Special Semiannual Financial Report under Regulation A (Form 1-SA)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 1-SA

SEMIANNUAL REPORT PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933

For the Fiscal Semiannual Period ended June 30, 2025

Fundrise Development eREIT, LLC

(Exact name of issuer as specified in its charter)

Delaware		83-3430017
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11 Dupont Circle NW, 9th Fl, Washington, DC (Full Mailing Address of Principal Executive Offices)		20036 (Zip Code)

(202) 584-0550
Issuer's telephone number, including area code

TABLE OF CONTENTS

Management's Discussion and Analysis of Financial Condition and Results of Operations			3
Other Information			12
Index to the Unaudited Consolidated Financial Statements of Fundrise Development eREIT, LLC			13
Exhibits			14

Item 1.

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

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto contained in this Semiannual Report on Form 1-SA ("Semiannual Report"). The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the Statements Regarding Forward Looking Information beginning on page 59 in our latest offering circular (the "Offering Circular") qualified by the Securities and Exchange Commission ("SEC"), which may be accessed here and may be updated from time to time by our future filings under Regulation A ("Regulation A") of the Securities Act of 1933. Except as otherwise required by the U.S. federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Unless otherwise indicated, the latest results discussed below are as of June 30, 2025. The consolidated financial statements included in this filing as of June 30, 2025 and for the six months ended June 30, 2025 and 2024 are unaudited and have not been reviewed, and may not include year-end adjustments necessary to make those consolidated financial statements comparable to audited results, although in the opinion of management all necessary adjustments have been included to make interim statements of operations not misleading.

Business

Fundrise Development eREIT, LLC (formerly known as Fundrise Growth eREIT 2019, LLC) is a Delaware limited liability company formed on February 1, 2019 and substantially commenced operations on July 5, 2019. The use of the terms "Fundrise Development eREIT", the "Company", "we", "us", or "our" in this Semiannual Report refer to Fundrise Development eREIT, LLC unless the context indicates otherwise. Effective August 2, 2021, the Company merged with Fundrise Growth eREIT V, LLC, with the Company as the surviving entity (the "Merger"), and concurrently changed its name to Fundrise Development eREIT, LLC.

We intend to originate, invest in, and manage a diversified portfolio of commercial real estate investments including, primarily, residential rental properties, as well as real estate-related debt securities (including commercial mortgage-backed securities, collateralized debt obligations, and real estate investment trust ("REIT") senior unsecured debt) and other real estate-related assets, where the underlying assets primarily consist of such properties. We may make our investments through majority-owned subsidiaries, some of which may have rights to receive preferred economic returns. The Company has one reportable segment consisting of investments in real estate.

The Company has initiated a proposed merger with Fundrise Real Estate Interval Fund II, LLC (the "Flagship Fund II"), where the Flagship Fund II will be the surviving entity, that is anticipated to be completed before the end of the calendar year. This action is intended to enhance long-term returns for existing shareholders through greater diversification, minimized operating costs, and increased economies of scale.

As a limited liability company, we have elected to be taxed as a C corporation. Commencing with its taxable year ended December 31, 2019, the Company has qualified for treatment as a REIT under the Internal Revenue Code of 1986, as amended,, and intends to continue to operate as such.

We are externally managed by Fundrise Advisors, LLC (our "Manager"), which is an investment adviser registered with the SEC, and a wholly-owned subsidiary of Rise Companies Corp. (our "Sponsor"), the parent company of Fundrise, LLC, our affiliate. Fundrise, LLC owns and operates our platform located at www.fundrise.com, which allows investors to hold interests in opportunities that may have been historically difficult to access. Our Manager has the authority to make all decisions regarding our investments, subject to the limitations in our operating agreement and the direction and oversight of our Manager's investment committee. Our Sponsor also provides asset management, marketing, investor relations and other administrative services on our behalf. Accordingly, we do not currently have any employees nor do we currently intend to hire any employees who will be compensated directly by us.

Risk Factors

We face risks and uncertainties that could affect us and our business as well as the real estate industry generally. These risks are outlined under the heading "Risk Factors" in our latest Offering Circular, which may be accessed here (beginning on page 27), as the same may be updated from time to time by our future filings under Regulation A. In addition, new risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. These risks could result in a decrease in the value of our common shares.

Offering Results

During the second quarter of 2025 our Manager closed our Regulation A Offering of common shares of the Company (which we refer to as our "Offering"). The Company may in the future file an offering statement to qualify additional common shares for sale pursuant to Regulation A, or offer its common shares pursuant to Regulation D ("Regulation D") of the Securities Act, as determined by our manager. As of both June 30, 2025 and December 31, 2024, we had raised total gross offering proceeds of approximately $158.2 million in total, respectively, from settled subscriptions (including proceeds received in the private placements to our Sponsor, and Fundrise, L.P., an affiliate of our Sponsor, and approximately $1.9 million, respectively, received in private placements to third parties) and had settled subscriptions in our Offering and separate private placements for an aggregate of approximately 15,240,000, of our common shares.

Upon the reopening of our Offering, if any, the per share purchase price for our common shares is adjusted by our Manager at the beginning of each semi-annual period, or such other period as determined by our Manager in its sole discretion, but no less frequently than annually. Our Manager has currently determined to adjust the per share purchase price quarterly (or as soon as commercially reasonable and announced by us thereafter), and will equal the greater of (i) $10.00 per share or (ii) the sum of our net asset value ("NAV"), divided by the number of our common shares outstanding as of the end of the prior fiscal quarter ("NAV per share").

Below is the NAV per share since December 31, 2023, as determined in accordance with our valuation policy. Linked in the table is the relevant Form 1-U detailing each NAV evaluation method, incorporated by reference herein.

Date		NAV Per Share				Link
December 30, 2023		$	9.52			Form 1-U
March 29, 2024		$	9.49			Form 1-U
June 29, 2024		$	9.57			Form 1-U
September 30, 2024		$	9.27			Form 1-U
December 31, 2024		$	8.95			Form 1-U
March 31, 2025		$	8.86			Form 1-U
June 30, 2025		$	8.85			Form 1-U

Distributions

To maintain our qualification as a REIT, we are required to make aggregate annual distributions to our shareholders of at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). To avoid federal income and excise taxes on retained taxable income and gains, we must distribute 100% of such income and gains annually. Our Manager may authorize distributions in excess of those required for us to maintain REIT status and/or avoid such taxes on retained taxable income and gains depending on our financial condition and such other factors as our Manager deems relevant. Provided we have sufficient available cash flow, we intend to authorize and declare distributions based on daily record dates and pay distributions on a quarterly or other periodic basis. We have not established a minimum distribution level.

While we are under no obligation to do so, we have in the past, and expect in the future, to declare and pay distributions monthly or quarterly in arrears; however, our Manager may declare other periodic distributions as circumstances dictate. In order that investors may generally begin receiving distributions immediately upon our acceptance of their subscription, we expect to authorize and declare distributions based on daily record dates. However, there may also be times when our Manager elects to reduce our rate of distributions in order to preserve or build up a higher level of liquidity at the Company level.

Any distributions that we may make will directly impact our NAV by reducing our assets. Our goal is to provide a reasonably predictable and stable level of current income, through quarterly or other periodic distributions, while at the same time maintaining a fair level of consistency in our NAV. Over the course of a shareholder's investment, the shareholder's distributions plus the change in NAV per share (either positive or negative) will produce the shareholder's total return.

Our distributions will generally constitute a return of capital to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. To the extent that a distribution is treated as a return of capital for U.S. federal income tax purposes, it will reduce a shareholder's adjusted tax basis in the shareholder's shares, and to the extent that it exceeds the shareholder's adjusted tax basis will be treated as gain resulting from a sale or exchange of such shares.

For further details, please see Note 8, Distributions to the unaudited consolidated financial statements.

Redemption Plan

Although we do not intend to list our common shares for trading on a stock exchange or other trading market, we have adopted a redemption plan designed to provide our shareholders with limited liquidity for their investment in our shares. The Company's redemption plan provides that on a quarterly basis, subject to certain exceptions, a shareholder could obtain liquidity as described in detail in our Offering Circular. Our Manager may, in its sole discretion, amend, suspend, or terminate the redemption plan at any time, including to protect our operations and our non-redeemed shareholders, to prevent an undue burden on our liquidity, to preserve our status as a REIT, following any material decrease in our NAV, or for any other reason. During the third quarter of 2025, in advance of a proposed merger involving the Company, the redemption plan has been temporarily suspended, and the Company is not currently processing redemption requests.

As of June 30, 2025 and December 31, 2024, approximately 6.9 million and 5.7 million common shares, respectively, had been submitted for redemption since operations commenced, and 100% of such redemption requests have been honored. We believe the redemptions during the six months ended June 30, 2025 are attributable to investor demand to restore and preserve personal liquidity in response to the changes in economic conditions across the broader financial markets.

Sources of Operating Revenues and Cash Flows

We expect to primarily generate revenue and cash flows through the rental operations of our rental real estate properties and distributions from our investments in equity method investees. We may also seek to acquire other investments which generate attractive returns without any leverage. See Note 2, Summary of Significant Accounting Policies - Revenue Recognition to the unaudited consolidated financial statements for further detail.

Results of Operations

For the six months ended June 30, 2025 and 2024, we had net losses of approximately $1.8 million and $2.5 million, respectively. Further information on certain changes in our results is as follows:

Revenue

Rental Revenue

For the six months ended June 30, 2025 and 2024, we earned rental revenue of approximately $2.2 million and $2.6 million, respectively, from the operation of rental real estate properties. The decrease is primarily attributable to the sale of two wholly owned subsidiaries in the second half of 2024 for which we recognized approximately $350,000 of rental revenue in the prior period. See Our Investments in this Semiannual Report for further detail.

Other Revenue

For the six months ended June 30, 2025 and 2024, we earned other revenue of approximately $342,000 and $409,000, respectively. The decrease in other revenue is primarily attributable to a decrease in forfeited deposits for the C20 Property (as defined below) during the period.

Expenses

Property Operating and Maintenance

For the six months ended June 30, 2025 and 2024, we incurred property operating and maintenance expenses of approximately $1.4 million and $1.5 million, respectively, which includes property insurance, real estate taxes, and other routine maintenance costs. Property operating and maintenance expenses remained relatively consistent with no significant changes from the prior period.

Depreciation and Amortization

For the six months ended June 30, 2025 and 2024, we incurred depreciation and amortization expense of approximately $886,000 and $1.1 million, respectively. The decrease in depreciation and amortization expense is primarily attributable to in-place lease assets and deferred leasing costs being fully amortized for the C20 Property (as defined below) in January 2025. See Note 5, Intangible Lease Assets and Liabilities to the unaudited consolidated financial statements for further information.

Investment Management and Other Fees - Related Party

For the six months ended June 30, 2025 and 2024, we incurred investment management and other related party fees of approximately $373,000 and $547,000, respectively. The decrease in investment management fees was primarily attributable to a lower quarterly average net asset value, as the investment management fee is calculated as a percentage of net assets each quarter. The overall decrease in average net assets is primarily attributable to redemptions throughout the period and the lower average fair value of our investments in the six month period ended June 30, 2025 as compared to the corresponding period in 2024. For more detailed information on our investment performance, please see the linked Form 1-U detailing each NAV in our Offering Results above. In addition, "other fees - related party" decreased period over period due to a reduction in development management fees following the partial sale of one joint venture equity investment, which included a property under development.

