Nuveen Global Cities REIT Inc.

11/14/2025 | Press release | Distributed by Public on 11/14/2025 11:49

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
References herein to "Company," "we," "us," or "our" refer to Nuveen Global Cities REIT, Inc. and its subsidiaries unless the context specifically requires otherwise.
The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 and elsewhere in this Quarterly Report on Form 10-Q.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements about our business, operations and financial performance, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks, uncertainties and assumptions. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from those expressed or implied by these forward-looking statements as a result of various factors, including but not limited to those discussed under Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, and elsewhere in this Quarterly Report on Form 10-Q. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Quarterly Report on Form 10-Q is filed with the Securities and Exchange Commission (the "SEC"). Except as required by law, we do not undertake to update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q.
Table of Contents
Overview
Nuveen Global Cities REIT, Inc. is a Maryland corporation formed on May 1, 2017 that qualifies as a real estate investment trust ("REIT") for U.S. federal income tax purposes. We were formed to invest in properties in or around certain global cities selected for their resilience, long-term structural performance and ability to deliver an attractive and stable distribution yield. We expect that over time a majority of our real estate investments will be located in the United States and that a substantial but lesser portion of our portfolio will include real properties located in Canada, Europe and the Asia-Pacific region. We seek to complement our real property investments by investing a smaller portion of our portfolio in real estate-related assets. We are externally managed by our advisor, Nuveen Real Estate Global Cities Advisors, LLC (the "Advisor"), an investment advisory affiliate of Nuveen Real Estate. Nuveen Real Estate is the real estate investment management division of our sponsor, Nuveen, LLC ("Nuveen"). Nuveen is the asset management arm and a wholly owned subsidiary of Teachers Insurance and Annuity Association of America ("TIAA").
Public Offerings
Our Registration Statement on Form S-11 (File No. 333-222231) for our initial public offering of our common stock (the "Initial Public Offering") was first declared effective by the SEC on January 31, 2018 and terminated on July 2, 2021. Our Registration Statement on Form S-11 (File No. 333-252077) for our follow-on public offering (the "Follow-on Public Offering") was declared effective by the SEC on July 2, 2021 and terminated on November 6, 2024.
Our Registration Statement on Form S-11 (File No. 333-280368) for our third public offering of up to $5.0 billion in shares of our common stock, consisting of up to $4.0 billion in shares of common stock in our primary offering and up to $1.0 billion in shares of common stock pursuant to our distribution reinvestment plan (the "Third Public Offering") was declared effective on November 6, 2024. We are offering to the public any combination of four classes of shares of our common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The publicly offered share classes have different upfront selling commissions and ongoing stockholder servicing fees. The purchase price per share for each class of common stock varies and generally equals our prior month's net asset value ("NAV") per share, as calculated monthly, plus applicable upfront selling commissions and dealer manager fees.
Private Offerings
TIAA invested $200,000 through the purchase of 20,000 shares of common stock at $10.00 per share as our initial capitalization. Subsequent to our initial capitalization, TIAA purchased $300.0 million in shares (less the $200,000 initial capitalization amount).
We are conducting a private offering of Class I shares to feeder vehicles primarily created to hold our Class I shares, which in turn will offer interests in themselves to investors. We are conducting such offering pursuant to an exemption to registration under the Securities Act of 1933, as amended (the "Securities Act").
Through Nuveen Global Cities REIT OP, LP ("Nuveen OP" or the "Operating Partnership"), we have launched a private placement program (the "DST Program") to issue and sell up to a maximum aggregate offering amount of $3.0 billion of beneficial interests ("DST interests") in specific Delaware statutory trusts (the "DSTs") holding real properties (the "DST Properties"). These DST interests will be issued and sold to "accredited investors," as that term is defined under Regulation D promulgated by the SEC under the Securities Act in private placements exempt from registration pursuant to Section 4(a)(2) of the Securities Act (the "DST Offerings"). Under the DST Program, each DST Property may be sourced from our real properties or from third parties, will be held in a DST, and will be leased back by a wholly-owned subsidiary of the Operating Partnership in accordance with a master lease agreement. Each master lease agreement will be guaranteed by the Operating Partnership, which will retain a fair market value purchase option (the "FMV Option") giving it the right, but not the obligation, to acquire the interests in the applicable DST or specific DST Properties held by the applicable DST from the investors for a period of one year commencing two years from the closing of the applicable DST offering in exchange for units of the Operating Partnership ("OP Units") or cash. After a one-year holding period, investors who acquire OP Units under the FMV Option generally have the right to cause the Operating Partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both.
The DST Program is giving us the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product with potential tax advantages for investors that may be seeking replacement properties to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended. Certain affiliates of the Adviser receive fees in connection with the sale of the Interests and the management of the DSTs. We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, repay indebtedness, fund the repurchase of shares of all classes of our common stock under our share repurchase plan and for other corporate purposes. We commenced our first DST Offering in June 2025. As of September 30, 2025, we have raised $7.4 million in net proceeds from the DST program.
Q3 2025 Highlights
Operating results:
•Declared and paid monthly net distributions totaling $29.7 million during the three months ended September 30, 2025. The details of the average annualized distribution rates and total returns are shown in the following table:
Class I Class D Class T Class S
Average Annualized Distribution Rate 5.56% 5.30% 4.70% 4.77%
Year-to-Date Total Return, without upfront selling commissions 3.00% 2.81% 2.36% 2.40%
Year-to-Date Total Return, assuming maximum upfront selling commissions N/A 1.28% (1.21)% (1.17)%
Inception-to-Date Total Return, without upfront selling commissions 7.43% 7.19% 6.80% 6.45%
Inception-to-Date Total Return, assuming maximum upfront selling commissions N/A 6.97% 6.25% 5.81%
Capital Activity:
•Raised $104.6 million of gross proceeds during the three months ended September 30, 2025.
•Raised $6.9 million of net proceeds from the DST Program during the three months ended September 30, 2025.
•Satisfied all share repurchase requests, totaling $74.2 million, for the three months ended September 30, 2025.
Acquisition Activity:
•In July 2025, we acquired Telgraekkerne, 26 student living row houses, located in the Naerheden submarket of Copenhagen, Denmark as an add-on to the Casa Norde Portfolio. The purchase price was $13.7 million. The 32,206 square foot property is 100% leased.
•In August 2025, we acquired Henderson Square, a grocery-anchored retail center located in the King of Prussia submarket of Philadelphia, Pennsylvania. The purchase price was $34.5 million. The 107,368 square foot property is 100% leased.
Portfolio
The following charts outline the allocation of our investments based on fair value as of September 30, 2025(1) (2):
(1) Allocation by region/asset type includes property investments we own directly (82%) and investments in our International Affiliated Funds (4%).
(2) RE-Related Securities includes publicly-listed REITs (4%) and CMBS (4%) as shown on our Consolidated Balance Sheets.
The following charts further describe the diversification of our direct investments in real properties based on fair value as of September 30, 2025(3)(4):
(3) Allocation by region includes only directly owned domestic property investments.
(4) Allocation by sector includes our directly held properties in Copenhagen, Denmark and Tokyo, Japan.
