UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended March 31, 2026

OR 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

Commission File Number: 000-53650

Lightstone Value Plus REIT V, Inc.

(Exact Name of Registrant as Specified in Its Charter)

1985 Cedar Bridge Avenue, Suite 1, Lakewood, New Jersey 08701

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:  (888) 808-7348

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the Registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 7, 2026, the Registrant had approximately 16.1 million shares of common stock outstanding.

LIGHTSTONE VALUE PLUS REIT V, INC.

INDEX

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

Lightstone Value Plus REIT V, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

See Notes to Consolidated Financial Statements.

Lightstone Value Plus REIT V, Inc.

Consolidated Statements of Operations and Comprehensive Income

(Dollars and shares in thousands, except per share amounts)

(unaudited)

See Notes to Consolidated Financial Statements.

Lightstone Value Plus REIT V, Inc.

Consolidated Statements of Stockholders’ Equity

(Dollars and shares in thousands)

(unaudited)

See Notes to Consolidated Financial Statements.

Lightstone Value Plus REIT V, Inc.

Consolidated Statements of Cash Flows

(Dollars in thousands)

(unaudited)

See Notes to Consolidated Financial Statements.

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Lightstone Value Plus REIT V, Inc.
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the notes thereto. Dollar and share amounts are presented in thousands, except per share data and where indicated in millions.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include discussion and analysis of the financial condition of Lightstone Value Plus REIT V, Inc. and our subsidiaries (which may be referred to herein as the “Company,” “we,” “us” or “our”), including our ability to make accretive real estate or real estate-related investments, rent space on favorable terms, to address our debt maturities and to fund our liquidity requirements, to sell our assets when we believe advantageous to achieve our investment objectives, our anticipated capital expenditures, the amount and timing of future cash distributions, if any, to our stockholders, the estimated net asset value (“NAV”) per Common Share (“NAV per Share”), and other matters. Words such as “may,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors described below:

Forward-looking statements in this Quarterly Report on Form 10-Q reflect our management’s view only as of the date of this Quarterly Report on Form 10-Q, and may ultimately prove to be incorrect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

Cautionary Note

The representations, warranties, and covenants made by us in any agreement filed as an exhibit to this Quarterly Report on Form 10-Q are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties, or covenants to or with any other parties.  Moreover, these representations, warranties, or covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

Executive Overview

We were formed primarily to acquire and operate commercial real estate and real estate-related assets on an opportunistic and value-add basis. In particular, we have focused generally on acquiring commercial properties with significant possibilities for capital appreciation, such as those requiring development, redevelopment or repositioning, those located in markets and submarkets with high growth potential, and those available from sellers who were distressed or faced time-sensitive deadlines. In addition, our opportunistic and value-add investment strategy has included investments in real estate-related assets that present opportunities for higher current income. Since our inception, we have acquired a wide variety of commercial properties, including office, industrial, retail, hospitality, multifamily residential and student housing. We have purchased existing, income-producing properties and newly constructed properties. We have also invested in mortgage and mezzanine loans. We have made our investments in or in respect of real estate assets located in the U.S. and other countries based on our view of existing market conditions.

All of our current investments are located in the U.S. We currently intend to hold our various real estate properties until such time as our board of directors (the “Board of Directors”) determines that a sale or other disposition appears to be advantageous to achieve our investment objectives or until it appears that the objectives will not be met.  We currently have one operating segment. As of March 31, 2026, we wholly owned and consolidated eight multifamily residential properties containing an aggregate 2,480 apartment units.

Current Environment

Our operating results and financial condition are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, new and existing competition, inflation, the impact of tariffs and global trade disruptions, recessionary pressures, supply chain disruptions, wars and acts of war, geopolitical tensions, political upheaval or uncertainty, potential violence, civil unrest, criminal activity or terrorism, the availability and cost of comprehensive insurance coverage, the effects of climate change, environmental liabilities, natural and other disasters, security breaches and cybercrime, any disruptions in the financial markets that may adversely affect the availability or terms of financings, unfavorable changes in laws, ordinances and regulations, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, and loss of key relationships.

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation or tariffs, higher interest rates, labor and supply chain challenges, and other changes in economic conditions, could adversely affect our future results of operations and financial condition.

Liquidity and Capital Resources

As of March 31, 2026, we had cash and cash equivalents of $67.0 million, marketable securities, available for sale of $4.0 million and restricted cash of $4.7 million.