Other Income (Expense)

Decrease in Fair Value of Derivative Financial Instrument

For the six months ended June 30, 2025 and 2024, we recognized a decrease in the fair value of our derivative financial instrument of approximately $351,000 and $539,000, respectively. The derivative financial instrument is related to the interest rate swap contract on the original mortgage payable of the C20 Property (as defined below). The decrease in the fair value of our derivative financial instrument is primarily attributable to movement in interest rates and the approach of its maturity, which occurred on March 6, 2025. See Note 7, Derivative Financial Instrument to the unaudited consolidated financial statements for further information.

Equity in Earnings

For the six months ended June 30, 2025 and 2024, we recognized equity in earnings from our equity method investees of approximately $943,000 and $889,000, respectively. The increase in equity in earnings is primarily attributable to a gain realized from one of our equity method investees due to a partial sale. See Note 3, Investments in Equity Method Investees to the unaudited consolidated financial statements for further detail.

Interest Expense, net

For the six months ended June 30, 2025 and 2024, we incurred net interest expense of approximately $912,000 and $497,000, respectively. The increase in interest expense is primarily attributable to a decrease in interest rate swap income, which is recorded as a reduction to "Interest expense, net" in our consolidated statements of operations. See Note 7, Derivative Financial Instrument to the unaudited consolidated financial statements for further information.

Interest Expense - Related Party

For the six months ended June 30, 2025 and 2024, we incurred interest expense on related party debt of approximately $1.2 million and $1.3 million, respectively. The decrease in related party interest expense is primarily attributable to lower interest rates on our average principal balance outstanding in the six month period ended June 30, 2025 as compared to the corresponding period in 2024.

Loss on Sale of Real Estate

For the six months ended June 31, 2025 and 2024, we incurred a net realized loss on investments of approximately $0 and $58,000, respectively. The loss in the prior period related to the sale of a single property, whereas no sales occurred in the first half of 2025.

Impairment Loss on Real Estate

For the six months ended June 30, 2025 and 2024, we incurred impairment loss of approximately $0 and $606,000, respectively. The loss in the prior period related to the impairment of a single property where the carrying amount of the asset exceeded its fair value, whereas no such impairments were incurred in the six months ended June 30, 2025.

Our Investments

The following tables summarize the investments held during the period from January 1, 2024 through June 30, 2025. See "Recent Developments" in this Semiannual Report for a description of any investments we have made since June 30, 2025. Note that the use of the term "controlled subsidiary" is not intended to conform with the accounting principles generally accepted in the United States of America ("U.S. GAAP") definition and does not correlate to a subsidiary that would require consolidation under U.S. GAAP.

Real Property Controlled Subsidiaries (Wholly-Owned Investments)		Location		Type of Property		Approx. Square Footage at Acquisition		Date of Acquisition		Approx. Acquisition Cost				Projected Renovation Cost (1)				Projected Exit Price (1)			Projected Hold Period (1)		Overview (Form 1-U)
RSE W421 Controlled Subsidiary(4)		Los Angeles, CA		Commercial		11,300		07/25/2019		$	7,325,000			$	610,000			$	7,935,000		7 years		Initial Update
RSE C35 Controlled Subsidiary		Los Angeles, CA		Multifamily		5,300		07/31/2019		$	4,195,000			$	20,200,000			$	24,400,000		7 years		Initial
RSE V40 Controlled Subsidiary (3)		Brentwood, MD		Mixed-Use		60,000		11/08/2019		$	4,120,000			$	2,400,000			$	6,520,000		7 years		Initial Update
RSE R450 Investment		Brentwood, MD		Multifamily		43,500		11/08/2019		$	7,660,000			$	--			$	7,660,000		10 years		Initial
W420 Controlled Subsidiary(5)		Los Angeles, CA		Mixed-Use		15,000		12/06/2019		$	7,490,000			$	4,920,000			$	12,410,000		7 years		Initial Update
W372 Controlled Subsidiary		Los Angeles, CA		Multifamily		6,250		12/31/2019		$	1,520,000			$	900,000			$	2,420,000		7 years		Initial
W422 Controlled Subsidiary		Los Angeles, CA		Mixed-Use		7,000		08/24/2020		$	3,055,000			$	4,170,000			$	7,225,000		10 years		Initial
B19 Controlled Subsidiary (2)		Landover, MD		Unimproved Land		965,000		08/02/2021		$	6,881,000			$	52,119,000			$	59,000,000		10 years		Initial
C20 Controlled Subsidiary (2)		Alexandria, VA		Mixed-Use		290,000		08/02/2021		$	39,105,000			$	--			$	39,105,000		5 years		Initial

(1)	Projected renovation costs, exit prices, and hold periods presented are as of the date of acquisition by the Company, and have not been subsequently updated.
(2)	These assets were acquired by the Company on August 2, 2021 in connection with the Merger. The acquisition costs, renovation costs, exit prices, and hold periods presented are as of the initial date of acquisition, and were not updated as of or subsequent to the date of the Merger.
(3)	On April 16, 2024 the RSE V40 Controlled Subsidiary sold the RSE V40 Property.
(4)	On December 26, 2024, the Company sold its original interest in the RSE W421 Controlled Subsidiary and entered into a tenancy-in-common ("TIC") transaction. As of December 31, 2024, the surviving investment in CNP 108, LLC is included in "Investments in equity method investees" on the Company's consolidated balance sheets.
(5)	On December 26, 2024, the Company sold its original interest in the W420 Controlled Subsidiary and entered into a TIC transaction. As of June 30, 2025, the surviving investment in CNP 108, LLC is included in "Investments in equity method investees" on the Company's consolidated balance sheets.

Real Property Controlled Subsidiaries (JV Equity Investments)

Location

Property Type

Date of Acquisition

Purchase Price (1)

Overview (Form 1-U)

GlenLine Controlled Subsidiary

Washington, DC

Land

09/25/2019

$

5,850,000

Initial

Update

Hampton Station Controlled Subsidiary (3)

Greenville, SC

Mixed Use

11/19/2021

$

1,891,000

Initial

N/A

CNP 108, LLC(2)

Los Angeles, CA

Mixed Use

12/26/2024

$

9,455,000

(4)

Initial

N/A

5957 Western, LLC(2)

Los Angeles, CA

Mixed Use

12/26/2024

$

4,125,000

Initial

N/A

4801 WJ, LLC(2)

Los Angeles, CA

Mixed Use

12/26/2024

$

4,654,000

Initial

N/A

(1)	Purchase Price refers to the total price paid by us for our pro rata share of the equity in the controlled subsidiary. The Purchase Prices are presented as of the date of acquisition, and have not been subsequently updated.
(2)	On December 26, 2024, the Company acquired a 25% TIC interest in 5957 Western, LLC, a 50% TIC interest in 4801 WJ, LLC and a 50% interest in CNP 108, LLC. The surviving investment in CNP 108, LLC is inclusive of the 50% purchase of the original interests in both the W420 Controlled Subsidiary and W421 Controlled Subsidiary for a purchase price of $5.0 million and $4.5 million, respectively.
(3)	On November 25, 2024, Hampton Station Holdings, LLC sold part of the Hampton Station property located in Greenville, SC for a sales price of approximately $11.1 million. Our distribution received from the sale totaled approximately $3.5 million. On January 24, 2025, Hampton Station Holdings, LLC sold an additional part of the Hampton Station property located in Greenville, SC for a sales price of approximately $45.4 million. Our distribution received from the sale totaled approximately $16.7 million. See Note 3, Investments in Equity Method Investees to the unaudited consolidated financial statements for further information regarding this disposition.
(4)	Transaction in-kind. Member interest in CNP 108, LLC acquired in connection with the sale of the Company's original interests in the W420 Controlled Subsidiary and the W421 Controlled Subsidiary.

The following assets are owned by Fundrise SFR DEV JV 1, LLC, a joint venture ("Co-Investment Arrangement") between the Company and Fundrise Real Estate Interval Fund, LLC. See Note 3, Investments in Equity Method Investees to the unaudited consolidated financial statements for more information.

Real Property Controlled Subsidiaries (Co-Investments)

Location

Property Type

Date of Acquisition

Purchase Price (1)

Overview (Form 1-U)

Carmel Villas Controlled Subsidiary

Denton, TX

Land

04/02/2021

$

6,594,000

Initial

Update

Kingsland Heights Controlled Subsidiary(2)

Brookshire, TX

Single Family Rental

07/22/2021

$

2,516,000

Initial

Update

(1)	Purchase Price refers to the total price paid by us for our pro rata share of the equity in the controlled subsidiary. The Purchase Prices are presented as of the date of acquisition, and have not been subsequently updated.
(2)	On June 28, 2024 the investment in Kingsland Heights Controlled Subsidiary was redeemed.

As of June 30, 2025, the Company's investments in companies that are accounted for under the equity method of accounting also included the contributions to National Lending, LLC ("National Lending") in exchange for ownership interests. See Note 10, Related Party Arrangements to the unaudited consolidated financial statements for further information regarding National Lending and Co-Investment Arrangements.

Liquidity and Capital Resources

We obtain the capital to fund our investment activities and operating expenses from secured or unsecured financings from banks, cash flow from rental real estate properties and equity method investments, net proceeds from asset repayments and sales, and other financing transactions. We use our capital to originate, invest in and manage a diversified portfolio of real estate investments and fund our operations. As of June 30, 2025, we had deployed approximately $153.2 million for fourteen investments and had approximately $3.2 million in cash and cash equivalents. The Company has a continuous funding commitment to maintain a total capital contribution amount of 5% of its assets under management to National Lending. See Note 10, Related Party Arrangements to the unaudited consolidated financial statements for further information regarding National Lending. As of June 30, 2025, we anticipate that cash on hand, cash flow from our rental real estate properties and equity method investments, proceeds from asset sales or repayments, and proceeds from potential future offerings will provide sufficient liquidity to meet funding commitments and costs of operations for at least the next 12 months.

We may selectively employ leverage to enhance total returns to our shareholders through a combination of senior financing on our real estate acquisitions, secured facilities, and capital markets financing transactions. We have outstanding unsecured Company level debt (inclusive of accrued interest) of approximately $46.5 million and $42.4 million and as of September 18, 2025 and June 30, 2025, respectively. This amount does not include any debt secured by the real property of our consolidated or unconsolidated investments. Our targeted portfolio-wide leverage is between 50-85% of the greater of the cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. During periods when we are growing our portfolio, we may employ greater leverage on individual assets (that will also result in greater leverage of the portfolio) in order to quickly build a more diversified portfolio of assets. We seek to secure conservatively structured leverage that is long-term, non-recourse, non-mark-to-market financing to the extent obtainable on a cost-effective basis. To the extent a higher level of leverage is employed it may come either in the form of government-sponsored programs or other long-term, non-recourse, non-mark-to-market financing. Our Manager may from time to time modify our leverage policy in its discretion in light of then-current economic conditions, relative costs of debt and equity capital, market values of our assets, general conditions in the market for debt and equity securities, growth and acquisition opportunities or other factors. However, other than during our initial period of operations, it is our policy to not borrow more than 85% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. We cannot exceed the leverage limit of our leverage policy unless any excess in borrowing over such level is approved by our Manager's investment committee.

The Company has entered into a guarantee agreement in connection with a mortgage loan extended to one of its underlying real estate properties, referred to as the "C20 Property". Under the terms of the loan agreement, the Company has guaranteed certain obligations of the C20 Property through the loan's initial maturity date of April 28, 2028, including any borrower-elected extension periods. Consistent with the Company's strategy to use leverage to enhance total shareholder return, these guarantees were provided to strengthen the credit profile of the C20 Property, secure more favorable financing terms and support the Company's investment activities. See Note 6, Mortgage Payable and Note 12, Commitments and Contingencies to the unaudited consolidated financial statements for further detail.

