CIM Opportunity Zone Fund LP

11/13/2026 | Press release | Distributed by Public on 11/13/2026 16:14

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see Item 1A - Risk Factors of this Quarterly Report on Form 10-Q and the Fund's Annual Report on Form 10-K for the year ended December 31, 2025. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in "Part I - Financial Information" of this Quarterly Report on Form 10-Q, including the notes to the financial statements contained therein, and the terms "we," "us," "our" and the "Fund" refer to CIM Opportunity Zone Fund, L.P.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements" (within the meaning of the federal securities laws that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as "may," "will," "seek," "expects," "anticipates," "believes," "targets," "intends," "should," "estimates," "could," "continue," "assume," "projects," "plans" or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. In addition, these risks and uncertainties include those associated with general economic, market and other conditions. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law. The forward-looking statements should be read in light of the risk factors identified in Item 1A - Risk Factors of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025.
The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements:
•our future operating results;
•our business prospects and the prospects of the real estate and infrastructure in which we may invest;
•historic correlations among economic growth, inflation and rents resulting in the loss of the potential inflation hedging attributes of real estate;
•any recent perceived improvement in real estate fundamentals, corporate earnings, stock market performance and the supply and demand characteristics of commercial real estate, any one of which could adversely affect the performance of the Fund;
•the availability of capital markets, including the debt financing expected to be employed by the Fund;
•the predictive value of real estate and infrastructure capitalization rates compared with intermediate U.S. Treasury bonds;
•the impact of the investments that we expect to make;
•our ability to raise sufficient capital to execute our investment strategy;
•our ability to source adequate investment opportunities to efficiently deploy capital;
•the ability of our portfolio entities to achieve their objectives;
•our approach to artificial intelligence;
•our current and expected financing arrangements and investments;
•changes in the general interest rate environment;
•the adequacy of our cash resources, financing sources and working capital;
•the timing and amount of cash flows, distributions and dividends, if any, from our properties;
•our contractual arrangements and relationships with third parties;
•actual and potential conflicts of interest with CIM or any of its affiliates;
•the dependence of our future success on the general economy and its effect on the industries in which we may invest;
•our use of financial leverage;
•the ability to locate suitable investments and to monitor and administer our investments;
•the ability to attract and retain highly talented professionals;
•our ability to structure investments in a tax-efficient manner and the effect of changes to tax legislation and our tax position; and
•the tax status of the enterprises in which we may invest.
Overview
The Fund was formed on November 1, 2018 and commenced operations on January 21, 2019, and is governed by the Partnership Agreement. The Fund is organized as an open-ended vehicle for the purpose of investing in infrastructure and real estate, through entities that acquire, own, develop or re-develop and operate infrastructure and real estate assets in Opportunity Zones, with the objective of generating returns from capital appreciation and operating income once development of these assets is complete. The Fund's assets under development had plans in place or were developed at the time of the Fund's acquisition that are strategic to each asset achieving current income and appreciation of value. The Fund engages third parties or affiliates of the Manager (also referred to as the "development manager") to provide development management services, and in consideration the Fund pays development management fees. The Fund is also invested in Permanent Power Company, a portfolio entity, as further discussed in Note 2 - Summary of Significant Accounting Policies.
Portfolio Information
As of September 30, 2026, we had investments in 19 assets, with a carrying value of $3.1 billion. During the nine months ended September 30, 2026, we did not acquire ownership interests in any additional properties.
Results of Operations
Overview
We are not aware of any material trends or uncertainties, other than geopolitical conflict and national economic conditions affecting real estate in general, such as inflation and heightened interest rates and the imposition of tariffs and other changes to trade policy in the U.S. and other jurisdictions, that may reasonably be expected to have a material impact on our results from the acquisition, management and operation of properties other than those listed in the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 and this Quarterly Report on Form 10-Q.