The following map shows the location and property type of directly held real estate investments owned by European Cities Partnership SCSP ("ECF"), in which we are currently invested, as of September 30, 2025
The following map shows the location and property type of directly held real estate investments owned by Asia Pacific Cities Fund ("APCF"), in which we are currently invested, as of September 30, 2025
Investments in Real Estate
The following charts provide information on the nature and geographical locations of our direct investments in real properties as of September 30, 2025:
Sector and Property/Portfolio Name Number of
Properties 		Location Acquisition Date Ownership
Interest 		Sq. Ft. (in
thousands)
/ # of units 		Occupancy
Multifamily:
Kirkland Crossing 1 Aurora, IL Dec, 2017 100% 266 Units 94%
Tacara Steiner Ranch 1 Austin, TX June, 2018 100% 246 Units 95%
Brookson Flats 1 Huntersville, NC June, 2021 100% 296 Units 94%
Signature at Hartwell 1 Seneca, SC Nov, 2021 96.5% 185 Units 100%
The Reserve at Stonebridge Ranch 1 McKinney, TX Dec, 2021 100% 301 Units 93%
CASA Nord Portfolio 5 Copenhagen, DK Dec, 2022 100% 84 Units 100%
Meidaimae Multifamily 1 Tokyo, JP Mar, 2025 100% 60 Units 100%
Total Multifamily 11 1,438 Units 95%
Industrial:
West Phoenix Industrial 1 Phoenix, AZ Dec, 2017 100% 265 Sq. Ft 100%
Denver Industrial 3 Golden & Denver, CO Dec, 2017 100% 486 Sq. Ft 85%
Henderson Interchange 1 Henderson, NV Dec, 2018 100% 197 Sq. Ft 100%
Globe Street Industrial 1 Moreno Valley, CA Oct, 2019 100% 252 Sq. Ft 100%
1 National Street 1 Boston, MA Nov, 2020 100% 300 Sq. Ft 100%
Rittiman West 6 & 7 2 San Antonio, TX Dec, 2020 100% 147 Sq. Ft 92%
10850 Train Ct. 1 Houston, TX Dec, 2021 100% 113 Sq. Ft 100%
5501 Mid Cities Pkwy 1 San Antonio, TX Dec, 2021 100% 88 Sq. Ft 100%
Tampa Lakeland Industrial 3 Tampa, FL Jan, 2022 100% 366 Sq. Ft 95%
610 Loop 5 Houston, TX Mar, 2022 100% 709 Sq. Ft 89%
UP Minneapolis 3 Minneapolis, MN June, 2022 100% 406 Sq. Ft 100%
Wilsonville Logistics Center 1 Wilsonville, OR July, 2022 100% 508 Sq. Ft 100%
Alliance Logistics 7 Various Oct, 2022 100% 1,236 Sq. Ft 98%
Mountain View Industrial Center 1 Salt Lake City, UT Mar, 2025 100% 265 Sq. Ft 100%
Total Industrial 31 5,338 Sq. Ft 96%
Retail:
Main Street at Kingwood 1 Houston, TX Oct, 2018 100% 199 Sq. Ft 98%
GFI Grocery Anchored Portfolio 5 Various Sep, 2022 95% 496 Sq. Ft 99%
Short Pump Station 1 Short Pump, VA Dec, 2024 100% 91 Sq. Ft 92%
Henderson Square 1 King of Prussia, PA Aug, 2025 100% 107 Sq. Ft 100%
Total Retail 8 786 Sq. Ft 98%
Office:
Defoor Hills 1 Atlanta, GA June, 2018 100% 91 Sq. Ft 100%
East Sego Lily 1 Salt Lake City, UT May, 2019 100% 148 Sq. Ft 90%
Perimeter's Edge 1 Raleigh, NC Sept, 2021 100% 85 Sq. Ft 77%
Total Office 3 324 Sq. Ft 90%
Healthcare:
9725 Datapoint 1 San Antonio, TX Dec, 2019 100% 205 Sq. Ft 100%
Linden Oaks 1 Chicago, IL Nov, 2020 100% 43 Sq. Ft 100%
Locust Grove 1 Atlanta, GA Nov, 2020 100% 40 Sq. Ft 100%
2945 Wilderness Place 1 Boulder, CO Jan, 2021 100% 31 Sq. Ft 100%
Hillcroft Medical Clinic 1 Sugarland, TX June, 2021 100% 41 Sq. Ft 100%
Pacific Center 1 San Diego, CA May, 2021 100% 92 Sq. Ft 100%
Buck's Town Medical Campus I 5 Philadelphia, PA Sept, 2021 100% 142 Sq. Ft 87%
620 Roseville Parkway 1 Roseville, CA Oct, 2021 100% 194 Sq. Ft 88%
Buck's Town Medical Campus II 2 Langhorne, PA Oct, 2021 100% 69 Sq. Ft 85%
Project Sullivan 10 Various Various 100% 661 Sq. Ft 98%
Total Healthcare 24 1,518 Sq. Ft 95%
Sector and Property/Portfolio Name Number of
Properties 		Location Acquisition Date Ownership
Interest 		Sq. Ft. (in
thousands)
/ # of units 		Occupancy
Self-Storage:
Out O' Space Storage 1 Palm Bay, FL June, 2022 100% 240 Units 80%
Imperial Sugar Land 1 Sugarland, TX June, 2022 100% 791 Units 85%
Advantage Storage 1 Houston, TX Aug, 2022 100% 781 Units 68%
Pflugerville Self-Storage 1 Pflugerville, TX Dec, 2022 100% 546 Units 83%
Brighton Storage 1 Brighton, CO Mar, 2023 100% 716 Units 85%
Total Self-Storage 5 3,074 Units 81%
Single-Family Housing:
Single-Family Rentals 383 Various Various 100% 774 Sq. Ft 96%
Total Single-Family Housing 383 96%
Total Investment Properties 465 95%
The following schedule details the expiring leases at our industrial, retail, office and healthcare properties by annualized base rent and square footage as of September 30, 2025 ($ and square feet data in thousands). The table below excludes our multifamily properties, single-family rentals and self-storage properties as substantially all leases at such properties expire within 12 months.
Year Number of Expiring Leases
Annualized Base Rent(1)
% of Total Annualized Base Rent Expiring Square Feet % of Total
Square Feet
Expiring
2025 (remaining) 9 $ 5,493 6 % 654 8 %
2026 56 10,174 10 % 1,087 14 %
2027 69 16,041 17 % 1,159 15 %
2028 63 15,183 16 % 1,377 18 %
2029 52 6,151 6 % 548 7 %
2030 57 9,613 10 % 608 8 %
2031 17 3,039 3 % 144 2 %
2032 14 10,885 11 % 1,119 14 %
2033 22 8,998 9 % 545 7 %
2034 6 1,159 1 % 30 - %
Thereafter 16 10,416 11 % 481 7 %
Total 381 $ 97,152 100 % 7,752 100 %
(1) The annualized September 30, 2025 base rent per leased square foot of the applicable year excluding tenant recoveries, straight-line rent and above-market and below-market lease amortization.
Investments in Real Estate-Related Securities
We invest in real estate-related securities including shares of common stock of publicly listed REITs. As of September 30, 2025, we had 59 holdings and have invested $97.8 million in securities that are valued at $104.4 million.
The following chart further describes the diversification of our investments in real estate-related securities of September 30, 2025:
Investments in Real Estate Debt
We invest in CMBS, securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. CMBS are generally pass-throughs and represent beneficial ownership interests in trusts whose assets consist of defined portfolios of one or more commercial mortgage loans. Losses are usually borne by the most subordinate class, which receive payments only after the senior classes have received payments to which they are entitled. CMBS are subject to the risks of the underlying mortgage loans. The majority (approximately 94%) of our CMBS are single-asset, single-borrower deals, and nearly all our CMBS are rated Investment Grade (BBB- or higher) with approximately 7.0% being non-Investment Grade (BB+ or lower). The greatest concentration by property sector of our CMBS is in industrial properties (31%). Additionally, to minimize interest rate risk, the portfolio is concentrated in floating-rate securities (approximately 82%) whose base index rate of one-month SOFR is 4.13%, and help to generate a current portfolio yield of approximately 6.40%. As of September 30, 2025, we have invested $131.9 million in CMBS that are valued at $130.5 million on our Consolidated Balance Sheet.
The following charts further describe our investments in CMBS as of September 30, 2025:
Investments in International Affiliated Funds
European Cities Partnership SCSp
ECF was launched in March 2016 as an open-end, Euro-denominated fund that seeks to build a diversified portfolio of high-quality and stabilized commercial real estate with good fundamentals (i.e., core real estate) located in or around certain investment cities in Europe selected for their resilience, potential for long-term structural performance and ability to deliver an attractive and stable distribution yield. As of September 30, 2025, ECF had total equity commitments of $1.3 billion (€1.2 billion), all of which had been called. As of June 30, 2025, ECF had 10 assets with a gross asset value of $1.7 billion (€1.6 billion) and a loan to value ("LTV") ratio of 39.6%. The ECF portfolio is well diversified and had a balanced country exposure with 22.1% in the United Kingdom, 14.2% in Italy, 13.5% in Spain, 12.5% in Finland, 11.7% in Germany, 10.3% in the Netherlands, 9.0% in Austria, and 6.7% in Denmark. The 12-month net total return and since-inception net total return was 0.7% and 1.6%, respectively, as of June 30, 2025.