Our principal demands for funds going forward are expected to be for the payment of (a) our anticipated operating expenses, including capital expenditures, and (b) scheduled debt service (excluding any balloon payments due at maturity) on our outstanding indebtedness including any required replacement interest rate cap contracts and including our current expectation that we will successfully extend or refinance the Citadel Apartments Mortgages on or before their scheduled maturity date (see “Mortgage Debt Maturities”). We also may, at our discretion, use funds for (a) tender offers and/or redemptions of our Common Shares, (b) distributions, if any, to our shareholders, and (c) selective acquisitions and/or real estate-related investments. Generally, we expect to meet our cash needs with our cash and cash equivalents and marketable securities on hand along with our cash flow from operations and the release of certain funds held in restricted cash. 

However, to the extent that these sources are not sufficient to cover our cash needs, we may use proceeds from additional borrowings and/or selective asset sales to fund such needs.

2026 Financing Activities

Axis at Westmont Mortgage

On March 30, 2026, we entered into a $60.0 million non-recourse mortgage loan (the “Axis at Westmont Apartments Mortgage”) scheduled to initially mature on April 9, 2028, which has three, one-year extension options subject to the satisfaction of certain conditions. The Axis at Westmont Apartments Mortgage bears interest at  SOFR + 2.35%, subject to a floor of 4.85%, and provides for monthly interest-only payments with the unpaid principal balance due at maturity. The Axis at Westmont Apartments Mortgage is collateralized by  the Axis at Westmont Apartments. A substantial portion of the proceeds from the Axis at Westmont Apartments Mortgage were used to repay in full prior mortgage indebtedness of $34.5 million, which was also collateralized by the Axis at Westmont Apartments. In connection with the Axis at Westmont Apartments Mortgage, we paid the Advisor a debt financing fee of $0.6 million.

Valley Ranch Apartments Mortgage

On February 27, 2026, we entered into a $60.5 million non-recourse mortgage loan (the “Valley Ranch Apartments Mortgage”) scheduled to mature on March 1, 2033. The Valley Ranch Apartments Mortgage bears interest at 5.23% and requires monthly interest-only payments through April 1, 2030, monthly principal and interest payments of approximately $0.3 million thereafter, and the unpaid principal balance due upon maturity. The Valley Ranch Apartments Mortgage is collateralized by the Valley Ranch Apartments. A substantial portion of the proceeds from the Valley Ranch Apartments Mortgage were used to repay in full the prior mortgage indebtedness of $43.4 million, which was also collateralized by the Valley Ranch Apartments. In connection with the Valley Ranch Apartments Mortgage, we paid the Advisor a debt financing fee of $0.6 million.

We have borrowed money to acquire properties and make other investments. Under our charter, the maximum amount of our indebtedness is limited to 300% of our “net assets” (as defined by our charter) as of the date of any borrowing; however, we may exceed that limit if approved by a majority of our independent directors. In addition to our charter limitation, our Board of Directors has adopted a policy to generally limit our borrowings to 75% of the value of our assets unless substantial justification exists that borrowing a greater amount is in our best interests. Our policy limitation, however, does not apply to individual real estate assets.

Concentration of Credit Risk

As of March 31, 2026 and December 31, 2025,  we had cash deposited in certain financial institutions in excess of U.S. federally insured levels. We regularly monitor the financial stability of these financial institutions and currently believe that we are not exposed to any significant credit risk for our cash and cash equivalents or restricted cash.

Results of Operations

We completed the disposition of the Autumn Breeze Apartments on February 27, 2025 and it did not qualify to be reported as discontinued operations since it did not represent a strategic shift that had a major effect on our operations and financial results. Accordingly, the operating results of the Autumn Breeze Apartments are reflected in our results from continuing operations for all periods presented through its date of disposition.

Three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Our results of operations for the three months ended March 31, 2026 compared to the same period in 2025 reflect the operating results of the properties owned by us during such periods. Properties which were owned by us during the entire periods presented are referred to as our “Same Store” properties.

The following table provides summary information about our results of operations:

The following table reflects total rental revenues and total property operating expenses for the three months ended March 31, 2026 and 2025 for our Same Store properties and the disposition of the Autumn Breeze Apartments:

The table below reflects the occupancy and effective monthly rental rates per unit for our eight wholly owned multifamily residential properties:

Rental Revenues

Rental revenues for the three months ended March 31, 2026 were $12.6 million, a decrease of $1.0 million, compared to $13.6 million for the same period in 2025.  Excluding the effect of the disposition of the Autumn Breeze Apartments, our rental revenues decreased by $0.2 million for our Same Store properties during the 2026 period principally due to a slight decline in occupancy.