We face additional challenges in order to ensure liquidity and capital resources on a long-term basis. If we are unable to raise additional funds from the issuance of common shares, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make. We may be subject to more fluctuations based on the performance of the specific assets we acquire. Further, we have certain direct and indirect operating expenses. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income and would limit our ability to make distributions.

Outlook and Recent Trends

We seek to identify and make our investments according to large macroeconomic trends precisely because we believe those trends are likely to drive outsized growth, which in turn can deliver above average performance. Over the past six months, we've experienced the benefits of being invested in the right locations and asset types, even amidst sustained headwinds from elevated borrowing costs.

In September 2024, the Federal Reserve (the "Fed") began its much anticipated rate cutting cycle, which in turn initially translated to positive performance across most of the portfolio; however, recent announcements suggest a slower and more uncertain path to additional cuts. Interest rates have yet to meaningfully decrease, but we still expect a decrease in interest rates in the long-term. The magnitude of these initial returns represents only a portion of the ground to be made up relative to the total decline in real estate values that occurred since the peak in 2022. We believe this recovery will continue to gain momentum in the coming years. Additionally, we expect that near-term impacts of many of the new administration's tariff, immigration, and other policies (which we expect to result in slower economic growth and higher construction costs) will in turn lead to higher values for most of the portfolio. Further, as a result of the sustained strong operating performance of our properties, we have been able to drive growth in net operating incomes.

Looking ahead, our investment approach remains focused on disciplined capital deployment across both equity and credit strategies, aligned with our long-term objectives and responsive to evolving market conditions. Furthermore, the Fed, by its own forecast, is less than halfway through its expected rate cutting cycle, and is expected to continue cutting rates, albeit at a slower pace in the short-term than many initially anticipated. We believe this indicates that similar or larger gains could be achieved as rates continue to decrease. We expect that the assets acquired during this period of depressed pricing and falling interest rates will be one of the largest drivers of outsized returns in the future. We also recognize that the new political administration and ongoing policy shifts will continue to impact the economy, potentially through the deregulation of the financial sector, the impact of tariffs, reduced immigration and lower taxes. We anticipate that this will result in a more business-friendly environment with lower regulatory burdens and more liquidity in financial markets, but also the potential for increased volatility and higher costs around construction and new development. This dynamic has the potential to not only increase investment demand but to also further reduce future supply, compounding the existing supply constraints, which would result in even more appreciation in asset values.

Off-Balance Sheet Arrangements

As of June 30, 2025 and December 31, 2024, we had no off-balance sheet arrangements.

Recent Developments

National Lending

On July 3, 2025, the Company made a draw of $100,000 on the 2025 - D National Lending promissory note. The note bears a 5.50% interest rate and matures on April 29, 2026. As of September 18, 2025, the principal outstanding on the promissory note is $500,000.

On July 3, 2025, National Lending issued a new promissory note to the Company for a total maximum principal amount of $3.0 million. The note bears a 5.75% interest rate and matures on July 3, 2026. As of September 18, 2025, the principal outstanding on the promissory note is $3.0 million.

On July 30, 2025, National Lending issued a new promissory note to the Company for a total maximum principal amount of $2.0 million. The note bears a 5.75% interest rate and matures on July 30, 2026. As of September 18, 2025, the principal outstanding on the promissory note is $1.5 million.

On August 28, 2025, the Company partially paid off $1.0 million of principal on the 2024 - G National Lending promissory note. The note bears a 6.00% interest rate and matures on December 31, 2025. As of September 18, 2025, the principal outstanding on the promissory note is $28.0 million.

Item 2.

Other Information

None.

Item 3.

Financial Statements

INDEX TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF

Fundrise Development eREIT, LLC

Consolidated Balance Sheets	F-1
Consolidated Statements of Operations	F-2
Consolidated Statements of Members' Equity	F-3
Consolidated Statements of Cash Flow	F-4
Notes to Consolidated Financial Statements	F-5 to F-21

Fundrise Development eREIT, LLC

Consolidated Balance Sheets

(Amounts in thousands, except share data)

		As of June 30, 2025 (unaudited)				As of December 31, 2024 (*)
ASSETS
Cash and cash equivalents		$	3,182			$	3,063
Restricted cash			2,278				1,463
Other assets, net			665				802
Due from related party			191				-
Intangible lease assets, net			660				921
Derivative financial instrument			-				351
Investments in equity method investees			46,639				62,558
Investments in rental real estate properties, net			90,063				90,497
Investments in real estate held for improvement			9,288				9,185
Total Assets		$	152,966			$	168,840
LIABILITIES AND MEMBERS' EQUITY
Liabilities:
Accounts payable and accrued expenses		$	467			$	515
Due to related party			631				219
Redemptions payable			4,367				5,037
Distributions payable			57				64
Rental security deposits and other liabilities			384				476
Intangible lease liabilities, net			1,517				1,716
Notes payable - related party			45,627				43,307
Mortgage payable, net			29,517				34,604
Total Liabilities			82,567				85,938
Commitments and Contingencies
Members' Equity:
Common shares, net of redemptions; unlimited shares authorized; 15,240,286 and 15,240,286 shares issued and 8,363,261 and 9,550,145 shares outstanding as of June 30, 2025 and December 31, 2024, respectively			90,299				100,872
Accumulated deficit and cumulative distributions			(19,900	)			(17,970	)
Total Members' Equity			70,399				82,902
Total Liabilities and Members' Equity		$	152,966			$	168,840

*Derived from audited consolidated financial statements

The accompanying notes are an integral part of these consolidated financial statements.

Fundrise Development eREIT, LLC

Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

		For the Six Months Ended				For the Six Months Ended
		June 30, 2025 (unaudited)				June 30, 2024 (unaudited)
Revenue
Rental revenue		$	2,241			$	2,606
Other revenue			342				409
Total revenue			2,583				3,015
Expenses
Property operating and maintenance			1,445				1,488
Depreciation and amortization			886				1,120
Investment management and other fees - related party			373				547
General and administrative expenses			268				245
Total expenses			2,972				3,400
Other income (expense)
Decrease in fair value of derivative financial instrument			(351	)			(539	)
Equity in earnings (losses)			943				889
Dividend income			55				63
Interest expense, net			(912	)			(497	)
Interest expense - related party			(1,162	)			(1,343	)
Loss on sale of real estate			-				(58	)
Impairment loss on real estate			-				(606	)
Total other (expense) income			(1,427	)			(2,091	)
Net loss		$	(1,816	)		$	(2,476	)
Net loss per basic and diluted common share		$	(0.20	)		$	(0.22	)
Weighted average number of common shares outstanding, basic and diluted			9,198,953				11,195,382

The accompanying notes are an integral part of these consolidated financial statements. In the opinion of management, all necessary adjustments have been included in order to make the interim financial statements not misleading.

Fundrise Development eREIT, LLC

Consolidated Statements of Members' Equity

(Amounts in thousands, except share data)

		Common Shares
		Shares				Amount				Accumulated Deficit and Cumulative Distributions				Total Members' Equity
December 31, 2024 (*)			9,550,145			$	100,872			$	(17,970	)		$	82,902
Issuance of common shares			-				-				-				-
Offering costs			-				(37	)			-				(37	)
Distributions declared on common shares			-				-				(114	)			(114	)
Redemptions of common shares			(1,186,884	)			(10,536	)			-				(10,536	)
Net loss			-				-				(1,816	)			(1,816	)
June 30, 2025 (unaudited)			8,363,261			$	90,299			$	(19,900	)		$	70,399

		Common Shares
		Shares				Amount				Accumulated Deficit and Cumulative Distributions				Total Members' Equity
December 31, 2023 (*)			11,445,268			$	118,717			$	(9,276	)		$	109,441
Issuance of common shares			1,773				18				-				18
Offering costs			-				(45	)			-				(45	)
Distributions declared on common shares			-				-				(112	)			(112	)
Redemptions of common shares			(929,100	)			(8,740	)			-				(8,740	)
Net loss			-				-				(2,476	)			(2,476	)
June 30, 2024 (unaudited)			10,517,941			$	109,950			$	(11,864	)		$	98,086

*Derived from audited consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Fundrise Development eREIT, LLC

Consolidated Statements of Cash Flows

(Amounts in thousands)

		For the Six Months Ended June 30, 2025 (unaudited)				For the Six Months Ended June 30, 2024 (unaudited)
OPERATING ACTIVITIES:
Net loss		$	(1,816	)		$	(2,476	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of above- and below-market leases, net			(184	)			(164	)
Amortization of deferred rental revenue			33				(70	)
Amortization of deferred financing costs			28				-
Depreciation and amortization			886				1,120
Bad debt expense			(3	)			67
Equity in (earnings) losses			(943	)			(889	)
Amortization of below-market debt value			66				197
Decrease in fair value of derivative financial instrument			351				539
Loss on sale of investments in rental real estate properties			-				58
Return on investment from equity method investees			315				126
Impairment loss on real estate			-				606
Deferred financing fees			(481	)			-
Changes in assets and liabilities:
Net decrease (increase) in other assets			108				170
Net increase (decrease) in accounts payable and accrued expenses			(61	)			(768	)
Net increase (decrease) in due to related party			1,094				247
Net increase (decrease) in rental security deposits and other liabilities			(92	)			(44	)
Net cash provided by (used in) operating activities			(699	)			(1,281	)
INVESTING ACTIVITIES:
Investment in equity method investees			(901	)			(1,412	)
Return of investment from equity method investees			17,694				4,640
Capital expenditures related to rental real estate properties			(207	)			(221	)
Capital expenditures related to real estate held for improvement			(95	)			(2,092	)
Proceeds from the sale of investments in real estate held for sale			-				4,201
Net cash provided by (used in) investing activities			16,491				5,116
FINANCING ACTIVITIES:
Proceeds from issuance of common shares			-				15
Redemptions paid			(11,206	)			(10,924	)
Proceeds from notes payable - related party			16,200				12,900
Repayment of notes payable - related party			(15,000	)			(3,500	)
Proceeds from mortgage payable			30,000				-
Repayment of mortgage payable			(34,700	)			-
Distributions paid			(121	)			(246	)
Offering costs paid			(31	)			(42	)
Reimbursements to related party			-				(4	)
Net cash provided by (used in) financing activities			(14,858	)			(1,801	)
Net increase (decrease) in cash and cash equivalents and restricted cash			934				2,034
Cash and cash equivalents and restricted cash, beginning of period			4,526				5,494
Cash and cash equivalents and restricted cash, end of period		$	5,460			$	7,528
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
Capital expenditures related to real estate held for improvement included in accounts payable and accrued expenses		$	8			$	619
Reclass investments in real estate held for improvement to investments in rental real estate properties		$	-			$	13,328
Reclass investments in real estate held for improvement to intangible lease assets		$	-			$	428
Reclass intangible lease assets to investments in rental real estate properties		$	-			$	703
Reclass investments in real estate held for sale to investments in rental real estate properties		$	-			$	7,571
Non-cash extinguishment of debt		$	3,200			$	-
Investment in equity method investees		$	91			$	-
Return on investment from equity method investees		$	(33	)		$	-
Return of investment from equity method investees		$	(304	)		$	-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid - related party notes		$	42			$	865
Interest paid - mortgage payable		$	1,128			$	1,388

The accompanying notes are an integral part of these consolidated financial statements.