Income from equity investments in unconsolidated international affiliated funds from ECF for the three and nine months ended September 30, 2025 was $0.9 million and $2.1 million, respectively.
Asia Pacific Cities Fund
APCF was launched in November 2018 as an open-end, U.S. dollar-denominated fund that seeks durable income and capital appreciation from a balanced and diversified portfolio of real estate investments in a defined list of investment cities in the Asia-Pacific region. As of September 30, 2025, APCF had total equity commitments of $1.20 billion and had called $1.18 billion of these commitments. As of June 30, 2025, APCF had 12 investments (27 assets) with a gross asset value of $1.7 billion and an LTV ratio of 40.0%. APCF had 30.6% exposure in South Korea, 28.4% in Singapore, 24.7% in Japan, 11.0% in Hong Kong and 5.3% in Australia, resulting in a 12-month total return and a since-inception total return of (1.4)% and 5.6% (foreign exchange-neutral), respectively, as of June 30, 2025.
Gain (loss) from equity investments in unconsolidated international affiliated funds from APCF for the three and nine months ended September 30, 2025 was $2.5 million and $(0.4) million, respectively.
Investments in Commercial Mortgage Loans
The following table summarizes our investments in commercial mortgage loans as of September 30, 2025 ($ in thousands):
Investment Name Origination Date Loan Type Property Type Location Interest Rate Maturity Date Periodic Payment Terms Commitment Amount Principal Receivable Fair Value
9-90 Corporate Center(1)
11/9/2021 Senior Office Framingham, MA
SOFR + 186 bps
11/9/2025 Interest only $72,033 $59,774 $58,270
9-90 Corporate Center 11/9/2021 Mezzanine Office Framingham, MA
SOFR + 586 bps
11/9/2025 Interest only $23,344 $23,258 $22,470
Panorama House(1)
11/16/2021 Senior Multifamily Seattle, WA
SOFR + 165 bps
12/9/2025 Interest only $66,488 $65,113 $65,113
Panorama House 11/16/2021 Mezzanine Multifamily Seattle, WA
SOFR + 597 bps
12/9/2025 Interest only $22,163 $21,704 $21,704
Tucson IV 3/28/2022 Senior Multifamily Tucson, AZ
SOFR + 295 bps
4/9/2026 Interest only $76,260 $76,260 $76,200
Tucson IV 3/28/2022 Mezzanine Multifamily Tucson, AZ
SOFR + 295 bps
4/9/2026 Interest only $25,420 $25,420 $24,360
Dolce Living Royal Palm(1)
7/8/2022 Senior Multifamily Kissimmee, FL
SOFR + 185 bps
7/9/2026 Interest only $51,432 $51,432 $50,960
Dolce Living Royal Palm 7/8/2022 Mezzanine Multifamily Kissimmee, FL
SOFR + 525 bps
7/9/2026 Interest only $17,144 $17,144 $16,620
Sterling Self-Storage 3/28/2024 Senior Self-Storage Various
SOFR + 370 bps
4/9/2027 Interest only $20,850 $20,850 $20,850
Total $356,547
(1) Sold to unaffiliated parties, but did not qualify for sale accounting under GAAP and were not derecognized.
In accordance with the adoption of the fair value option allowed under ASC 825, Financial Instruments, and at our election, the existing commercial mortgage loans are stated at fair value and were initially valued at the face amount of the loan funding. Subsequently, the commercial mortgage loans are valued at least quarterly by an independent third-party valuation firm with additional oversight being performed by the Advisor's internal valuation department. The value will be based on market factors, such as market interest rates and spreads for comparable loans, the performance of the underlying collateral (such as the LTV ratio and the cash flow of the underlying collateral), and the credit quality of the borrower.
For the three and nine months ended September 30, 2025, we had unrealized gains on commercial mortgage loans of $1.1 million and $0.7 million, respectively.
For the three and nine months ended September 30, 2025, we recognized interest and loan origination income from our investment in commercial mortgage loans of $6.7 million and $20.8 million, respectively.
Factors Impacting Our Operating Results
Our business is affected by conditions in the financial markets and economic conditions in the United States and to a lesser extent, elsewhere in the world. During the nine months ended September 30, 2025, global markets continued to experience volatility, driven by concerns over persistent inflation, elevated interest rates, slowing economic growth and geopolitical uncertainty. However, global real estate values started to show signs of stabilization as total returns for real estate became positive during 2024 and continuing in 2025, driven by consistently positive and stable income returns coupled with modest valuation changes. The ease of inflation has led most developed market central banks to begin to taper interest rates. Though, as the market stabilization is in the early stages, it remains difficult to predict the full impact of the new geopolitical environment and any future changes in interest rates or inflation.
Results of operations are also dependent on the rental revenue we receive from the properties that we acquire, the timing of lease expirations, operating expenses, the competitive environment for real estate assets and income from our investments in real estate-related securities, real estate debt, commercial mortgages and the International Affiliated Funds. Real estate has produced strong returns over the last few years and has priced in the effects of higher inflation and monetary policy to a more limited extent than other asset classes. Higher market rents, particularly from industrial, healthcare and housing properties, are translating into strong net operating income growth, and investors continue to view real estate as a key portfolio diversifier in a high-inflation environment. U.S. commercial real estate should benefit even during a rising interest rate environment, as real estate assets will continue to be a higher-yielding alternative to fixed-income assets in the short term.
Competitive Environment
We face competition from a diverse mix of market participants, including other companies with similar business models, REITs, private equity funds, independent investors and other real estate investors. Competition from others may diminish our opportunity to acquire a desired property on favorable terms or at all. In addition, this competition may put pressure on us to reduce the rental rates at the properties we acquire below those that we expect to charge, which would adversely affect our financial results.
Rental Revenues
We receive income primarily from rental revenue generated by the properties that we acquire. The amount of rental revenue depends upon a number of factors, including our ability to enter into leases with increasing or market value rents for the properties that we acquire and rent collection, which primarily relates to each future tenant's financial condition and ability to make rent payments to us on time.
Operating Expenses
Our operating expenses include general and administrative expenses, including legal, accounting and other expenses related to corporate governance, public reporting and compliance with the various provisions of U.S. securities laws. As we have with the
leases associated with our industrial, retail, office and healthcare properties, we generally expect to structure our leases so that the tenant is responsible for taxes, maintenance, insurance and structural repairs with respect to the premises throughout the lease term. Increases or decreases in such operating expenses will impact our overall financial performance.
Our Qualification as a REIT
We have elected to be taxed as a REIT for U.S. federal income tax purposes. Shares of our common stock are subject to restrictions on ownership and transfer that are intended, among other purposes, to assist us in qualifying and maintaining our qualification as a REIT. In qualifying for taxation as a REIT under the Code, we are subject to federal corporate income tax to the extent we distribute less than 100% of our REIT taxable income (including any net capital gains) to our stockholders and meet certain tests regarding the nature of our income and assets. In order to satisfy a requirement that five or fewer individuals do not own (or be treated as owning) more than 50% of our stock, subject to certain exceptions, no person or entity may own, or be deemed to own, by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (in value or number of shares, whichever is more restrictive) of the aggregate of our outstanding shares of stock or more than 9.8% (in value or number of shares, whichever is more restrictive) of our outstanding common stock.