Property Operating Expenses

Property operating expenses for the three months ended March 31, 2026 were $4.1 million, a decrease of $0.3 million, compared to $4.4 million for the same period in 2025.  Excluding the effect of the disposition of the Autumn Breeze Apartments, our property operating expenses were relatively unchanged for our Same Store properties during the 2026 period.

Real Estate Taxes

Real estate taxes for the three months ended March 31, 2026 were $1.5 million, a decrease of $0.4 million, compared to $1.9 million for the same period in 2025. Excluding the effect of the disposition of the Autumn Breeze Apartments, our real estate taxes decreased by $0.2 million for our Same Store properties during the 2026 period.

General and Administrative Expenses

General and administrative expenses for both the three months ended March 31, 2026 and 2025 were $2.0 million. Excluding the effect of the disposition of the Autumn Breeze Apartments, our general and administrative expenses were relatively unchanged for our Same Store properties during the 2026 period.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended March 31, 2026 was $3.8 million, a decrease of $0.5 million, compared to $4.3 million for the same period in 2025.  Excluding the effect of the disposition of the Autumn Breeze Apartments, our depreciation and amortization expenses decreased by $0.3 million for our Same Store properties during the 2026 period. This decrease was primarily attributable to lower amortization expense associated with in-place lease intangibles during the 2026 period as a result of certain of them becoming fully amortized during 2025.

Interest Expense, Net

Interest expense, net for the three months ended March 31, 2026 was $4.6 million, an increase of $0.3 million, compared to $4.3 million for the same period in 2025.  Interest expense is primarily attributable to the mortgage financings associated with our multifamily residential properties and reflects both changes in market interest rates on our variable rate indebtedness, the amortization of deferred financing costs and the weighted average principal outstanding during each of the periods. Excluding the effect of the disposition of the Autumn Breeze Apartments, interest expense, net increased by $0.4 million for our Same Store properties during the 2026 period compared to the 2025 period. Additionally, during the three months ended March 31, 2026 and 2025, we earned $0.1 million and $0.4 million, respectively, from our interest rate cap contracts which is recorded in interest expense, net.

Gain on Sale of Investment Property

In connection with the sale of the Autumn Breeze Apartments on February 27, 2025, we recognized a gain on sale of investment property of $18.1 million during the first calendar quarter of 2025.

Interest and Other Income, Net

Interest and other income, net was $0.8 million and $0.2 million during the three months ended March 31, 2026 and 2025, respectively. The increase reflects (i) higher interest income during the 2026 period resulting from an increase in our cash and cash equivalents on hand and (ii) negative mark to market adjustments on derivative financial instruments of $0.3 million recorded during the 2025 period.

Related Party Transactions

Our business is externally managed by the Advisor, an affiliate of Lightstone which provides advisory services to us and we have no employees. Lightstone is majority owned by David Lichtenstein, a member of the Board of Directors. Pursuant to the terms of an advisory agreement and subject to the oversight of our Board of Directors, the Advisor is responsible for managing our day-to-day affairs and for services related to the management of our assets.

We have agreements with the Advisor and its affiliates to pay certain fees and reimburse certain expenses in connection with services performed and costs incurred by these entities and other related parties. We are dependent on the Advisor and its affiliates for performing a full range of services that are essential to us, including asset management, property management, property management oversight (for those of our properties which are managed by an unrelated third-party property manager) and acquisition, disposition and financing activities, and other general administrative responsibilities; such as tax, accounting, legal, IT and investor relations services. If the Advisor and its affiliates are unable to provide these services to us, we would be required to provide the services ourselves or obtain the services from another party or other parties.

The advisory agreement has a one-year term and is renewable annually upon the mutual consent of our Advisor and our independent directors.

The following table represents the fees incurred associated with the payments to our Advisor:

Summary of Cash Flows

Operating activities

The net cash used in operating activities of $0.2 million for the three months ended March 31, 2026 consisted of our net loss of $2.6 million and the net negative change in operating assets and liabilities of $1.8 million adjusted to add back depreciation and amortization expense of $3.8 million and amortization of deferred financing costs of $0.4 million.

Investing activities

The net cash used in investing activities of $0.6 million for the three months ended March 31, 2026 consisted primarily of capital expenditures.

Financing activities

The net cash provided by financing activities of $8.8 million for the three months ended March 31, 2026 consisted primarily of the following:

Debt Financings

From time to time, we have obtained mortgage, bridge, or mezzanine loans for acquisitions and investments, as well as property development, redevelopment and renovations. In the future, we may obtain new financings for such activities or to refinance our existing real estate assets, depending on multiple factors.

