Annual Report for Fiscal Year Ending DECEMBER 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Annual Report on Form 10-K 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"). Words such as "may," "could," "should," "expect," "intend," "plan," "goal," "seek," "anticipate," "believe," "estimate," "predict," "variables," "potential," "continue," "expand," "maintain," "create," "strategies," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or 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 listed and described under "Risk Factors" in this Annual Report on Form 10-K.

Forward-looking statements in this Annual Report on Form 10-K reflect our management's view only as of the date of this Report and may ultimately prove to be incorrect or false. 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.

The following discussion and analysis is based on the consolidated financial statements for the years ended December 31, 2025, 2024 and 2023. Our stockholders should read the following discussion and analysis along with our consolidated financial statements and the related notes thereto.

Overview

As noted above, we were formed and sponsored by IREIC to acquire and manage a portfolio of commercial real estate investments located in the United States. We elected to be taxed as a REIT commencing with the tax year ended December 31, 2013. Our strategic plan focuses primarily on acquiring and owning a portfolio substantially all of which is comprised of grocery-anchored properties. As noted herein, the board has asked the Business Manager to evaluate the Company's business plan and related strategy and to consider and present alternatives and enhancements to this plan and strategy for board review with a view towards being able to increase the Company's assets and cash flow on an accretive basis as well as to enhance the Company's capital (primarily equity) and provide liquidity to stockholders over time. See, however, "Risk Factors - Risks Related to Our Business - The board's recent review of strategic alternatives did not result in a liquidity event for stockholders and there is no assurance that any future review or strategies resulting therefrom will increase our capital resources or result, in among other things, an event or events that create liquidity for stockholders" for additional information.

We raised equity capital through a "best efforts" offering that commenced on October 18, 2012, and concluded on October 16, 2015. We sold 33,534,022 shares of common stock in the offering generating gross proceeds of $834.4 million. We have not raised any further equity capital through underwritten or best-efforts basis since the offering was completed. We have also generated equity capital through the sale of shares through our DRP. As noted herein, the DRP was suspended in September 2024 until February 2026. Since inception until December 31, 2025, we had issued a total of 6,760,659 shares through the DRP generating aggregate proceeds of $148.1 million. Although the DRP was recently reinstated, there is no assurance that stockholders will continue to participate at the level before suspension. We have also used, and may continue to use, various sources of debt capital to fund acquisitions and other capital and operating needs as further described.

As of December 31, 2025, we owned 52 retail properties, totaling 7.2 million square feet located in 24 states. A majority of our properties are multi-tenant, necessity-based retail shopping centers located primarily in major regional markets and growing secondary markets throughout the United States. As of December 31, 2025, grocery-anchored or grocery shadow-anchored shopping center properties represented 87% of our annualized base rent. A grocery shadow-anchored shopping center is a shopping center near a grocery store that we do not own and is not a part of our shopping center but that we believe generates traffic for our shopping center. As of December 31, 2025, our portfolio had physical and economic occupancy of 92.0% and 92.2%, respectively. As of December 31, 2025, 2024 and 2023, annualized base rent ("ABR") per square foot averaged $19.57, $19.72 and $19.61, respectively, for all owned properties. ABR is calculated by annualizing the monthly base rent for leases in-place as of the applicable date, excluding ground leases. ABR including ground leases averaged $17.23, $16.93 and $16.79 as of December 31, 2025, 2024 and 2023, respectively. There were no acquisitions or dispositions during the year ended December 31, 2025.