Results of Operations
The following table sets forth the results of our operations for the three and nine months ended September 30, 2025 and 2024 ($ in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 vs 2024 2025 2024 2025 vs 2024
Revenues
Rental revenue $ 46,827 $ 44,216 $ 2,611 $ 137,516 $ 133,080 $ 4,436
Income from commercial mortgage loans 6,658 7,871 (1,213) 20,824 23,252 (2,428)
Total revenues 53,485 52,087 1,398 158,340 156,332 2,008
Expenses
Rental property operating 16,770 16,075 695 48,252 47,573 679
General and administrative 2,335 1,970 365 6,741 6,375 366
Advisory fee due to affiliates 7,815 7,434 381 22,893 22,298 595
Depreciation and amortization 20,315 20,061 254 60,628 59,818 810
Total expenses 47,235 45,540 1,695 138,514 136,064 2,450
Other income (expense)
Realized and unrealized gain from real estate-related securities 3,353 14,910 (11,557) 3,654 12,080 (8,426)
Realized and unrealized gain from real estate debt 181 508 (327) 382 2,528 (2,146)
Realized gain on sale of real estate investments - - - - 15 (15)
Gain (loss) from equity investments in unconsolidated International Affiliated Funds 3,380 (1,718) 5,098 1,683 (4,347) 6,030
Unrealized gain on commercial mortgage loans 1,145 846 299 722 787 (65)
Unrealized gain (loss) from interest-rate derivatives 1 (394) 395 52 (339) 391
Unrealized (loss) gain on note payable (110) (70) (40) 110 105 5
Interest income 2,444 1,980 464 7,171 5,651 1,520
Interest expense (11,134) (11,610) 476 (33,133) (33,756) 623
Total other income (expense) (740) 4,452 (5,192) (19,359) (17,276) (2,083)
Net income $ 5,510 $ 10,999 $ (5,489) $ 467 $ 2,992 $ (2,525)
Net income (loss) attributable to non-controlling interests 11 (6) 17 25 (20) 45
Net income attributable to preferred stock 4 4 - 11 11 -
Net income attributable to common stockholders $ 5,495 $ 11,001 $ (5,506) $ 431 $ 3,001 $ (2,570)
Rental Revenue and Rental Property Operating Expenses
Due to acquisitions of real estate we made since the period ended September 30, 2024, our rental revenues and rental property operating expenses for the three and nine months ended September 30, 2025 and 2024 are not comparable. However, certain properties in our portfolio were owned for both the three and nine months ended September 30, 2025 and 2024 and are further discussed below in "Same Property Results of Operations."
Income from Commercial Mortgage Loans
During the three months ended September 30, 2025, income from commercial mortgage loans decreased by $(1.2) million, in comparison to the corresponding period in 2024, due to the payoff of Luxe Scottsdale, a decrease in interest rates, and no additional fundings on commercial mortgage loans in 2025. During the nine months ended September 30, 2025, income from commercial mortgage loans decreased by $(2.4) million in comparison to the corresponding period in 2024, attributable to the payoff of Luxe Scottsdale, no origination fee income in the current period, and a decrease in interest rates.
General and Administrative Expenses
During the three and nine months ended September 30, 2025, general and administrative expenses increased by $0.4 million and $0.4 million, respectively, in comparison to the corresponding period in 2024. The increase is primarily attributable to increases in fund administrative fees.
Depreciation and Amortization
During the three and nine months ended September 30, 2025, depreciation and amortization increased by $0.3 million and $0.8 million, respectively, in comparison to the corresponding period in 2024 primarily due to acquisition activity.
Realized and Unrealized Gain from Real Estate-Related Securities
During the three months ended September 30, 2025, realized and unrealized gain from real estate-related securities decreased $11.6 million in comparison to the corresponding period in 2024. For the nine months ended September 30, 2025, realized and unrealized gain from real estate-related securities decreased $8.4 million in comparison to the prior period in 2024. The change was primarily driven by less favorable market conditions.
Realized and Unrealized Gain from Real Estate Debt
During the three months ended September 30, 2025, realized and unrealized gain from real estate debt decreased $0.3 million in comparison to the corresponding period in 2024. During the nine months ended September 30, 2025, realized and unrealized gain from real estate debt decreased $2.1 million, in comparison to the corresponding period in 2024. The change was primarily due to fair value adjustments driven by changes in market assumptions.
Gain (Loss) from Equity Investments in Unconsolidated International Affiliated Funds
Gain (loss) from equity investments in unconsolidated International Affiliated Funds changed $5.1 million from a loss of $(1.7) million for the three months ended September 30, 2024, to a gain of $3.4 million for the three months ended September 30, 2025. The change was primarily due to positive fluctuations in foreign currency for APCF. Gain (loss) from equity investments in unconsolidated International Affiliated Funds changed $6.0 million from a loss of $(4.3) million for the nine months ended September 30, 2024 to a gain of $1.7 million for the nine months ended September 30, 2025. The change was primarily driven by valuation increases in the office and logistics sectors for APCF and ECF.
Unrealized Gain on Commercial Mortgage Loans
During the three months ended September 30, 2025, unrealized gain on commercial mortgage loans increased $0.3 million compared to the corresponding period in 2024. The change was primarily driven by fair value adjustments resulting from interest rate fluctuations projected over the remaining terms of the portfolio. For the nine months ended September 30, 2025, unrealized gains on commercial mortgage loans stayed relatively flat in comparison to the corresponding period in 2024.
Interest Income
During the three months ended September 30, 2025, interest income increased $0.5 million compared to the corresponding period in 2024. During the nine months ended September 30, 2025, interest income increased $1.5 million compared to the corresponding period in 2024 due to accelerated amortization of discount related to CMBS paydowns before maturity.
Interest Expense
During the three and nine months ended September 30, 2025, interest expense decreased $0.5 million and $0.6 million, respectively, in comparison to the corresponding period in 2024 primarily due to falling interest rates.
Same Property Results of Operations
We evaluate our consolidated results of operations on a same property basis, which allows us to analyze our property operating results excluding acquisitions during the periods under comparison. Properties in our portfolio are considered same property if they were owned for the full periods presented, otherwise they are considered non-same property. Newly acquired or recently developed properties that have not achieved stabilized occupancy are excluded from same property results and are considered non-same property. We do not consider our real estate-related securities, real estate debt, commercial mortgage loans, single-family housing and International Affiliated Funds segments to be same property.
For the three and nine months ended September 30, 2025, our same-property portfolio consisted of 30 industrial, 24 healthcare, nine multifamily, six retail, five self-storage, and three office properties.
Same property operating results are measured by calculating same property net operating income ("NOI"). Same property NOI is a supplemental non-GAAP disclosure of our operating results that we believe is meaningful as it enables management to evaluate the impact of occupancy, rents, leasing activity and other controllable property operating results at our real estate properties. We define same property NOI as operating revenues less operating expenses, which exclude (i) depreciation and amortization, (ii) interest expense and (iii) other non-property-related revenue and expense items such as (a) general and administrative expenses, (b) management fees, (c) interest income, (d) income from real estate-related securities, (e) income from equity investments in unconsolidated international affiliated funds and (f) income from commercial mortgage loans.
Our same property NOI may not be comparable to that of other REITs and should not be considered to be more relevant or accurate in evaluating our operating performance than the current GAAP methodology used in calculating net income (loss).