Our notes payable balance was $350.7 million, net of deferred financing fees of $7.6 million, and had a weighted average interest rate of 5.59% as of March 31, 2026. Our notes payable balance was $310.5 million, net of deferred financing fees of $5.3 million, and had a weighted average interest rate of 5.37% as of December 31, 2025.

Derivative Financial Instruments

We have entered into interest rate cap contracts with unrelated financial institutions in order to reduce the effect of increases to interest rates associated with certain of our variable rate debt. We are exposed to credit risk in the event of non-performance by the counterparty to these financial instruments. Management believes the risk of loss due to non-performance is remote.

We account for our interest rate cap contracts as economic hedges marking them to their fair market value taking into account present market interest rates compared to the contractual fixed rate over the life of the contract. The changes in the fair value of these economic hedges represent unrealized gains or losses on the interest rate cap contracts which are included in interest and other income, net on the consolidated statements of operations.

Pursuant to the terms of our Axis at Westmont Mortgage and Citadel Apartments Mortgages, we are required to maintain interest rate cap contracts at certain required notional amounts capping SOFR at prescribed rates for as long as these mortgages remain outstanding. See Note 5 of the Notes to Consolidated Financial Statements.

On March 30, 2026 we entered into an interest rate cap contract with a notional amount of $60.0 million that effectively caps SOFR at 5.50% from March 30, 2026 through April 15, 2028 at a cost of $0.1 million.

Additionally, on October 10, 2024, we entered into a one-year interest rate cap contract with a notional amount of $44.0 million that effectively capped SOFR at 3.00% from October 11, 2024 through October 11, 2025 at a cost of $0.5 million. On October 9, 2025, we extended the term of this interest rate cap contract through October 11, 2026 at a cost of $0.3 million.

Contractual Obligations

One of our principal short-term and long-term liquidity requirements includes the refinancing or repayment of our maturing mortgage debt. The following table provides information with respect to the contractual maturities and scheduled debt service payments of our mortgage indebtedness as of March 31, 2026:

As of March 31, 2026, we were in compliance with all of our financial debt covenants.

Mortgage Debt Maturities

Our nonrecourse mortgage loans (the “Citadel Apartments Mortgages”) collateralized by the Citadel Apartments (aggregate outstanding principal balance of $44.0 million as of March 31, 2026) are scheduled to mature on October 11, 2026. We currently intend to seek to extend or refinance the Citadel Apartments Mortgages on or before their scheduled maturity date.

We do not currently expect any issues in extending or refinancing our maturing mortgage indebtedness at favorable terms although there can be no assurances that we will be able to do so. If we are unable to successfully extend or refinance our maturing mortgage indebtedness, we may also consider repaying the then outstanding principal balances due at their respective maturity dates with available cash on hand and/or proceeds from selective asset sales even though such mortgage indebtedness is not recourse to us. Other than the mortgage debt maturities discussed above, we have no additional maturities of mortgage debt over the next 12 months from the date of these consolidated financial statements.

Tender Offer

On December 30, 2025, our Board of Directors approved an issuer self-tender offer (the “Tender Offer”) to commence on or about December 31, 2025, for up to 2.2 million of our Common Shares at a price of $14.08 per Common Share, or approximately $31.1 million.

We commenced the Tender Offer on December 31, 2025 and a total of approximately 3.9 million Common Shares were properly tendered and not withdrawn before the expiration of the Tender Offer on February 13, 2026. In accordance with the terms and conditions of the Tender Offer, on March 5, 2026 we accepted and purchased approximately 2.2 million Common Shares at a purchase price of $14.08 per Common Share, for an aggregate cost of approximately $31.1 million.

Due to the oversubscription of the Tender Offer, we accepted for purchase on a pro rata basis approximately 56.5% of the Common Shares validly tendered and not withdrawn (other than “odd lot” stockholders, whose Common Shares were purchased in full on a priority basis).

Amended SRP

On November 10, 2022, the Board of Directors adopted a Seventh Amended and Restated Share Redemption Program (the “Amended SRP”), which became effective on January 1, 2023. Under the terms of the Amended SRP, any stockholder may request redemption of their Common Shares, subject to significant conditions and limitations. Additionally, under the terms of the Amended SRP, Common Shares are redeemed at 85% of our most recently published NAV per Share (subject to adjustment for any distributions designated as “special distributions” by the Board of Directors), in effect as of the date the redemption request is approved.