Fundrise Development eREIT, LLC

Notes to Consolidated Financial Statements (unaudited)

1.	Formation and Organization

Fundrise Development eREIT, LLC (formerly known as Fundrise Growth eREIT 2019, LLC) was formed on February 1, 2019 as a Delaware limited liability company and substantially commenced operations on July 5, 2019. Effective August 2, 2021, Fundrise Growth eREIT V, LLC, merged with and into Fundrise Growth eREIT 2019, LLC (which was concurrently renamed Fundrise Development eREIT, LLC), with the Company as the surviving entity (the "Merger"). As used herein, the "Company", "we", "us", and "our" refer to Fundrise Development eREIT, LLC, except where the context otherwise requires.

The Company has one reportable segment consisting of investments in real estate. The Company was organized primarily to originate, invest in and manage a diversified portfolio of real estate investments, and may also invest in real estate-related debt securities and other real estate-related assets. The Company may make its investments through majority-owned subsidiaries, some of which may have rights to receive preferred economic returns.

The Company's business is externally managed by Fundrise Advisors, LLC (the "Manager"), a Delaware limited liability company and an investment adviser registered with the Securities and Exchange Commission (the "SEC"). Subject to certain restrictions and limitations, the Manager is responsible for managing the Company's affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company.

We have operated in such a manner as to qualify as a real estate investment trust ("REIT") for federal income tax purposes beginning with the taxable year ended December 31, 2019. We hold substantially all of our assets directly, and as of June 30, 2025 and December 31, 2024 have not established an operating partnership or any taxable REIT subsidiary, though we may form such entities as required in the future to facilitate certain transactions that might otherwise have an adverse impact on our status as a REIT. We elect to treat certain wholly-owned subsidiaries as qualified REIT subsidiaries ("QRSs"). See Note 2, Summary of Significant Accounting Policies - Income Taxes for further information on the QRSs.

During the second quarter of 2025, our Manager closed the Regulation A Offering of common shares of the Company. The Company's initial and subsequent offering of its common shares (the "Offering") have been conducted as a continuous offering pursuant to Rule 251(d)(3) of Regulation A ("Regulation A") of the Securities Act of 1933, as amended (the "Securities Act"), meaning that while the offering of securities is continuous, active sales of securities may happen sporadically over the term of an Offering. A maximum of $75.0 million of the Company's common shares may be sold to the public in its Offering in any given twelve-month period. However, each Offering is subject to qualification by the SEC. The Manager has the authority to issue an unlimited number of common shares.

The Company may in the future file an offering statement to qualify additional common shares for sale pursuant to Regulation A, or offer its common shares pursuant to Regulation D of the Securities Act ("Regulation D"), as determined by our Manager.

As of June 30, 2025 and December 31, 2024, after redemptions, the Company has common shares outstanding of approximately 8,363,000 and 9,550,000, respectively, including common shares issued to Rise Companies Corp. (the "Sponsor"), the owner of the Manager. As of both June 30, 2025 and December 31, 2024, approximately 1,000 common shares were held by the Sponsor for an aggregate purchase price of approximately $11,000. In addition, as of both June 30, 2025 and December 31, 2024, Fundrise, L.P., an affiliate of the Sponsor, had purchased an aggregate of approximately 10,500 common shares for an aggregate purchase price of approximately $106,000. As of June 30, 2025 and December 31, 2024, after redemptions, third parties owned approximately 116,000 and 126,000 common shares, respectively, in private placements for an aggregate purchase price of approximately $1.4 million and $1.5 million, respectively. As of both June 30, 2025 and December 31, 2024, the total amount of equity issued by the Company on a gross basis was approximately $158.2 million, and there were no settling subscriptions.

2.	Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America ("U.S. GAAP") and Article 8 of Regulation S-X of the rules and regulations of the SEC. The Company has no items of other comprehensive income or loss in any period presented.

In the opinion of management, all adjustments considered necessary for a fair presentation of the Company's financial position, results of operations and cash flows have been included and are of a normal and recurring nature. Interim results are not necessarily indicative of operating results for any other interim period or for the entire year. The December 31, 2024 balance sheet and certain related disclosures are derived from the Company's December 31, 2024 audited financial statements. These interim financial statements should be read in conjunction with the Company's financial statements and notes thereto included in the Company's annual report, which was filed with the SEC. The financial statements as of June 30, 2025 and for the six months ended June 30, 2025 and 2024, and certain related notes, are unaudited, have not been reviewed, and may not include year-end adjustments to make those financial statements comparable to audited results.

Principles of Consolidation

We consolidate entities when we own, directly or indirectly, a majority interest in the entity or are otherwise able to control the entity. We consolidate variable interest entities ("VIEs") in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation, if we are the primary beneficiary of the VIE as determined by our power to direct the VIE's activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We did not have any VIEs for the periods presented in these consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consists of money market funds as of June 30, 2025 and December 31, 2024.

Cash may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250,000 per institution. The Company mitigates credit risk by placing cash with major financial institutions. To date, the Company has not experienced any losses with respect to cash.

Restricted Cash

Restricted cash consists of cash balances restricted in use by contractual obligations with third parties. This may include funds escrowed for tenant security deposits, real estate taxes, property insurance, and mortgage escrows required by lenders on certain of our properties to be used for future building renovations or tenant improvements.

Loss per Share

Basic loss per share is calculated on the basis of weighted-average number of common shares outstanding during the period. Basic loss per share is computed by dividing net income or loss available to members by the weighted-average common shares outstanding during the period. Diluted net loss per common share equals basic net loss per common share as there were no potentially dilutive securities outstanding during the six months ended June 30, 2025 and 2024.

Offering Costs

Offering costs of the Company were initially paid by the Manager on behalf of the Company. Pursuant to the Company's second amended and restated operating agreement (the "Operating Agreement"), the Company is obligated to reimburse the Manager, or its affiliates, as applicable, for offering costs incurred on its behalf, subject to certain conditions.

Reimbursement is permitted only after the Company reached a NAV per share greater than $10.00 per share (the "Hurdle Rate"). Once the Hurdle Rate is met, the Company may begin reimbursing the Manager for offering costs incurred both before and after the Hurdle Rate was achieved, without interest. Reimbursements are made in monthly installments and are limited to 0.50% of aggregate gross offering proceeds per month. Any unreimbursed amounts exceeding the monthly reimbursement limit may be carried forward and reimbursed in subsequent periods, provided that such reimbursements do not cause the NAV per share to fall below the Hurdle Rate.

The Company recognizes a liability for offering costs payable to the Manager when it is probable and estimable that a liability has been incurred in accordance with FASB ASC 450, Contingencies. As a result, no liability was recognized by the Company until it reached the Hurdle Rate. After the Company's NAV per share exceeded the Hurdle Rate, it recognized a liability with a corresponding reduction to equity for offering costs.

The table below presents the Company's offering costs paid and payable to the Manager as of and for the periods presented (amounts in thousands):

Offering Costs (1)		For the Six Months Ended June 30, 2025				For the Year Ended December 31, 2024
Costs incurred by the Manager:
Beginning balance		$	238			$	233
Costs incurred during the period			1				5
Ending balance		$	239			$	238
Less: cumulative costs reimbursed to Manager			(225	)			(225	)
Less: costs payable to Manager			-				-
Total costs subject to reimbursement in a future period		$	14			$	13

⁽¹⁾ The Hurdle Rate was met as of December 31, 2020.

During the six months ended June 30, 2025 and 2024, the Company directly incurred offering costs of approximately $37,000 and $42,000, respectively. As of June 30, 2025 and December 31, 2024, approximately $6,000 and $3,000, respectively, of directly incurred offering costs were payable and included within "Accounts payable and accrued expenses" in the consolidated balance sheets.

Settling Subscriptions

Settling subscriptions presented on the consolidated balance sheets represent equity subscriptions for which funds have been received but common shares have not yet been issued. Under the terms of the Offering Circular for our common shares, subscriptions will be accepted or rejected within thirty days of receipt by us. Once a subscription agreement is accepted, settlement of the shares may occur up to fifteen days later, depending on the volume of subscriptions received; however, we generally issue shares the later of five business days from the date that an investor's subscription is approved by our Manager or when funds settle in our bank account. We rely on our Automated Clearing House (ACH) provider to notify us that funds have settled for this purpose, which may differ from the time that cash is posted to our bank statement.

Investments in Equity Method Investees

If it is determined that we do not have a controlling interest in a joint venture through our financial interest in a VIE or through our voting interest in a voting interest entity and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost and adjusted for contributions, distributions, basis difference, and to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. We did not have any VIEs for the periods presented in these consolidated financial statements.

Distributions received from an equity method investee are recognized as a reduction in the carrying amount of the investment. If distributions are received from an equity method investee that would reduce the carrying amount of an equity method investment below zero, the Company evaluates the facts and circumstances of the distributions to determine the appropriate accounting for the excess distribution, including an evaluation of the source of the proceeds and implicit or explicit commitments to fund the equity method investee. The excess distribution is either recorded as a gain from equity method investee, or in instances where the source of proceeds is from financing activities or the Company has a significant commitment to fund the investee, the excess distribution would result in an equity method liability and the Company would continue to record its share of the equity method investee's earnings and losses. When the Company does not have a significant requirement to contribute additional capital over and above the original capital commitment and the carrying value of the investment in the unconsolidated venture is reduced to zero, the Company discontinues applying the equity method of accounting unless the venture has an expectation of an imminent return to profitability. If the venture subsequently reports net income, the equity method of accounting is resumed only after the Company's share of that net income equals the share of net losses or distributions not recognized during the period the equity method was suspended.

With regard to distributions from equity method investees, we utilize the cumulative earnings approach to determine whether distributions from equity method investments are returns on investment (cash inflow from operating activities) or returns of investment (cash inflow from investing activities). Using the cumulative earnings approach, the Company compares cumulative distributions received for each investment, less distributions received in prior periods that were determined to be returns of investment, with the Company's cumulative equity in earnings. Generally, cumulative distributions received that do not exceed cumulative equity in earnings represent returns on investment and cumulative distributions received in excess of the cumulative equity in earnings represent returns of investment.

The Company evaluates its investment in equity method investees for impairment whenever events or changes in circumstances indicate that there may be an other-than-temporary decline in value. To do so, the Company would calculate the estimated fair value of the investment using various valuation techniques, including, but not limited to, discounted cash flow models, which consider inputs such as the Company's intent and ability to retain its investment in the entity, the financial condition and long-term prospects of the entity, and the expected term of the investment. If the Company determined any decline in value is other-than-temporary, the Company would recognize an impairment charge to reduce the carrying value of its investment to fair value. No impairment losses were recorded related to equity method investees for the six months ended June 30, 2025 and 2024.

Rental Real Estate Properties and Real Estate Held for Improvement

Our investments in rental real estate properties and real estate held for improvement may include the acquisition of unimproved land, homes, multifamily properties, townhomes or condominiums, office space, or industrial properties that are (i) held as rental properties or (ii) held for redevelopment or are in the process of being renovated.

In accordance with FASB ASC 805, Business Combinations, the Company first determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired does not constitute a business, the Company accounts for the transaction as an asset acquisition. The guidance for business combinations states that when substantially all of the fair value of the gross assets to be acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the asset or set of assets is not a business. All property acquisitions to date have been accounted for as asset acquisitions.