The following table provides summary information about our results of operations for the three and nine months ended September 30, 2026 and 2025 (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 Change 2026 2025 Change
Solar revenue $ 33,014 $ 31,293 $ 1,721 $ 76,920 $ 61,657 $ 15,263
Rental and other property income 16,927 9,283 7,644 46,989 27,470 19,519
Total Revenue 49,941 40,576 9,365 123,909 89,127 34,782
Solar and property operating expense 20,096 9,621 10,475 62,440 27,899 34,541
Management fees to related party 11,668 10,423 1,245 34,950 30,958 3,992
Transaction-related costs - 3,354 (3,354) - 3,354 (3,354)
Expense reimbursement to related parties 1,097 772 325 4,510 2,552 1,958
Interest expense and other 9,566 3,005 6,561 25,790 9,186 16,604
General and administrative expense 5,098 2,680 2,418 13,793 7,454 6,339
Depreciation, amortization, and accretion expense, net 17,690 10,722 6,968 54,369 32,210 22,159
Real estate tax 1,995 889 1,106 7,077 3,692 3,385
Total Expenses 67,210 41,466 25,744 202,929 117,305 85,624
Other income - 28,541 (28,541) - 31,223 (31,223)
Interest income 7,351 6,479 872 19,872 17,870 2,002
Change in fair value of derivatives 17,542 - 17,542 13,999 - 13,999
Realized gain on net investment in lease - - - - 117,364 (117,364)
Gain on investments in unconsolidated entities - 2,675 (2,675) - 4,297 (4,297)
Change in fair value of notes payable 248 (31,260) 31,508 384 (31,798) 32,182
Total other income (expense) 25,141 6,435 18,706 34,255 138,956 (104,701)
Net income (loss) 7,872 5,545 2,327 (44,765) 110,778 (155,543)
Net income attributable to non-controlling interests 11,509 303 11,206 10,736 15,032 (4,296)
Net (loss) income attributable to CIM Opportunity Zone Fund, L.P. $ (3,637) $ 5,242 $ (8,879) $ (55,501) $ 95,746 $ (151,247)
Solar revenue
The increase in solar revenue of $1.7 million and $15.3 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was due to the Fund acquiring increased interest in new revenue-producing assets as part of the Permanent Power Company transaction.
Rental and other property income
The increase in rental and other property income of $7.6 million and $19.5 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was primarily due to increased occupancy at the Fund's operational properties along with additional properties becoming operational subsequent to September 30, 2025.
Solar and property operating expense
The increase in solar and property operating expense of $10.5 million and $34.5 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was primarily due to the amendment of solar
contracts in 2025 which changed the basis of expense from volume to capacity, as well as the acquisition of interests in additional solar facilities as part of the Permanent Power Company transaction and additional real estate properties becoming operational subsequent to September 30, 2025.
Management fees to related party
Management fees to related party are calculated based on each Limited Partner's Management Fee percentage multiplied by their proportionate share of NAV as of the beginning of the quarter.
The increase in management fees of $1.2 million and $4.0 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was primarily due to an increase in NAV driven by additional capital raised, as well as an increase in the valuation of the portfolio of assets held by the Fund. From September 30, 2025 to September 30, 2026 the Fund accepted an additional $90.3 million in capital contributions.
Expense reimbursement to related parties
The Manager receives reimbursement for performing certain services for the Fund and its subsidiaries.
The increase in expense reimbursement to related parties of $325,000 and $2.0 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was primarily due to increased administrative fees associated with the growth of the investment portfolio.
Interest expense and other
Interest expense and other also includes amortization of deferred financing costs.
The increase in interest expense and other of $6.6 million and $16.6 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was primarily due to additional borrowings entered into subsequent to September 30, 2025, including $528.2 million drawn on the Fund's credit facilities.
General and administrative expenses
General and administrative expenses primarily consist of legal, third-party administrator expenses, audit and tax expenses, banking fees and corporate expenses.
The increase in general and administrative expenses of $2.4 million and $6.3 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025, was primarily due to increased administrative fees resulting from increased investments at September 30, 2026, compared to during 2025.
Depreciation, amortization, and accretion expense, net
The increase in depreciation and amortization expense, net of $7.0 million and $22.2 million during the three and nine months ended September 30, 2026, compared to the same periods in 2025 was primarily due to depreciation and amortization from assets placed in service subsequent to September 30, 2025 along with the addition of new properties associated with the Permanent Power Company transaction.
Real estate tax
The increase in real estate tax of $1.1 million and $3.4 million for the three and nine months ended September 30, 2026 compared to the same periods in 2025 was due to increased property taxes in relation to reassessments of the Fund's properties that became operational subsequent to September 30, 2025.