We have no employees and are externally managed and advised by the Business Manager, an indirect wholly owned subsidiary of our Sponsor. We pay fees to and reimburse certain expenses incurred by the Business Manager for the services provided to us. This fee was reduced dollar-for-dollar for amounts we paid to Mark Zalatoris during the time he served as the Company's president and chief executive officer. The agreement with Mr. Zalatoris ended on February 2, 2026, and Mr. Zalatoris resigned from his positions as president and chief executive officer effective the same date. The Business Manager will now directly pay Mr. Michael, our newly elected president and chief executive officer effective February 2, 2026, and we will pay the Business Manager the full amount of the fee it is entitled to under our agreement with the Business Manager. We do not reimburse the Business Manager for any compensation it pays to any person serving as one of our executive officers. Our properties are managed by Inland Commercial Real Estate Services LLC, also an indirect wholly owned subsidiary of our Sponsor.

Inflation and Interest Rates

Inflationary pressures, volatility in interest rates, the imposition of new duties, tariffs, trade barriers and retaliatory countermeasures by the U.S. and other governments, could all reduce consumer spending and adversely impact retailer profitability, particularly if rates rise which may impact our ability to increase rents as well as tenant demand for new and existing store locations. Regardless of inflation levels, base rent under most of our long-term anchor leases remain constant (subject to tenants' exercise of renewal options at pre-negotiated rent increases) until the expiration of their lease terms, regardless of the inflation rate for any period. While many of our leases require tenants to pay their share of shopping center operating expenses (including common area maintenance, real estate tax and insurance expenses), our ability to collect the expense increases passed through to tenants is dependent on their ability to absorb and pay these increases. Inflation may also impact other aspects of our operating costs, including fees paid to service providers, the cost to complete redevelopments and build-outs of recently leased vacancies and interest rate costs relating to variable rate loans and refinancing of lower fixed-rate indebtedness. While we have not been significantly impacted by any of these items to date, no assurances can be provided that these inflationary pressures will not have a material adverse effect on our business in the future.

LIQUIDITY AND CAPITAL RESOURCES

General

Our primary uses and sources of cash are as follows:

We have funded our capital needs primarily through cash flow from operations and through draws on the Credit Facility, if needed.

As of December 31, 2025 and December 31, 2024, we had total debt outstanding of $841.7 million and $837.7 million, respectively, excluding unamortized debt issuance costs. As of December 31, 2025 and December 31, 2024, the outstanding debt bore interest at a weighted average interest rate of 4.65% per annum and 4.55% per annum, respectively. As of December 31, 2025, the weighted average years to maturity for our debt was 3.2 years, not taking into account any extension options that may be exercised at our option. As of both December 31, 2025 and December 31, 2024, our borrowings were 52% of the purchase price of our investment properties. As of December 31, 2025, our cash and cash equivalents balance was $8.0 million. See "Risk Factors-Risks Associated with Debt Financing-The financial covenants under our credit agreement may restrict our ability to make distributions and our operating and acquisition activities. If we breach the financial covenants we could be held in default under the credit agreement, which could accelerate our repayment date and materially adversely affect our liquidity and financial condition" for further information.

As of December 31, 2025, we had $248 million outstanding under the Revolving Credit Facility and $575 million outstanding under the Term Loan. As of December 31, 2025, the interest rates on the Revolving Credit Facility and the Term Loan were 5.63% per annum and 4.24% per annum, respectively. As of December 31, 2024, the interest rates on the Revolving Credit Facility and the Term Loan were 6.34% and 4.30%, respectively. Each of the Revolving Credit Facility and the Term Loan matures on April 1, 2029, subject to a twelve month extension at our option. As of March 11, 2026 and December 31, 2025, we had $18 million and $37 million, respectively, available for borrowing under the Revolving Credit Facility, subject to various terms and conditions, including compliance with the covenants which could further limit the amount available, of the credit agreement that governs the Credit Facility. Our leverage ratio, as defined in the Credit Facility, generally cannot exceed 60%, provided however that two times during the term of our Revolving Credit Facility our leverage ratio may be 65% for two consecutive quarters. Our leverage ratio was 57% as of December 31, 2025.