Upon acquisition of a property, the Company assesses the fair value of acquired tangible and intangible assets (including land, buildings, site improvements, above-market leases, acquired in-place leases, and other identified intangible assets), intangible liabilities (including below-market leases), and assumed liabilities, and allocates the purchase price on a relative fair value basis (including capitalized acquisition costs) to the acquired assets and assumed liabilities. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. During this process, we also evaluate each investment for purposes of determining whether a property can be immediately rented (presented on the consolidated balance sheets as "Investments in rental real estate properties, net") or will need improvements or redevelopment (presented on the consolidated balance sheets as "Investments in real estate held for improvement").

The amortization of in-place leases is recorded to depreciation and amortization expense on the Company's consolidated statements of operations. The amortization of above- or below-market leases is recorded as an adjustment to rental revenue on the Company's consolidated statements of operations. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below-market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options. If the value of below-market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any lease intangible value is written off.

For rental real estate properties, significant improvements are capitalized. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. We capitalize expenditures that improve or extend the life of a property and for certain furniture and fixtures additions.

For real estate held for improvement, we capitalize the costs of improvement as a component of our investment in each property. These include renovation costs and other capitalized costs associated with activities that are directly related to preparing our properties for their intended use. Other costs may include interest, property taxes, property insurance, and utilities. The capitalization period associated with our improvement activities begins at such time that development activities commence and concludes at the time that a property is available to be rented or sold.

Costs capitalized in connection with rental real estate property acquisitions and improvement activities are depreciated over their estimated useful lives on a straight-line basis. The depreciation period commences upon the cessation of improvement related activities. For those costs capitalized in connection with rental real estate properties acquisitions and improvement activities and those capitalized on an ongoing basis, the useful lives range of the assets are as follows:

Description		Depreciable Life
Building and building improvements		20 - 39 years
Site improvements		5 - 20 years
Furniture, fixtures, and equipment		5 - 10 years
Lease intangibles		Over lease term

We evaluate our real estate properties for impairment when there is an event or change in circumstances that indicates an impaired value. If the carrying amount of the real estate investment is no longer recoverable and exceeds the fair value of such investment, an impairment loss is recognized. The impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value. If the Company determines that an impairment has occurred, the affected assets must be reduced to their fair value. During the six months ended June 30, 2025 and 2024, we recognized an impairment loss of approximately $0 and $606,000, respectively.

Investments in Real Estate Held For Sale

 From time to time, we may identify rental real estate properties to be sold. At the time that any such properties are identified, we perform an evaluation to determine whether or not such properties should be classified as held for sale or presented as discontinued operations in accordance with U.S. GAAP.

 Factors considered as part of our held for sale evaluation process include whether the following conditions have been met: (i) we have committed to a plan to sell a property that is immediately available for sale in its present condition; (ii) an active program to locate a buyer and other actions required to complete the plan to sell a property have been initiated; (iii) the sale of a property is probable within one year (generally determined based upon listing for sale); (iv) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (v) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. To the extent that these factors are all present, we discontinue depreciating the property, measure the property at the lower of its carrying amount or its fair value less estimated costs to sell, and present the property separately within investments in real estate held for sale on our consolidated balance sheets. For the six months ended June 30, 2025 and 2024, we did not recognize any impairment loss.

Real Estate Deposits

During the closing on a real estate investment, we may place a cash deposit on the property being acquired or fund amounts into escrow. These deposits are placed before the closing process of the property is complete. If subsequent to placing the deposit, we acquire the property (the deed is transferred to us), the deposit placed will be credited to the purchase price. If subsequent to placing the deposit, we do not acquire the property (deed is not transferred to us), the deposit will generally be returned to us. The Company may pay a deposit for a property that is ultimately acquired by a related party fund. Upon acquisition of the property, the related party fund reimburses the Company for the full amount of the deposit.

Derivative Financial Instruments

Derivative financial instruments are initially recorded at fair value on the date on which a derivative contract is entered into and are subsequently remeasured to fair value at each reporting period. Any changes in fair value of our derivative contracts not designated for hedge accounting are recorded in our consolidated statements of operations as "Decrease in fair value of derivative financial instrument". In the event a derivative financial instrument is settled, terminated, or extinguished before maturity, any realized gain or loss resulting from the transaction is recognized in our consolidated statements of operations in "Increase (decrease) in fair value of derivative financial instrument". The realized gain or loss represents the difference between the carrying fair value of the derivative at the time of the termination and the settlement amount paid or received. Any gains or losses arising from cash paid or received on derivative contracts are recorded in our consolidated statements of operations as "Interest expense, net."

Deferred Leasing Costs

We capitalize and amortize direct and incremental costs associated with the successful negotiation of leases, on a straight-line basis over the terms of the respective leases. Deferred leasing costs are classified in "Intangible lease assets, net" on the consolidated balance sheets. We record the amortization of deferred leasing costs in "Depreciation and amortization" on the consolidated statements of operations. If an applicable lease terminates prior to the expiration of its initial lease term, we write off the carrying amount of the costs to amortization expense.

Share Redemptions

Share repurchases are recorded as a reduction of common share par value under our redemption plan, pursuant to which we may elect to redeem shares at the request of our members, subject to certain exceptions, conditions, and limitations. The maximum number of shares purchasable by us in any period depends on a number of factors and is at the discretion of our Manager.

The Company's redemption plan provides that on a quarterly basis, subject to certain exceptions, a member could obtain liquidity as described in detail in our Offering Circular. In the event that we amend, suspend, or terminate our redemption plan, we will file an offering circular supplement and/or Form 1-U, as appropriate, and post such information on our website to disclose such amendment.

Income Taxes

As a limited liability company, we have elected to be taxed as a C corporation. The Company has qualified for treatment each year as a REIT under the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2019, and intends to continue to operate as such. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company's annual REIT taxable income to its members (which is computed without regard to the distributions paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles). As a REIT, the Company generally will not be subject to U.S. federal income tax to the extent it distributes qualifying distributions to its members. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. No material provisions have been made for federal income taxes in the accompanying consolidated financial statements during the six months ended June 30, 2025 and 2024. No gross deferred tax assets or liabilities have been recorded as of June 30, 2025 and December 31, 2024.

Beginning in 2020, we elected to treat certain wholly-owned subsidiaries as QRSs. The QRSs are corporations that are wholly-owned by the Company and are disregarded for both federal and state income tax purposes. A corporation that is a QRS shall not be treated as a separate corporation, and all assets, liabilities, and items of income, deduction, and credit of a QRS shall be treated as assets, liabilities and such items (as the case may be) of the REIT.

As of June 30, 2025, the tax period for the taxable year ending December 31, 2021 and all tax periods following remain open to examination by the major taxing authorities in all jurisdictions where we are subject to taxation. For the open tax periods, the Company has no uncertain tax positions that would require recognition in the consolidated financial statements.

Revenue Recognition

Rental revenue is recognized on a straight-line basis over the term of the lease. We review the collectability of our tenant receivables and record an allowance for doubtful accounts for any estimated probable losses. Rental revenue is recorded net of bad debt expense in the consolidated financial statements.

Other revenue consists of utility reimbursements, damages, termination fees, forfeited deposits, recoverable expenses, and administrative and late fees, which are recognized on an accrual basis.

Dividend income consists of interest earned on bank accounts and money market dividend income, which is related to dividends earned through our cash sweep bank account and is recognized on an accrual basis.

Gains or losses on the sale of real estate are recognized net of selling costs at the time the property is delivered, and title and possession are transferred to the buyer.

As of June 30, 2025, non-cancellable commercial operating leases provide for future minimum rental revenue from continuing operations as follows (amounts in thousands):

Year		Minimum Rental Revenue
Remainder of 2025		$	1,797
2026			3,227
2027			2,084
2028			1,603
2029			1,139
Thereafter			285
Total		$	10,135

For the six months ended June 30, 2025 and 2024, three tenants accounted for greater than 10% of rental revenue.

Recent Accounting Pronouncements

In July 2025, the FASB issued Accounting Standards Update ("ASU 2025-05"), Financial Instruments - Credit Losses (Topic 326), which provides a practical expedient for all entities and an accounting policy election for entities other than public business entities when estimating expected credit losses on trade receivables and contract assets arising from revenue transactions under Topic 606. The standard is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2025, with early adoption permitted. The Company is evaluating the standard to determine its impact on the Company's disclosures.

In May 2025, the FASB issued Accounting Standards Update ("ASU 2025-03"), Business Combinations (Topic 805) and Consolidation (Topic 810), which amends existing guidance for determining the accounting acquirer in a transaction primarily effected through the exchange of equity interests in which the legal acquiree is a VIE that meets the definition of a business. The standard is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2026, with early adoption permitted. The Company is evaluating the standard to determine its impact on the Company's disclosures.

In November 2024, the FASB issued Accounting Standards Update ("ASU 2024-03"), Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures, which requires disclosure within the notes to the financial statements of specified expense categories as well as qualitative descriptions for amounts not disaggregated quantitatively within expense captions on the income statement. The standard is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the standard to determine its impact on the Company's disclosures.

In January 2024, the Company adopted Accounting Standards Update 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280), which expands segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and are included in each reported measure of segment profit or loss. It also requires disclosure of the amount and composition of "other segment items", as well as interim disclosures of segment profit or loss and assets. These requirements apply to all public entities, including those with a single reportable segment. Adoption of the new standard affected financial statement disclosures only and did not impact the Company's financial position or results of operations.

3.	Investments in Equity Method Investees

The table below presents the activity of the Company's investments in equity method investees as of and for the periods presented (amounts in thousands):

Investments in Equity Method Investees:		For the Six Months Ended June 30, 2025				For the Year Ended December 31, 2024
Beginning balance		$	62,558			$	54,418
Additional investments in equity method investees(1)			810				20,847
Distributions from equity method investees(1)			(17,672	)			(13,855	)
Equity in earnings of equity method investees(2)			943				1,148
Ending balance		$	46,639			$	62,558

(1)	Includes non-cash reallocations of contributions and distributions to align ownership interests under the Company's TIC arrangements with related-party REITs. These reallocations are reflected as increases or decreases to the 'Due to related party' or 'Due from related party' accounts on the consolidated balance sheets, rather than through cash activity.
(2)	For the six months ended June 30, 2025, the Company's equity in earnings of equity method investees includes a gain of approximately $1.5 million which is the result of distributions in excess of the equity investment basis in the Hampton Station Holdings, LLC entity.

As of June 30, 2025, the Company's investments in companies that are accounted for under the equity method of accounting consist of the following:

(1)	A 90% non-controlling member interest in GlenRise 4th Street LLC, whose activities are carried out through the following wholly-owned asset: GlenLine 4th Street Property, a dual tenant industrial flex building with redevelopment potential in Washington, DC.
(2)	Investments in equity method investees includes the contributions to National Lending, LLC ("National Lending"), in exchange for ownership interests. As of June 30, 2025 and December 31, 2024, the carrying value of the Company's equity method investment in National Lending was approximately $7.8 million and $7.6 million, respectively. See Note 10, Related Party Arrangements for further information regarding National Lending.
(3)	A 40% non-controlling member interest in Fundrise SFR DEV JV 1, LLC, which primarily invests in ground-up development and newly constructed single-family residential real properties located throughout the Sunbelt region of the United States. See Note 10, Related Party Arrangements for further information regarding co-investment arrangements.
(4)	A 21.58% non-controlling member interest in Hampton Station Holdings, LLC, whose activities are carried out through the following wholly-owned asset: Hampton Station, a multi-tenant building and a development site for multi-family apartments in Greenville, SC. On November 19, 2021, the Company was admitted as a member of the joint venture concurrently with the closing of a construction loan related to the development of a mid-rise apartment complex. Remaining equity contributions to Hampton Station Holdings, LLC, will be contributed 95% by the Company and Fundrise East Coast Opportunistic REIT, LLC, an affiliate eREIT. On November 25, 2024, Hampton Station Holdings, LLC sold part of the Hampton Station property located in Greenville, SC for a sales price of approximately $11.1 million. Our distribution received from the sale totaled approximately $3.5 million. On January 24, 2025, Hampton Station Holdings, LLC sold part of the Hampton Station property located in Greenville, SC for a sales price of approximately $45.4 million. Our distribution received from the sale totaled approximately $16.7 million. Hampton Station Holdings, LLC continues to own and operate the remaining Hampton Station property located in Greenville, SC.