Other income
Other income for the three and nine months ended September 30, 2025 primarily consisted of a $28.5 million gain recognized in connection with the cancellation of a contract related to the Permanent Power Company transaction. No comparable contract cancellation occurred during the three and nine months ended September 30, 2026.
Change in fair value of derivatives
Change in fair value of derivatives for the three and nine months ended September 30, 2026 compared to the same periods in 2025 increased due to new derivative contracts being entered into between the periods in relation to new debt agreements at Permanent Power Company.
Interest income
Interest income consists of amounts received on interest-bearing accounts, interest on receivable balances, and interest income on sales-type leases.
Interest income during the nine months ended September 30, 2026 compared to the same period in 2025 increased primarily due to interest income from the network reimbursement receivable following the acquisition of solar projects between periods. Interest income during the three months ended September 30, 2026 compared to the same period in 2025 increased primarily related to higher interest earned on cash balances held.
Realized gain on net investment in lease
Realized gain on net investment in lease was $117.4 million during the nine months ended September 30, 2025 resulting from a sales-type lease in a power purchase agreement that was entered into during the nine months ended September 30, 2025. No such lease was entered into during the three and nine months ended September 30, 2026.
Gain on investments in unconsolidated entities
Gain on investments in unconsolidated entities reflect the changes in fair value of the Fund's investments in unconsolidated entities.
Gain on investments in unconsolidated entities was $2.7 million and $4.3 million during the three and nine months ended September 30, 2025, resulting from an increase in the valuation of the portfolio assets held by the unconsolidated entities. Both of the Fund's investments in unconsolidated entities were contributed to Permanent Power Company subsequent to September 30, 2025 and the Fund had no investments in unconsolidated entities during the three and nine months ended September 30, 2026.
Change in fair value of notes payable
We have elected the fair value option for our notes payable. Changes in fair value are recorded in the consolidated statements of operations.
The Fund recognized gains from changes in fair value of notes payable during the three and nine months ended September 30, 2026, primarily due to changes in market interest rates and changes in credit spreads resulting in a decrease in the fair value of the debt. Conversely, the Fund recognized losses during the corresponding periods in 2025 in connection with the conversion of the Fund's convertible note in connection with the Permanent Power Company transaction.
Net income attributable to non-controlling interests
The change in net income attributable to non-controlling interests during the three months ended September 30, 2026 was primarily due to an increase in income at the Fund's infrastructure segment, the interests of which are 33.3% held by non-controlling interest holders subsequent to the Permanent Power Company transaction. Net income attributable to the non-controlling interest holders was $11.5 million and $10.7 million during the three and nine months ended September 30, 2026, respectively, compared to net income attributable to the non-controlling interest holders of $303,000 and $15.0 million during the same periods in 2025, respectively. The change in the nine months ended September 30, 2026 was driven by the allocation of non-controlling interest for the gain on sales-type lease during the nine months ended September 30, 2025, without a corresponding transaction during the nine months ended September 30, 2026.
Financial Condition, Liquidity and Capital Resources
General
Since December 31, 2025, our financial condition has changed primarily as a result of increased investment and development activity and the related financing of those activities. Notes payable, at fair value, increased from $512.8 million as of December 31, 2025 to $790.5 million as of September 30, 2026, primarily reflecting $323.7 million of borrowings, offset by $27.8 million of repayments and additional deferred financing costs of $23.6 million during the nine
months ended September 30, 2026. These borrowings were principally used to fund development activities and other capital requirements.
Real estate and solar facilities under development increased from $276.5 million at December 31, 2025 to $746.5 million at September 30, 2026, reflecting continued investment in the development and construction of our real estate and solar projects.
Accounts payable and accrued expenses increased from $79.6 million at December 31, 2025 to $196.0 million at September 30, 2026. This increase was primarily attributable to higher accrued capital expenditures associated with our development and construction activities, which increased to $92.7 million at September 30, 2026 from $46.1 million at December 31, 2025. These accrued capital expenditures are expected to be paid as construction and development milestones are achieved and billed.