On January 30, 2026, we drew $19 million on the Revolving Credit Facility to repay indebtedness secured by a mortgage on the Milford Marketplace property, which had an outstanding principal balance of $18.7 million and was repaid in full on January 30, 2026. Subsequent to the payoff, the property was added to the borrowing base for the Credit Facility. See "Risk Factors-Risks Associated with Debt Financing-The financial covenants under our credit agreement may restrict our ability to make distributions and our operating and acquisition activities. If we breach the financial covenants we could be held in default under the credit agreement, which could accelerate our repayment date and materially adversely affect our liquidity and financial condition" and "-Risks Associated with Debt Financing-Volatility in the financial markets and challenging economic conditions could adversely affect our ability to secure debt financing on attractive terms and our ability to service any future indebtedness that we may incur" for further information.

As of March 11, 2026 and December 31, 2025, a total of 52 and 51 properties, respectively, out of our 52 properties comprised the borrowing base for the Credit Facility. We may not use any property to secure debt on any particular property without removing the property from the borrowing base. Doing so would, however, reduce the amount that we may draw under the Credit Facility. As of December 31, 2025, we have paid all interest and principal amounts when due, and were in compliance with all financial covenants under the Credit Facility, as amended.

During the year ended December 31, 2025, we used $22.0 million to invest in capital expenditures and tenant improvements, which was approximately $8.1 million more than we invested during the year ended December 31, 2024. For 2026, we anticipate investing approximately $22.0 million for capital expenditures and tenant improvements. Capital expenditures and tenant improvements are funded by cash flows generated from operations during current or prior periods.

Cash Flow Analysis

Operating activities

Cash provided by operating activities decreased $0.6 million during 2025 compared to 2024 and increased $3.9 million during 2024 compared to 2023. The decrease from 2024 to 2025 was primarily due to the timing of tenant receipts and an increase in leasing commissions in 2025. The increase from 2023 to 2024 was primarily due to an increase in property net operating income primarily due to higher base rent, a decrease in cash paid for interest due to lower average debt outstanding and a decrease in business management fees in 2024 resulting from a change in the fee that became effective April 1, 2023.

Investing activities

During the year ended December 31, 2025, there was an increase in cash used in investing activities compared to 2024 due to an increase in capital expenditures. During the year ended December 31, 2024, there was an increase in cash used in investing activities compared to 2023 due to an increase in capital expenditures.

Financing activities

During 2025, 2024 and 2023, cash and proceeds from Revolving Credit Facility were used to repay debt. There were no distributions reinvested through the DRP or shares repurchased through the SRP during the year ended December 31, 2025. During the years ended December 31, 2024 and 2023, we generated proceeds from the sale of shares pursuant to the DRP of $5.0 million and $7.0 million, respectively. During the years ended December 31, 2024 and 2023, share repurchases through the SRP were $5.0 million and $6.0 million, respectively. During the years ended December 31, 2025, 2024 and 2023, we paid $19.6 million, $19.6 million and $19.6 million, respectively, in distributions. As noted herein, in connection with the board's review of strategic alternatives, the DRP and SRP were both been suspended effective October 1, 2024 and have been reinstated effective February 1, 2026.

Although the DRP was reinstated effective February 1, 2026, stockholders were required to affirmatively elect reinvestment of any future distributions we may pay through the DRP. There is no assurance that we will be able to generate proceeds through the DRP consistent with the amount generated during the years ended December 31, 2024 or 2023, if at all. See "Risk Factors-Risks Related to Our Business-Following the recent suspension of our DRP, there is no assurance that stockholders will continue to participate at the level before suspension, which may impact our ability to generate proceeds from the sale of shares in the DRP." In addition, the terms of the SRP were recently revised. Although shares were previously purchased at a discount to the then-current Estimated Per Share NAV at the time of repurchase, under the Sixth SRP, to the extent the board authorizes repurchases during any particular period, the repurchase price will be equal to the then-current Estimated Per Share NAV for "Exceptional Repurchases" and equal to 80 percent of the then-current Estimated Per Share NAV for "Ordinary Repurchases" as those terms are defined in the SRP.