(5)	In connection with the TIC transactions (See Note 10, Related Party Arrangements, for further information regarding the TIC transactions), the Company invested approximately $18.2 million in the following equity method investments:

●

A 50% non-controlling member interest in 4801 WJ, LLC, whose activities are carried out through the following wholly-owned asset: 4801 W Jefferson Blvd, a creative office building located in Los Angeles, CA.

●

A 50% non-controlling member interest in CNP 108, LLC, whose activities are carried out through the following wholly-owned assets: 4202 W Jefferson Blvd, a creative office building located in Los Angeles, CA and 4216 W Jefferson Blvd, a creative office building located in Los Angeles, CA.

●

A 25% non-controlling member interest in 5957 Western, LLC, whose activities are carried out through the following wholly-owned asset: 5957 S Western Ave, a mixed use property located in Los Angeles, CA.

The condensed financial position and results of operations of the Company's equity method investments for the periods presented are summarized below (amounts in thousands):

Condensed balance sheet information:		As of June 30, 2025				As of December 31, 2024
Real estate assets, net		$	133,292			$	175,339
Other assets(1)			132,084				114,032
Total assets		$	265,376			$	289,371
Mortgage/construction loans payable, net			46,740				29,977
Other liabilities(2)			44,610				62,570
Equity			174,026				196,824
Total liabilities and equity			265,376				289,371
Company's equity investment, net		$	46,639			$	62,558

(1)

As of June 30, 2025 and December 31, 2024, approximately $113.2 million and $98.3 million, respectively, of "Other assets" are promissory notes receivable from other eREITs held by the Company's equity method investment in National Lending. See Note 10, Related Party Arrangements for further information regarding National Lending.

(2)	As of June 30, 2025 and December 31, 2024, approximately $42.1 million and $22.0 million of "Other liabilities" represent promissory notes issued from affiliated entities to National Lending, respectively. See Note 10, Related Party Arrangements for further information regarding National Lending.

Condensed income statement information:		For the Six Months Ended June 30, 2025				For the Six Months Ended June 30, 2024
Total revenue		$	6,744			$	5,359
Total expenses			6,417				1,717
Net income (loss)			327				3,642
Company's equity in net income (loss) of investee		$	943			$	889

4.	Investments in Rental Real Estate Properties and Real Estate Held for Improvement

As of June 30, 2025 and December 31, 2024, we had invested in five rental real estate properties, respectively.

The following table presents the Company's investments in rental real estate properties (amounts in thousands):

		As of June 30, 2025				As of December 31, 2024
Land		$	66,538			$	66,538
Building			25,598				25,452
Site improvements			2,272				2,272
Total gross investment in rental real estate properties			94,408				94,262
Less: Accumulated depreciation			(4,345	)			(3,765	)
Total investment in rental real estate properties, net		$	90,063			$	90,497

As of both June 30, 2025 and December 31, 2024, the carrying amount of the rental real estate properties above included cumulative capitalized acquisition costs of approximately $303,000, which includes cumulative acquisition fees paid to the Sponsor of approximately $162,000. As of both June 30, 2025 and December 31, 2024, capitalized acquisition costs and cumulative acquisition fees paid to the Sponsor for the properties that were sold was approximately $374,000.

For the six months ended June 30, 2025 and 2024, the Company recognized approximately $581,000 and $626,000 of depreciation expense on rental real estate properties, respectively.

The following table presents the Company's investments in real estate held for improvement (amounts in thousands):

		As of June 30, 2025				As of December 31, 2024
Land		$	6,881			$	6,881
Building and building improvements			1,962				1,907
Work-in-progress			445				397
Total investment in real estate held for improvement		$	9,288			$	9,185

5.	Intangible Lease Assets and Liabilities

The Company's intangible lease assets and liabilities consist of in-place leases, deferred leasing costs, above-market leases, and below-market leases primarily related to acquisition of the C20 Property resulting from the Merger. In-place leases, deferred leasing costs, and above-market leases are classified as "Intangible lease assets, net" on our consolidated balance sheets; whereas, below-market leases are classified as "Intangible lease liabilities, net" on our consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, in-place leases, net were approximately $295,000 and $505,000, respectively. In-place lease assets are amortized over the remaining term of the respective leases. For the six months ended June 30, 2025 and 2024, amortization of in-place lease assets was approximately $210,000 and $355,000, respectively, and included in "Depreciation and amortization" in the consolidated statements of operations.

As of June 30, 2025 and December 31, 2024, deferred leasing costs, net were approximately $358,000 and $393,000, respectively. Deferred leasing costs are amortized over the remaining term of the respective leases. For the six months ended June 30, 2025 and 2024, amortization of deferred leasing costs was approximately $95,000 and $139,000, respectively, and was included in "Depreciation and amortization" in the consolidated statements of operations.

As of June 30, 2025 and December 31, 2024, above-market leases, net were approximately $7,000 and $23,000, respectively, and below-market leases, net were approximately $(1.5 million) and $(1.7 million), respectively. The Company recognizes the amortization of acquired above- and below-market leases over the remaining term of the respective leases. For the six months ended June 30, 2025 and 2024, amortization of above-market leases was approximately $15,000 and $37,000, respectively, and amortization of below-market leases was approximately $(199,000) and $(201,000), respectively. The amortization of above-market leases is included as a reduction to "Rental revenue" in the consolidated statements of operations, whereas the amortization of below-market leases is included as an addition to "Rental revenue" in the consolidated statements of operations.

The following table summarizes the scheduled amortization of the Company's acquired intangible lease assets for each of the five succeeding years and thereafter (amounts in thousands):

Year		In-Place Lease Intangibles				Deferred Leasing Costs				Above-Market Lease Intangibles
Remainder of 2025		$	111			$	76			$	7
2026			105				124				-
2027			56				68				-
2028			23				37				-
2029			-				18				-
Thereafter			-				35				-
Total		$	295			$	358			$	7

The following table summarizes the scheduled amortization of the Company's acquired intangible lease liabilities for each of the five succeeding years and thereafter (amounts in thousands):

Year		Below-Market Lease Intangibles
Remainder of 2025		$	(192	)
2026			(204	)
2027			(130	)
2028			(98	)
2029			(83	)
Thereafter			(810	)
Total		$	(1,517	)

6.	Mortgage Payable

The following is a summary of the Company's mortgage payable as of June 30, 2025 and December 31, 2024 (dollar amounts in thousands):

Borrower (1)		Interest Rate		Maturity Date		Balance at June 30, 2025				Balance at December 31, 2024
C20 Property		SOFR + 1.61%(4)		03/06/2025		$	-			$	34,604	(3)
C20 Property		7.75%		04/28/2028		$	29,517	(2)		$	-
Total						$	29,517			$	34,604

(1)

Effective August 2, 2021, the C20 property entered into a mortgage payable ("the C20 mortgage payable") with a principal balance of $38.5 million, which was subsequently modified to $35.5 million as a result of partial principal repayment on February 10, 2023. In February 2025, the maturity date of March 6, 2025 was extended to June 6, 2025. On April 28, 2025, the Company refinanced the C20 mortgage payable with a new $30.0 million loan. In connection with the refinancing, the Company made a payment of approximately $6.8 million to fully retire the prior loan and fund interest reserves and closing costs related to the new loan. All mortgage loans are secured by the Company's properties.

(2)	This balance represents the principal balance of approximately $30.0 million, net of the unamortized deferred financing fees of approximately $483,000 as of June 30, 2025.
(3)	This balance represents the principal balance of approximately $34.7 million, net of the unamortized below-market debt value of approximately $65,000 and approximately $31,000 of deferred financing fees as of December 31, 2024.

(4)	Effective February 10, 2023, the loan was amended and the interest rate was modified from LIBOR + 1.5%, to SOFR + 0.1144% + 1.5% spread. SOFR represents the Daily Simple Secured Overnight Financing Rate established per the loan agreement.

Both the original mortgage loan and the newly refinanced mortgage loan requires monthly, interest-only payments until maturity, at which time the entire outstanding principal balance becomes due. For both of the six months ended June 30, 2025 and 2024, we incurred interest expense of approximately $1.1 million, respectively, which is recorded as "Interest expense, net" in our consolidated statements of operations.

As of June 30, 2025 and December 31, 2024, the total below-market debt value was approximately $0 and $1.4 million, which is amortized on a straight-line basis over the term of the mortgage note. The straight-line adjustment approximates the effective interest method, and is an adjustment to interest expense in the consolidated statements of operations. During the six months ended June 30, 2025 and 2024, the amortization of below-market debt value was approximately $66,000 and $197,000, respectively.

Debt issuance costs are being amortized over the loan term on the straight-line method, which approximates the effective interest method, and is an adjustment to interest expense in the consolidated statements of operations. During the six months ended June 30, 2025 and 2024, approximately $511,000 and $0 respectively, of debt issuance costs were incurred related to the mortgage loan listed above, and the carrying value of the unamortized debt issuance costs as of June 30, 2025 and December 31, 2024 was approximately $511,000 and $31,000, respectively. Deferred financing costs are reflected net of accumulated amortization on the consolidated balance sheets as a reduction to the related mortgages payable. During the six months ended June 30, 2025 and 2024, the amortization of debt issuance costs was approximately $28,000 and $0 respectively.

The mortgage loan contains various financial and non-financial covenants. Included in these covenants are general liquidity requirements for the Company as a guarantor of a portion of the mortgage loan. The loan agreement also contains quarterly minimum compliance requirements. As of June 30, 2025, the Company and C20 property were in compliance with these covenants.

7.	Derivative Financial Instrument

Effective August 2, 2021, we entered into an interest rate swap agreement with a notional amount of $38.5 million to swap the floating interest rate of the C20 Property mortgage payable (see Note 6, Mortgage Payable) to a fixed rate of 0.7075% plus a 1.50% spread for an all-in fixed rate of approximately 2.21% over the initial term.

Effective February 10, 2023, the loan was amended and the interest rate was modified from LIBOR to SOFR + 0.1144%, with no change to the spread, for an all-in fixed rate of approximately 2.2459%. The notional amount was modified to $35.5 million as a result of a partial principal repayment during the year ended December 31, 2022 and there was no change to the maturity date.

The interest rate swap is not for trading purposes and we have not designated the interest rate swap for hedge accounting treatment. As a result, any changes in fair value of the interest rate swap are recognized immediately through earnings. During the six months ended June 30, 2025 and 2024, we recorded a decrease in the fair value of the interest rate swap of approximately $351,000 and $539,000, respectively, which is reflected as "Decrease in fair value of derivative financial instrument" in our consolidated statements of operations. During the six months ended June 30, 2025 and 2024, we recognized aggregate income of approximately $234,000 and $841,000, respectively, related to the interest rate swap, which is recorded as a reduction to "Interest expense, net" in our consolidated statements of operations. As of June 30, 2025 and December 31, 2024, approximately $0 and $120,000, respectively, of interest rate swap income was payable to the Company and was recorded net of the related accrued interest expense. The interest rate swap matured on March 6, 2025, and the Company has not entered into any other interest rate swaps during the six months ended June 30, 2025.