Pursuant to the terms of the Amended SRP, any Common Shares approved for redemption are redeemed on a periodic basis as determined by the Board of Directors, generally shortly after the end of each quarterly period. However, we will not redeem, during any year, more than 5% of the number of Common Shares outstanding on last day of the previous year (the “5% Limitation”). The cash available for redemption of Common Shares is set by the Board of Directors not less often than at least annually (the “Funding Limitation” and, together with the 5% Limitation, the “Redemption Limitations”). We may change the amount of the Redemption Limitations upon 10 business days of notice to our stockholders and may provide notice of any change to the Redemption Limitations by either including such information in (a) a current report on Form 8-K, an annual report on Form 10-K or a quarterly report on Form 10-Q, all which are publicly filed with the SEC or (b) a separate mailing to our stockholders.

Redemption requests may be subject to proration due to the above noted Redemption Limitations and are not considered on a first come, first served basis.

The Board of Directors reserves the right in its sole discretion at any time and from time to time, subject to any notice requirements described in our Amended SRP, to (i) reject any request for redemption of Common Shares, (ii) change the purchase price for redemption of Common Shares, (iii) limit the funds to be used for redemption of Common Shares under the Amended SRP or otherwise change the Redemption Limitations, or (iv) amend, suspend (in whole or in part) or terminate the Amended SRP.

In connection with the approval of the Tender Offer and as required by the rules of the Securities Exchange Act of 1934, as amended, the Board of Directors approved the immediate suspension of the Amended SRP effective December 30, 2025. While the Amended SRP was suspended, we did not accept any requests for redemption and any such requests and all pending requests were not be honored or retained.

On March 26, 2026, the Board of Directors reinstated the Amended SRP and determined it would consider the amount of cash available for redemption of Common Shares on a quarterly basis throughout 2026. On the same date, the Board of Directors approved that an amount up to $2.0 million would be made available for consideration of redemption requests for the second, third and fourth quarters of 2026.

For the three months ended March 31, 2025, we repurchased 148,258 Common Shares, pursuant to the Amended SRP at a weighted average price per share of $13.49.

Distributions

We made an election to qualify as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2008. U.S. federal tax law requires a REIT to distribute at least 90% of our annual REIT taxable income (which does not equal net income, as calculated in accordance with GAAP determined without regard to the deduction for dividends paid and excluding any net capital gain in order to maintain our REIT status. However, in order to continue to qualify for REIT status, it is possible we may be unable to make any such required distributions if they are in an amount in excess of our available cash.

Our distributions, if any, are authorized at the discretion of our Board of Directors based on their analysis of our performance over the previous periods and expectations of performance for future periods. The Board of Directors considers various factors in its determination, including but not limited to, our sources and availability of capital, our operating and interest expenses, our ability to refinance near-term debt, as well as the Internal Revenue Service’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. Although our Board of Directors’ decisions will be substantially influenced by the intention to maintain our federal tax status as a REIT, we cannot provide assurance that we will pay distributions at any particular level, or at all.

Funds from Operations and Modified Funds from Operations

We believe that the historical cost accounting convention used for real estate assets in accordance with GAAP implicitly assumes that the value of a real estate asset diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe the presentation of operating results for a REIT using the historical accounting convention for depreciation and certain other items may be insufficient by themselves.

The National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has published a standardized non-GAAP measure of performance known as funds from operations (“FFO”), which is used in the REIT industry as a supplemental performance measure. We believe FFO, which excludes certain items such as real estate-related depreciation and amortization, is an appropriate supplemental measure of a REIT’s operating performance. However, FFO is not equivalent to our net income or loss as determined under GAAP.

We calculate FFO in accordance with the current NAREIT definition. FFO represents net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, income taxes attributable to gains from the sale of certain real estate assets gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

Our computation of FFO may not be comparable to other REITs that do not compute FFO in accordance with the current NAREIT definition. We believe that the use of FFO provides a more complete understanding of our performance to investors and to management, and reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Changes in the accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, As a result, the Investment Program Association (the “IPA”), another industry trade group, published a standardized non-GAAP measure of performance known as modified funds from operations (“MFFO”), which the IPA has recommended as a supplemental measure for publicly registered, non-listed REITs. MFFO excludes from FFO: acquisition fees and expenses (to the extent that such fees and expenses have been recorded as operating expenses); adjustments related to contingent purchase price obligations; amounts relating to straight-line rents and amortization of above- and below-market intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; amortization of closing costs relating to debt investments; impairments of real estate-related investments; mark-to-market adjustments included in net income; and gains or losses included in net income for the extinguishment or sale of debt or hedges.