Distributions

A summary of the distributions declared, distributions paid and cash flows provided by operations during the years ended December 31, 2025, 2024 and 2023 follows (Dollar amounts in thousands, except per share amounts):

Results of Operations

The following discussion is based on our consolidated financial statements for the years ended December 31, 2025, 2024 and 2023.

This section describes and compares our results of operations for the years ended December 31, 2025, 2024 and 2023. We generate primarily all of our net operating income from property operations. In order to evaluate our overall portfolio, management analyzes the net operating income of properties that we have owned and operated for the periods presented, in their entirety, referred to herein as "same store" properties. By evaluating the property net operating income of our "same store" properties, management is able to monitor the operations of our existing properties for comparable periods to measure the performance of our current portfolio and determine the effects of any acquisitions or dispositions on net income.

We consider property net operating income an important financial measure because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates and operating expenses. Although property net operating income is a widely used measure among REITs, there can be no assurance that property net operating income presented by us is comparable to similarly titled metrics used by other REITs.

We calculate property net operating income using net income and excluding adjustments to straight-line income (expense), that are calculated in accordance with GAAP, on operating leases, amortization of intangibles and lease incentives, general and administrative expenses, acquisition related costs, the business management fee, provisions for impairment, depreciation and amortization, interest expense, gains on sale of investment properties, gains on termination of interest rate swap agreements, losses on extinguishment of debt, and interest or other income.

Comparison of the Years ended December 31, 2025 and 2024 (Dollar amounts in thousands)

All 52 investment properties we currently own were held for the entirety of both the years ended December 31, 2025 and 2024.

The following table presents the property net operating income prior to straight-line income (expense), net, amortization of intangibles, interest, and depreciation and amortization for the years ended December 31, 2025 and 2024, along with a reconciliation to net loss, calculated in accordance with GAAP.

Net loss. Net loss was $11,047 and $14,978 for the years ended December 31, 2025 and 2024, respectively.

Total property net operating income. During the year ended December 31, 2025, property net operating income decreased $1,226, total property income increased $1,693, and total property operating expenses including real estate tax expense increased $2,919.

The increase in total property income is primarily due to an increase in base rent in new leases and step-up rent on existing leases, and an increase in tenant recovery income. The increase in property operating expenses is primarily due to increases in the following: (i) $1,132 in repairs and maintenance expense due to the timing of projects, (ii) $772 in snow removal costs, (iii) $531 in non-recoverable expenses, (iv) $333 in insurance expense, (v) $280 in utilities and (vi) $214 in legal costs, partially offset by a decrease of $827 in direct recovery expenses.

Straight-line income (expense), net. Straight-line income (expense), net increased $1,268 in 2025 compared to 2024. This increase is primarily due to increase in rent abatements on new leases in 2025.

Amortization of intangibles and lease incentives. Income from the amortization of intangibles and lease incentives increased $416 in 2025 compared to 2024. The increase is primarily due to write-off of below market leases due to early tenant move-outs.

General and administrative expenses.General and administrative expenses increased $2,301 in 2025 compared to 2024 primarily due to costs incurred for professional fees in connection with the review of strategic alternatives.

Business management fee. Business management fees increased $38 in 2025 compared to 2024. The increase is primarily due to an increase in "Average Invested Assets" as defined in the Business Management Agreement resulting from the investment in capital expenditures and tenant improvements described herein. During the years ended December 31, 2025 and 2024, $350 and $323, respectively, paid by the Company to Mr. Zalatoris reduced the amount paid by the Company to the Business Manager under the Business Management Agreement on a dollar-for-dollar basis. Because we do not expect to reimburse the Business Manager for any amounts it pays to Mr. Michael, our newly elected president and chief executive officer, effective February 2, 2026, the fee that we pay to the Business Manager will no longer be reduced.

Depreciation and amortization.Depreciation and amortization decreased $3,555 in 2025 compared to 2024. The decrease is primarily due to a larger amount of fully amortized assets in 2025 compared to 2024.