The fair value of the interest rate swap is estimated based on the expected future cash flows by incorporating the notional amount of the swap, the contractual period to maturity, and observable market-based inputs, including interest rate curves and counterparty default risk.

The fair value of our interest rate swap as of June 30, 2025 and December 31, 2024 is shown below (dollar amounts in thousands):

		Notional Amount										Fair Value
Derivative Financial Instrument		As of June 30, 2025				As of December 31, 2024				Maturity Date		As of June 30, 2025				As of December 31, 2024
Interest rate swap		$	-			$	35,475			03/06/2025		$	-			$	351

8.	Distributions

Distributions are calculated based on members of record each day during the distribution periods. During the six months ended June 30, 2025 and 2024, the Company's total distributions declared to members, the Sponsor, and its affiliates were approximately $114,000 and $112,000, respectively. Of the distributions declared during the six months ended June 30, 2025 and the year ended December 31, 2024, approximately $57,000 and $177,000, respectively, were paid, and approximately $57,000 and $64,000 remained payable as of June 30, 2025 and December 31, 2024, respectively.

9.	Fair Value of Financial Instruments

We are required to disclose an estimate of fair value of our financial instruments for which it is practicable to estimate the value. U.S. GAAP defines the fair value as the price that the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges by willing parties.

We determine the fair value of certain investments in accordance with the fair value hierarchy that requires an entity to maximize the use of observable inputs. The fair value hierarchy includes the following three levels based on the objectivity of the inputs, which were used for categorizing the assets or liabilities for which fair value is being measured and reported:

Level 1 - Quoted market prices in active markets for identical assets or liabilities.

Level 2 - Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs).

Level 3 - Valuation generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow methodologies or similar techniques, which incorporate management's own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation.

The net carrying amounts of cash and cash equivalents, restricted cash, other assets, and notes payable to related parties reported in the Consolidated Balance Sheets approximates fair value because of the short maturity of these instruments.

The only financial instruments that are recorded at fair value on the Consolidated Balance Sheets on a recurring basis are the derivative financial instruments. We value these financial instruments utilizing significant other observable inputs (Level 2). See Note 7, Derivative Financial Instrument, for detail of these valuation inputs.

As of June 30, 2025 and December 31, 2024, the net carrying amounts and fair values of other financial instruments were as follows (amounts in thousands):

		June 30, 2025								December 31, 2024
		Carrying Amount				Fair Value				Carrying Amount				Fair Value
Liabilities:
Mortgage Payable		$	30,000			$	29,960			$	34,604			$	34,665
Total		$	30,000			$	29,960			$	34,604			$	34,665

Fair value estimates are subjective in nature and are dependent on a number of important assumptions, including estimates of future cash flows, risks, discount rates and relevant comparable market information associated with each financial instrument (see Note 2 - Summary of Significant Accounting Policies). The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Any changes to the valuation methodology will be reviewed by management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while we anticipate that our valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value could result in a different estimate of fair value at the reporting date.

The following methods and assumptions were used in estimating fair value disclosures for financial instruments:

Mortgages Payable (Level 3): The fair value of our mortgage payable principal balance is estimated using a discounted cash flow method (an income approach) and recent investment method (a market approach). Significant inputs and assumptions include the market-based interest or preferred return rate (discount rate), loan to value ratios, and expected repayment and prepayment dates. Differences between the carrying values of the Mortgage Payable in the table above and the Mortgage Payable in the Consolidated Balance Sheets are due to unamortized deferred financing costs.

10.	Related Party Arrangements

Fundrise Advisors, LLC, Manager

The Manager and certain affiliates of the Manager will receive fees and compensation in connection with the Company's Offering, and the acquisition, management and sale of the Company's real estate investments.

The Manager is reimbursed for offering expenses incurred in conjunction with the Offering upon meeting the Hurdle Rate. See Note 2, Summary of Significant Accounting Policies - Offering Costs for the amount of offering costs incurred and payable for the six months ended June 30, 2025 and 2024.

The Company will also reimburse the Manager for actual expenses incurred on behalf of the Company in connection with the selection, acquisition or origination of an investment, to the extent not reimbursed by the borrower, whether or not the Company ultimately acquires or originates the investment. The Company will reimburse the Manager for out-of-pocket expenses paid to third parties in connection with providing services to the Company. This does not include the Manager's overhead, employee costs borne by the Manager, or utility costs. Expense reimbursements payable to the Manager also may include expenses incurred by the Sponsor in the performance of services pursuant to a shared services agreement between the Manager and the Sponsor (the "Shared Services Agreement"), including any increases in insurance attributable to the management or operation of the Company. For the six months ended June 30, 2025 and 2024, the Manager incurred approximately $4,000 and $2,000 of operational costs on our behalf, respectively. There was approximately $1,000 of operational costs due and payable to the Manager as of both June 30, 2025 and December 31, 2024.

The Company will pay the Manager a quarterly investment management fee of one-fourth of 0.85%, of our NAV at the end of each prior quarter. This rate is determined by our Manager in its sole discretion, but cannot exceed an annualized rate of 1.00%. In addition, the Manager may in its sole discretion waive its investment management fee, in whole or in part. The Manager will forfeit any portion of the investment management fee that is waived.

During the six months ended June 30, 2025 and 2024, we have incurred investment management fees of approximately $372,000 and $475,000, respectively. As of June 30, 2025 and December 31, 2024, approximately $180,000 and $207,000, respectively, of investment management fees remained payable to the Manager.

The Company may be charged by the Manager a development management fee of 5.00% of total development costs, excluding property. However, such development fee is only intended to be charged if it is net of a fee being charged by the developer of the direct equity investment project or if there is no outside developer of the direct equity investment project. Our Manager may, in its sole discretion, waive its development management fee, in whole or in part. The Manager will forfeit any portion of the development management fee that is waived. For the six months ended June 30, 2025 and 2024, approximately $8,000 and $191,000, respectively, of development fees have been incurred. As of June 30, 2025 and December 31, 2024, approximately $1,000 and $2,000, respectively were due and payable.

The Company will also reimburse the Manager for actual expenses incurred on our behalf in connection with the special servicing of non-performing assets. The Manager will determine, in its sole discretion, whether an asset is non-performing. As of June 30, 2025 and December 31, 2024, the Manager has not designated any asset as non-performing and no special servicing fees are payable to the Manager. For the six months ended June 30, 2025 and 2024, no special servicing fees have been incurred or paid to the Manager.

The Company will also reimburse the Manager for actual expenses incurred on our behalf in connection with the liquidation of any of our equity investments in real estate and will also pay the Manager an equity disposition fee of up to 1.50% of the gross proceeds from such sale if our Manager is acting as the real estate developer or is engaged by the developer to sell the project. For the six months ended June 30, 2025 and 2024, approximately $0 and $68,000, respectively, of disposition fees have been incurred or paid. As of June 30, 2025 and December 31, 2024, no disposition fees were payable to the Manager.

Fundrise Lending, LLC

As an alternative means of acquiring loans or other investments for which we do not yet have sufficient funds, and in order to comply with certain state lending requirements, Fundrise Lending, LLC, a wholly-owned subsidiary of our Sponsor, or its affiliates may close and fund a loan or other investment prior to it being acquired by us. This allows us the flexibility to deploy our offering proceeds as funds are raised. We then will acquire such investment at a price equal to the fair market value of the loan or other investment (including reimbursements for servicing fees and interest revenue in kind, if any), so there is no mark-up (or mark-down) at the time of our acquisition. During the six months ended June 30, 2025 and 2024 the Company did not purchase any investments that were owned by Fundrise Lending, LLC.

For situations where our Sponsor, Manager or their affiliates have a conflict of interest with us that is not otherwise covered by an existing policy we have adopted or a transaction is deemed to be a "principal transaction", the Manager has appointed an independent representative (the "Independent Representative") to protect the interests of the members and review and approve such transactions. Any compensation payable to the Independent Representative for serving in such capacity on our behalf will be payable by us. Principal transactions are defined as transactions between our Sponsor, Manager or their affiliates, on the one hand, and us or one of our subsidiaries, on the other hand. Our Manager is only authorized to execute principal transactions with the prior approval of the Independent Representative and in accordance with applicable law. Such prior approval may include but not be limited to pricing methodology for the acquisition of assets and/or liabilities for which there are no readily observable market prices.

Fundrise, L.P., Member

Fundrise, L.P. is a member of the Company and held approximately 10,500 shares as of both June 30, 2025 and December 31, 2024. One of our Sponsor's wholly-owned subsidiaries is the general partner of Fundrise, L.P.

Rise Companies Corp., Member and Sponsor

Rise Companies Corp. is a member of the Company and held approximately 1,000 common shares as of June 30, 2025 and December 31, 2024.

For the six months ended June 30, 2025 and 2024, the Sponsor incurred approximately $24,000 and $37,000, respectively, of operational costs on our behalf, in connection with the Shared Services Agreement. As of June 30, 2025 and December 31, 2024, approximately $13,000 and $8,000 of operational costs were due and payable, respectively.

National Lending, LLC

Our Manager formed a self-sustaining lending entity, National Lending, which is financed by certain of the real estate investment trusts ("eREITs") and other investment vehicles (the "Funds") managed by our Manager and affiliated with our Sponsor, Including the Company. The Sponsor became the manager of National Lending effective June 18, 2025, but does not hold any equity interest in National Lending. Prior to this change, an independent manager managed National Lending under a management agreement at a market rate. The Sponsor is not compensated for its role as manager. Each eREIT or Fund contributes an amount to National Lending in exchange for ownership interests. The current effective operating agreement with National Lending requires each eREIT or Fund maintain a capital contribution amount of 5% of its assets under management, which is measured on a semi-annual basis (January 15th and July 15th). As of June 30, 2025 and December 31, 2024, the Company has contributed approximately $6.5 million for a 9.40% and 9.00% ownership in National Lending, respectively. See Note 3, Investments in Equity Method Investees for further information regarding the Company's ownership interests in National Lending.

National Lending may provide short-term bridge financing through promissory notes with any of the eREITs or Funds who have contributed to it in order to maintain greater liquidity and better finance such eREIT's or Fund's individual real estate investment strategies. Any promissory note bears a market rate of interest. National Lending may also obtain a promissory note from any of these eREITs in order to secure short-term bridge financing.