The following table reconciles GAAP net loss attributable to our stockholders to same property NOI ($ in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Net income attributable to common stockholders $ 5,495 $ 11,001 $ 431 $ 3,001
Adjustments to reconcile to same property NOI
Income from commercial mortgage loans (6,658) (7,871) (20,824) (23,252)
Straight-line rental income (849) (585) (1,662) (1,609)
General and administrative 2,335 1,970 6,741 6,375
Advisory fee due to affiliates 7,815 7,434 22,893 22,298
Depreciation and amortization 20,315 20,061 60,628 59,818
Realized and unrealized gain from real estate-related securities (3,353) (14,910) (3,654) (12,080)
Realized and unrealized gain from real estate debt (181) (508) (382) (2,528)
Realized gain on sale of real estate investments - - - (15)
(Loss) gain from equity investments in unconsolidated international affiliated funds (3,380) 1,718 (1,683) 4,347
Unrealized (gain) loss on commercial mortgage loans (1,145) (846) (722) (787)
Unrealized loss (gain) from interest rate derivatives (1) 394 (52) 339
Unrealized gain on note payable 110 70 (110) (105)
Interest income (2,444) (1,980) (7,171) (5,651)
Interest expense 11,134 11,610 33,133 33,756
Income (loss) attributable to non-controlling interests 11 (6) 25 (20)
Income attributable to preferred stock 4 4 11 11
NOI $ 29,208 $ 27,556 $ 87,602 $ 83,898
Non-same property NOI 3,511 1,287 9,218 4,289
Same property NOI $ 25,697 $ 26,269 $ 78,384 $ 79,609
The following table details the components of same property NOI ($ in thousands):
Three Months Ended September 30,
2025 vs 2024
Nine Months Ended September 30,
2025 vs 2024
2025 2024 $ % 2025 2024 $ %
Same property rental revenue
Industrial $ 12,948 $ 12,093 $ 855 7 % $ 38,152 $ 36,525 $ 1,627 4 %
Healthcare 11,727 12,090 (363) (3) % 35,365 36,231 (866) (2) %
Multifamily 7,897 8,108 (211) (3) % 23,844 24,165 (321) (1) %
Retail 4,707 4,671 36 1 % 14,182 14,217 (35) - %
Office 2,164 2,487 (323) (13) % 6,806 7,757 (951) (12) %
Self-Storage 1,007 983 24 2 % 2,988 2,918 70 2 %
Total revenues 40,450 40,432 18 - % 121,337 121,813 (476) - %
Same property operating expenses
Industrial 3,837 3,564 273 8 % 11,025 10,900 125 1 %
Healthcare 4,586 4,355 231 5 % 13,674 12,799 875 7 %
Multifamily 3,667 3,523 144 4 % 10,029 10,089 (60) (1) %
Retail 1,296 1,422 (126) (9) % 4,217 4,314 (97) (2) %
Office 704 647 57 9 % 2,132 1,976 156 8 %
Self-Storage 663 652 11 2 % 1,876 2,126 (250) (12) %
Total expenses 14,753 14,163 590 4 % 42,953 42,204 749 2 %
Same property NOI $ 25,697 $ 26,269 $ (572) (2) % $ 78,384 $ 79,609 $ (1,225) (2) %
Same Property-Revenue
Our rental revenue includes contractual rental income from our tenants based on the leases and tenant reimbursement income for costs related to common area maintenance, real estate taxes and other recoverable costs. For the three and nine months ended September 30, 2025, rental revenues were flat and decreased by $0.5 million, respectively, across the same property portfolio as compared to the corresponding period in 2024.
For the three months ended September 30, 2025, the rental revenue remaining flat was driven primarily by increased tenant reimbursement income as a result of higher operating costs and base rent increases at certain of our industrial properties. Offset primarily by a decrease in occupancy and increased rental concessions at certain of our office properties. Additionally, rent concessions increased at certain of our healthcare properties.
For the nine months ended September 30, 2025, the decrease was driven primarily by decrease in collection of previously written off receivables and increased rental concessions at certain of our office properties, decrease in tenant reimbursement income and increase in concessions at certain of our healthcare properties, partially offset by increases in tenant reimbursement income and base rent related to our industrial properties.
Same Property-Expenses
Same property rental property operating expenses primarily include real estate taxes and maintenance expenses associated with grounds and repairs and maintenance with our real estate properties. For the three and nine months ended September 30, 2025, property operating expenses increased by $0.6 million and $0.7 million, respectively, across the same property portfolio as compared to the corresponding period in 2024.
For the three months ended September 30, 2025, the increase was driven primarily by increased real estate taxes and repairs and maintenance expenses at certain of our healthcare and industrial properties.
For the nine months ended September 30, 2025, the increase was driven primarily by increased real estate taxes and grounds expenses at certain of our healthcare and office properties, partially offset by decreased real estate taxes at certain of our multifamily properties.
Liquidity and Capital Resources
We believe we are well positioned from a liquidity perspective with approximately $592.9 million of liquidity as of September 30, 2025, consisting of $323.4 million of undrawn capacity on our unsecured revolving credit facility (the "Credit Facility"), approximately $234.9 million in investments in real estate debt securities and real estate-related equity securities and $34.5 million of unrestricted cash on hand, that could be utilized to satisfy any potential liquidity requirements.
Our primary needs for liquidity and capital resources are to fund our investments, to make distributions to our stockholders, to repurchase shares of our common stock pursuant to our share repurchase plan, to pay our offering and operating expenses and capital expenditures and to pay debt service on the outstanding indebtedness we incur. Our operating expenses include, among other things, fees and expenses related to managing our properties and other investments, the advisory fee we pay to the Advisor and general corporate expenses.
In addition to our current liquidity, we obtain incremental liquidity through the sale of shares of our common stock in our continuous public offering and private offerings and the sale of DST Interests, from which we have collectively received proceeds of $2.6 billion as of September 30, 2025.
The following table is a summary of our indebtedness ($ in thousands):
September 30, 2025
Principal Balance as of
Indebtedness
Weighted-Average Interest Rate(1)
Weighted-Average Maturity Date(2)
Maximum Facility Size September 30, 2025 December 31, 2024
Fixed-rate mortgage loans secured by our properties:
Fixed-rate mortgages(3)
2.46% 2/20/2028 $ 216,160 $ 216,160 $ 198,971
Variable-rate mortgage loans secured by our properties:
Variable-rate mortgage loans
+0.70%
12/31/2032 29,953 29,953 19,785
Total mortgage loans secured by our properties 246,113 218,756
Deferred financing costs, net (1,263) (845)
Discount on assumed mortgage notes, net (7,107) (8,429)
Total net mortgage loans secured by our properties 237,743 209,482
Variable-rate loans secured by other investments:
Variable-rate note payable
+1.65%
4/9/2026 71,947 71,947 71,947
Total loans secured by other investments $ 309,690 $ 281,429
Unsecured loans:
Unsecured variable-rate revolving credit facility(4)
+applicable margin 9/26/2028 440,000 116,590 173,000
Unsecured variable-rate TL facility +applicable margin 9/26/2028 225,000 225,000 134,000
Total unsecured loans 665,000 341,590 307,000
Total indebtedness $ 983,060 $ 651,280 $ 588,429
(1) "+" refers to the relevant floating benchmark, which include one-month SOFR and one-month Copenhagen Interbank Offered Rate, as applicable to each secured or unsecured loan.
(2) Weighted-average maturity assumes maximum maturity date.
(3) See Note 11. "Mortgages Payable" in our consolidated financial statements for additional information related to our variable and fixed rate mortgage loans.
(4) Additional borrowing under the Credit Facility is immediately available.
Capital Uses
During periods when we are selling more shares than we are repurchasing, we primarily use our capital to acquire investments, which we also fund with other capital resources. During periods when we are repurchasing more shares than we are selling, we primarily use our capital to fund repurchases. We continue to believe that our current liquidity position is sufficient to meet the needs of our business, and all repurchase requests from our inception through September 30, 2025 have been satisfied.
In addition, we may have other funding obligations, which we expect to satisfy with the cash flows generated from our investments and our capital resources described above. Such obligations may include distributions to our stockholders, operating expenses, capital expenditures, repayment of indebtedness, and debt service on our outstanding indebtedness. Our operating expenses include, among other things, the advisory fee we pay to the Advisor, which will impact our liquidity.
Cash Flows
The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash ($ in thousands):
Nine Months Ended September 30,
2025 2024
Cash flows provided by operating activities $ 55,694 $ 53,565
Cash flows used in investing activities (131,106) (14,510)
Cash flows provided by (used in) financing activities 130,453 (27,225)
Effect of exchange rate changes on cash and cash equivalents and restricted cash (463) -
Net increase in cash and cash equivalents and restricted cash $ 54,578 $ 11,830
Cash flows provided by operating activities increased $2.1 million during the nine months ended September 30, 2025 compared to the corresponding period in 2024, primarily due to a decrease in unrealized gain on changes in fair value of real estate-related securities and a decrease in unrealized gain on changes in fair value of real estate debt, partially offset by an increase in (gain) loss from equity investments in unconsolidated international affiliated funds.