Interest expense.Interest expense decreased $2,163 in 2025 compared to 2024. The decrease is primarily due to lower average debt outstanding and a lower average interest rate.

Interest and other income.Interest and other income increased $94 in 2025 compared to 2024 primarily due to a non-recurring recovery of $165 related to unclaimed property, partially offset by lower interest income on cash.

Comparison of the Years ended December 31, 2024 and 2023 (Dollar amounts in thousands)

All 52 investment properties we currently own were held for the entirety of both the years ended December 31, 2024 and 2023.

The following table presents the property net operating income broken out between same store and non-same store, prior to straight-line income (expense), net, amortization of intangibles, interest, and depreciation and amortization for the years ended December 31, 2024 and 2023, along with a reconciliation to net loss, calculated in accordance with GAAP.

Net loss. Net loss was $14,978 and $15,123 for the years ended December 31, 2024 and 2023, respectively.

Total property net operating income. During the year ended December 31, 2024, property net operating income increased $2,467, total property income increased $2,661, and total property operating expenses including real estate tax expense increased $194.

The increase in property net operating income is primarily due to an increase in base rent in new leases and step-up rent on existing leases, and an increase in tenant recovery income. The increase in property operating expenses is primarily due to an increase in snow removal costs, higher repairs and maintenance costs due to the timing of projects and an increase in insurance premium costs compared to 2023.

Straight-line income (expense), net. Straight-line income (expense), net decreased $28 in 2024 compared to 2023. This decrease is primarily due to higher straight-line write-offs in 2024 compared to 2023, partially offset by step-up rent on existing leases.

Amortization of intangibles and lease incentives. Income from the amortization of intangibles and lease incentives decreased $2,400 in 2024 compared to 2023. The decrease is primarily due to fully amortized intangibles and fewer write-offs for early termination.

General and administrative expenses.General and administrative expenses increased $580 in 2024 compared to 2023 primarily due to the amount paid to Mr. Zalatoris under the CEO Agreement and an increase in professional fees. Amounts paid to Mr. Zalatoris reduced the amount paid by the Company to the Business Manager under the Business Management Agreement on a dollar-for-dollar basis.

Business management fee. Business management fees decreased $669 in 2024 compared to 2023. The decrease is primarily due to an amendment to the Business Management Agreement that reduced the base fee. As noted herein, the amount we paid to Mr. Zalatoris under the CEO Agreement reduced our payment under the Business Management Agreement on a dollar-for-dollar basis. During the year ended December 31, 2024, total costs incurred under the CEO Agreement were $323, which are included in general and administrative expenses.

Depreciation and amortization.Depreciation and amortization increased $1,267 in 2024 compared to 2023. The increase is primarily due to additions to fixed assets and leasing commissions during 2024 and higher fixed asset write-offs in 2024 compared to 2023.

Interest expense.Interest expense decreased $1,179 in 2024 compared to 2023. The decrease is primarily due to lower average debt outstanding and a decrease in interest rate swap amortization.

Interest and other income.Interest and other income increased $105 in 2024 compared to 2023 primarily due to interest earned on cash held in bank accounts.

Leasing Activity

The following table sets forth leasing activity during the year ended December 31, 2025. Leases with terms of less than 12 months have been excluded from the table.

Non-GAAP Financial Measures

Accounting for real estate assets in accordance with GAAP assumes the value of real estate assets is reduced over time due primarily to non-cash depreciation and amortization expense. Because real estate values may rise and fall with market conditions, operating results from real estate companies that use GAAP accounting may not present a complete view of their performance. We use Funds from Operations, or "FFO", a widely accepted metric to evaluate our performance. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or "NAREIT", has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. On November 7, 2018, NAREIT's Executive Board approved the White Paper restatement, effective December 15, 2018. The purpose of the restatement was not to change the fundamental definition of FFO but to clarify existing guidance. The restated definition of FFO by NAREIT is net income (loss) computed in accordance with GAAP, excluding depreciation and amortization related to real estate, excluding gains (or losses) from sales of certain real estate assets, excluding 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 and excluding gains and losses from change in control. We have adopted the restated NAREIT definition for computing FFO. Previously presented periods were not impacted.