The following is a summary of the promissory notes issued by National Lending to the Company during the the six months ended June 30, 2025 and the year ended December 31, 2024 and remaining outstanding balances as of June 30, 2025 and December 30, 2024 (dollar amounts in thousands):

Note		Maximum Principal Balance				Interest Rate				Maturity Date		Balance at June 30, 2025				Balance at December 31, 2024
2024 - A (1)(4)		$	38,500				6.50	%		12/31/2024		$	-			$	-
2024 - B (2)		$	4,000				6.50	%		1/31/2025		$	-			$	-
2024 - C (3)		$	4,000				6.50	%		3/28/2025		$	-			$	-
2024 - D (4)		$	3,000				6.25	%		7/29/2025		$	-			$	-
2024 - E (4)		$	2,000				5.75	%		9/30/2025		$	-			$	-
2024 - F (4)		$	1,000				6.00	%		11/26/2025		$	-			$	-
2024 - G (4)(5)		$	44,000				6.00	%		12/31/2025		$	29,000			$	43,300
2025 - A		$	3,900				6.00	%		12/31/2025		$	3,900			$	-
2025 - B (6)		$	3,200				5.50	%		4/03/2026		$	-			$	-
2025 - C		$	8,000				5.50	%		4/23/2026		$	8,000			$	-
2025 - D		$	500				5.50	%		4/29/2026		$	400			$	-
2025 - E (6)		$	3,200				5.25	%		6/30/2026		$	3,200			$	-
												$	44,500			$	43,300

(1)	On January 2, 2024, the Company entered into a new promissory note with National Lending, providing for a maximum principal balance of $38.5 million, bearing interest at 6.50% and maturing on December 31, 2024. Upon execution of this agreement, the Company fully repaid all outstanding loans from National Lending as of December 31, 2023, which included approximately $32.5 million of principal and approximately $850,000 in accrued interest. The repayment of the $32.5 million in principal was completed through a non-cash debt extinguishment. This loan was secured by properties pledged by the Company with a total carrying value of approximately $75.2 million. On December 31, 2024, the Company repaid this loan.
(2)	On January 31, 2024, National Lending issued a new promissory note to the Company for a total maximum principal amount of $4.0 million, and the company had drawn the entire $4.0 million. This loan was secured by properties pledged by the Company with a total carrying value of approximately $75.2 million. On May 3, 2024, the Company partially paid off $600,000 of principal. On December 12, 2024, the Company paid the remaining $3,400,000 principal balance and approximately $182,000 of accrued interest.
(3)	On March 28, 2024, National Lending issued a new promissory note to the Company for a total maximum principal amount of $4.0 million. Of the $4.0 million, the Company had drawn $2.9 million of the principal balance. This loan was secured by properties pledged by the Company with a total carrying value of approximately $75.2 million. On April 24, 2024, the Company partially paid off $2,000,000 of principal. On May 3, 2024, the Company paid the remaining $900,000 principal balance and approximately $15,000 of accrued interest.
(4)	During the year ended December 31, 2024, the Company entered into several new loan agreements with National Lending and drew principal totaling approximately $10.8 million. On December 31, 2024, the Company entered into a new unsecured promissory note with National Lending, providing for a maximum principal balance of $44.0 million, bearing interest at 6.0% and maturing on December 31, 2025. Upon execution of this agreement, the Company fully repaid all outstanding loans from National Lending as of December 31, 2024, which included approximately $43.3 million of principal and approximately $2.6 million in accrued interest. The repayment of the $43.3 million in principal was completed through a non-cash debt extinguishment.
(5)	On January 8, 2025, the Company had drawn an additional $700,000 of principal balance. On January 30, 2025, the Company partially paid off $15.0 million of principal.
(6)	On April 4, 2025, the Company entered into a new promissory note with National Lending, providing for a maximum principal balance of $3.2 million, bearing interest at 5.50%, and maturing on April 3, 2026. On June 30, 2025, the Company fully paid off this promissory note including approximately $42,000 of accrued interest. The repayment of the $3.2 million in principal was completed through a non-cash debt extinguishment. Upon execution of this agreement, the Company entered into a new promissory note with National Lending, providing for a maximum principal balance of $3.2 million, bearing interest at 5.25%, and maturing on June 30, 2026. This loan is secured by properties pledged by the Company with a total carrying value of approximately $6.7 million.

For the six months ended June 30, 2025 and 2024, the Company incurred approximately $1.2 million and $1.3 million, respectively, in interest expense on related party notes with National Lending. As of June 30, 2025 and December 31, 2024, we had outstanding accrued interest of approximately $1.1 million and $7,000, respectively, due to National Lending.

Co-Investment Arrangements

The Company may gain exposure to real estate investments through co-investment arrangements ("Co-Investments") with other eREITs and Funds affiliated with our Manager. Through a Co-Investment, the Company acquires partial interests rather than full ownership of an investment. The Company's ownership percentage in the Co-Investment will generally be pro rata the Company's origination or commitment amount for the underlying acquisition.

TIC Arrangements with Affiliate REITs

In December 2024, the Company entered into four TIC arrangements with REITs managed by our Manager and affiliated with our Sponsor. Under the terms of the TIC arrangements, the Company and the affiliate REITs hold undivided ownership interests in mixed-use properties located in Los Angeles, CA. The TIC arrangements allow each owner to independently own a specified interest in the property while sharing in the income and expenses associated with the property in proportion to their ownership interests. As of June 30, 2025, the Company continued to hold its interests in these TIC arrangements and did not enter into any additional similar transactions during the period.

11.	Economic Dependency

Under various agreements, the Company has engaged or will engage our Manager and its affiliates to provide certain services that are essential to the Company, including asset management services, asset acquisition and disposition decisions, the sale of the Company's common shares available for issue, as well as other administrative responsibilities for the Company including accounting services and investor relations. The Manager in turn has entered into the Shared Services Agreement to assist the Manager in providing such services. As a result of these relationships, the Company is dependent upon our Manager and its affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

12.	Commitments and Contingencies

Guarantees

The Company has entered into a guarantee agreement in connection with a mortgage loan extended to the C20 property. Under the terms of the loan agreement, the Company has guaranteed certain obligations of the C20 property through the loan's initial maturity date of April 28, 2028, including any borrower-elected extension periods. Consistent with the Company's strategy to use leverage to enhance total shareholder return, these guarantees were provided to strengthen the credit profile of the C20 property, secure more favorable financing terms, and support the Company's investment activities.

The Company's obligations as a guarantor include an unconditional repayment guarantee of up to $15.0 million of principal, plus related interest, fees, and expenses, in connection with the C20 mortgage loan. This guarantee obligates the Company to fund repayment of a specified portion of the loan in the event of borrower default. As of June 30, 2025, the maximum potential amount of future payments under this guarantee was approximately $15.0 million, which represents the Company's maximum contractual exposure.

Based on current information and analysis, we believe the likelihood of the Company being required to perform under the guarantee is remote and that no material liability exists as of the reporting date. Accordingly, as of June 30, 2025, no liability has been recorded in the consolidated financial statements. We will continue to monitor the financial condition and performance of the Company and the C20 property and will reassess the need to record a liability if future events or circumstances indicate a probable loss.

Reimbursable Offering Costs

The Company has a contingent liability related to potential future reimbursements to the Manager for offering costs that were paid by the Manager on the Company's behalf. As of June 30, 2025 and December 31, 2024, approximately $14,000 and $13,000 of offering costs incurred by the Manager may be subject to reimbursement by the Company in future periods, based on achieving specific performance hurdles as described in Note 2, Summary of Significant Accounting Policies - Offering Costs.

Legal Proceedings

As of the date of the consolidated financial statements we are not currently named as a defendant in any active or pending material litigation. However, it is possible that the Company could become involved in various litigation matters arising in the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of any litigation, management is not aware of any current litigation that we assess as being significant to us.

13.	Segment Reporting

The Company operates as a single reportable segment. The management committee of Fundrise Advisors, LLC, our Manager, acts as the Company's CODM, assessing performance and making decisions about resource allocation. The CODM determined that the Company operates a single reportable segment based on the fact that the CODM monitors the operating results of the Company as a whole and that the Company's long-term strategic asset allocation is pre-determined in accordance with the terms of its offering circular, based on a defined investment strategy. The financial information, including information about the Company's significant revenues and expenses, that is provided to and reviewed by the CODM is consistent with that presented within the Company's consolidated financial statements. Total expenses and total other expenses, as disclosed in the consolidated financial statements, represent the CODM's measure of significant expenses for all segments. The CODM uses this financial information to evaluate the Company's overall performance and investment returns, supporting decisions on acquisitions, dispositions, and distributions. Refer to the consolidated statements of operations in our consolidated financial statements for further detail on our total revenue, total expenses, and net consolidated income or loss. No single shareholder accounts for more than 10% of the Company's total revenue. All of the Company's real estate investments are located within the United States and all revenues are derived from U.S.-based operations.

14.	Subsequent Events

In connection with the preparation of the accompanying consolidated financial statements, we have evaluated events and transactions occurring through September 18, 2025 for potential recognition or disclosure.

National Lending

On July 3, 2025, the Company made a draw of $100,000 on the 2025 - D National Lending promissory note. The note bears a 5.50% interest rate and matures on April 29, 2026. As of September 18, 2025 the principal outstanding on the promissory note is $500,000.

On July 3, 2025, National Lending issued a new promissory note to the Company for a total maximum principal amount of $3.0 million. The note bears a 5.75% interest rate and matures on July 3, 2026. As of September 18, 2025 the principal outstanding on the promissory note is $3.0 million.

On July 30, 2025, National Lending issued a new promissory note to the Company for a total maximum principal amount of $2.0 million. The note bears a 5.75% interest rate and matures on July 30, 2026. As of September 18, 2025 the principal outstanding on the promissory note is $1.5 million.

On August 28, 2025, the Company partially paid off $1.0 million of principal on the 2024 - G National Lending promissory note. The note bears a 6.00% interest rate and matures on December 31, 2025. As of September 18, 2025 the principal outstanding on the promissory note is $28.0 million.

Item 4.

Exhibits

INDEX OF EXHIBITS

Exhibit No.		Description
2.1*		Certificate of Formation (incorporated by reference to the copy thereof filed as Exhibit 2.1 of the Company's Form DOS filed with the SEC on March 7, 2019)
2.2*		Certificate of Amendment to Certificate of Formation dated August 3, 2021 (incorporated by reference to the copy thereof filed as Exhibit 2.2 of the Company's Form 1-SA filed with the SEC on September 27, 2021)
2.3*		Second Amended and Restated Operating Agreement (incorporated by reference to the copy thereof filed as Exhibit 2.3 to the Company's Semiannual Report on Form 1-SA filed with the SEC on September 27, 2023)
4.1*		Form of Subscription Agreement (incorporated herein by reference to Appendix A of the Company's Offering Circular filed with the SEC on October 2, 2020)
6.1*		Form of License Agreement between Fundrise Growth eREIT 2019, LLC and Fundrise LLC (incorporated by reference to the copy thereof filed as Exhibit 6.1 of the Company's Form DOS filed with the SEC on March 7, 2019)
6.2*		Form of Fee Waiver Support Agreement between Fundrise Growth eREIT 2019, LLC and Fundrise Advisors, LLC (incorporated by reference to the copy thereof filed as Exhibit 6.2 of the Company's Form DOS filed with the SEC on March 7, 2019)
6.3*		Form of Shared Services Agreement between Fundrise Advisors, LLC and Rise Companies Corp. (incorporated by reference to the copy thereof filed as Exhibit 6.3 of the Company's Form DOS filed with the SEC on March 7, 2019)
6.4*		Agreement of Merger and Plan of Reorganization dated July 30, 2021 between Fundrise Growth eREIT 2019, LLC and Fundrise Growth eREIT V, LLC (incorporated by reference to the copy thereof filed as exhibit 6.4 to the Company's Form 1-A filed on May 2, 2022)

*	Previously filed.
**	Filed herewith.

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on September 18, 2025.

	Fundrise Development eREIT, LLC
	By: Fundrise Advisors, LLC, a Delaware limited liability company, its Manager
	By:	/s/ Benjamin S. Miller
		Name:	Benjamin S. Miller
		Title:	Chief Executive Officer

Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ Benjamin S. Miller		Chief Executive Officer of		September 18, 2025
Benjamin S. Miller		Fundrise Advisors, LLC
		(Principal Executive Officer)
/s/ Alison A. Staloch		Chief Financial Officer of		September 18, 2025
Alison A. Staloch		Fundrise Advisors, LLC
		(Principal Financial Officer and
		Principal Accounting Officer)