Cash flows used in investing activities increased $116.6 million during the nine months ended September 30, 2025 compared to the corresponding period in 2024 primarily due to a $109.9 million increase in acquisitions of real estate and $48.7 million increase in purchases of real estate-related securities and real estate debt, partially offset by a $19.9 million decrease in commercial mortgage loan originations and fundings as well as a $16.7 million increase in proceeds from paydowns of commercial mortgage loans.
Cash flows provided by (used in) financing activities increased $157.7 million during the nine months ended September 30, 2025 compared to the corresponding period in 2024 due to a $54.9 million increase in proceeds from the issuance of common stock, a $45.0 million increase in subscriptions received in advance, a $35.8 million decrease in common stock repurchases, and a $25.8 million increase in borrowings from mortgages payable. This activity was partially offset by a $7.4 million decrease in net borrowings under the credit facility.
Funds from Operations and Adjusted Funds from Operations
We believe funds from operations ("FFO") is a meaningful supplemental non-GAAP operating metric, which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance. Our consolidated financial statements are presented under historical cost accounting which, among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments will decrease evenly over a set time period. However, we believe that the value of real estate investments will fluctuate over time based on market conditions and as such, depreciation under historical cost accounting may be less informative. FFO is a standard REIT industry metric defined by the National Association of Real Estate Investment Trusts ("NAREIT").
FFO, as defined by NAREIT and presented below, is calculated as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of depreciable real property and impairment write-downs on depreciable real property, plus real estate-related depreciation and amortization.
We also believe that Adjusted FFO ("AFFO") is a meaningful supplemental non-GAAP disclosure of our operating results which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance. AFFO further adjusts FFO in order for our operating results to reflect the specific characteristics of our business by adjusting for items we believe are not related to our core operations. Our adjustments to FFO to arrive to AFFO include straight-line rental income, amortization of above- and below-market lease intangibles, amortization of deferred financing costs and mortgage discount, organization costs, unrealized gains or losses from changes in fair value of real estate-related securities and real estate debt, unrealized loss on commercial mortgage loans and note payable, amortization of restricted stock awards and unrealized loss or income from investments in international affiliated funds. AFFO is not defined by NAREIT and our calculation of AFFO may not be comparable to the disclosures made by other REITs.
The following table presents a reconciliation of net income under GAAP to FFO and to AFFO ($ in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Net income $ 5,510 $ 10,999 $ 467 $ 2,992
Adjustments:
Real estate depreciation and amortization 20,315 20,061 60,628 59,818
Amount attributable to non-controlling interests for above adjustments (87) (85) (218) (255)
Funds from Operations attributable to common stockholders 25,738 30,975 60,877 62,555
Straight-line rental income (848) (585) (1,662) (1,609)
Amortization of above- and below-market lease intangibles (1,035) (907) (3,111) (2,772)
Amortization of deferred financing costs 89 323 379 966
Amortization of mortgage discount 426 295 1,323 884
Unrealized gain from changes in fair value of real estate-related securities (2,353) (12,531) (598) (8,882)
Unrealized gain from changes in fair value of real estate debt (35) (508) (217) (2,930)
Unrealized gain on commercial mortgage loans (1,145) (846) (722) (787)
Unrealized (gain) loss from interest rate derivatives (1) 394 (52) 339
Unrealized loss (gain) on note payable 110 70 (110) (105)
Amortization of restricted stock awards 153 91 259 197
Unrealized (gain) loss from investments in international affiliated funds (818) 2,584 2,436 6,592
Adjusted Funds from Operations attributable to stockholders $ 20,281 $ 19,355 $ 58,802 $ 54,448
FFO and AFFO should not be considered to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) or in evaluating our operating performance. In addition, FFO and AFFO should not be considered as alternatives to net income (loss) as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO and AFFO are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders.
Distribution Policy
Our distribution policy is set by our board of directors and is subject to change based on available cash flows. We cannot guarantee the amount of distributions paid, if any. Our stockholders will not be entitled to receive a distribution if their shares are repurchased prior to the applicable time of the record date. In connection with a distribution to our stockholders, our board of directors approves a monthly distribution for a certain dollar amount for each class of our common stock. We then calculate each stockholder's specific distribution amount for the month using applicable record and declaration dates, and the distributions begin to accrue on the date we admit our stockholders.
Our distribution policy reflects our intention to pay distributions monthly, subject to the discretion of our board of directors. The net distribution varies for each class based on the applicable stockholder servicing fee and advisory fee, which are deducted from the monthly distribution per share and paid directly to the applicable recipients.
Distributions
We declare monthly distributions for each class of our common stock which are generally paid within 30 days after month-end. Each class of our common stock received the same gross distribution per share, which was $0.1939 and $0.5818 per share for the three and nine months ended September 30, 2025, respectively. The net distribution varies for each class based on the applicable stockholder servicing fee and advisory fee, which are deducted from the monthly distribution per share and paid by us to the recipients.
The following table details the aggregate distribution declared for each of our share classes:
Three Months Ended September 30, 2025
Class T Common Stock Class S Common Stock Class D Common Stock Class I Common Stock Class N Common Stock
Gross distribution per share of common stock $ 0.1939 $ 0.1939 $ 0.1939 $ 0.1939 $ 0.1939
Advisory fee per share of common stock (0.0346) (0.0341) $ (0.0346) $ (0.0345) $ (0.0187)
Stockholder servicing fee per share of common stock (0.0240) (0.0245) $ (0.0073) $ - $ -
Net distribution per share of common stock $ 0.1353 $ 0.1353 $ 0.1520 $ 0.1594 $ 0.1752
Nine Months Ended September 30, 2025
Class T Common Stock Class S Common Stock Class D Common Stock Class I Common Stock Class N Common Stock
Gross distribution per share of common stock $ 0.5818 $ 0.5818 $ 0.5818 $ 0.5818 $ 0.5818
Advisory fee per share of common stock (0.1034) (0.1021) (0.1036) (0.1032) (0.0560)
Stockholder servicing fee per share of common stock (0.0730) (0.0730) (0.0211) - -
Net distribution per share of common stock $ 0.4054 $ 0.4067 $ 0.4571 $ 0.4786 $ 0.5258
For the three and nine months ended September 30, 2025, we declared and paid distributions of $29.7 million and $87.9 million, respectively. The September 2025 distribution was declared and paid in October 2025.
The following table summarizes our distributions declared and paid ($ in thousands):
Three Months Ended September 30, 2025 Three Months Ended September 30, 2024
Amount Percentage Amount Percentage
Distributions
Paid in cash $ 16,374 55.13 % $ 15,933 56.00 %
Reinvested in shares 13,329 44.87 % 12,517 44.00 %
Total distributions $ 29,703 100.00 % $ 28,450 100.00 %
Sources of distributions
Cash flows from operating activities $ 18,760 63.16 % $ 15,087 53.03 %
Debt and financing proceeds 10,943 36.84 % 13,363 46.97 %
Total sources of distributions $ 29,703 100.00 % $ 28,450 100.00 %
Total cash flows from operating activities $ 18,760 $ 15,087
Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
Amount Percentage Amount Percentage
Distributions
Paid in cash $ 48,862 55.60 % $ 48,901 56.18 %
Reinvested in shares 39,016 44.40 % 38,148 43.82 %
Total distributions $ 87,878 100.00 % $ 87,049 100.00 %
Sources of distributions
Cash flows from operating activities $ 55,694 63.38 % $ 53,565 61.53 %
Debt and financing proceeds 32,184 36.62 % 33,484 38.47 %
Total sources of distributions $ 87,878 100.00 % $ 87,049 100.00 %
Total cash flows from operating activities $ 55,694 $ 53,565
Net Asset Value
Our board of directors, including a majority of our independent directors, has adopted valuation guidelines that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV. The overarching principle of these guidelines is to produce a valuation that represents a fair and accurate estimate of the value of our investments or the price that would be received for our investments in an arm's-length transaction between market participants, less our liabilities. These valuation guidelines are largely based upon standard industry practices used by private, open-end real estate funds and are administered by the Advisor.