Under GAAP, acquisition related costs are treated differently if the acquisition is a business combination or an asset acquisition. An acquisition of a single property will likely be treated as an asset acquisition as opposed to a business combination and acquisition related costs will be capitalized rather than expensed when incurred. Publicly registered, non-listed REITs typically engage in a significant amount of acquisition activity in the early years of their operations, and thus incur significant acquisition related costs, during these initial years. Although other start up entities may engage in significant acquisition activity during their initial years, publicly registered, non-listed REITs are unique in that they typically have a limited timeframe during which they acquire a significant number of properties and thus incur significant acquisition related costs. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Institute for Portfolio Alternatives, or "IPA", an industry trade group, published a standardized measure known as Modified Funds from Operations, or "MFFO", which the IPA has promulgated as a supplemental measure for publicly registered non-listed REITs and which may be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT. We believe it is appropriate to use MFFO as a supplemental measure of operating performance because we believe that, when compared year-over-year, 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.

MFFO excludes expensed costs associated with investing activities, some of which are acquisition related costs that affect our operations only in periods in which properties are acquired, and other non-operating items that are included in FFO, such as straight-lining of rents as required by GAAP. By excluding costs that we consider more reflective of acquisition activities and other non-operating items, the use of MFFO provides another measure of our operating performance once our portfolio is stabilized. Because MFFO may be a recognized measure of operating performance within the non-listed REIT industry, MFFO and the adjustments used to calculate it may be useful in order to evaluate our performance against other non-listed REITs. Like FFO, MFFO is not equivalent to our net income or loss as determined under GAAP, as detailed in the table below, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to acquire a significant amount of properties. MFFO should only be used as a measurement of our operating performance while we are acquiring a significant amount of properties because it excludes, among other things, acquisition costs incurred during the periods in which properties were acquired.

We believe our definition of MFFO, a non-GAAP measure, is consistent with the IPA's Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the "Practice Guideline," issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to straight-line rents and amortization of above and below market lease assets and liabilities, accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; nonrecurring 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.

Our presentation of FFO and MFFO may not be comparable to other similarly titled measures presented by other REITs. We believe that the use of FFO and MFFO provides a more complete understanding of our operating performance to stockholders and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs. Neither FFO nor MFFO is intended to be an alternative to "net income" or to "cash flows from operating activities" as determined by GAAP as a measure of our capacity to pay distributions. Management uses FFO and MFFO to compare our operating performance to that of other REITs and to assess our operating performance.

Our FFO and MFFO for the years ended December 31, 2025, 2024 and 2023 are calculated as follows (Dollar amounts in thousands):

Critical Accounting Estimates

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. Our significant accounting policies are described in Note 2 - "Summary of Significant Accounting Policies" which is included in our December 31, 2025 Notes to Consolidated Financial Statements in Item 15. We have identified Impairment of Investment Properties as a critical accounting policy.

We consider this policy to be critical because it requires our management to use judgment in the application of accounting policy, 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. If management's 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.

Impairment of Investment Properties

We assess the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed the carrying value, we will be required to record an impairment loss to the extent that the carrying value exceeds fair value. The valuation and possible subsequent impairment of investment properties will be a significant estimate that can change based on our continuous process of analyzing each property and reviewing assumptions about inherently uncertain factors, as well as the economic condition of the property at a particular point in time.

Recent Accounting Pronouncements

For information related to recently issued accounting pronouncements, reference is made to Note 2 - "Summary of Significant Accounting Policies" which is included in our December 31, 2025 Notes to Consolidated Financial Statements in Item 15.

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.