MFFO is designed to be reflective of the ongoing operating performance of publicly registered, non-listed REITs by adjusting for those costs that are more reflective of acquisitions and investment activity, along with other items the IPA believes are not indicative of the ongoing operating performance of a publicly registered, non-listed REIT, such as straight-lining of rents as required by GAAP. We believe it is appropriate to use MFFO as another supplemental measure of operating performance because we believe that it reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income or loss. However, MFFO is also not equivalent to our net income or loss as determined under GAAP.

We compute MFFO in accordance with the definition included in Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the “Practice Guideline”) issued by the IPA in November 2010 as interpreted by management. The Practice Guideline defines MFFO as FFO further adjusted for acquisition and transaction-related fees and expenses and other items. In calculating MFFO, we follow the Practice Guideline and exclude acquisition and transaction-related fees and expenses (which includes costs incurred in connection with strategic alternatives), amounts relating to deferred rent receivables and amortization of market lease and other intangibles, net (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), accretion of discounts and amortization of premiums on debt investments and borrowings, mark-to-market adjustments included in net income (including gains or losses incurred on assets held for sale), gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. Certain of the above adjustments are also made to reconcile net income or loss to net cash provided by or used in operating activities, such as for the amortization of a premium and accretion of a discount on debt and securities investments, amortization of fees, any unrealized gains or losses on derivatives, securities or other investments, as well as other adjustments.

MFFO excludes non-recurring impairment of real estate-related investments. We assess the credit quality of our investments and adequacy of reserves on a quarterly basis, or more frequently as necessary. Significant judgment is required in this analysis. We consider the estimated net recoverable value of a loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the prospects for the borrower and the competitive situation of the region where the borrower does business.

We believe that, because MFFO excludes costs that we consider more reflective of acquisition activities and other non-operating items, MFFO can provide, on a going-forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is stabilized. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry and allows for an evaluation of our performance against other publicly registered, non-listed REITs.

Not all REITs, including publicly registered, non-listed REITs, calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs, including publicly registered, non-listed REITs, may not be meaningful. Furthermore, FFO and MFFO are not indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income or loss or income or loss from continuing operations as determined under GAAP as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions, if any, to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. FFO and MFFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or loss or in its applicability in evaluating our operating performance. The methods utilized to evaluate the performance of a publicly registered, non-listed REIT under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and MFFO, and the adjustments to GAAP in calculating FFO and MFFO.

Neither the SEC, NAREIT, the IPA nor any other regulatory body or industry trade group has passed judgment on the acceptability of the adjustments that we use to calculate our FFO or MFFO. In the future, NAREIT, the IPA or another industry trade group may publish updates to the current definitions of FFO and MFFO or the SEC or another regulatory body could standardize the allowable adjustments across the publicly registered, non-listed REIT industry, and we may have to adjust our calculations and characterizations of FFO or MFFO accordingly.

Our calculations of FFO and MFFO are presented below (dollar amounts and shares in thousands, except per share amounts):

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, we evaluate these estimates, including impairment of investment property and depreciation and amortization. Actual results could differ from those estimates.

Our critical accounting policies and estimates have not changed significantly from the discussion found in the Management Discussion and Analysis and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the US. Securities and Exchange Commission, or SEC, on March 26, 2026.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, including our principal executive officer and principal financial officer, evaluated, as of March 31, 2026, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e) using the criteria established in Internal Control-New Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective, as of March 31, 2026, to provide reasonable assurance that information required to be disclosed by us in this report is recorded, processed, summarized, and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

There has been no change in internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time in the ordinary course of business, we may become subject to legal proceedings, claims or disputes.

As of the date hereof, we are not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on our results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, we have not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities

During the period covered by this quarterly report, we did not sell any equity securities that were not registered under the Securities Act of 1933.

Our Common Shares are not currently listed on any national securities exchange. The timing of a liquidity event for our stockholders will depend upon then prevailing market conditions and the Board of Directors’ assessment of our investment objectives and liquidity options for our stockholders. The Board of Directors has established June 30, 2033 as the targeted timeline for us to commence a liquidity event based on their assessment of our investment objectives and liquidity options for our stockholders. We can provide no assurances as to the actual timing of the commencement of a liquidity event, the duration of a liquidity event, or our ultimate liquidation. Furthermore, we are required to seek stockholder approval prior to liquidating our entire portfolio.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.