As a public company, we are required to issue financial statements based on historical cost in accordance with GAAP, which are subject to an independent audit. To calculate our NAV for purposes of establishing a purchase and repurchase price for our shares, we have adopted a model that adjusts the value of our assets from historical cost to fair value in accordance with the GAAP principles set forth in FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures. However, our valuation procedures and our NAV are not subject to independent audit. Our NAV may differ from equity reflected on our audited financial statements, even if we are required to adopt a fair value basis of accounting for GAAP financial statement purposes in the future. Because these fair value calculations involve significant professional judgment in the application of both observable and unobservable attributes, the calculated fair value of our assets may differ from their actual realizable value or future fair value. Furthermore, no rule or regulation requires that we calculate NAV in a certain way. While we believe our NAV calculation methodologies are consistent with standard industry principles, there is no established practice among public REITs, whether listed or not, for calculating NAV in order to establish a purchase and repurchase price. As a result, other public REITs may use different methodologies or assumptions to determine NAV.
The following valuation methods are used for purposes of calculating our NAV:
•Investments in real property are valued by our independent valuation advisor, SitusAMC Real Estate Valuation Services, LLC ("SitusAMC"), using the income approach's discounted cash flow method. The discounted cash flow method takes into consideration all contractual rent payments over the life of the lease term offset by any capitalized expenditures. SitusAMC may supplement the discounted cash flow analysis with a sales comparison approach and the income approach's direct capitalization method, but typically reconciles exclusively to the discounted cash flow method. Following the table below that sets forth our NAV calculation is a sensitivity analysis for our investments in real property.
•Investments in commercial mortgage loans are valued by SitusAMC using the income approach's discounted cash flow method. When used to value commercial mortgage loans, this method discounts the scheduled monthly interest payments at a market discount rate. The market discount rate takes into consideration a number of factors specific to the property (remaining term, LTV and quality of property) and market (capital market flows, current Treasury rates and quoted lending spreads).
•Investments in International Affiliated Funds are included in our NAV at the value reported by each funds' manager, which is calculated in accordance with the manager's valuation policy. Investments in the International Affiliated Funds are generally valued using a discounted cash flow analysis supplemented by a direct capitalization analysis as provided by an independent third party.
•Investments in real estate-related securities are valued on the basis of publicly available market quotations or at fair value determined in accordance with GAAP.
•Investments in real estate debt consist of CMBS. We classify CMBS as trading securities and the Advisor generally values such CMBS on the basis of publicly available market quotations or at fair value determined in accordance with GAAP. We generally determine the fair value of our investments in real estate debt by utilizing third-party service providers whenever available.
•Liabilities include the fees payable to the Advisor and the Dealer Manager, accounts payable, accrued operating expenses, property-level mortgages, note payable, any portfolio-level credit facilities and other liabilities. Other than property-level mortgages and note payable, we include the cost basis of our liabilities as part of NAV, which approximates fair value. These carrying amounts are meant to reasonably approximate fair value due to the liquid and short-term nature of the instruments. We include as part of NAV the fair value of our property-level mortgages and note payable, which are valued quarterly by SitusAMCusing the income approach's discounted cash flow method.
At the beginning of each calendar year, the Advisor develops a valuation plan with the objective of having each of our wholly owned properties valued each quarter by an appraisal, except for newly acquired properties as described below. Our independent valuation advisor relies in part on property-level information provided by the Advisor, including (1) historical and projected operating revenues and expenses of the property, (2) lease agreements with respect to the property and (3) information regarding recent or planned capital expenditures. Appraisals are performed in accordance with the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practices of The Appraisal Foundation, or the similar industry standards for the country where the property appraisal is conducted. Each appraisal must be reviewed, approved and signed by an individual with the professional designation of MAI (Member of the Appraisal Institute) or similar designation or, for international appraisals, a public or other certified expert for real estate valuations. Our independent valuation advisor generally performs the appraisals, but in its discretion, may engage other independent valuation firms to provide appraisals of certain of our properties. Any appraisal provided by a firm other than our independent valuation advisor is performed in accordance with our valuation guidelines and is not incorporated into the calculation of our NAV until our independent valuation advisor has confirmed the reasonableness of such appraisal.
Wholly owned properties and joint ventures may be valued more frequently than quarterly under certain circumstances. If, in the opinion of the Advisor an event becomes known to the Advisor (including through communication with our independent valuation advisor) that is likely to have any material impact on previously provided estimated values of the affected properties, the Advisor will notify our independent valuation advisor. If in the opinion of our independent valuation advisor, such event is likely to have an impact on a previously provided value of the affected properties, our independent valuation advisor will recommend intra-quarter valuation adjustments that will be incorporated into our NAV calculation. For example, an unexpected termination or renewal of a material lease, a material change in vacancies, an unanticipated structural or environmental event at a property or capital market events may cause the value of a wholly owned property to change materially. Once the independent valuation advisor has communicated the adjusted estimate of property value to the Advisor, the Advisor will cause such adjusted value to be included in our monthly NAV calculation. Any such adjustments will be estimates of the market impact of material events to the appraised value of the property, based on assumptions and judgments that may or may not prove to be correct and may also be based on limited information readily available at that time. In general, we expect that any estimates of value or interim appraisals will be performed as soon as possible after a determination by the Advisor that a material change has occurred and the financial effects of such change are quantifiable by the independent valuation advisor. However, rapidly changing market conditions or material events may not be immediately reflected in our NAV. The resulting potential disparity in our NAV may inure to the benefit of stockholders whose shares are repurchased or new purchasers of our common stock, depending on whether our published NAV per share for such class is overstated or understated.
In accordance with the valuation guidelines, our fund administrator calculates our NAV per share for each class of our common stock as of the last calendar day of each month, using a process that reflects several components (each as described above), including the estimated fair value of (1) each of our properties based upon individual appraisal reports provided periodically by third-party independent valuation firms and reviewed by our independent valuation advisor, (2) our real estate-related assets for which third-party market quotes are available, (3) our other real estate-related assets, if any, and (4) our other assets and liabilities. The NAV per share for our share classes may differ because stockholder servicing fees allocable to a specific class of shares are only included in the NAV calculation for that class and the advisory fee allocable to the Class N shares differs from the advisory fee allocable to the other share classes.
At the end of each month, before taking into consideration additional issuances of shares of capital stock, share repurchases or class-specific expense accruals for that month, any change in our aggregate NAV (whether an increase or decrease) is allocated among each class of shares based on each class's relative percentage of the previous aggregate NAV plus issuances of shares that were effective on the first calendar day of such month. The NAV calculation is available generally within 15 calendar days after the end of the applicable month. Changes in our monthly NAV include, without limitation, accruals of our net portfolio income, interest expense, the advisory fee, distributions, unrealized/realized gains and losses on assets, any applicable organization and offering costs and any expense reimbursements. Changes in our monthly NAV also include material non-recurring events, such as capital expenditures and material property acquisitions and dispositions occurring during the month. On an ongoing basis, the Advisor will adjust the accruals to reflect actual operating results and the outstanding receivable, payable and other account balances resulting from the accumulation of monthly accruals for which financial information is available.
We reimburse the Advisor for any organization and offering expenses that it incurs on our behalf as and when incurred. These expenses include legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of our transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging and meals, but exclude upfront selling commissions, dealer manager fees and stockholder servicing fees. After the termination of each public offering, the Advisor has agreed to reimburse us to the extent that the organization and offering expenses that we incur with respect to that offering exceed 15% of the gross proceeds from such offering. In connection with the Initial Public Offering, the Advisor advanced $4.6 million of our organization and offering expenses on our behalf from our inception through December 2018. We began reimbursing the Advisor for all such expenses ratably over the 60 months commencing October 31, 2021, the date our NAV reached $1.0 billion. Such expenses will not be deducted from our NAV until they are payable to the Advisor.