Liquidity and Capital Resources
We expect to obtain the liquidity and capital resources that we need over the short and long-term from cash on hand, the net proceeds from our continuous private offering of our units in reliance on exemptions from the registration requirements of the Securities Act, cash flows from our operating assets, any undistributed funds from operations and any financing arrangements we may enter into in the future. For additional detail regarding our private offering, see "Part II, Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities-Use of Proceeds from Registered Sales of Securities" in the Fund's Annual Report on Form 10-K for the year ended December 31, 2025.
Our primary needs for liquidity and capital resources are to fund our investments in portfolio entities and other investments, pay our operating fees and expenses (including the Management Fee and Incentive Allocation), pay any distributions that we make to the holders of our units, periodic redemptions under our redemption program, and pay interest on any outstanding indebtedness that we incur.
We currently anticipate that our available capital resources, including the proceeds from our private offering and the proceeds from any financing arrangements we may enter into, when combined with cash flow generated from our operating assets, will be sufficient to meet our anticipated working capital and capital expenditure requirements over the next 12 months and beyond.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Contractual Obligations
As of September 30, 2026, we had fixed and variable rate mortgage loans payable with an outstanding principal balance of $297.9 million, and credit facilities with an outstanding principal balance of $528.2 million. Collectively, these obligations had an estimated fair value of $790.5 million. The Fund's mortgage notes payable are collateralized by the respective property on which the debt was placed. The mortgage notes payable are non-recourse, and contain various restrictions and covenants. The Fund's credit facilities are also subject to customary financial covenants and other restrictions. As of September 30, 2026, the Fund was in compliance with all applicable covenants under its debt agreements.
Cash Flows
The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash (amounts in thousands):
Nine Months Ended September 30,
2026 2025
Net Cash Provided by Operating Activities $ 1,841 $ 8,029
Net Cash Used In Investing Activities (353,954) (135,536)
Net Cash Provided by Financing Activities 223,168 12,504
Net Change In Cash And Cash Equivalents And Restricted Cash $ (128,945) $ (115,003)
As of September 30, 2026 and 2025, cash and cash equivalents and restricted cash totaled $292.4 million and $225.6 million, respectively.
Net cash provided by operating activities for the nine months ended September 30, 2026 was $1.8 million, compared to net cash provided by operating activities of $8.0 million during the nine months ended September 30, 2025. Cash provided by operating activities for both the nine months ended September 30, 2026 and 2025 primarily related to rental income, solar income, lease income and interest income earned on the Fund's interest-bearing accounts during the period. These inflows are offset by cash used in operating activities, including payments of management fees, interest expense, property operating expenses and marketing, legal, prepaids, and tax and accounting fees. The decrease in operating cash flows during the nine months ended September 30, 2026, compared to the same period in 2025 was primarily attributable to higher accounts receivable balances and increased payments to related parties.
Cash used in investing activities for both the nine months ended September 30, 2026 and 2025 primarily relates to additions to our investments.
Net cash provided by financing activities for the nine months ended September 30, 2026 primarily related to additional notes payable secured by the Funds' solar assets and additional capital contributions. This was partially offset by distributions and redemptions paid along with deferred financing fees paid on the notes at the Fund's solar assets. Net cash provided by financing activities for nine months ended September 30, 2025 primarily related to additional capital contributions offset by repayments of notes payable and distributions and redemptions paid.
Related Parties
See Note 8 - Management Fees, Incentive Allocation and Other Related-Party Transactions for a description of certain transactions and relationships with related parties.
Critical Accounting Policies
Our accounting policies have been established to conform with U.S. GAAP. The preparation of interim consolidated financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the interim consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses.
We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our interim consolidated financial statements, which should be read in conjunction with the more complete discussion of our significant accounting policies and procedures included in Note 2 - Summary of Significant Accounting
Policies to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025. We consider our critical accounting policies to be the following:
•Recoverability of Real Estate and Infrastructure Assets;
•Acquisitions and Initial Consolidation of VIEs; and
•Fair Value Measurements.
A complete description of such policies and our considerations is contained in our Annual Report on Form 10-K for the year ended December 31, 2025. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2025 and related notes thereto.
CIM Opportunity Zone Fund LP published this content on November 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 13, 2026 at 22:15 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]