000 for the three months ended MarchJune 31,30, 2026. Included in net gain on derivative instruments was (i) realized gain on interest rate swaps of $0.8$0.3 millionmillion, andoffset by (ii) unrealized gainloss on interest rate swaps of $42,000,$0.2 offsetmillion byand (iii) realized loss on interest rate swaps of $63,000$89,000 for the three months ended MarchJune 31,30, 2026. We recorded net lossgain on derivative instruments of $1.8$1.0 million for the three months ended MarchJune 31,30, 2025. Included in net lossgain on derivative instruments was (i) unrealized loss on interest rate swaps of $4.5 million, offset by (ii) realized gain on interest rate swaps of $2.7 million, offset by unrealized loss on interest rate swaps of $1.7 million for the three months ended MarchJune 31,30, 2025. The change in net (gain) loss on derivative instruments was primarily due to changes in fair values with respect to our interest rate swaps that are not accounted for as cash flow hedges during the three months ended MarchJune 31,30, 2026. In general, we expect net gains or losses on derivative instruments to vary based on fair value changes with respect to our interest rate swaps that are not accounted for as cash flow hedges. In addition, as the remaining lives of our interest rate swaps that are not accounted for as cash flow hedges decrease, we expect the fair values of these interest rate swaps to move towards zero, decreasing the net gains or losses on derivative instruments.

During the three months ended MarchJune 31,30, 2026, we recorded non-cash impairment charges of $10.6$17.8 million to write down the carrying value of antwo office propertyproperties to itstheir estimated fair value asbased aon result of changes in cash flow estimates, including a change to(i) the anticipatedcontracted holdsales periodprice offor theone property,office whichproperty triggeredand the(ii) futureoffers estimatedreceived undiscountedfor cashone flowsoffice toproperty be lower than the net carrying value of the property. The decrease in cash flow projectionsthat was primarilymarketed duefor to the continued softening of market conditions in the central business district where the asset is located, which included an increase in the terminal cap and discount rates, and reduced projected revenue due to slower projected rent growth and leasing activity in the market.sale. We did not record any impairment charges during the three months ended MarchJune 31,30, 2025.

During the three months ended MarchJune 31,30, 2026 and 2025,2026, we recorded an unrealized loss on real estate equity securities of $6.2$2.4 millionmillion, and $5.2during the three months ended June 30, 2025, we recorded an unrealized gain on real estate equity securities of $2.8 million, respectively, as a result of the change in the closing price of the units of the SREIT on the SGX-ST.