Following the aggregation of the net asset values of our investments, the addition of any other assets (such as cash on hand) and the deduction of any other liabilities, our fund administrator incorporates any class-specific adjustments to our NAV, including additional issuances and repurchases of our common stock and accruals of class-specific stockholder servicing fees and advisory fees. For each applicable class of shares, each of the stockholder servicing fee and the advisory fee is calculated as a percentage of the aggregate NAV for such class of shares. The declaration of distributions reduces the NAV for each class of our common stock in an amount equal to the accrual of our liability to pay such distribution. NAV per share for each class is calculated by dividing such class's NAV at the end of each month by the number of shares for that class then outstanding.
The purchase price per share for each class of our common stock will generally equal our prior month's NAV per share, as determined monthly, plus applicable selling commissions and dealer manager fees. Our NAV for each class of shares is based on the net asset values of our investments (including real estate-related securities, real estate debt, commercial mortgage loans and International Affiliated Funds), the addition of any other assets (such as cash on hand) and the deduction of any liabilities and stockholder servicing fees applicable to such class of shares.
We calculate NAV per share in accordance with the valuation guidelines that have been approved by our board of directors. We believe our NAV is a meaningful supplemental non-GAAP operating metric. The following table provides a breakdown of the major components of our NAV as of September 30, 2025 ($ and shares in thousands, except per-share data):
Components of NAV September 30, 2025
Investments in real property $ 2,386,089
Investments in commercial mortgage loans 182,204
Investments in real estate debt 130,504
Investments in international affiliated funds 117,180
Investments in real estate-related securities 104,422
Cash and cash equivalents 34,543
Restricted cash 75,801
Other assets 21,221
Debt obligations (648,062)
Other liabilities (96,140)
Subscriptions received in advance (74,883)
Stockholder servicing fees payable the following month(1)
(518)
Non-controlling interests in joint venture (13,100)
Net Asset Value $ 2,219,261
Net Asset Value attributable to preferred stock 129
Net Asset Value attributable to common stockholders $ 2,219,132
Number of outstanding shares of common stock 193,090
(1) Stockholder servicing fees only apply to Class T, Class S and Class D shares. For purposes of NAV we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. Under GAAP, we accrue the full cost of the stockholder servicing fee as an offering cost at the time we sell Class T, Class S and Class D shares. As of September 30, 2025, we have accrued under GAAP approximately $42.8 million of stockholder servicing fees payable to the Dealer Manager related to the Class T, Class S and Class D shares sold.
The following table provides a breakdown of our total NAV and NAV per share by share class as of September 30, 2025
($ in thousands, except per-share data):
NAV Per Share Class T Shares Class S Shares Class D Shares Class I Shares Class N Shares Total
Net asset value attributable to common stockholders $ 159,143 $ 540,017 $ 85,970 $ 1,139,048 $ 294,954 $ 2,219,132
Number of outstanding shares 13,867 47,627 7,474 99,399 24,723 193,090
NAV per share as of September 30, 2025
$ 11.48 $ 11.34 $ 11.50 $ 11.46 $ 11.93
Set forth below are the weighted averages of the key assumptions in the discounted cash flow methodology used in the September 30, 2025 valuations, based on property types.
Property Type Discount Rate Exit Capitalization Rate
Industrial 7.03% 5.86%
Multifamily 6.28 5.23
Office 7.99 7.28
Healthcare 7.35 6.49
Retail 6.91 5.85
Self-Storage 7.29 5.68
Single-Family Housing 7.25 5.50
These assumptions are determined by our independent valuation advisor. A change in these assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:
Input Hypothetical
Change 		Industrial
Investment
Values 		Multifamily
Investment
Values 		Office
Investment
Values 		Healthcare Investment Values Retail Investment Values Self-Storage Investment Values Single- Family Housing Investment Values
Discount Rate 0.25% decrease 2.01% 1.83% 1.83% 1.96% 1.91% 2.05% 2.01%
(weighted average) 0.25% increase (1.93)% (1.99)% (1.90)% (1.92)% (1.84)% (1.71)% (2.01)%
Exit Capitalization Rate 0.25% decrease 2.96% 3.22% 2.04% 2.57% 2.69% 2.90% 2.95%
(weighted average) 0.25% increase (2.72)% (3.04)% (2.11)% (2.35)% (2.42)% (2.73)% (2.66)%
The following table reconciles stockholders' equity per our Consolidated Balance Sheets to our NAV ($ in thousands):
September 30, 2025
Reconciliation of Stockholders' Equity to NAV
Stockholders' equity under GAAP $ 1,673,375
Redeemable non-controlling interest 318
Total partners' capital of Operating Partnership
1,673,693
Adjustments:
Organization and offering costs(1)
961
Accrued stockholder servicing fees(2)
42,263
Unrealized net real estate and real estate debt appreciation(3)
177,780
Accumulated depreciation and amortization(4)
341,537
Straight-line rent receivable (16,973)
Net Asset Value $ 2,219,261
(1) The Advisor and its affiliates agreed to advance organization and offering costs on our behalf through December 31, 2018. Organization costs are expensed and offering costs are a component of equity in the form of additional paid-in capital. For NAV, such costs will be recognized as a reduction to NAV as they are reimbursed over 60 months commencing October 31, 2021.
(2) Accrued stockholder servicing fees represent the accrual for the full cost of the stockholder servicing fee for Class T, Class S and Class D shares. Under GAAP, we accrue the full cost of the stockholder servicing fee payable over the life of each share (assuming such share remains outstanding the length of time required to pay the maximum stockholder servicing fee) as an offering cost at the time we sold the shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid.
(3) Our investments in real estate are presented under historical cost in our GAAP consolidated financial statements. Additionally, our mortgage notes and revolving credit facilities (collectively referred to as "Debt") are presented at their carrying value in our GAAP consolidated financial statements. As such, any changes in the fair market value of our investments in real estate and Debt are not included in our GAAP results. For purposes of determining our NAV, our investments in real estate and our Debt are recorded at fair value.
(4) In accordance with GAAP, we depreciate our investments in real estate and amortize certain other assets and liabilities. Such depreciation and amortization is not recorded for purposes of determining our NAV.
Limitations and Risks
As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different NAV per share. Accordingly, with respect to our NAV per share, we can provide no assurance that:
(1) a stockholder would be able to realize this NAV per share upon attempting to resell his or her shares;
(2) we would be able to achieve, for our stockholders, the NAV per share, upon a listing of our shares of common stock on a national securities exchange, selling our real estate portfolio, or merging with another company; or
(3) the NAV per share, or the methodologies relied upon to estimate the NAV per share, will be found by any regulatory authority to comply with any regulatory requirements.
Furthermore, the NAV per share was calculated as of a particular point in time. The NAV per share will fluctuate over time in response to, among other things, changes in real estate market fundamentals, capital markets activities and attributes specific to the properties and assets within our portfolio.
Critical Accounting Policies
The preparation of our consolidated financial statements in accordance with GAAP involves significant judgments and assumptions and requires estimates about matters that are inherently uncertain. These judgments affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our consolidated financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.
There have been no material changes to the critical accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2024.
Contractual Obligations
The following table aggregates our contractual obligations and commitments with payments due after September 30, 2025
($ in thousands):
Obligations Total Less than
1 year 		1-3 Years 3-5 Years More than
5 Years
Indebtedness $ 659,650 $ 410 $ 142,138 $ 426,523 $ 90,579
Organization and offering costs 961 384 577 - -
Interest expense(1)
74,905 25,729 43,617 4,248 1,311
Ground leases(2)
17,529 93 474 776 16,186
Total $ 753,045 $ 26,616 $ 186,806 $ 431,547 $ 108,076
(1) Represents interest expense for our fixed and variable rate mortgages payable, note payable and Credit Facility, with the assumption that the Credit Facility is paid off at maturity. The weighted-average interest rate on both the Credit Facility and note payable for the nine months ended September 30, 2025 was 5.81%.
(2) Represents minimum future payments for land under non-cancelable operating and finance leases at a number of our properties expiring in various years through 2070.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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